UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
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                                    FORM 10-K


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


                   For the fiscal year ended December 31, 2000

                        Commission File Number: 000-29727
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                               PARTSBASE.COM, INC.
             (Exact name of registrant as specified in its charter)

                   Texas                               76-0604158
                   -----                               ----------
   State or other jurisdiction of      (I.R.S. Employer Identification No.)
   incorporation or organization)

                              621 N.W. 53rd Street
                         Boca Raton, Florida 33487-8233
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (561) 953-0700

--------------------------------------------------------------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES  REGISTERED  PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, NO PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes [X] No [ ]

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

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
registrant as of March 28, 2001 was approximately  $5,167,189 based on the $1.00
closing  sales  price for the Common  Stock  quoted on NASDAQ on such date.  For
purposes of this  computation,  all  executive  officers  and  directors  of the
registrant have been deemed to be affiliates.  Such determination  should not be
deemed to be an  admission  that  such  directors  and  officers  are,  in fact,
affiliates of the registrant.

The number of shares of Common Stock of the  registrant  outstanding as of March
28, 2001 was 14,247,807.


<PAGE>


                               PARTSBASE.COM, INC.

                                TABLE OF CONTENTS


                                                                         Page
                                                                        ------

                                     PART I

   ITEM 1.   Business........................................................ 1

   ITEM 2.   Properties......................................................13

   ITEM 3.   Legal Proceedings...............................................14

   ITEM 4.   Submission of Matters to a Vote of Security Holders.............14

                                     PART II

   ITEM 5.   Market for Registrant's Common Equity and Related
             Stockholder Matters.............................................14

   ITEM 6.   Selected Financial Data.........................................15

   ITEM 7.   Management's Discussion and Analysis of Financial Condition
             and Results of Operations.......................................16

   ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk......21

   ITEM 8.   Financial Statements and Supplementary Data.....................21

   ITEM 9.   Change in and Disagreements with Accountants on Accounting
             and Financial Disclosures.......................................21

                                    PART III

   ITEM 10.   Directors and Executive Officers of the Registrant.............22

   ITEM 11.   Executive Compensation.........................................25

   ITEM 12.   Security Ownership of Certain Beneficial Owners and
              Management.....................................................29

   ITEM 13.   Certain Relationships and Related Transactions................ 30

                                     PART IV

   ITEM 14.   Exhibits, Financial Statement Schedules and Reports
              on Form 8-K....................................................30

   SIGNATURES................................................................31

   ANNEX I..................................................................F-1


<PAGE>


                                     PART I
ITEM 1.  BUSINESS

     THE  FOLLOWING   DESCRIPTION  OF  OUR  BUSINESS  CONTAINS   FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995, AS DO THE MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF  OPERATIONS  SECTIONS OF THIS FORM 10-K,  ALL OF WHICH RELATE TO SUCH
MATTERS AS ANTICIPATED FINANCIAL PERFORMANCE, BUSINESS PROSPECTS,  TECHNOLOGICAL
DEVELOPMENTS, AND SIMILAR MATTERS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN
AND UNKNOWN RISKS,  UNCERTAINTIES,  AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL
RESULTS,  PERFORMANCE, OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT
FROM THOSE  EXPRESSED  OR IMPLIED BY SUCH  FORWARD-LOOKING  STATEMENTS.  FACTORS
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED ELSEWHERE IN THIS REPORT IN THE
SECTION  ENTITLED "RISK FACTORS" AND THE RISKS DISCUSSED IN OUR OTHER SECURITIES
AND EXCHANGE COMMISSION FILINGS.

Company

     All  references to "we",  "us",  "our",  "our company",  the "Company",  or
"PartsBase" in this report refer to PartsBase.com, Inc., a Texas corporation. We
are an online provider of Internet business-to-business  e-commerce services for
the aviation industry.  Our global  e-marketplace  provides a means for aviation
parts buyers and sellers to buy and sell new,  repaired or  overhauled  aviation
parts, list products,  services and catalogs,  and hold auctions for slow moving
and excess inventory.

     We began  operations  in April 1996 under the name  Aviation  Parts Base, a
division of Aviation  Laboratories,  Inc. While our Web site was  operational in
1996, we did not begin charging  subscription  fees, our primary revenue source,
until  November 1998. In April 1999, the assets of the division were conveyed to
Robert A.  Hammond,  Jr. in  connection  with the sale of Mr.  Hammond's  equity
interest  in  Aviation  Laboratories,  Inc.  On  April  27,  1999,  Mr.  Hammond
transferred the assets of the division into and incorporated PartsBase.com, Inc.
as  a  Texas  corporation.  Our  Web  site  address  is  WWW.PARTSBASE.COM.  The
information  contained  on the Web site is not a part of this  Annual  Report on
Form 10-K.

Industry Overview

     We are an  online  provider  of  Internet  business-to-business  e-commerce
services for the aviation industry. Our global e-commerce marketplace, sometimes
referred to as our  "e-marketplace" or our "solution,"  provides our subscribers
in more  than 115  countries  with the  ability  to buy and sell  new,  used and
overhauled  aviation  parts  and  products  in  an  efficient,  competitive  and
cost-effective manner. We estimate that our e-marketplace utilizes a database of
approximately  2,500  suppliers,  containing  over  23  million  line  items  of
inventory.  We  believe  our  e-marketplace   constitutes  one  of  the  largest
independent  databases of inventory and  information  in the aviation  industry.
Current members of our e-commerce marketplace include Boeing, Honeywell, Federal
Express,  Airborne  Express,  United Airlines,  Frontier  Airlines,  BF Goodrich
Aerospace, Saab, Southwest Airlines, and Northrup Grumman.


                                       1

<PAGE>


     The worldwide  market for aviation parts and products is highly  fragmented
and  includes  many types of  suppliers,  such as airlines,  original  equipment
manufacturers  ("OEMs"),  numerous  independent  distributors,  on-site  airport
maintenance  providers,  also known as fixed base  operators,  Federal  Aviation
Administration  certified  repair  and  overhaul  facilities,  and  traders  and
brokers.  There are four types of parts,  components,  or supplies  purchased by
aviation  companies:  rotables (i.e.  pumps,  landing gear),  repairables  (i.e.
valves, pistons), expendables (i.e. fasteners,  bearings), and consumables (i.e.
grease,  oil). Rotables constitute 80% of the value of all parts purchased,  but
only 20% of the  transactions.  A typical air carrier can process 3,000 purchase
orders per day, while a typical major OEM can process 20,000 purchase orders per
day. A large  commercial  aircraft,  such as a 747,  can contain  over 3 million
parts.

     In recent  years,  the airline  industry  has  experienced  rapid growth in
business and leisure travel.  Increased  passenger travel and the  corresponding
growth in aircraft  have likely  contributed  to demand for  aviation  parts and
products,  as aircraft  must be serviced at  scheduled  intervals.  According to
Boeing's  20-year  current  market  outlook,  the  world  fleet of  aircraft  is
projected to increase from 22,315  aircraft in 1999 to 31,755  aircraft in 2019.
Boeing  estimates the total market  potential  during this period for commercial
aviation  support  services,  in 1999 dollars,  is $2.7 trillion,  of which $257
billion  will be spent on airframe  and engine  repair  parts.  The airframe and
engine  repair parts market  constitutes  the primary  focus of our database and
service offerings. In addition, management believes that as the age of the world
fleet of  aircraft  increases,  demand for new,  used and  overhauled  parts and
products   may   increase.   Gartner   Research   estimates   that  the   global
business-to-business  e-commerce  market will grow from $433  billion in 2000 to
$919 billion in 2001, a 112% increase.  The total e-market market is expected to
grow to $8.5 trillion by 2005, according to Gartner.

     We provide the aerospace  industry with an Internet based  e-marketplace in
which this fragmented  market can easily locate and procure parts from a variety
of sellers,  in a cost effective manner.  The advent of the Internet has created
new opportunities  for conducting  business-to-business  commerce,  offering the
potential for  organizations to streamline  complex  processes,  lower costs and
improve productivity. Even if a company is currently using other electronic data
interchange (EDI) networks, the Internet and e-marketplace exchanges can provide
significant opportunities to save companies on transaction costs, in addition to
providing better pricing  opportunities.  In a recent news article, a major U.S.
air carrier  stated that  currently  70 percent of its parts and other goods are
bought using  electronic  data  interchange  networks.  The other 30 percent are
purchased  using phone and fax.  The airline then  predicted  that by moving its
procurement  activity to an e-marketplace  exchange,  it could shave $10 off the
cost of each  EDI-based  transaction  and  $57  off the  cost of each  phone/fax
purchase.

     In February 2001, we introduced "PartsDirect", which allows aviation buyers
to solicit quotes online to purchase  aircraft  parts. As sellers reply to these
quotations,  buyers  are given an  easy-to-read  display  of all  pricing  being
offered by potential sellers. Seller quotations are updated on a real-time basis
as bids are posted. The buyer can then generate a purchase order  electronically
to the seller of his or her choice. Through "PartsDirect",  we seek to provide a
worldwide search capability to buyers that creates a forum in which these buyers
can save money by enabling them to more quickly and  efficiently  locate surplus
new, repaired, or overhauled inventory. Sellers utilizing the e-marketplace will
gain access to an expanded customer base and have a greater  opportunity to sell
their inventory.  If our new technology gains acceptance in the marketplace,  we
intend  to  begin  charging  transaction  fees  for  facilitating  an  inventory
purchase,   as  well  as  in  the  future  providing  marketplace  data,  credit
information,  and financing  alternatives to our  subscribers.  In addition,  we
anticipate  charging additional fees to facilitate the integration of our site's
offerings, utilizing standard XML protocols, into customers' Enterprise Resource
Planning (ERP) systems.  Because of the aerospace  industries  enormous size and
global nature,  the  integration  challenge of tying together these companies is
one of great  magnitude.  Many industry  experts estimate that this is a process
that will take at least two or three years to gain traction.



                                       2

<PAGE>



Business Strategy

     Our  goal  is to  solidify  our  position  as one of the  leading  aviation
industry  e-commerce  marketplaces.  In order  to  capitalize  on the  continued
expansion of the market for aviation parts and products,  our  technology  takes
advantage of the growth, pervasiveness,  low costs and community building nature
of the  Internet  as a basis for  e-commerce  for the broad,  highly  fragmented
aviation  industry.  It is our belief that the value of an  e-marketplace  grows
substantially as each new member brings additional parts, products,  information
and buying power to the community.

     Our technology has been designed to streamline  the  procurement  cycle for
our subscribers.  We enable subscribers to source,  bid parts and products,  and
eventually  manage their order payment online.  Our target members are primarily
businesses that buy and sell aviation parts, supplies and components in a global
marketplace.  Our  current  members  vary from small  businesses  to Fortune 500
companies such as Boeing,  BFGoodrich,  Honeywell,  and Federal Express. We have
designed  our  e-marketplace  to meet the  needs of these  customers  and  their
industry. With a standard Internet connection, a Web browser and a PartsBase.com
subscription,  each of our e-marketplace subscribers can immediately participate
as both a buyer and a seller.

     Our  e-marketplace  is  designed  to provide  advantages  over  traditional
procurement processes, including:

     -  Reduced procurement costs;
     -  More efficient pricing and improved access to sellers for buyers;
     -  Ability to locate the most geographically desirable parts;
     -  Expanded distribution opportunities for sellers; and
     -  Ease of use and better access to information.

     Our current Web site features include:

     -  Online  buying and selling  utilizing  advanced  parts search  features,
        inventory listings, requests for quotations ("RFQs"), and purchase order
        generation;
     -  Member access to detailed information regarding current transactions;
     -  Online auctions for aviation parts and products;
     -  Procurement  controls  providing  members  with the  ability  to monitor
        corporate purchasing; and
     -  Community-building  information  such as industry job and aircraft sales
        listings, as well as links to members and other industry Web sites.

     Our objective is to establish our  e-marketplace as the preferred  aviation
industry  business-to-business  e-commerce  solution.  The key  elements  of our
strategy include:


                                       3

<PAGE>


     -  Achieving growth through transaction fees and other sources of revenues;
     -  Strengthening the PartsBase.com brand;
     -  Increasing the number of subscribers and market penetration;
     -  Establishing and expanding strategic sales and marketing relationships;
     -  Expanding international presence; and
     -  Attracting  and  retaining  members  with  new  content,   features  and
        services.

     The successful implementation of our strategy will be subject to many risks
and will depend on many  factors,  including  but not  limited to the  continued
growth and acceptance of e-commerce in the aviation industry as a whole, and the
acceptance of our business model in particular.  We may be adversely affected by
a variety of risks and  difficulties.  For a detailed  description of certain of
these risks, please refer to the "Risk Factors" section.

Sales and Marketing

     We market  through a direct  inside  and  outside  sales  force.  Since our
potential members fall within a defined market segment,  we are able to identify
and target the purchasing decision-makers and potential users who will influence
the decision to adopt our e-commerce solution.

     Our sales and  marketing  approach  is  designed to help buyers and sellers
understand both the business and technical benefits of our e-marketplace, and to
promote  adoption  through  one-on-one  education  and  training.  We  intend to
continue to expand our direct sales force through the  establishment of multiple
daily sales shifts per day, allowing us to reach geographically diverse markets.

     Our sales and marketing programs are designed to educate our target market,
create  awareness  and attract  members to our  e-marketplace.  To achieve these
goals,  we intend to take  advantage  of the  community  offered by our existing
membership base and engage in marketing activities such as trade shows, speaking
engagements and Web site marketing.

     We provide  member  service  support  from 6:00 a.m. to 3:00 a.m.,  Eastern
Standard  Time,  Monday  through  Friday.  Our customer  support  department  is
responsible  for day-to-day  contact with members and responds to questions from
members  through e-mail and a toll-free  number.  This department is responsible
for retaining and increasing use by existing  members and is an important aspect
of member  satisfaction.  Our  customer  support  and service  personnel  handle
general member inquiries and technical questions.  We have automated some of the
tools used by our customer  support and service staff,  such as tracking screens
that let our support staff track a transaction  through a variety of information
sources.

     Our sales and marketing group consisted of approximately 127 individuals as
of  December  31,  2000,  all of whom are  located  at our Boca  Raton,  Florida
headquarters.


                                       4

<PAGE>


Competition

     The market for  business-to-business  e-commerce and Internet  ordering and
purchasing is new and rapidly evolving,  and competition is intense and expected
to  increase  significantly  in the future.  We believe  that  companies  in our
Internet business-to-business e-marketplace compete on the basis of:

     -  Ease of use of technology;
     -  Breadth and depth of product and service offerings;
     -  Pricing of products and services;
     -  Quality and reliability of the Internet purchasing solution; and
     -  Quality and scope of customer service and support.

     We currently  compete  almost  solely in the market for aviation  parts and
products and face  competition  from three main areas within this market:  other
start-up  businesses  that have  formed  exchanges  with  e-commerce  offerings,
existing aerospace companies, or groups of companies that have formed exchanges,
and traditional manufacturers, suppliers and distributors of aviation parts that
have developed  e-commerce  initiatives that are designed to facilitate commerce
between one buyer and multiple sellers.

     Because of the rapidly  evolving  nature of e-commerce,  it is difficult to
objectively  estimate the number of companies that compete  directly against us.
We believe that  currently,  our primary  competitor  is the  Inventory  Locator
Service Inc., a subsidiary of Aviall,  Inc.  Additional  competition is expected
during  2001  from buy side  exchanges  formed  by major  domestic  and  foreign
carriers, and sell side exchanges formed by large aerospace OEM's.

     Current  and  potential  competitors  may be able to  devote  significantly
greater  resources to marketing and  promotional  campaigns,  and may adopt more
aggressive pricing policies or may try to attract users by offering services for
free and devote  substantially  more resources to product  development  than us.
Increased  competition may result in reduced operating  margins,  loss of market
share and  diminished  value in our brand,  any of which  could  materially  and
adversely  affect our business,  financial  condition and results of operations.
New  technologies  and the expansion of existing  technologies  may increase the
competitive  pressures  on us by  enabling  competitors  to offer a similar  but
lower-cost  service.  We  cannot  assure  you  that we  will be able to  compete
successfully against current and potential competitors.  Further, as a strategic
response to changes in the  competitive  environment or otherwise,  we may, from
time to time, make pricing,  service or marketing decisions or acquisitions that
could  materially  and adversely  affect our business,  financial  condition and
results of operations.

Intellectual Property

     We rely on a  combination  of trademark  and  copyright  law,  trade secret
protection and  confidentiality  and/or license  agreements  with our employees,
customers and business  partners to protect our proprietary  rights in products,
services, know-how and information. We have a federal trademark registration for
"PartsBase" and "PartsBase.com." We may seek additional  trademarks,  copyrights
and patents in the future. Our means of protecting our proprietary rights in the
United States or abroad may not be adequate and  competitors  may  independently
develop  similar  technology.  We cannot be  certain  that our  services  do not
infringe  patents or other  intellectual  property rights that may relate to our
services. Like other technology and Internet-based  businesses, we face the risk


                                       5

<PAGE>


that  we  will  be  unable  to  protect  our  intellectual  property  and  other
proprietary  rights,  and the risk that we will be found to have  infringed  the
proprietary rights of others.

Government Regulation

     Both domestic and foreign entities  regulate the parts and products sold on
our Web site. The Federal  Aviation  Administration  (the "FAA") is charged with
regulating  the  manufacture,  repair and operation of all aircraft and aircraft
equipment operated in the United States. The FAA monitors safety by promulgating
regulations  regarding  proper  maintenance of aircraft and aircraft  equipment.
Similar  regulations  exist in foreign  countries.  Regulatory  agencies specify
maintenance,   repair  and  inspection  procedures  for  aircraft  and  aircraft
equipment.  Certified technicians in approved repair facilities on set schedules
must perform these procedures.  All parts must conform to prescribed regulations
and be certified  prior to  installation  on any  aircraft.  Although we are not
currently  subject  to any  governmental  regulation  regarding  the  parts  and
products  sold on our Web site,  we may in the future  become  subject to FAA or
other regulatory requirements.

Employees

     As of December  31, 2000 and 1999,  we had 189 and 67 full time  employees,
respectively. Of these, 127 and 51 were in sales and marketing, 33 and 7 were in
programming, technical and customer support and operations, and 29 and 9 were in
finance and administration,  respectively. None of our employees are represented
by a labor union. We have not  experienced  any work stoppages,  and we consider
our relationship with our employees to be good.

Risk Factors

     WE HAVE  NEVER  BEEN  PROFITABLE,  ANTICIPATE  CONTINUED  LOSSES AND CANNOT
GUARANTEE  PROFITABILITY IN THE FUTURE. We have never been profitable and expect
to continue to incur operating  losses until at least the end of fiscal 2001. We
may be unable to ever achieve  profitability in the future. We have incurred net
losses  in each  accounting  period  since we began  operations  in April  1996,
including net losses of $13,453,981, $7,815,409 ($5,913,034 before consideration
of the value of a preferred stock beneficial  conversion feature),  and $148,121
for the years ended December 31, 2000, 1999, and 1998, respectively, and we will
need  to  generate  significant  revenues  to  achieve  profitability.  Although
revenues have grown in recent periods, we cannot assure you that we will achieve
sufficient revenues for profitability.  Even if we do achieve profitability,  we
cannot assure you that we can sustain or increase  profitability  on a quarterly
or annual basis in the future. If revenues grow slower than we anticipate, or if
operating expenses exceed  expectations or cannot be adjusted  accordingly,  our
business,  results of operations and financial  condition will be materially and
adversely affected.

     WE CANNOT PREDICT OUR SUCCESS BECAUSE OUR BUSINESS MODEL IS UNPROVEN AND WE
HAVE OPERATED OUR BUSINESS FOR ONLY A SHORT PERIOD OF TIME.  Our business  model
is new to the aviation  industry and our ability to generate revenues or profits
is unproven.  We have a limited operating history,  which will make it difficult
to evaluate our performance. Our prospects will be dependent upon our ability to
effectively   implement  our  business   model  and  adapt  to  changes  in  the
business-to-business  e-commerce  market. If our business model is not viable or
if we are unable to identify and address changes in our markets,  we will not be
able to grow our business,  compete effectively or achieve profitability.  These
factors could cause our stock price to fall significantly.



                                       6

<PAGE>


     WE PRIMARILY RELY ON REVENUE FROM  SUBSCRIPTIONS  AND WE MAY NOT BE ABLE TO
SUCCESSFULLY EXPAND OUR MEMBERSHIP BASE OR ESTABLISH ADDITIONAL REVENUE SOURCES.
We  currently  generate  revenues  from  e-commerce  customers  in the  aviation
industry  who  subscribe  to our  service.  Our success will be dependent on our
ability to expand our  membership  base within the aviation  industry.  While we
have  experienced  increases in our subscriber  base,  there can be no assurance
that our recent growth in subscriber  base can be  continued.  In addition,  our
success will depend on our ability to generate  additional  revenues through the
introduction of a transaction-based  model and/or the expansion into new markets
and  industries.  We cannot assure you that we will be successful in any efforts
to generate additional revenues.

     WE  RECEIVE  SUBSTANTIALLY  ALL OF OUR  REVENUE  FROM  PARTICIPANTS  IN THE
AVIATION  INDUSTRY,  SO A DOWNTURN IN THE  AVIATION  INDUSTRY  COULD  DAMAGE OUR
BUSINESS.  We receive  substantially all of our revenue from members  associated
with the  aviation  industry,  and we expect  these  revenues  will  account for
substantially all of our revenues for the foreseeable  future. Our dependence on
members  associated with the aviation  industry makes us vulnerable to downturns
in that  industry.  A downturn  could lead our members to reduce  their level of
activity on our e-marketplace and cause some to cancel their subscription.

     INTENSE COMPETITIVE PRESSURES IN THE BUSINESS-TO-BUSINESS E-COMMERCE MARKET
MAY IMPEDE OUR ABILITY TO ESTABLISH A SUBSTANTIAL  MARKET SHARE THAT WOULD ALLOW
US TO BE PROFITABLE. The business-to-business  e-commerce market is new, rapidly
evolving,  and  intensely  competitive,  and we expect  competition  to  further
intensify in the future.  Barriers to entry are  minimal,  and  competitors  may
develop and offer services  similar to ours in the future.  Recent entrants into
the business-to-business  aviation parts market include an alliance of prominent
aircraft  parts  manufacturers  and  aviation  industry  participants  that have
superior  capital  resources and  established  reputations  in the industry.  In
addition,  we expect that additional  companies will offer competing  e-commerce
solutions in the future, and our business could be severely harmed if we are not
able to compete successfully against current or future competitors. In addition,
our  members  and  partners  may become  competitors  in the  future.  Increased
competition  is  likely to result in price  reductions,  reduced  gross  margins
and/or loss of market share,  any of which could harm our  business.  Our actual
and  potential  competitors  vary in size and in the  scope and  breadth  of the
services they offer.

     QUARTERLY  OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT  FLUCTUATIONS.  Our
revenues and operating  results may vary  significantly  from quarter to quarter
due to a number of factors,  not all of which are in our control.  These factors
include:

     -  Subscriber and advertiser demand for our solutions;
     -  User traffic levels and activity on our e-marketplace;
     -  Seasonal fluctuations in Internet usage;
     -  Changes in the growth rate of Internet  usage;
     -  The  commitment  of  e-commerce  customers in the aviation  industry who
        subscribe to our service;
     -  The  timing  and  amount  of  costs  relating  to the  expansion  of our
        operations;
     -  Changes in our pricing policies or those of our competitors;


                                       7

<PAGE>


     -  The introduction of new solutions by us or our competitors;
     -  Costs related to acquisitions of technology or businesses; and
     -  General economic and market conditions.

     Our  revenues  for the  foreseeable  future will remain  dependent  on user
traffic  levels and the  commitment  of  e-commerce  customers  in the  aviation
industry who  subscribe to our service.  Such future  revenues are  difficult to
forecast. In addition, we plan to significantly  increase our operating expenses
to increase our sales and marketing  operations,  to continue our expansion,  to
upgrade and enhance our technology,  and to market and support our solutions. We
may be unable to adjust spending quickly enough to offset any unexpected revenue
shortfall.  If we have a shortfall in revenues in relation to our expenses, then
our business,  results of operations and financial condition would be materially
and  adversely  affected.  Such a result would likely affect the market price of
our common stock in a manner that may be unrelated  to our  long-term  operating
performance.

     Due to all of the foregoing  factors and the other risks  discussed in this
section, you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance.  It is possible that, in some
future  periods,  our results of  operations  may be below the  expectations  of
public market  analysts and  investors.  In this event,  the price of our common
stock may fall.

     IF WE  FAIL  TO  EFFECTIVELY  MANAGE  OUR  OPERATIONS  AND  THE  USE OF OUR
SERVICES, WE MAY LOSE MEMBERS OR INCUR SIGNIFICANT EXPENSES. Our success depends
on effective planning and growth management. We will need to continue to improve
our financial and managerial controls, reporting systems, and procedures, and we
will need to continue to expand, train and manage our workforce.  We continue to
increase  the  scope of our  operations  and our  growth  has  placed,  and will
continue  to place,  a  significant  strain on our  management  and  operational
systems and resources.  If we do not successfully  implement and integrate these
new systems or if we fail to scale these systems to our growth,  the performance
of our Web site may suffer  which would cause us to lose  members.  In addition,
any failure could make us unable to operate with  adequate,  accurate and timely
financial  and  operational  information,  which  could  result in us  incurring
unnecessary and possibly damaging expenses.

     BECAUSE  OUR  REVENUE IS DERIVED  FROM  PROVIDING  E-MARKETPLACE  ACCESS TO
SUBSCRIBERS FOR AN ANNUAL  SUBSCRIPTION  FEE, THE CANCELLATION OR NON-RENEWAL OF
THESE SUBSCRIPTIONS WOULD HURT OUR BUSINESS. We have generated substantially all
of our  revenues  to date  through  member  subscription  fees for access to our
e-marketplace. Generally, our subscription fees are paid on an annual basis, and
these  subscriptions  may be terminated on short-term  notice.  We have expended
significant  financial and personnel  resources and have expanded our operations
on the assumption that our subscribers will renew these annual subscriptions. We
do not have a  sufficiently  long  history of  operations  to be able to predict
renewal rates of our members.  If our members fail to continuously  renew, or if
they terminate their subscriptions,  our revenues would be significantly reduced
and our business could suffer dramatically.

     THERE IS A FINITE NUMBER OF POTENTIAL  SUBSCRIBERS  AND WE MAY BE UNABLE TO
DEVELOP OTHER MEANS OF GENERATING REVENUE, SO OUR GROWTH MAY BE LIMITED. A major
element of our growth  strategy is the  expansion of our  subscriber  base.  The
number of participants  in the aviation  market limits our potential  subscriber
base.  Additionally,  the barriers to entry, which exist in the aviation market,
may  limit  the  entry  of  additional   subscribers  into  our   e-marketplace.


                                       8

<PAGE>


Accordingly,  the number of potential subscribers to our e-marketplace is likely
finite,  in which  case our  revenues  may be  similarly  limited  if we  cannot
generate revenue through other means.

     IF OUR SELLERS DO NOT PROVIDE TIMELY,  PROFESSIONAL  AND LAWFUL DELIVERY OF
PRODUCTS TO OUR BUYERS,  OUR MEMBERSHIP MAY DECREASE AND WE MAY HAVE  LIABILITY.
We rely on our sellers to deliver  purchased parts and products to our buyers in
a professional,  safe and timely manner. If our sellers do not deliver the parts
and products to our buyers in a professional,  safe and timely manner,  then our
service will not meet customer expectations and our reputation and brand will be
damaged.  In  addition,  deliveries  that  are  nonconforming,  late  or are not
accompanied by information  required by applicable  laws or  regulations,  could
expose us to liability or result in decreased  adoption and use of our solution,
which could have a negative  effect on our business,  results of operations  and
financial condition.

     WE CANNOT GUARD AGAINST HARM TO OUR BUSINESS  FROM THE  ACTIVITIES OF THIRD
PARTIES  ON OUR WEB SITE.  Our  future  success  will  depend  largely  upon the
reliably of our sellers in delivering and accurately  representing  their listed
products  and  buyers  paying  the  agreed   purchase  price.  We  do  not  take
responsibility  for the  delivery  of  payment or goods to any  member.  We have
received  in the  past,  and  anticipate  that we will  receive  in the  future,
communications  from  members  who did not  receive  the  purchase  price or the
products  that were to be  exchanged.  While we can  suspend the  privileges  of
members who fail to fulfill  their  delivery or payment  obligations,  we do not
currently have the ability to require  sellers to deliver  products or buyers to
make payments. We do not compensate members who believe they have been defrauded
by other members.  Any negative publicity generated as a result of fraudulent or
deceptive  conduct by members of our  e-marketplace  could damage our reputation
and diminish the value of our brand name. We may in the future receive  requests
from  members  for  reimbursement  or threats of legal  action  against us if no
reimbursement  is made. Any resulting  litigation could be costly for us, divert
management  attention,  result in  increased  costs of doing  business,  lead to
adverse judgments, or otherwise harm our business.

     IF WE ARE UNABLE TO  IMPLEMENT  ADEQUATE  MEASURES TO MAINTAIN THE VALUE OF
OUR  INTELLECTUAL  PROPERTY AND INTERNET DOMAIN NAME, OUR ABILITY TO COMPETE MAY
BE SEVERELY HARMED. As an Internet company,  our current and future  copyrights,
service  marks,  trademarks,  patents,  trade  secrets,  domain name and similar
intellectual property, if any, are especially vital to our success.  Despite our
precautions,  unauthorized  third  parties may  infringe or  misappropriate  our
intellectual  property;  copy  portions of our  services or reverse  engineer or
obtain and use information  that we regard as proprietary.  Any  infringement or
misappropriation of our intellectual  property or proprietary  information could
make it  difficult  for us to compete.  In addition,  we currently  hold various
Internet  Web  addresses  relating  to our  network,  including  the domain name
"PARTSBASE.COM."  If we are not able to prevent third parties from acquiring Web
addresses that are similar to our addresses, third parties could acquire similar
domain names that could  create  confusion  that  diverts  traffic away from our
e-marketplace to other competing Web sites.

     OTHER  PARTIES MAY ASSERT  CLAIMS  AGAINST US THAT WE ARE  INFRINGING  UPON
THEIR INTELLECTUAL PROPERTY RIGHTS, WHICH COULD HARM OUR FINANCIAL CONDITION AND
ABILITY TO COMPETE.  We cannot be certain that our services do not infringe upon
the intellectual  property rights of others.  Because patent applications in the
United  States  are  not  publicly   disclosed   until  the  patent  is  issued,
applications  may have been  filed  which  relate to  services  similar to those
offered by us. We may be subject to legal  proceedings  and claims  from time to
time in the  ordinary  course  of our  business,  including  claims  of  alleged


                                       9

<PAGE>


infringement of the trademarks and other  intellectual  property rights of third
parties.  If our services  violate  third-party  proprietary  rights,  we cannot
assure you that we would be able to obtain  licenses to continue  offering  such
services on  commercially  reasonable  terms,  or at all. Any claims  against us
relating to the  infringement  of third-party  proprietary  rights,  even if not
meritorious,  could  result in the  expenditure  of  significant  financial  and
managerial  resources and for injunctions  preventing us from distributing these
services. Such claims could severely harm our financial condition and ability to
compete.

     IF WE  ARE  UNABLE  TO  LICENSE  THIRD-PARTY  TECHNOLOGIES  OR  EFFECTIVELY
INTEGRATE  them, we may  experience  delays in  development  or expansion of our
business.  The e-commerce market is rapidly evolving and we have and will depend
on third-party  software and other technology for the effective operation of our
Web site and  business.  We may not be able to license or renew the  license for
these  technologies  on terms favorable to us or at all. Our inability to obtain
necessary  third-party  licenses  could delay the continued  development  of our
business and services,  which could result in a loss of members, slow our growth
and severely  harm our  business.  In  addition,  even if we are able to license
needed technology,  we may not be able to successfully integrate such technology
into our  operations,  which could also  result in a loss of  members,  slow our
growth and severely harm our business.

Risks Related to the Internet and e-Commerce industries

     OUR GROWTH MAY BE IMPAIRED IF THE INTERNET IS UNABLE TO ACCOMMODATE  GROWTH
IN  E-COMMERCE.  Our success  depends on the widespread use of and growth in the
use of the Internet for retrieving,  sharing and transferring  information among
buyers  and  sellers  in the  aviation  parts  market.  If the  Internet  cannot
accommodate growth in e-commerce or experiences periods of poor performance, the
growth of our  business  may  suffer.  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.  Additionally,  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 e-commerce and online purchasing. In addition, companies that have
already invested substantial resources in traditional methods of procurement, or
in-house  e-commerce  solutions,  may  be  reluctant  to  adopt  our  e-commerce
solution, thus impairing the growth of our member base and revenue potential.


                                       10

<PAGE>


     THE SECURITY  RISKS RELATED TO  E-COMMERCE  MAY CAUSE MEMBERS TO REDUCE THE
USE OF OUR SERVICE,  AND ATTEMPTING TO GUARD AGAINST THESE RISKS MAY CAUSE US TO
INCUR  SIGNIFICANT  COSTS AND  EXPENSES.  A fundamental  requirement  to conduct
business-to-business  e-commerce is the secure  transmission of information over
public networks. If our members are not confident in the security of e-commerce,
they  may  not  affect   transactions  on  our   e-marketplace  or  renew  their
subscriptions, which would severely harm our business. There can be no guarantee
that  advances  in  computer  capabilities,  new  discoveries  in the  field  of
cryptography,  or other developments will not result in the compromise or breach
of the  algorithms  that  we use to  protect  content  and  transactions  on our
e-marketplace or proprietary information in our databases. We may be required to
incur  significant  costs to protect against  security  breaches or to alleviate
problems caused by breaches.  Further, a well-publicized  compromise of security
could deter people from using the Internet to conduct  transactions that involve
transmitting confidential information. Our failure to prevent security breaches,
or well-publicized  security breaches  affecting the Internet in general,  could
adversely affect the willingness of our members to use our services.

     IF OUR  SELLERS  FAIL TO  PROVIDE  TIMELY  AND  ACCURATE  INFORMATION,  OUR
MEMBERSHIP BASE AND POTENTIAL  REVENUE MAY DECLINE.  Our members use our service
in  large  part  because  of  the  comprehensive  breadth  and  accuracy  of our
databases.  It is our responsibility to load seller product information into our
database and categorize the information  for search  purposes.  However,  we are
dependent  on our  sellers  to  provide  us in a timely  manner  with  accurate,
complete,  and current  information  regarding their product  inventory.  If our
timely  loading of this  information  is  impaired,  this could result in member
dissatisfaction and a loss of members.

     WE MAY NOT BE ABLE TO KEEP UP WITH TECHNOLOGICAL ADVANCEMENTS,  WHICH COULD
RESULT IN A LOSS OF  MEMBERS  AND HARM OUR  ABILITY TO  COMPETE.  The market for
Internet commerce is characterized by rapid change,  evolving industry standards
and the frequent  introduction of new technological  products and services.  The
introduction of new technology,  products, services or standards may prove to be
too  difficult,  costly or simply  impossible  to  integrate  into our  existing
systems. Moreover,  innovations could render obsolete our existing or any future
products  and  services.  Our  ability to remain  competitive  will also  depend
heavily  upon our ability to maintain  and upgrade our  technology  products and
services.  We must continue to add hardware and enhance  software to accommodate
any increased  content and use of our Web site. If we are unable to increase the
data  storage and  processing  capacity of our systems at least in pace with the
growth in  demand,  our Web site may fail to  operate  at an  optimal  level for
unknown  periods  of time.  As a  relatively  small  company  in the  market for
Internet  commerce,  we will be in a position  of  responding  to  technological
changes  rather  than  establishing  them.  Any  difficulty  keeping  pace  with
technological  advancements  could  hurt  our  ability  to  retain  members  and
effectively compete.

     BECAUSE WE DO NOT MAINTAIN A REDUNDANT  SYSTEM,  ANY SYSTEM  FAILURE  COULD
DELAY OR  INTERRUPT  OUR  SERVICE,  WHICH COULD  SEVERELY  HARM OUR BUSINESS AND
RESULT IN A LOSS OF MEMBERS. Our ability to successfully  maintain an e-commerce
marketplace and provide acceptable levels of customer service depends largely 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 members.  Our  computer and  communications  systems are
located in Boca Raton,  Florida.  Although we periodically back up our databases
to tapes and store the backup tapes offsite,  we have not maintained a redundant


                                       11

<PAGE>


site. As a result,  our systems and  operations are  particularly  vulnerable to
damage or interruption from human error, sabotage, fire, flood, hurricane, power
loss,  telecommunications  or equipment  failure,  and similar events. We cannot
assure you that we will not experience system failures in the future.  Moreover,
we have  experienced  delays and  interruptions  in our  telephone  and Internet
access that have prevented members from accessing our e-marketplace and customer
service department.  Furthermore, we do not have a formal disaster recovery plan
and do not carry sufficient business interruption insurance to compensate us for
losses  that may occur as a result of any  system  failure,  and  therefore  the
occurrence  of any  system  failure  or similar  event  could harm our  business
dramatically.

     DEFECTS IN THE COMPLEX  SOFTWARE ON WHICH OUR  SERVICES  DEPEND COULD CAUSE
SERVICE  INTERRUPTIONS  THAT COULD DAMAGE OUR  REPUTATION AND HARM OUR BUSINESS.
Unlike many  traditional  suppliers and  distributors  of aviation parts, we are
wholly  dependent  on  the  error-free  functioning  of our  Web  site  and  its
associated  software.  Our e-marketplace  depends on complex software  developed
internally  and by  third  parties.  Moreover,  we are  relying  on  third-party
software to implement our  transaction-based  model,  which software has not yet
been integrated into our system.  Software often contains defects,  particularly
when first introduced or when new versions are released.  Our testing procedures
may not discover  software  defects  that affect our new or current  services or
enhancements  until after they are  deployed.  These defects could cause service
interruptions,  which could damage our reputation or increase our service costs,
cause us to lose revenue,  delay market  acceptance,  or divert our  development
resources,  any of which could severely harm our business,  financial condition,
and results of operations.

     WE COULD FACE LIABILITY FOR INFORMATION  RETRIEVED FROM OR TRANSMITTED OVER
THE INTERNET AND  LIABILITY FOR AIRCRAFT  PRODUCTS  SOLD OVER THE  INTERNET.  We
could be exposed to liability with respect to third-party  information  that may
be  accessible  through our Web site.  If any  third-party  content  information
provided  on our Web site  contains  errors,  consumers  potentially  could make
claims  against us for losses  incurred  in  reliance  on that  information.  In
addition,  because defective  aviation products can result in substantial losses
of property  or life,  we have a  relatively  greater  risk of being  exposed to
product  liability  claims  arising out of or  relating  to  aviation  parts and
products  sold  through  our  Web  site,  which  could  result  in us  incurring
substantial defense costs and, if successful,  liability,  either of which could
severely harm our business.  We currently carry no policies,  which would insure
us against product liability claims.

Risks Associated with Potential Acquisitions or Investments

     WE MAY ACQUIRE OR MAKE  INVESTMENTS  IN BUSINESSES,  PRODUCTS,  SERVICES OR
TECHNOLOGIES  SOME  OF  WHICH  MAY  NOT  BE  COMPLEMENTARY  OR  RELATED  TO  OUR
E-MARKETPLACE.  From  time  to  time  we may  have  discussions  with  companies
regarding our acquiring, or investing in, their businesses,  products,  services
or technologies.  We cannot assure you that we will be able to identify suitable
acquisition  or  investment   candidates.   Even  if  we  do  identify  suitable
candidates,  we  cannot  assure  you  that we will  be able to  consummate  such
acquisitions  or  investments  on  commercially  acceptable  terms.  If we buy a
company,  we could have difficulty in assimilating that company's  personnel and
operations.  In addition,  the key personnel of the acquired  company may decide
not to work for us.  If we make  other  types  of  acquisitions,  we could  have
difficulty in assimilating the acquired products,  services or technologies into
our operations.  These difficulties could disrupt our ongoing business, distract
our  management and  employees,  increase our expenses and adversely  affect our
results  of  operations  due  to  accounting   requirements  such  as  goodwill.


                                       12

<PAGE>


Furthermore,  we may incur debt or issue equity securities to pay for any future
acquisitions.  The  issuance  of  equity  securities  could be  dilutive  to our
existing  stockholders.  We do not  have  established  criteria  for  evaluating
acquisition or investment opportunities.

     FUTURE GROWTH OF OUR  OPERATIONS MAY MAKE  ADDITIONAL  CAPITAL OR FINANCING
NECESSARY.  We anticipate  that we have  sufficient  working capital to meet our
working capital needs for at least the next 12 months.  However,  we may need to
raise additional funds in the future in order to:

     - Finance unanticipated working capital requirements;
     - Develop or enhance existing services or products;
     - Respond to competitive pressures; and
     - Acquire complementary businesses, technologies, content or products.

     We  cannot  be  certain  that we will be able to  obtain  needed  funds  on
favorable  terms,  if at all. If we decide to raise funds by issuing  additional
equity  securities,  investors  in our common  stock may  experience  additional
dilution.

     WE MAY BE UNABLE TO OBTAIN  SUFFICIENT  FUNDS TO  EFFECTIVELY  OPERATE  OUR
BUSINESS,  WHICH COULD DAMAGE OUR COMPETITIVE  POSITION. In the rapidly evolving
and highly  competitive  e-commerce  industry,  our future prospects will depend
heavily on our  ability to take  advantage  of new  business  opportunities  and
respond to technological  developments.  There can be no assurances that we will
have  sufficient  capital  resources  to  respond  to  business   opportunities,
technological   advancements  and  competitive  pressures.  A  lack  of  capital
resources could seriously damage our competitive position and prospects.

     YOU MAY EXPERIENCE SIGNIFICANT VOLATILITY IN THE MARKET VALUE OF OUR SHARES
AND MAY BE UNABLE TO SELL OUR STOCK ON TERMS  FAVORABLE TO YOU.  Because we have
no history of  profitability,  it will be difficult  for investors in the public
market to determine the intrinsic value of our shares.  In addition,  our market
capitalization  and public float is small relative to other public  companies in
the business-to-business  e-commerce or other sectors. As a result, the price at
which our common  stock trades may be more  volatile  than those of other public
companies  and, as a result,  it may be more difficult for you to sell our stock
on terms favorable to you. In addition, any significant volatility in the market
price of our common stock could result in the  initiation  of  securities  class
action  litigation,  which could divert our management  and financial  resources
from more productive uses.

ITEM 2.  PROPERTIES

     During  May  2000 we  entered  into a  sublease  agreement  (the  "Sublease
Agreement")  with an unaffiliated  third party for 35,668 square feet of general
office  space.  The Sublease  Agreement  expires  October 31, 2006. In lieu of a
security deposit,  we have entered into an irrevocable  standby letter of credit
in favor of the sublessor in the amount of $500,000.  From the commencement date
of the Sublease  Agreement  through  February 28, 2001 we were  obligated to pay
rent on only  25,000  square  feet as defined  in the prime  lease  between  the
sublessor and the prime landlord. The base rent per square foot during this term
ranges between $12.57 and $12.94 plus common area  maintenance  fees.  Effective
March 1, 2001 we became obligated to pay all minimum annual rent required by the
prime lease.


                                       13

<PAGE>


ITEM 3.  LEGAL PROCEEDINGS

     In September 2000 we sued a third party financial  institution because such
financial  institution  paid a check in the  amount of  $161,000  despite a stop
payment order duly issued by us. The check,  along with a replacement check, was
cashed by the payee.  Before we learned  that both checks had been cashed by the
payee,  we entered into a binding  settlement with the payee ending our business
relationship  with the payee.  The payee  refused to return the  amounts and the
financial institution failed to credit our account. We filed suit, and discovery
has  commenced.  The only  claim  against  us in this  matter  is the  financial
institution's demand for legal fees if the financial institution prevails.

     In December 2000, a third party company (the "Third  Party"),  unaffiliated
with us, instituted  arbitration  proceedings against us in Dallas,  Texas based
upon the Third  Party's  allegation  that we  breached a  professional  services
agreement  dated  February  18, 2000.  The Third Party seeks  damages from us of
$308,083  plus  interest,   fees,   costs  and  alleged  damages  for  copyright
infringement,  all based upon the Third Party's allegations that we breached our
payment  obligations  under  the  professional  services  agreement.  We filed a
counterclaim  denying that we breached the professional  services  agreement and
claimed entitlement to a refund of $73,496 of funds previously paid to the Third
Party.  Additionally,  we claimed  damages of  $250,000 as a result of the Third
Party's  breach of its  obligations  to us. The  Company  intends to  vigorously
defend  the  lawsuit,  but there  can be no  assurance  that it will  ultimately
prevail.  Because this matter is in its early stages, we have not yet determined
the impact, if any, upon our financial statements.

     From time to time, we could be subject to legal  proceedings  and claims in
the ordinary  course of business,  including  claims of alleged  infringement of
trademarks, copyrights and other intellectual property rights.

     We are not currently aware of any other legal proceedings or claims that we
believe are likely to have a material adverse effect on our financial  position,
results of operations, or cash flows.

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

     No  matters  were  submitted  to a vote of  stockholders  during the fourth
quarter of the fiscal year covered by this report.


                                     PART II

ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     Since  March 22,  2000,  our  Common  Stock has been  traded on the  NASDAQ
National  Market System under the symbol "PRTS".  The following table sets forth
the high and low  closing  sales  prices  for our Common  Stock for the  periods
indicated.


                                       14

<PAGE>


       2000                                                High         Low
       ----                                                ----         ---
       First Quarter (Commencing March 22)               $14.88        $9.00
       Second Quarter                                    $10.88        $4.25
       Third Quarter                                     $ 8.75        $2.75
       Fourth Quarter                                    $ 3.88        $1.69

     We derived  $40,710,595  in net  proceeds  from the  closing of our initial
public  offering of  securities  ("IPO") in March 2000.  As part of the IPO, our
convertible  secured  subordinated  notes  aggregating  $962,500,   and  855,000
outstanding  shares of our Preferred Stock were converted to 481,250 and 855,000
shares, respectively, of our common stock.

     As of March 2001, there were  approximately  1,467 holders of record of our
Common Stock.

     We have never paid cash dividends on our common stock.  We intend to retain
future  earnings,  if any, to finance the  expansion  of our business and do not
anticipate that any cash dividends will be paid in the foreseeable  future.  The
future  dividend  policy  will  depend on our  earnings,  capital  requirements,
expansion plans, financial condition and other relevant factors.

ITEM 6.  SELECTED FINANCIAL DATA

     The following  selected  financial data should be read in conjunction  with
the  financial  statements  and  the  notes  to  the  financial  statements  and
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations",  which are  included  elsewhere  in this Form  10-K.  The  selected
financial  data of  PartsBase.com  as of and for each of the  five  years in the
period ended  December 31, 2000 have been derived from  PartsBase.com's  audited
financial statements.

<TABLE>
<CAPTION>
                                                    Period From
                                                   April 1, 1996
                                                  (Inception) to
Statements of Operations Data:                      December 31,                     Year Ended December 31,
                                                    ------------    ----------------------------------------------------------
                                                        1996            1997           1998           1999             2000
                                                    ------------    -----------     ---------     -----------     ------------
<S>                                                 <C>             <C>             <C>           <C>             <C>

Net revenues                                        $        --     $     2,861     $   3,504     $   362,224     $  4,097,585
                                                    -----------     -----------     ---------     -----------     ------------
Cost of revenues                                         16,842         104,041        43,462       1,412,532        6,140,741
Stock-based compensation expense                             --              --            --       1,799,139        2,308,440
                                                    -----------     -----------     ---------     -----------     ------------
  Total cost of revenues                                 16,842         104,041        43,462       3,211,671        8,449,181
                                                    -----------     -----------     ---------     -----------     ------------
    Gross loss                                          (16,842)       (101,180)      (39,958)     (2,849,447)      (4,351,596)

Operating expenses:
General and administrative expenses                      55,064          90,452       108,163       1,293,091        8,920,354
Stock-based compensation expense                             --              --            --         899,821        1,944,398
                                                    -----------     -----------     ---------     -----------     ------------
 Total operating expenses                                55,064          90,452       108,163       2,192,912       10,864,752
                                                    -----------     -----------     ---------     -----------     ------------
   Operating loss                                       (71,906)       (191,632)     (148,121)     (5,042,359)     (15,216,348)
Other income (expense), net                                  --              --            --        (870,675)       1,762,367
                                                    -----------     -----------     ---------     -----------     ------------
   Net loss                                             (71,906)       (191,632)     (148,121)     (5,913,034)     (13,453,981)
Value of preferred stock beneficial
   conversion feature                                        --              --            --      (1,902,375)              --
                                                    -----------     -----------     ---------     -----------     ------------
Net loss applicable to common stockholders          $   (71,906)    $  (191,632)    $(148,121)    $(7,815,409)    $(13,453,981)
                                                    ===========     ===========     =========     ===========     ============
Basic and diluted net loss per share                $        --     $        --     $      --     $      (.84)    $      (1.03)
                                                    ===========     ===========     =========     ===========     ============
Weighted average common shares outstanding                   --              --            --       9,251,250       13,053,755
                                                    ===========     ===========     =========     ===========     ============
</TABLE>


                                       15

<PAGE>


<TABLE>
<CAPTION>
Balance Sheet Data:
                                                                        As of December 31,
                                         ---------------------------------------------------------------------------------
                                            1996             1997             1998              1999               2000
<S>                                      <C>             <C>              <C>              <C>                <C>
Cash and cash equivalents                $     --        $      --        $      --        $   735,276        $ 23,045,491
Investments, at amortized cost
  (current portion)                            --               --               --                 --           7,139,052
Working capital (deficiency)               (2,043)          (1,709)         (19,044)          (687,172)         28,152,259
Total assets                                1,767            7,848            6,084          4,729,295          37,151,106
Accumulated deficit                       (71,906)        (263,538)        (411,659)        (7,762,678)        (21,216,659)
Total stockholders' equity
  (deficiency)                               (276)           6,139          (19,044)         1,541,916          32,347,901
</TABLE>


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

Overview

     We are an  online  provider  of  Internet  business-to-business  e-commerce
services for the aviation industry.  Our global  e-marketplace  provides a means
for  aviation  parts  buyers  and  sellers  to buy and  sell  new,  repaired  or
overhauled  aviation  parts,  list  products,  services and  catalogs,  and hold
auctions for slow moving and excess inventory.

     The  following  discussion  of  our  financial  condition  and  results  of
operations should be read together with the financial statements and the related
notes included  elsewhere in this report and which are deemed to be incorporated
into this section. The following discussion contains forward-looking  statements
that reflect our plans,  estimates  and beliefs.  Our actual  results may differ
materially  from those  anticipated  in these  forward-looking  statements  as a
result of a number of  factors,  including  but not  limited  to those set forth
under "Risk Factors" and included elsewhere in this report.

     We were  incorporated  in Texas on April  27,  1999 and  prior to such date
operated  as  a  division  (the  "Division")  of  Aviation  Laboratories,   Inc.
("Aviation Labs").

     Since we began  operations in April 1996, we have incurred  significant net
losses.  For the years ended  December 31, 1997,  1998,  1999 and 2000,  our net
losses  attributable  to  holders  of  common  stock  were  $191,632,  $148,121,
$7,815,409 and $ 13,453,981, respectively.

Results of Operations

Comparison of Years Ended December 31, 2000 and 1999

Net Revenues

     Net revenues consist of subscription  fees charged to subscribers and, to a
lesser extent, banner advertising and other revenues.  For fiscal years 2000 and
1999, our net revenues were $4,097,585 and $362,224,  respectively,  an increase
of  $3,735,361  or  1,031%.  During  fiscal  year  2000,  we signed up 3,175 new
subscribers  and renewed  1,285  subscriptions  from  existing  customers.  This
compares to 1,952 new  subscribers and 26 renewals sold in fiscal year 1999. The


                                       16

<PAGE>


average  subscription  fee in fiscal  year 2000 was $1,411  compared  to $899 in
fiscal year 1999.  The average new  subscriber fee increased in fiscal year 2000
due to additional value added services being provided to our  subscribers,  such
as  government  procurement  data.  At December  31,  2000,  we had 4,756 paying
subscribers,  compared to 1,952 paying  subscribers at December 31, 1999. A paid
subscriber is defined as a customer whose  subscription is currently active, and
therefore, does not include subscribers whose subscriptions have expired.

     For the fiscal years 2000 and 1999,  gross  revenues  were  $6,293,834  and
$1,631,855,  respectively,  an increase of $4,661,979,  or 286%. The increase in
gross  revenue in fiscal  year 2000 is  attributable  to a larger  sales  force,
subscription price increases, additional value-added services, and the impact of
renewals on subscriptions sold in 1999.

     We recognize  subscription,  banner advertising and other revenues over the
life of the respective subscription, which is typically 12 months. Gross revenue
represents total  subscription and advertising  sales made during the period, of
which a portion is deferred and  recognized  as earned.  Net revenues  represent
that portion of current and prior year's gross  revenues  that was earned during
the period. Sales costs,  including  commissions,  are expensed as incurred, and
are  included  in the  cost of  revenue.  Deferred  revenue,  net  increased  to
$3,219,422 at December 31, 2000, compared to $1,263,978 as of December 31, 1999.

     The  following  table sets forth gross  revenue by product line for each of
the four quarters in fiscal year 2000, as well as sequential  quarter-to-quarter
revenue growth  percentage for the second,  third, and fourth quarters of fiscal
year 2000.

<TABLE>
<CAPTION>
                      Gross Revenue by Product Line (000's)
                          Year Ended December 31, 2000

-------------------------------------------------------------------------------
                                   Three Months Ended                          Sequential Growth
                         ----------------------------------------      ----------------------------------
                         03/31      06/30       09/30       12/31      2nd Qtr       3rd Qtr      4th Qtr
                         -----      -----       -----       -----      -------       -------      -------
<S>                     <C>        <C>         <C>         <C>          <C>           <C>          <C>
Subscription            $1,182     $1,191      $1,607      $2,083           0.1%       34.9%        29.6%
Advertising                128         95          48          20         (25.8%)     (49.5%)      (58.3%)
Other                        1         17           5          --       1,600.0%      (70.6%)         --
                        ------     ------      ------      ------      --------        ----         ----
Total                   $1,311     $1,303      $1,660      $2,103           0.0%       27.4%        26.7%
                        ======     ======      ======      ======     =========        ====         ====
</TABLE>


Cost of Revenues

     Cost of  revenues  consists  of  compensation  for our sales and  marketing
personnel,  telephone expenses, web site development costs, contract payments to
a third party for procurement  data  functionality  and a proportion of rent and
office  expenses.  For fiscal year 2000,  our total cost of revenues,  including
stock-based compensation of $2,308,440,  were $8,449,181 compared to $3,211,671,
including  stock-based  compensation  of  $1,799,139,  for fiscal year 1999,  an
increase  of  $5,237,510,  or 163%.  As a percent of sales,  costs of  revenues,
excluding stock-based compensation, were 150% and 390% for fiscal years 2000 and
1999, respectively. The primary reason for the increase of $4,728,209 in cost of
revenues, excluding stock-based compensation for fiscal year 2000 is an increase
of $2,651,974 in  commissions to our  salespeople,  and  information  technology
costs totaling  $1,023,669  incurred in 2000,  which include  contract  payments
totaling   $700,000  to  a  third   party  for   government   procurement   data


                                       17

<PAGE>


functionality, that were not incurred in 1999. At December 31, 2000, we employed
127 persons in sales and marketing and 14 persons in customer support,  compared
with 51 in total at December 31, 1999.

Operating Expenses

     For  fiscal  years  2000  and  1999,  our  operating  expenses,   including
stock-based compensation expense, were $10,864,752 and $2,192,912, respectively,
an  increase  of  $8,671,840,   or  395%  from  the  prior  year.   General  and
administrative expenses consisted primarily of personnel costs of $5,577,268 and
$478,361,  advertising costs of $745,685 and $151,195,  and other costs totaling
$2,597,401  and $663,535,  consisting of  professional  fees,  rent,  utilities,
supplies and other related administrative costs, for the fiscal years ended 2000
and 1999,  respectively.  At  December  31,  2000,  we  employed  48  persons in
administrative,  information  technology  and  executive  management  positions,
compared with 16 persons in such positions at December 31, 1999.

Stock-Based Compensation

     In connection  with the issuance of employee  stock options issued prior to
our IPO,  stock-based  compensation  expense of $4,252,838  and  $2,698,960  was
recognized in fiscal years 2000 and 1999,  respectively,  and is classified as a
component of cost of revenue and operating  expense (See Note 7 to the financial
statements).  These charges will  continue,  but will decrease in magnitude each
quarter until fully recognized by April 2002.

Other Income (Expense), Net

     For fiscal years 2000 and 1999, other income (expense),  net was $1,762,367
and  ($870,675),  respectively,  an  increase  of  $2,633,042.  The  significant
increase in other income  (expense)  net, in fiscal year 2000 is attributable to
interest  income  earned  primarily  on the  proceeds  from our IPO  compared to
non-cash  interest expense related to the issuance of convertible  notes as part
of our private placement during the prior year.

Net Loss

     As a  result  of  the  foregoing,  the  net  loss  attributable  to  common
stockholders  increased to $13,453,981  for fiscal year 2000 from $7,815,409 for
fiscal year 1999.  Excluding  stock-based  compensation expense in 2000 and 1999
and the value of the preferred stock beneficial  conversion feature in 1999 (See
Note 7 to the  financial  statements),  the  net  loss  attributable  to  common
stockholders  for  fiscal  year  2000  decreased  to  $9,201,143,   compared  to
$3,214,074 for fiscal year 1999.


Comparison of Years Ended December 31, 1999 and 1998

     During  1998 we were still in the  process  of  developing  our  e-commerce
technology. Revenues for the year were $3,504 and total expenses were $151,625.


                                       18

<PAGE>


Financial Condition

     For fiscal years 2000 and 1999, the Company had $23,045,491 and $735,276 of
cash and cash equivalents, $7,139,052 and $0 of current investments at amortized
cost, and $501,851 and $0 of non-current investments, respectively. The increase
in cash and cash equivalents and investments in fiscal year 2000 is attributable
to our IPO that raised $40,710,595 in net proceeds.  In addition, as of December
31, 2000, the Company owned a one-year certificate of deposit,  maturing on June
1, 2001, in the amount of $500,000,  which is used to secure a standby letter of
credit the  Company  was  required  to obtain in  connection  with the  Sublease
Agreement.  Such  certificate  of deposit is included in "Prepaid  expenses  and
other current assets" in the December 31, 2000 balance sheet of the accompanying
financial statements.

     We believe  that our  existing  cash and cash  equivalents  and  marketable
securities  will be  sufficient to meet our  anticipated  cash needs for working
capital and capital expenditures for at least the next twelve months. Our future
long-term  capital needs will depend  significantly on the rate of growth of our
business,  the  timing of  extended  service  offerings,  the  success  of these
services  once  they are  launched  as well as the  extent to which we engage in
acquisitions or investments.  Any projections of future long-term cash needs and
cash  flows  are  subject  to  substantial  uncertainty.  We may  need to  raise
additional  funds in future  periods  through public or private  financings,  or
other arrangements. Any additional financings, if needed, might not be available
on reasonable  terms or at all.  Failure to raise capital when needed could harm
our business, financial condition and results of operations. In addition, such a
failure to raise  needed  capital  could  impair our future  plans to expand our
e-marketplace, attract new members, and provide new and upgrade current services
to our members.  If additional  funds are raised  through the issuance of equity
securities,  additional  dilution  to existing  shareholders  could  result.  In
addition,  any equity  securities  issued  might  have  rights,  preferences  or
privileges senior to our common stock.

Cash Flows

     Net cash flows used in operating activities were $7,844,219,  $596,498, and
$83,096 for fiscal years 2000, 1999, and 1998, respectively. The increase in net
cash used in operating  activities for fiscal year 2000 was primarily the result
of increased expenditures for sales and marketing,  information technology,  and
general and administrative expenses to coincide with the Company's expansion.

     Net cash flows used in investing  activities were $10,592,615,  $1,238,124,
and $688 for fiscal years 2000,  1999, and 1998,  respectively.  The increase in
net cash used in investing activities for fiscal year 2000 includes the purchase
of current and  non-current  investment  securities  totaling  $7,643,140 and an
increase in  expenditures  resulting  from  purchases  of personal  property and
equipment  for  the new  facility,  including  computer  hardware  and  software
commensurate with the ramp-up of the sales staff.

     Net  cash  flows  provided  by  financing   activities  were   $40,747,049,
$2,569,898, and $83,784 for fiscal years 2000, 1999, and 1998, respectively. The
increase  in net cash  used in  financing  activities  for  fiscal  year 2000 is
primarily  the result of net  proceeds of  $40,881,000  received by PartsBase in
connection  with the  issuance of common  stock  related to the  Company's  IPO,
offset by the  purchase  for  treasury  of 136,685  shares of our common  stock,
totaling $330,202.


                                       19

<PAGE>


New Accounting Guidance

     In June 1999, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the Effective Date of FASB Statement No. 133".  SFAS 137 amends SFAS
No. 133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities" by
deferring the effective  date of SFAS 133 to fiscal years  beginning  after June
15, 2000. SFAS 133 establishes accounting and reporting standards requiring that
every derivative instrument  (including certain derivative  instruments embedded
in other  contracts)  be  recorded  in the  balance  sheet as either an asset or
liability  measured at its fair value.  SFAS 133  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge accounting criteria are met. SFAS 133 was amended in June 2000 by SFAS No.
138 for certain  derivative  instruments and hedging  activities as indicated by
SFAS 138.  The  Company  will adopt SFAS 133 in fiscal  year 2001.  The  Company
currently  does not engage in,  nor does it expect to engage in,  derivative  or
hedging  activities,  and therefore,  the Company  anticipates  there will be no
impact to its financial statements.

     In September 1999, the Emerging Issues Task Force ("EITF") issued EITF D-83
"Accounting for Payroll Taxes with Stock Option  Exercises."  When  nonqualified
stock options are exercised,  the difference between the exercise price paid and
the fair value of the acquired stock on the exercise date ("intrinsic value") is
considered  ordinary income for purposes of determining  the employee's  federal
income taxes.  The employer is entitled to a federal income tax deduction in the
period the option is  exercised of an amount  equal to the  employee's  ordinary
income.  Also,  the intrinsic  value of the exercised  options is considered the
equivalent of  compensation  paid directly to the employee and,  therefore,  the
employer  must pay  Medicare  taxes,  and perhaps  FICA taxes,  depending on the
employee's  aggregate  compensation  level. The FASB staff believes that payroll
taxes,  even though directly related to the  appreciation on stock options,  are
operating  expenses  and  should  be  reflected  as  such  in the  statement  of
operations. The Company adopted EITF D-83 for employer payroll taxes incurred on
stock options  exercised during fiscal year 2000 (no stock options were eligible
for exercise  during  fiscal 1999) and all such payroll  taxes were  recorded as
operating expenses in the accompanying statements of operations.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"),  which among other guidance,  clarifies  certain  conditions to be met in
order  to  recognize   revenue.   In  October  2000,   the  staff  deferred  the
implementation  date of SAB 101 until no later than the fourth quarter of fiscal
years  beginning  after  December 15, 1999. The Company has conformed its income
recognition policies to SAB 101 during fiscal year 2000, and such conformity had
no impact to its financial statements as of December 31, 2000.

     In July 2000,  the EITF issued  "Classification  in the  Statement  of Cash
Flows of the Income Tax Benefit Realized by a Company upon Employee  Exercise of
a Non-qualified Stock Option" ("EITF 00-15"). This Issue addresses the cash flow
statement  presentation of the windfall tax benefit associated with nonqualified
stock  options.  Companies  receive an income tax deduction  for the  difference
between the exercise price and the market price of a  nonqualified  stock option
upon exercise by the employee.  EITF 00-15 concludes that the income tax benefit
realized by the Company  upon  employee  exercise  should be  classified  in the
operating  section of the cash flow  statement.  The EITF is  effective  for all
quarters  ending after July 20, 2000. The Company  adopted EITF 00-15 as of July
1, 2000 for non-qualified stock options exercised by employees and such adoption


                                       20

<PAGE>


had no impact to its  financial  statements  as of  December  31, 2000 since the
Company has no taxable income.

ITEM 7A. QUANTITATIVE  AND  QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We are exposed to the impact of interest rate changes.

Interest Rate Risk

     The primary  objective of investment  activities  is to preserve  principal
while at the same time maximizing yields without significantly  increasing risk.
At December 31, 2000, our portfolio  consisted of  investments in  institutional
money market funds,  government  paper,  and "A" rated or higher corporate bonds
(See Note 3 to the financial  statements).  Our investment  policy is focused on
ensuring  that we have liquid cash  balances  available  to meet our  day-to-day
operating cash needs.  The policy  establishes  guidelines for the investment of
surplus  cash  balances  that will  maximize  return  with  minimum  credit  and
liquidity risk. All investments are held in U.S. dollars.  Specific  instruments
approved for inclusion in the portfolio  are limited to:  obligations  issued by
the U.S.  Treasury and U.S.  Federal  Agencies,  obligations of U.S.  commercial
banks such as bankers'  acceptances and certificates of deposits and obligations
of major corporations and bank holding companies such as direct issue commercial
paper and medium term notes.

     We intend to hold our investments until maturity;  however,  we are exposed
to the impact of interest  rate  changes and change in the market  values of our
investments.  Investments in both fixed rate and floating rate interest  earning
instruments carry a degree of interest rate risk. Fixed rate securities may have
their fair market  value  adversely  impacted  due to a rise in interest  rates,
while floating rate securities may produce less income than expected if interest
rates fall. Due in part to these factors,  our future investment income may fall
short of  expectations  due to changes in interest rates or we may suffer losses
in principal if forced to sell securities that have declined in market value due
to changes in interest rates.

Foreign Exchange Risk

     We have minimal  exposure to foreign  exchange  risk as all of our sales to
customers outside of the United States are collected in U.S. dollars.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     For information required by Item 8, refer to "PartsBase.com, Inc. Financial
Information" filed as part of this Report in Annex I.

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

     None.


                                       21

<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     At December 31, 2000 our executive officers were as follows:


        NAME                      AGE               POSITION
        ----                      ---               --------
Robert A. Hammond, Jr.            46        President, Chief Executive Officer
Anthony L. Plyler (1)             40        Chief Operating Officer
Michael W. Siegel                 38        Chief Financial Officer
Brian Tolley                      25        Chief Information Officer

(1) Resigned as of January 10, 2001.

     Robert A.  Hammond,  Jr. Mr.  Hammond  has served as our  President,  Chief
Executive  Officer and Chairman since our  incorporation in April 1999. In April
1996,   Mr.  Hammond   founded  our   predecessor  as  a  division  of  Aviation
Laboratories,  Inc.,  a  company  for which he also  served  as Chief  Executive
Officer from its inception in August 1985. From August 1985 until June 1999, Mr.
Hammond  was the Chief  Executive  Officer  and  Chairman  of Great  Pines Water
Company,  a  publicly  traded  bottled  water  company  that was sold to Suntory
Bottled Water Group in June 1999.

     Anthony L. Plyler.  Mr. Plyler joined us as Chief Operating  Officer in May
2000.  Prior to joining us, Mr.  Plyler  served as Director  of  E-business  for
Honeywell  Aerospace  Services  from  July  1999 to May  2000.  Mr.  Plyler  was
instrumental in the formation, strategy, and implementation of MyAircraft.com, a
joint partnership  between United  Technologies,  Honeywell and i2 Technologies.
Mr. Plyler was instrumental in the development of AlliedSignal's (now Honeywell)
e-business  strategy.  Before his involvement in development of this strategy he
was  Director  of  Repair &  Overhaul  for  AlliedSignal  Aerospace's  component
facility in  Phoenix,  Arizona  from July 1998 to July 1999.  From March 1995 to
July 1998,  Mr.  Plyler was in a succession  of  managerial  roles at BFGoodrich
Aerospace,   concluding  as  Vice  President  of  Operations  for  its  Everett,
Washington,  airframe maintenance facility. From October 1994 to March 1995, Mr.
Plyler  worked  as a  business  process-reengineering  consultant  for  American
Management  Systems.  From August 1987 to October  1994,  Mr.  Plyler worked for
Delta Air Lines in a variety of  management  roles and began his career there as
an aerospace  mechanic.  Mr. Plyler resigned from the Company in January 2001 to
accept a position with Exostar.

     Michael W.  Siegel.  Mr.  Siegel  joined us as Chief  Financial  Officer in
January  2000.  From August 1997 through  December  1999,  Mr.  Siegel served as
Director  of  Finance/Controller  of  Curtiss-Wright  Flight  Systems,  Inc.,  a
subsidiary of  Curtiss-Wright,  Inc., a NYSE listed  designer,  manufacturer and
overhauler  of  precision  components  and  systems  and a  provider  of  highly
engineered services to the aerospace and other industries. From May 1997 through
October 1999,  Mr.  Siegel served as a founder and vice  president of Mail Call,
Inc., a developmental stage e-commerce  company.  From April 1995 through August
1997, Mr. Siegel served as the Chief Financial  Officer of The Protective Group,


                                       22

<PAGE>


a manufacturer of protective  products such as bulletproof  vests,  armoring for
automobiles and helicopters, and firefighter gear. From March 1994 through April
1995,  Mr. Siegel served as the Chief  Financial  Officer of Universal  Heights,
Inc., a publicly  traded  manufacturer  and  distributor of licensed  sports and
entertainment novelty products.  Mr. Siegel is a Certified Public Accountant and
received a Bachelor of Science in economics from the Wharton School,  University
of Pennsylvania,  and a Master of Business Administration from the University of
Miami.

     Brian  Tolley.  Mr.  Tolley  joined  us as  Chief  Information  Officer  in
September 2000.  Prior to joining us, Mr. Tolley served as the Vice President of
Advanced Technology for Precision Response  Corporation,  Prcnet.com,  a company
engaged in providing telephone and internet based customer service and marketing
services on an outsourced basis to large corporations.  Prior to his tenure with
Prcnet.com,  Mr.  Tolley  served as the  Director  of Software  Development  for
Mortgage Banking System, Inc.

Board Committees

     We have  established an audit committee and a compensation  committee.  The
audit  committee,  the current members of which are Pierre Narath and Thomas Van
Hare,  recommends to the board of directors  the  independent  certified  public
accountants to be selected to audit our annual financial statements and approves
any special  assignments  given to those  accountants.  The audit committee also
reviews the planned scope of the annual audit and the  independent  accountants'
letter  of  comments  and  management's  response  thereto  regarding  any major
accounting  changes made or contemplated and the effectiveness and efficiency of
our internal accounting staff. The compensation  committee,  the current members
of which are Robert A. Hammond,  Jr.,  Pierre Narath and Thomas Van Hare,  makes
recommendations to the board of directors regarding the compensation  payable to
our executive  officers,  reviews general policies  relating to the compensation
and benefits of our employees and administers the PartsBase.com, Inc. 1999 stock
option plan.

Compensation Committee Interlocks and Insider Participation

     The  compensation   committee  is  responsible  for  determining  salaries,
incentives and other forms of compensation for our directors and other employees
and administering other various  compensation and benefit plans. We did not have
a compensation  committee meeting in 2000 or in 1999. Our board of directors was
responsible  for these  matters  during those years.  As of March 21, 2001,  our
board of directors consists of Messrs.  Robert A. Hammond,  Jr., Thomas Van Hare
and Pierre Narath.  Mr. Hammond  participates  in all  discussions and decisions
regarding salaries and incentive  compensation for all employees and consultants
of PartsBase.com,  Inc.,  except that he is excluded from discussions  regarding
his own salary and incentive  compensation.  Other than Mr. Hammond,  no current
board member has at any time been an officer or employee of PartsBase.com,  Inc.
No interlocking relationships exist between any member of our board of directors
and any  other  company's  board of  directors  or  compensation  committee.  No
interlocking  relationship  existed between any member of our board of directors
and any  member  of any  other  company's  board of  directors  or  compensation
committee in 1999.


                                       23

<PAGE>


     See "Certain  Relationships and Related  Transactions" for a description of
certain transactions between us and members of our board of directors.

Director Compensation

     Since inception until March 15, 2001, no board member has received any cash
compensation.  At the March 16, 2001 board of directors  meeting,  we granted to
Mr.  Narath  the  option to  acquire  20,000  shares of our  common  stock at an
exercise price of $3.00 per share at any time through March 2011.

Section 16(a) Beneficial Ownership Reporting Compliance

     Section  16(a)  of the  Securities  Exchange  Act  of  1934,  requires  the
Company's directors,  certain officers and beneficial owners of more than 10% of
our  common  stock  (collectively,  "Reporting  Persons")  to  file  reports  of
securities  ownership  and  changes in such  ownership  with the SEC.  Reporting
Persons  are  required  by the SEC to furnish  the  Company  with  copies of all
Section 16(a) forms they file.

     Based solely on its review of the copies of such forms  received or written
representations  from the  Reporting  Persons,  the Company  believes  that with
respect to the year ended December 31, 2000, all Reporting Persons complied with
all  applicable  reporting  requirements  under Section 16(a) of the  Securities
Exchange Act of 1934.


                                       24


<PAGE>


ITEM 11.   EXECUTIVE COMPENSATION

          The following table sets forth certain information regarding
compensation from PartsBase which was paid to PartsBase's Chief Executive
Officer and the four other most highly compensated executive officers during the
years ended December 31, 2000, 1999, and 1998.

<TABLE>
<CAPTION>
                                                  Summary Compensation Table
                                           -----------------------------------------
                                                                                                   Long Term
                                                      Annual Compensation                     Compensation Awards
                                           -----------------------------------------     -----------------------------
                                                                                         Securities
          Name and                                                   Other Annual        Underlying        All Other
     Principal Position         Year       Salary        Bonus      Compensation (1)     Options/SARs     Compensation
     ------------------         ----       -------       -----      ----------------     ------------     ------------
<S>                             <C>       <C>           <C>              <C>                    <C>       <C>
Robert Hammond, President,      2000      $ 227,778      $     --          $ 18,829                --        $     --
Chief Executive Officer, and    1999      $  81,250      $     --          $     52                --        $     --
Chairman of the Board (2)       1998      $      --      $     --                --                --        $     --

Anthony Plyler, Chief           2000      $ 144,000      $     --          $ 34,141           125,000        $     --
Operating Officer (3)           1999      $      --      $     --          $     --                --        $     --
                                1998      $      --      $     --          $     --                --        $     --

Michael Siegel, Chief           2000      $ 160,189      $ 30,000          $  8,666            75,000        $     --
Financial Officer (4)           1999      $      --      $     --          $     --                --        $     --
                                1998      $      --      $     --          $     --                --        $     --

Brian Tolley, Chief             2000      $  53,750      $     --          $     26                --        $     --
Information Officer (5)         1999      $      --      $     --          $     --            35,000        $     --
                                1998      $      --      $     --          $     --                --        $     --

Kevin Steil, Chief              2000      $ 115,000      $     --          $     85            10,000        $     --
Technology Officer (6)          1999      $  34,910      $     --          $     13            10,000        $     --
                                1998      $      --      $     --          $     --                --        $     --

Yves Duplan, Chief              2000      $ 159,244      $     --          $     26                --        $     --
Information Officer (7)         1999      $  24,830      $     --          $     --            35,000        $     --
                                1998      $      --      $     --          $     --                --        $     --

</TABLE>

----------

(1)  Unless otherwise  noted,  other annual  compensation  represents the annual
     premium for term life  insurance  for the above  executives  with  coverage
     ranging from $25,0000 to $100,000.

(2)  Other annual  compensation  includes lease payments on two vehicles paid by
     the Company.  The Company is the owner and  beneficiary of a $2,000,000 key
     man life insurance policy on Mr. Hammond.  The premium for fiscal year 2000
     was $3,935.

(3)  Other annual compensation includes $28,063 in moving expenses reimbursed or
     paid  directly  by the  Company  and a $6,000  car  allowance.  Mr.  Plyler
     resigned from the Company on January 10, 2001.

(4)  Mr.  Siegel  joined the Company on January 20, 2000 and  received a $30,000
     signing bonus paid upon acceptance of employment. Other annual compensation
     includes a car allowance of $8,523.


(5)  Mr. Tolley joined the Company on August 16, 2000.

(6)  Mr. Steil resigned from the Company on January 2, 2001.

(7)  Mr. Duplan resigned from the Company on September 30, 2000.


                                       25

<PAGE>


Stock Options

     The following  table sets forth  information  concerning the grant of stock
options to each of the named officers in fiscal year 2000.

<TABLE>
<CAPTION>
                      Option/SAR Grants in Last Fiscal Year

                                                    Individual Grants                                Potential Realizable
                      ---------------------------------------------------------------------        Value at Assumed Annual
                         Number of      Percentage of Total                                          Rates of Stock Price
                        Securities         Options/SARs                                                Appreciation for
                        Underlying          Granted to         Exercise or                               Option Term
                       Options/SARs        Employees In        Base Price        Expiration          --------------------
                       Granted (1)       Fiscal Year 2000        ($/Sh)             Date             5%($)         10%($)
                      ---------------    ----------------      -----------        -------            -----         ------
Name
<S>                     <C>                   <C>             <C>                  <C>             <C>           <C>
Robert Hammond             --                   N/A                N/A               N/A              N/A           N/A
Anthony Plyler(2)       100,000               10.44           $   5.81             05/01/10        $ 335,408     $ 834,042
Anthony Plyler(2)        25,000                2.61           $   6.69             07/06/10           98,811       246,976
Michael Siegel(3)        75,000                7.83           $   0.63             01/19/10          186,103       308,387
Brian Tolley(4)          35,000                3.65           $   6.38             07/27/10          132,973       332,909
Kevin Steil(5)           10,000                1.04           $   5.00             04/26/10           28,800        71,587
Yves Duplan(6)             --                   N/A                N/A               N/A              N/A           N/A
</TABLE>

(1)   All options granted under our 1999 Stock Option Plan.
(2)   Mr.  Plyler  resigned  from the Company on January 10, 2001 and his vested
      options will be forfeited on April 10, 2001 as a result of his departure.
(3)   Mr. Siegel's options vest in 24 equal monthly installments  commencing in
      February 2000.
(4)   Mr. Tolley's options vest in 48 equal monthly  installments  commencing in
      August 2000.
(5)   Mr.  Steil  resigned  from the  Company  on January 2, 2001 and his vested
      options will be forfeited on April 5, 2001 as a result of his departure.
(6)   Mr.  Duplan  resigned from the Company on September 30, 2000 and exercised
      15,415 options on October 12, 2000.
N/A   Not applicable.

The following table sets forth certain summary information  concerning exercised
and  unexercised  options to purchase  shares of our common stock as of December
31, 2000 held by the named executive officers.


                                       26


<PAGE>

                         Aggregated Option Exercises in
                   Last Fiscal Year And Year-end Option Values
                   -------------------------------------------
<TABLE>
<CAPTION>
                                                   Number of Securities Underlying         Value of Unexercised
                      Shares                        Unexercised Options at Fiscal         In-the-Money Options at
                   Acquired on        Value                  Year-End                        Fiscal Year-End
Name               Exercise (#)      Realized         Exercisable/Unexercisable        Exercisable/Unexercisable(1)
----               ------------      --------         -------------------------        ----------------------------
<S>                  <C>              <C>                  <C>                                <C>
Robert Hammond          0               N/A                    0/0                                 $0/$0

Anthony Plyler          0               N/A                14,271/110,729                          $0/$0

Michael Siegel          0               N/A                34,370/40,630                      $47,086/$55,663

Brian Tolley            0               N/A                 3,645/31,355                           $0/$0

Kevin Steil             0               N/A                 13,335/3,335                           $0/$0

Yves Duplan          15,415           $40,387                   0/0                                $0/$0
</TABLE>

----------
(1)   The  difference  between  the  average  of the high and low bid prices per
      share of the common  stock as  reported by the  NASDAQ-National  Market on
      December 29, 2000, and the exercise or base price.

Employment Agreements and Arrangements

     In  November  1999,  December  1999 and  September  2000,  we entered  into
employment  agreements  with  Messrs.  Hammond,  Jr.,  Siegel  and  Tolley.  The
employment  contracts  have initial  terms of two years but shall be renewed for
successive  two-year  periods unless earlier  terminated.  The agreements may be
terminated  by us or the  employee,  with or without  cause,  upon 30 days prior
written notice.  The base salaries of each executive officer may be increased at
the  discretion of the board of directors or the  compensation  committee of the
board of  directors.  In addition to base  salaries,  each of the  executives is
entitled to three weeks vacation, reimbursement of business expenses and may, at
our expense,  participate along with his spouse and dependents in any medical or
other insurance plan maintained by us for salaried employees. The Company leases
two automobiles for Mr. Hammond,  Jr.. Messrs. Siegel and Tolley receive monthly
car allowances of $750 and $500 respectively.  Each of the employment agreements
contain  non-compete  covenants  that  prohibit  the employee  from  directly or
indirectly   participating   in  business  in  competition   with  us  following
termination of his  employment for a period of two years.  Pursuant to the terms
of his  employment  agreement,  Mr.  Siegel is  entitled  to receive a severance
payment  equal  to six  month's  salary  in the  event of a  termination  of his
employment  for any reason  other  than  cause,  as  defined  in his  employment
agreement.

Employee Benefit Plans

     In November 1999, we adopted the PartsBase.com, Inc. 1999 stock option plan
for the purpose of promoting our long-term growth and profitability by providing
key people with  incentives to improve  stockholder  value and contribute to our
growth and financial success.

     The stock  option plan  provides  for the award to  eligible  participants,
including  employees,  officers,  directors  and  consultants,  of stock options
including non-qualified options and incentive stock options under Section 422 of
the Internal Revenue Service Code. Under the stock option plan, 2,000,000 shares


                                       27

<PAGE>


of common stock are reserved for issuance.  The stock option plan will terminate
on  September  30, 2008 unless  extended by our board of  directors  and, to the
extent required under  applicable law, our  stockholders.  The stock option plan
may be  amended  or  terminated  by our  board  at any  time  provided  that our
shareholders must approve any significant amendments.

     The stock option plan is administered by our by the compensation  committee
of our board of directors ("the Committee").  The Committee selects participants
and  establishes the terms and conditions of each option or other rights granted
under the stock option plan,  including the exercise price, the number of shares
subject to  options,  or other  equity  rights and the time at which the options
become  exercisable.  The exercise price of all "incentive stock options" within
the meaning of Section 422 of the Internal  Revenue Service Code,  granted under
the  stock  option  plan must be equal to 100% to the fair  market  value of the
option shares on the date of the grant.  The term of any incentive  stock option
granted under the stock option plan may not exceed ten years; however, where the
eligible  stock  option  plan  participant  owns over 10% of the total  combined
voting power of all classes of our stock,  the  exercise  price must be at least
equal to 110% of the fair market  value of the option  shares on the date of the
grant and the term can not exceed five years.

     To the extent required to comply with Rule 16b-3 under the Exchange Act, if
applicable,  and in any event in the case of an incentive stock option, no award
granted under the stock option plan is transferable by a grantee  otherwise than
by will or by laws of descent and  distribution.  Other terms and  conditions of
each  award  are set  forth in the  grant  agreement  governing  the  award  and
determined by the Committee as administrators of the stock option plan.

     As of the date of this annual report,  non-qualified  options to purchase a
total of  1,082,865  shares of common  stock  were  outstanding  under our stock
option plan at exercise prices ranging from $0.63 to $13.00.

Limitations on Liability of Directors and Indemnification of Directors
and Officers

     As permitted by the Texas Business Corporation Act, we have included in our
articles of  incorporation,  as amended,  a provision to eliminate  the personal
liability of our directors for monetary  damages for breach or alleged breach of
their fiduciary duties as directors, subject to exceptions. In addition, both of
our articles of  incorporation,  as amended,  and our bylaws provide that we are
required to indemnify  our officers  and  directors,  and we are required to pay
for,  and may advance,  expenses  for our officers and  directors as incurred in
connection with proceedings  against them for which they may be indemnified.  We
have entered into  indemnification  agreements  with our officers and  directors
containing   provisions  that  are  in  some  respects   broader  than  specific
indemnification  provisions contained in the Texas Business Corporation Act. The
indemnification  agreements  require us, among other  things,  to indemnify  our
officers and  directors  against  liabilities  that may arise by reason of their
status or service as officers and directors, other than liabilities arising from
willful misconduct of a culpable nature, to pay for their expenses incurred as a
result of any proceeding against them as to which they could be indemnified, and
to obtain  directors' and officers'  insurance if available on reasonable terms.
We have also obtained directors' and officers' liability insurance.


                                       28

<PAGE>


     At present,  we are not aware of any pending or  threatened  litigation  or
proceeding  involving  a director,  officer,  employee or agent of ours in which
indemnification  would  be  required  or  permitted.  We are  not  aware  of any
threatened   litigation  or  proceedings  that  might  result  in  a  claim  for
indemnification.  We believe  that our charter  provisions  and  indemnification
agreements  are necessary to attract and retain  qualified  persons as directors
and officers.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth  information  regarding shares of our common
stock beneficially owned as of March 22, 2001:

     -  Each person or group known to us that  beneficially  owns more than five
        percent of our outstanding common stock;

     -  Our directors  and the named  executive  officers  listed in the Summary
        Compensation Table; and - all of our executive officers and directors as
        a group.

     Beneficial  ownership is calculated in accordance  with Rule 13d-3(d) under
the Securities  Exchange Act of 1934.  Shares of common stock subject to options
and warrants that are currently exercisable or are exercisable within 60 days of
March 22, 2001 are deemed  outstanding  with respect to the person holding those
options but are not deemed  outstanding for purposes of computing the percentage
ownership  of any other  person.  We believe  each person named in the table has
sole  voting and  investment  power with  respect  to the shares  identified  as
beneficially owned by them.

Name And Address (1)                                 Number      Percent
--------------------                                 ------      -------
Robert A. Hammond, Jr                              9,000,000(2)    63.17
Thomas Van Hare (4)                                    6,667(3)      *
Pierre A. Narath (5)                                  66,667(6)      *
Michael W. Siegel                                     49,992(7)      *
Brian Tolley                                           7,291(3)      *
All directors and executive officers
as a group (5 persons)                             9,130,617       63.86

------
* Represents less than 1% of the outstanding common stock.

(1)  Except as otherwise  indicated,  the business address of each person listed
     is c/o  PartsBase.com,  Inc., 621 N.W.53rd  Street,  Suite 700, Boca Raton,
     Florida 33487.
(2)  Includes  4,500,000 shares owned by Mr. Hammond  individually and 4,500,000
     shares  owned by R.  Hammond,  L.P.,  a  limited  partnership  of which Mr.
     Hammond is the sole general  partner and of which a trust  established  for
     the benefit of Mr. Hammond's children is a 99% limited partner.
(3)  Consists of shares subject to stock options that are currently  exercisable
     or will become exercisable within 60 days following March 22, 2001.


                                       29

<PAGE>


(4)  Mr. Van Hare's  address is c/o Digital  Minute,  700 E. Palmetto Park Road,
     Suite 201, Boca Raton, Florida 33432.
(5)  Mr. Narath's address is 1538 Turnpike Street, North Andover,  Massachusetts
     01845.
(6)  Consists  of  40,000   shares  of  our  common  stock  owned  by  Metrotech
     Investments,  a company  controlled by Mr. Narath, and 26,667 stock options
     that are currently  exercisable or will become  exercisable  within 60 days
     following March 22, 2001.
(7)  Consists of 40,618  shares of common  stock  owned and 9,374 stock  options
     that are currently  exercisable or will become  exercisable  within 60 days
     following March 22, 2001.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In connection with our  incorporation in April 1999,  Robert Hammond,  Jr.,
our President and Chief Executive Officer,  contributed assets to us in exchange
for shares in our common stock. See Item 1- Business, for a brief description of
this transaction.

     A company  owned and operated by Mr. Thomas Van Hare, a member of our board
of directors, provided services in connection with the design of our advertising
brochures and other marketing materials.  We paid Mr. Van Hare's company $53,263
and $34,200 during the years ended December 31, 2000 and 1999, respectively, for
such services

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)  Documents filed as part of this Report:

     1.  Financial Statements

         Index to Financial Statements in Annex I

     2.  Financial Statement Schedules:

        All  schedules  have been  omitted  because they are  inapplicable,  not
     required,  or the  information  is  included  elsewhere  in  the  Financial
     Statements or Notes thereto.

     Exhibits:

     See Exhibit Index.  The Exhibits listed in the  accompanying  Exhibit Index
are filed or incorporated by reference as part of this report.

(b)  Reports on Form 8-K:

     On December 6, 2000,  we filed a Current  Report on Form 8-K dated  October
26,  2000  reporting  the  resignation  of Louis W. Storms IV as a member of our
company's Board of Directors.


                                       30

<PAGE>


                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                        By: /S/   Robert A. Hammond, Jr.
                                            -----------------------------------
                                            Robert A. Hammond, Jr.
                                            President, Chief Executive Officer,
                                            and Chairman
Date: March 30, 2001


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.


Date:  March 30, 2001                    /S/   Robert A. Hammond, Jr.
                                        ---------------------------------------
                                        Robert A. Hammond, Jr.
                                        President, Chief Executive Officer,
                                        and Chairman
                                        (Principal Executive Officer)


Date:  March 30, 2001                   /S/   Michael W. Siegel
                                        ---------------------------------------
                                        Michael W. Siegel
                                        Chief Financial Officer
                                        (Principal Financial Accounting Officer)


Date:  March 30, 2001                    /S/   Pierre Narath
                                         --------------------------------------
                                         Pierre Narath
                                         Director


Date:  March 30, 2001                    /S/   Thomas Van Hare
                                        ----------------------------------------
                                        Thomas Van Hare
                                        Director


                                       31

<PAGE>


                                     ANNEX I

                               PARTSBASE.COM, INC.
                          INDEX TO FINANCIAL STATEMENTS


                                                                           Page

Independent Auditors' Report ...........................................    F-2

Balance Sheets as of December 31, 2000 and 1999.........................    F-3

Statements of Operations for the Years Ended
December 31, 2000, 1999 and 1998........................................    F-4

Statements of Stockholders' Equity for the
Years Ended December 31, 2000, 1999 and 1998............................    F-5

Statements of Cash Flows for the Years Ended December 31, 2000, 1999
and 1998 ...............................................................    F-6

Notes to Financial Statements...........................................    F-7


                                       F-1


<PAGE>


INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
   PartsBase.com, Inc.
Boca Raton, Florida

We have audited the accompanying balance sheets of PartsBase.com (the "Company")
as of December  31, 2000 and 1999,  and the related  statements  of  operations,
stockholders'  equity,  and cash flows for each of the three years in the period
ended December 31, 2000. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with 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  audits  provide  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
1999, and the results of its operations and its cash flows for each of the three
years in the period ended  December  31, 2000,  in  conformity  with  accounting
principles generally accepted in the United States of America.



Deloitte and Touche  LLP
Certified Public Accountants

Fort Lauderdale, Florida
March 16, 2001


                                       F-2


<PAGE>


                               PARTSBASE.COM, INC.
                                 Balance Sheets


<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                                                       -------------------------------
                              ASSETS                                                        2000               1999
                                                                                       -------------------------------
<S>                                                                                    <C>                <C>
Current assets:
Cash and cash equivalents                                                              $ 23,045,491       $    735,276
Accounts receivable, net                                                                  1,510,645            297,884
Investments, at amortized cost                                                            7,139,052                 --
Prepaid expenses and other current assets                                                 1,171,221            504,547
                                                                                       ------------       ------------
  Total current assets                                                                   32,866,409          1,537,707
Property and equipment, net                                                               3,655,310          1,009,477
Deferred financing costs, net                                                                    --          1,937,677
Other assets                                                                                629,387            244,434
                                                                                       ------------       ------------
  Total assets                                                                         $ 37,151,106       $  4,729,295
                                                                                       ============       ============
               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                       $  1,075,032       $    727,631
Accrued expenses and other current liabilities                                              419,696            233,270
Deferred revenue, net                                                                     3,219,422          1,263,978
                                                                                       ------------       ------------
  Total current liabilities                                                               4,714,150          2,224,879
Other liabilities                                                                            89,055                 --
Convertible notes payable                                                                        --            962,500
                                                                                       ------------       ------------

  Total liabilities                                                                       4,803,205          3,187,379
                                                                                       ------------       ------------

Commitments and contingencies (Note 6)                                                           --                 --

Stockholders' equity:
Preferred stock, no par value; 2,000,000 shares authorized, issued
  and outstanding 0 shares in 2000 and 855,000 shares in 1999                                    --          1,902,375
Common stock, no par value; 30,000,000 shares authorized, issued
  and outstanding 14,255,480 in 2000 and 9,251,250 in 1999                                       --                 --
Additional paid-in capital                                                               55,478,819         15,178,497
Treasury stock (136,685 shares in 2000 and 0 shares in 1999)-
  at cost                                                                                  (330,202)                --
Accumulated deficit                                                                     (21,216,659)        (7,762,678)
Unearned compensation                                                                    (1,584,057)        (7,776,278)
                                                                                       ------------       ------------
  Total stockholders' equity                                                             32,347,901          1,541,916
                                                                                       ------------       ------------
    Total liabilities and stockholders' equity                                         $ 37,151,106       $  4,729,295
                                                                                       ============       ============
</TABLE>


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


                                      F-3

<PAGE>


                               PARTSBASE.COM, INC.
                            Statements of Operations

<TABLE>
<CAPTION>
                                                                                   Year Ended December 31,
                                                                  ----------------------------------------------------
                                                                      2000                  1999                1998
                                                                  ----------------------------------------------------
<S>                                                               <C>                   <C>                  <C>
Net revenues                                                      $  4,097,585          $   362,224          $   3,504
                                                                  ------------          -----------          ---------
Cost of revenues                                                     6,140,741            1,412,532             43,462
Stock-based compensation expense                                     2,308,440            1,799,139                 --
                                                                  ------------          -----------          ---------
       Total cost of revenues                                        8,449,181            3,211,671             43,462
                                                                  ------------          -----------          ---------
Gross loss                                                          (4,351,596)          (2,849,447)           (39,958)
                                                                  ------------          -----------          ---------
Operating expenses:
General and administrative expenses                                  8,920,354            1,293,091            108,163
Stock-based compensation expense                                     1,944,398              899,821                 --
                                                                  ------------          -----------          ---------
       Total operating expenses                                     10,864,752            2,192,912            108,163
                                                                  ------------          -----------          ---------
Operating loss                                                     (15,216,348)          (5,042,359)          (148,121)
Other income (expense), net                                          1,762,367             (870,675)                --
                                                                  ------------          -----------          ---------
Net loss before value of preferred stock beneficial
  conversion feature                                               (13,453,981)          (5,913,034)          (148,121)
                                                                  ------------          -----------          ---------
Value of preferred stock beneficial conversion feature                      --           (1,902,375)                --
                                                                  ------------          -----------          ---------
Net loss attributable to common shareholders                      $(13,453,981)         $(7,815,409)         $(148,121)
                                                                  ============          ===========          =========
Basic and diluted net loss per common share                       $      (1.03)         $     (0.84)         $      --
                                                                  ============          ===========          =========
Weighted average common shares outstanding                          13,053,755            9,251,250                 --
                                                                  ============          ===========          =========
</TABLE>

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


                                      F-4


<PAGE>


                               PARTSBASE.COM, INC.
                       Statements of Stockholders' Equity
              For the Years Ended December 31, 2000, 1999, and 1998

<TABLE>
<CAPTION>
                                                      PREFERRED STOCK             COMMON STOCK              TREASURY STOCK
                                                    -------------------       --------------------        -------------------
                                                    SHARES       AMOUNT       SHARES        AMOUNT        SHARES       AMOUNT
                                                    ------       ------       ------        ------        ------       ------
<S>                                                <C>         <C>           <C>            <C>           <C>          <C>
Balance, December 31, 1997..................            --     $        --            --    $   --            --       $   --
Contribution from parent ...................
Net loss ...................................
                                                  --------      ----------    ----------    ------      --------    ---------
Balance, December 31, 1998 .................            --              --            --        --            --           --

Net loss (January 1--April 26,  1999)
Contribution from parent ...................
Reorganization .............................
Common stock issued ........................                                 9,000,000
Restricted stock issued ....................                                 1,075,250
Preferred stock issued .....................       855,000     $1,902,375
Exchange of restricted stock for
  stock options ............................                                  (824,000)
Unearned compensation related to
  stock options ............................
Recognition of unearned
  compensation .............................
Beneficial conversion feature of
  convertible notes ........................
Warrants issued ............................
Net loss
  (April 27--December 31, 1999)                   --------      ----------    ----------    ------      --------    ---------
Balance, December 31, 1999 .................       855,000       1,902,375     9,251,250        --            --           --
Common stock issued, net....................                                   3,500,000
Conversion of convertible
  preferred stock ..........................      (855,000)     (1,902,375)      855,000
Conversion of convertible
  notes ....................................                                     481,250
Unearned compensation related
  to stock options .........................
Recognition of unearned
  compensation .............................
Employee non-qualified stock
  options exercised ........................                                     304,665
Purchases of treasury stock ................                                    (136,685)       --       136,685    $(330,202)
Net loss ...................................
                                                  --------      ----------    ----------    ------      --------    ---------
Balance, December 31, 2000 .................            --      $       --    14,255,480    $   --       136,685    $(330,202)
                                                  ========      ==========    ==========    ======      ========    =========
</TABLE>


     The accompanying notes are an integral part of these financial  statements,
continued


<PAGE>

<TABLE>
<CAPTION>
                                                                                                       DIVISIONAL
                                                  ADDITIONAL        UNEARNED        ACCUMULATED         EQUITY        STOCKHOLDERS'
                                               PAID-IN CAPITAL   COMPENSATION         DEFICIT         (DEFICIENCY)       EQUITY
                                                --------------   ------------      -------------      ----------      -------------
<S>                                            <C>               <C>               <C>                <C>             <C>
Balance, December 31, 1997 ..............      $    269,677       $        --       $         --       $(263,538)      $      6,139
Contribution from parent ................           122,938                                                                 122,938
Net loss ................................                                                               (148,121)          (148,121)
                                                  ---------      ------------      -------------       ---------       ------------
Balance, December 31, 1998 ..............           392,615                --                 --        (411,659)           (19,044)
Net loss (January 1--April 26, 1999)                                                                     (52,731)           (52,731)
Contribution from parent ................            22,659                                                                  22,659
Reorganization ..........................          (464,390)                                             464,390
Common stock issued .....................
Restricted stock issued .................         5,859,383       $(5,859,383)
Preferred stock issued ..................         1,902,375                         $ (1,902,375)                         1,902,375
Exchange of restricted stock for
  stock options .........................         3,531,441        (3,531,441)
Unearned compensation related to
  stock options .........................         1,084,414        (1,084,414)
Recognition of unearned
  compensation ..........................                           2,698,960                                             2,698,960
Beneficial conversion feature of
  convertible notes .....................           850,000                                                                 850,000
Warrants issued .........................         2,000,000                                                               2,000,000
Net loss
  (April 27--December 31, 1999)                                                       (5,860,303)                        (5,860,303)
                                               ------------       -----------       ------------       ---------       ------------
Balance, December 31, 1999 ..............        15,178,497        (7,776,278)        (7,762,678)                         1,541,916
Common stock issued .....................        40,710,595                                                              40,710,595
Conversion of convertible
  preferred stock .......................         1,902,375
Conversion of convertible
  notes .................................          (569,516)                                                               (569,516)
Unearned compensation related
  to stock options ......................         1,206,153        (1,206,153)                                                   --
Recognition of unearned
  compensation ..........................                           4,252,838                                             4,252,838
Reverse unearned compensation due to
  forfeited non-vested options...........        (3,145,536)        3,145,536                 --                                 --
Employee non-qualified stock
  options exercised .....................           196,251                                                                 196,251
Purchases of treasury stock .............                                                                                  (330,202)
Net loss ................................                                            (13,453,981)                       (13,453,981)
                                               ------------       -----------       ------------       ---------       ------------
Balance, December 31, 2000 ..............       $55,478,819       $(1,584,057)      $(21,216,659)      $      --       $ 32,347,901
                                               ============       ===========       ============       =========       ============
</TABLE>

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


                                      F-5

<PAGE>


                               PARTSBASE.COM, INC.
                            Statements of Cash Flows
<TABLE>
<CAPTION>

                                                                                          Year Ended December 31,
                                                                          ---------------------------------------------------
                                                                               2000                 1999              1998
                                                                          ---------------------------------------------------
<S>                                                                       <C>                   <C>                  <C>
Cash flows from operating activities:
  Net loss ......................................................         $(13,453,981)         $(5,913,034)         (148,121)
  Adjustments to reconcile net loss to cash used in
    operating activities:
  Depreciation and amortization .................................              752,314              410,918             2,453
  Loss on property disposals ....................................                   --                  583                --
  Recognition of stock-based compensation .......................            4,252,838            2,698,960                --
  Noncash interest on convertible notes .........................                   --              850,000                --
  Noncash costs allocated from former parent ....................                   --               15,037            39,153
  Changes in assets & liabilities:
    Accounts receivable, net ....................................           (1,212,761)            (297,884)               --
    Prepaids and other current assets ...........................             (666,674)            (504,547)               --
    Deferred financing costs & other assets .....................               (5,226)             (56,282)               --
    Accounts payable ............................................              347,401              716,054               760
    Other accrued liabilities ...................................              186,426              233,270                --
    Deferred revenue, net .......................................            1,955,444            1,241,319            22,659
    Accounts payable--related party .............................                   --                9,108                --
                                                                          ------------          -----------          --------
      Net cash used in operating activities .....................           (7,844,219)            (596,498)          (83,096)
                                                                          ------------          -----------          --------
Cash flows from investing activities:
  Capital expenditures ..........................................           (2,925,475)          (1,022,049)             (688)
  Purchase of investment securities .............................           (7,643,140)                  --                --
  Web site development costs ....................................              (24,000)            (216,075)               --
                                                                          ------------          -----------          --------
      Net cash used in investing activities .....................          (10,592,615)          (1,238,124)             (688)
                                                                          ------------          -----------          --------
Cash flows from financing activities:
  Issuance of convertible notes .................................                   --              962,500                --
  Issuance of common stock ......................................           40,881,000                   --                --
  Debt issue costs ..............................................                   --             (138,700)               --
  Issuance of preferred stock ...................................                   --            1,902,375                --
  Deferred offering costs .......................................                   --             (163,899)               --
  Exercise of employee non-qualified stock options ..............              196,251                   --                --
  Purchase of treasury stock ....................................             (330,202)                  --                --
  Paid-in capital ...............................................                   --                7,622            83,784
                                                                          ------------          -----------          --------
      Net cash provided by financing activities .................           40,747,049            2,569,898            83,784
                                                                          ------------          -----------          --------
Net increase in cash and cash equivalents .......................           22,310,215              735,276                --
Cash and cash equivalents at beginning of period ................              735,276                   --                --
                                                                          ------------          -----------          --------
Cash and cash equivalents at end of period ......................         $ 23,045,491          $   735,276                --
                                                                          ============          ===========          ========
Noncash financing activities--
Warrants issued in connection with issuance of the
  convertible notes .............................................         $         --          $ 2,000,000          $     --
                                                                          ============          ===========          ========
</TABLE>

                                      F-6

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


<PAGE>

Note 1 - BACKGROUND AND ORGANIZATION

     PartsBase.com  ("PartsBase"  or the  "Company")  is an online  provider  of
Internet business-to-business e-commerce services for the aviation industry. The
Company's  global  e-marketplace  provides a means for aviation parts buyers and
sellers  to buy and sell  new,  repaired  or  overhauled  aviation  parts,  list
products,  services and  catalogs,  and hold auctions for slow moving and excess
inventory.

     Prior to April 1999, the Company operated as a division (the "Division") of
Aviation Laboratories,  Inc. ("Aviation Labs"). In April 1999, the assets of the
Division were conveyed to Mr. Robert A. Hammond, Jr. in consideration for, among
other things, Mr. Hammond's equity interest in Aviation Labs. On April 27, 1999,
Mr.  Hammond  transferred  the  assets  of the  Division  into and  incorporated
PartsBase as a Texas  corporation.  The accounting for the  contribution  of the
Division  into  PartsBase  has  been  reported  in  the  accompanying  financial
statements  as a  reorganization  of entities  under common  control in a manner
similar to a pooling of interests.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

     PartsBase recognizes subscription,  banner advertising,  and other revenues
over the life of the  respective  subscription,  which is  typically  12 months.
Sales costs, including  commissions,  are expensed as incurred, and are included
in  the  cost  of  revenues.   Gross  revenue  represents  total   subscription,
advertising and other sales made during the period presented, of which a portion
is deferred.  Deferred  revenue as of December 31, 2000 and 1999 was  $3,219,422
and  $1,263,978,   respectively,  net  of  an  allowance  of  $130,447  and  $0,
respectively.  Net revenue  represents  that  portion of gross  revenue that was
earned during the period presented.

Cash and Cash Equivalents

     Cash and cash equivalents  consist of highly liquid  investments  purchased
with an original maturity of three months or less.

Concentration of Credit Risk

     Financial  instruments that potentially  subject the Company to credit risk
consist  primarily  of  uninsured  cash  and  cash  equivalents.  Cash  and cash
equivalents are deposited with a federally insured commercial bank in the United
States.  At  December  31,  2000  the  Company  had  all of its  cash  and  cash
equivalents in three financial institutions of which the excess over $100,000 is
not covered by FDIC insurance and which, therefore,  did not limit the Company's
amount of  credit  exposure.  The  Company  believes  it is not  exposed  to any
significant credit risk on cash and cash equivalents.

     The Company  sells  primarily to aviation  related  companies  and does not
require  collateral.  The Company  analyzes the need for reserves for  potential
credit  losses  and  records a  provision  for bad debts when  necessary.  As of
December 31, 2000 and 1999,  the Company  maintained  an allowance  for doubtful
accounts related to its receivables of $221,559 and, $0, respectively.


                                      F-7

<PAGE>


     The Company has subscribers in more than 115 countries. The Company did not
derive more than 10% of its revenue from any single foreign  country during 2000
and 1999. Prior to 1999, all of the Company's  revenue was derived from domestic
customers.

Property and Equipment

     Property and  equipment is stated at cost.  Costs  incurred for  additions,
improvements and betterments are capitalized as incurred.  Costs for maintenance
and repairs are charged to expense as incurred.  Gains or losses on dispositions
of  property  and  equipment  are  included  in the  statements  of  operations.
Leasehold  improvements are amortized over the shorter of their estimated useful
life  or the  lease  term  using  the  straight-line  method.  Depreciation  and
amortization  are computed  using the  straight-line  method over the  following
estimated service lives of the related assets:

         Computer software......................................    3 years
         Computer equipment.....................................    5 years
         Communication equipment................................    7 years
         Furniture and fixtures.................................    7 years

Deferred  Financing Costs

     Issue costs  associated  with obtaining debt through the Company's  Private
Placement,  including  the  excess  of the fair  value  over  exercise  price of
warrants issued to the underwriters of the debt, and the Initial Public Offering
("IPO") of its common  stock,  $2,302,602,  are  recorded as deferred  financing
costs in the  balance  sheet of  December  31,  1999.  All fees and issue  costs
associated with the Private Placement are amortized over the term of the related
debt  utilizing  the  straight-line  method or until  conversion of such debt to
shares of common stock.  Amortization  of financing costs related to the Private
Placement amounted to $364,925 for the year ended December 31, 1999. As the debt
was  converted to shares of common stock in  conjunction  with the IPO completed
during  fiscal 2000 and in accordance  with the terms of the Private  Placement,
the deferred financing costs were reclassified to additional paid-in capital and
offset against the proceeds from the IPO in fiscal 2000.

Fair Value Of Financial Instruments

     The Company's financial  instruments,  including cash and cash equivalents,
investments, accounts receivable and accounts payable are carried at cost, which
approximates  their  fair  value  because of the  short-term  maturity  of these
instruments. The Company's convertible notes payable are carried at cost and had
a fair value of $5,793,641  based on the market value of the  underlying  common
stock on December 31, 1999 plus unpaid interest as of December 31, 1999.

Web Site Development Costs

     The  Company  follows  the  provisions  of  Statements  Of  Position  98-1,
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal Use" ("SOP 98-1").  SOP 98-1 requires that entities  capitalize certain
costs related to internal use software once certain criteria have been met.

     Web site  development  costs,  which are  enhancements  intended  to extend
and/or improve  significantly  the  marketability of the original  product,  are
capitalized;  all other costs are expensed as incurred and classified as cost of
revenues.  Web site  development  costs of $24,000 and $216,075 were capitalized


                                      F-8


<PAGE>


during the years ended  December  31, 2000 and 1999,  respectively.  No web site
development costs were capitalized in prior periods. As of December 31, 2000 and
1999, capitalized web site development costs, net of amortization,  were $90,020
and  $188,152,  respectively,  and included in other assets in the  accompanying
balance sheets.

     Amortization is computed on an  enhancement-by-enhancement  basis utilizing
the  straight-line  method over the estimated  economic life of the enhancement,
which at December 31, 2000 and 1999, is estimated to be 24 months.

Accounting for Stock-based Compensation

     The  Company   accounts  for  stock-based   compensation   arrangements  in
accordance  with the provisions of Accounting  Principles  Board ("APB") Opinion
No. 25,  "Accounting  for Stock  Issued to  Employees,"  and  complies  with the
disclosure  provisions of Statement of Financial  Accounting  Standards ("SFAS")
No.  123,   "Accounting  for  Stock-Based   Compensation."  Under  APB  No.  25,
compensation  expense  is based on the  difference,  if any,  on the date of the
grant, between the fair value of the Company's stock and the exercise price.

Income Taxes

     Income  taxes are  accounted  for under  the  asset and  liability  method.
Deferred  tax  assets  and   liabilities  are  recognized  for  the  future  tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases and net operating loss and tax credit carry-forwards.  Deferred tax assets
and  liabilities  are  measured  using  enacted  tax rates  expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled.  The effect on deferred tax assets and liabilities of a
change  in tax rates is  recognized  in the tax  provision  in the  period  that
includes the enactment date. Valuation allowances are established when necessary
to reduce deferred tax assets to the amount to be recovered.

Net Loss Per Share

     Basic  net  income/(loss)  per  share  is  calculated  on the  basis of the
weighted  average  number of shares  outstanding  during the  period,  excluding
dilution.  Diluted net  income/(loss)  per share is computed on the basis of the
weighted average number of shares  outstanding  during the period plus potential
common shares  arising from the assumed  exercise of stock options and warrants,
if dilutive.  The dilutive  impact of potential  common  shares is determined by
applying the treasury stock method.


                                      F-9

<PAGE>

Reclassifications

     Certain  amounts  in  the  prior  years'  financial  statements  have  been
reclassified to conform to the current year presentation.

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 amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

New Accounting Guidance

     In June 1999, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the Effective Date of FASB Statement No. 133".  SFAS 137 amends SFAS
No. 133,  "Accounting  for  Derivative  Instruments  and Hedging  Activities" by
deferring the effective  date of SFAS 133 to fiscal years  beginning  after June
15, 2000. SFAS 133 establishes accounting and reporting standards requiring that
every derivative instrument  (including certain derivative  instruments embedded
in other  contracts)  be  recorded  in the  balance  sheet as either an asset or
liability  measured at its fair value.  SFAS 133  requires  that  changes in the
derivative's  fair value be  recognized  currently in earnings  unless  specific
hedge accounting criteria are met. SFAS 133 was amended in June 2000 by SFAS No.
138 for certain  derivative  instruments and hedging  activities as indicated by
SFAS 138.  The  Company  will adopt SFAS 133 in fiscal  year 2001.  The  Company
currently  does not engage in,  nor does it expect to engage in,  derivative  or
hedging  activities,  and therefore,  the Company  anticipates  there will be no
impact to its financial statements.

     In September 1999, the Emerging Issues Task Force ("EITF") issued EITF D-83
"Accounting for Payroll Taxes with Stock Option  Exercises."  When  nonqualified
stock options are exercised,  the difference between the exercise price paid and
the fair value of the acquired stock on the exercise date ("intrinsic value") is
considered  ordinary income for purposes of determining  the employee's  federal
income taxes.  The employer is entitled to a federal income tax deduction in the
period the option is  exercised of an amount  equal to the  employee's  ordinary
income.  Also,  the intrinsic  value of the exercised  options is considered the
equivalent of  compensation  paid directly to the employee and,  therefore,  the
employer  must pay  Medicare  taxes,  and perhaps  FICA taxes,  depending on the
employee's  aggregate  compensation  level. The FASB staff believes that payroll
taxes,  even though directly related to the  appreciation on stock options,  are
operating  expenses  and  should  be  reflected  as  such  in the  statement  of
operations. The Company adopted EITF D-83 for employer payroll taxes incurred on
stock options  exercised during fiscal year 2000 (no stock options were eligible
for  exercision  during fiscal 1999) and all such payroll taxes were recorded as
operating expenses in the accompanying statements of operations.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB
101"),  which among other guidance,  clarifies  certain  conditions to be met in
order  to  recognize   revenue.   In  October  2000,   the  staff  deferred  the
implementation  date of SAB 101 until no later than the fourth quarter of fiscal
years  beginning  after  December 15, 1999.  The Company  adopted SAB 101 during
fiscal year 2000, and such adoption had no impact to its financial statements as
of December 31, 2000.

     In July 2000,  the EITF issued  "Classification  in the  Statement  of Cash
Flows of the Income Tax Benefit Realized by a Company upon Employee  Exercise of
a Non-qualified Stock Option" ("EITF 00-15"). This Issue addresses the cash flow
statement  presentation of the windfall tax benefit associated with nonqualified
stock  options.  Companies  receive an income tax deduction  for the  difference
between the exercise price and the market price of a  nonqualified  stock option
upon exercise by the employee.  EITF 00-15 concludes that the income tax benefit
realized by the Company  upon  employee  exercise  should be  classified  in the
operating  section of the cash flow  statement.  The EITF is  effective  for all


                                      F-10
<PAGE>

quarters  ending after July 20, 2000. The Company  adopted EITF 00-15 as of July
1, 2000 for non-qualified stock options exercised by employees and such adoption
had no impact to its  financial  statements  as of  December  31, 2000 since the
Company has no taxable income.

Note 3 - INVESTMENTS

The Company's investments in U.S. government and corporate debt securities,
whose maturities are typically one year or less, are classified as
held-to-maturity and valued at amortized cost, which approximates fair value.
Investments in securities are summarized as follows at December 31, 2000:

<TABLE>
<CAPTION>
                                           Market          Gross Unrealized     Gross Unrealized          Amortized
                                           Value             Holding Gain         Holding Loss               Cost
                                         ----------           ----------           ----------            ----------
<S>                                      <C>                  <C>                  <C>                   <C>
Current:
U.S. government agencies                 $  774,162           $      939           $     --              $  773,223
Corporate debt securities                 6,440,416               74,587                 --               6,365,829
                                         ----------           ----------           ----------            ----------
Totals                                    7,214,578               75,526                 --               7,139,052
                                         ==========           ==========           ==========            ==========

Non-Current:
Corporate debt securities                   500,110                 --                 (1,741)              501,851
                                         ----------           ----------           ----------            ----------
Totals                                   $  500,110           $     --             $   (1,741)           $  501,851
                                         ==========           ==========           ==========            ==========
</TABLE>

     The  non-current  portion of investments is included in other assets in the
accompanying  balance sheets.  Investments  totaling  $2,237,  representing  the
balance in a brokerage  cash account at December  31, 2000,  are not included in
the summary above.

     On January 15, 2001, corporate debt securities owned by the Company, issued
by a State of California electrical utility (the "Utility"),  with a face value
of $400,000  and maturing on January 15, 2001,  were  defaulted  on. The current
market value of this security as of March 20, 2001,  excluding  accrued interest
owed, was $296,000 and its debt rating was recently lowered to Caa3 by Moody's .
The Utility is currently in negotiations with its banks and the Public Utilities
Commission of California to resolve its financial  difficulties  and pay amounts
owed to its secured and  unsecured  creditors.  The Company  believes that it is
probable  the  Company  will be able to collect  all  amounts  due the  Company,
including  accrued  interest,  according  to the  contractual  terms of the debt
security  and,  therefore,  the  decline in fair value of the debt  security  is
judged to be temporary as of December 31, 2000.


                                      F-11
<PAGE>


Note 4 - PROPERTY AND EQUIPMENT

Property and equipment, consisted of the following:

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

          Computer Equipment                $ 1,829,161          $   298,345
          Computer Software                   1,493,035              675,000
          Telephone Equipment                   289,230               42,379
          Furniture and Fixtures                336,363               18,399
          L/H Improvements                       11,808                   --
                                            -----------          -----------
                                              3,959,597            1,034,123
          Accumulated Depreciation             (304,287)             (24,646)
                                            -----------          -----------
                                            $ 3,655,310          $ 1,009,477
                                            ===========          ===========

Depreciation  and  amortization  expense for the years ended  December 31, 2000,
1999 and 1998 was $279,641, $22,193 and $2,453, respectively.

Note 5 - SEGMENT INFORMATION

     Based on the  criteria  established  by SFAS No.  131,  "Disclosures  about
Segments of an  Enterprise  and  Related  Information,"  the  Company  currently
operates  in one  principal  business  segment  globally,  the  development  and
marketing  of an online  marketplace  for the  purchasing  and  distribution  of
products.

     Summarized  information  by  revenue  source  as  excerpted  from  internal
management reports is as follows:

                                               Year Ended December 31,
                                     ------------------------------------------
                                        2000            1999            1998
                                     ----------      ----------      ----------
          Net revenues:
          Subscriptions              $3,876,333      $  357,877      $    3,504
          Advertising                   188,490           4,347              --
          Other                          32,762              --              --
                                     ----------      ----------      ----------
          Total                      $4,097,585      $  362,224      $    3,504
                                     ==========      ==========      ==========

Note 6 - COMMITMENTS AND CONTIGENCIES

     In December  2000, a third party company (the "Third  Party")  unaffiliated
with the  Company  instituted  arbitration  proceedings  against  the Company in
Dallas,  Texas based upon the Third Party's allegation that the Company breached
a professional services agreement dated February 18, 2000. The Third Party seeks
damages  from the Company of $308,083  plus  interest,  fees,  costs and alleged
damages for copyright infringement, all based upon the Third Party's allegations
that the  Company  breached  it's  payment  obligations  under the  professional
services  agreement.  The Company filed a counterclaim  denying that it breached
the  professional  services  agreement  and claimed  entitlement  to a refund of
$73,496 of funds previously paid to the Third Party.  Additionally,  the Company
claims  damages  of  $250,000  as a result  of the Third  Party's  breach of its
obligations. The Company intends to vigorously defend the lawsuit, but there can
be no assurance that it will ultimately  prevail.  Because this matter is in its
early stages,  the Company has not yet determined  the impact,  if any, upon its
financial statements.


                                      F-12
<PAGE>

     The Company is not currently aware of any legal  proceedings or claims that
the  Company  believes  are  likely  to have a  material  adverse  effect on the
Company's financial position, results of operations, or cash flows.

     The  Company is party to a Content  License  and  Reseller  Agreement  (the
"Agreement") with USA Information Systems Inc. ("USAIS"),  an exclusive owner of
an  Internet-based  government  parts,  logistic and digital document  database,
whereby USAIS provides access to that database to paid subscribers through a Web
site owned, operated and maintained by USAIS (the "Subscription Services").  Per
the Agreement,  as amended on March 15, 2001,  USAIS licenses to the Company the
non-exclusive rights to resell the Subscription  Services and to offer access to
certain segments of the USAIS Content to the Company's existing  customers.  The
Agreement  commenced on June 1, 2000 and has an initial term of three years. The
Agreement will be  automatically  renewed for two one-year terms,  unless either
party  notifies the other in writing of its intention not to renew the Agreement
within ninety (90) days prior to the  expiration of the  then-current  term. The
Company is  obligated  to pay USAIS the sum of $100,000 in monthly  installments
during  the first year of the  Agreement.  Beginning  with the  second  year and
continuing  until the expiration of the  Agreement,  the Company is obligated to
pay USAIS  $60,000 in monthly  installments.  In  conjunction  with the  amended
Agreement,  the Company was also obligated to obtain and deliver to USAIS, on or
before March 21, 2001, an irrevocable,  transferable standby Letter of Credit in
the amount of $1,665,000, collateralized by a certificate of deposit of the same
amount.

     During  May 2000 the  Company  entered  into a sublease  agreement  with an
unaffiliated  third party for 35,668 square feet of general  office  space.  The
sublease agreement expires October 31, 2006. In lieu of a security deposit,  the
Company has entered into an irrevocable standby letter of credit in favor of the
sublessor in the amount of $500,000.  From the commencement date of the sublease
through  February  28, 2001 the Company is  obligated to pay rent on only 25,000
square  feet.  The base rent per square foot  during  this term  ranges  between
$12.57 and $12.94 plus common area  maintenance  fees. The following  represents
the minimum annual rent during the term of the sublease:

                                                      Minimum
                                                      -------
            Year Ending December 31,                Annual Rent
            ------------------------                -----------

                   2001                             $   438,484
                   2002                                 477,470
                   2003                                 491,798
                   2004                                 506,544
                   2005                                 521,940
                   Thereafter                           161,040
                                                    -----------
                                                    $ 2,597,276
                                                    ===========

Rent expense for the years ended December 31, 2000, 1999, and 1998 was $573,527,
$44,859, and $12,000, respectively.


                                      F-13
<PAGE>

Note 7 - STOCKHOLDERS' EQUITY

Common Stock and Preferred Stock

     In March 2000, the Company  completed,  through an initial public  offering
("IPO"),  the  issuance of an  aggregate  of  3,500,000  shares of no par common
stock,  including  over-allotment  options granted to the underwriters.  The net
proceeds  of the  offering  to the  Company  were  $40.7  million  and were used
primarily for working capital,  information  technology,  expansion of sales and
marketing activities,  and other general corporate purposes. Between November 1,
1999 and  November 17,  1999,  the Company  sold 855,000  shares of its Series A
Convertible  Preferred  Stock at $2.50 per share for  aggregate  net proceeds of
$1,902,375 after commissions of $235,125.  The Convertible Preferred Stock had a
beneficial  conversion feature totaling  $1,902,375,  measured as the difference
between  the  conversion  price of $2.50  per  share  and the fair  value of the
underlying common stock at the time of issuance. In connection with the IPO, all
preferred  shares were  redeemed  into  855,000  shares of the  Company's no par
common stock.

     In accordance with the Company's share  repurchase  program  implemented in
the fourth quarter of 2000,  136,685  shares of the Company's  common stock were
repurchased  in fiscal 2000 at a total cost of  $330,202.  Such shares are to be
retired by the Company.

Unearned Compensation

     Unearned   compensation  of  $1,206,153  and  $10,475,238  was  charged  to
stockholders'  equity in 2000 and 1999,  respectively,  in  connection  with the
issuance of stock options and restricted  stock grants based on the market value
of the Company's common stock at the date of grant.  This charge is amortized to
the  statements  of operations as the  underlying  options vest. As  unamortized
options are forfeited, the unamortized unearned compensation is reversed against
additional paid-in capital.  During fiscal 2000,  $3,145,536 was reversed due to
forfeited options. Compensation expense of $4,252,838 and $2,698,960, related to
these options,  was  recognized in the statements of operations  during 2000 and
1999, respectively,

Warrants

     In  1999,   the  Company,   through  a  Private   Placement  (the  "Private
Placement"),  sold and  issued  8%  Convertible  Secured  Subordinated  Notes to
several investors. In connection with the closing of the private placement,  the
placement agent was granted warrants to purchase 200,000 shares of no par common
stock of the  Company at an  exercise  price  equal to $2.00 per share until the
expiration  date of September  1, 2002.  Subsequent  to December  31,  1999,  an
agreement  was  reached  with the  placement  agent that  reduced  the number of
warrants from 200,000 to 175,000.  As of December 31, 2000 and 1999, no warrants
had been exercised.  In the event of certain  consolidations  or sales affecting
the  Company,  the Company is required to call the  warrants for cash at a price
based on the greater of the trading price of the  Company's  common stock or the
value paid by a purchaser for it's no par common stock.


                                      F-14
<PAGE>

     In connection with the IPO of 3,500,000 shares of no par value common stock
in March 2000,  stock  purchase  warrants,  at an  exercise  price of $21.45 per
share,  for 262,500  shares of the  Company's no par common stock were issued to
representatives of the underwriters.

1999 Stock Option Plan

     On  November  2, 1999 the Board of  Directors  (the  "Board")  adopted  the
PartsBase.com, Inc. 1999 Stock Option Plan (the "Plan"). The Plan is a qualified
stock option plan in  accordance  with Section 422 of the Internal  Revenue Code
and provides for the issuance of both incentive and non-qualified stock options.
The maximum  number of shares of no par common stock that may be issued upon the
exercise  of all  options  shall not  exceed  2,000,000  shares of no par common
stock. The per share option price of the no par common stock shall be determined
by the Board.  The per share price with respect to any  incentive  stock options
shall not be less than the fair market  value of the no par common  stock on the
date of grant.  Each option granted vests in accordance with a vesting  schedule
established  by the  Board  or a  Committee  of the  Board.  Absent  a  specific
determination  of vesting,  options granted shall vest over a forty-eight  month
period and the period of exercise of each option shall not exceed ten (10) years
from date of grant.  A summary  of the  status  of the  Company's  stock  option
activity, and related information for the years ended December 31, 2000 and 1999
is presented below:

<TABLE>
<CAPTION>

                                                                                Weighted-
                                                                                 Average
                                                                                Exercise
                                                              Shares             Price
                                                            ----------        ----------
<S>                                                          <C>              <C>
     Outstanding January 1, 1999                                    --
     Granted                                                   919,375        $     0.63
     Exercised                                                      --
     Forfeited                                                      --                --
                                                            ----------        ----------
     Outstanding December 31, 1999                             919,375              0.63
     Granted                                                   983,625              5.13
     Exercised                                                (303,415)             0.63
     Forfeited                                                (536,720)             3.16
                                                            ----------        ----------
     Outstanding December 31, 2000                           1,062,865        $     3.52
                                                            ==========        ==========

     Options exercisable at December 31, 1999                  239,792        $     0.63
                                                            ==========        ==========
     Options exercisable at December 31, 2000                  464,166        $     2.22
                                                            ==========        ==========
</TABLE>


                                      F-15
<PAGE>

     The following table summarizes  information about stock options outstanding
and exercisable as of December 31, 2000:

<TABLE>
<CAPTION>
                                    Options Outstanding                           Options Exercisable
----------------------------------------------------------------------        ------------------------------
                                         Weighted-
                                          Average
        Range of                         Remaining        Weighted-                              Weighted-
        Exercise         Number         Contractual        Average              Number           Average
         Prices       Outstanding       Life (Years)    Exercise Price        Exercisable     Exercise Price
         ------       -----------       ------------    --------------        -----------     --------------
<S>                     <C>                 <C>              <C>                <C>               <C>
    $0.63 to $0.65        444,288           8.93             $0.63              304,969           $0.63
    $3.00 to $5.50        470,327           9.57              5.15              138,158            5.15
    $6.38 to $13.00       148,250           9.55              6.98               21,039            6.98
                        ---------           ----             -----              -------           -----
                        1,062,865           9.30             $3.52              464,166           $2.22
                        =========           ====             =====              =======           =====
</TABLE>

     The  Company  applies  the  provisions  of  APB  No.  25  and  its  related
interpretations   in  accounting  for  its  stock  option  plans.   Accordingly,
compensation  expense  recognized  was  different  than  what  would  have  been
otherwise  recognized under the fair value based method defined in SFAS No. 123.
Had the Company  accounted for these plans under SFAS No. 123, the Company's net
loss and net loss per share  would have been  impacted  as follows for the years
ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                       2000                  1999
                                                                  ---------------       --------------
<S>                                                               <C>                   <C>
Net loss attributable to common stockholders:
         As reported ......................................       $  (13,453,981)       $   (5,913,304)
                                                                  ==============        ==============
         Proforma .........................................       $  (18,546,041)       $   (6,004,972)
                                                                  ==============        ==============

Basic and diluted loss per share
         As reported ......................................       $        (1.03)       $        (0.64)
                                                                  ==============        ==============
         Proforma .........................................       $        (1.42)       $        (0.65)
                                                                  ==============        ==============
</TABLE>

     Pro forma information regarding net loss and net loss per share is required
by SFAS 123 and has been  determined  as if the  Company had  accounted  for its
employee stock options under the fair value method provided for in SFAS 123. The
fair value of options was estimated at the date of grant using the Black-Scholes
option pricing model with the following weighted-average assumptions for options
granted during the years ended December 31, 2000 and 1999:

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

     Risk-free interest rate ..........................     5.06%     5.88%
     Expected life (in years) .........................        3         3
     Volatility .......................................      125%        0%
     Dividend yield ...................................        0%        0%

     For  purposes of pro forma  disclosures,  the  estimated  fair value of the
options is amortized to expense over the vesting  period of the options  using a
graded  vesting  method.  The  effects  of  applying  SFAS  123  for  pro  forma
disclosures are not likely to be  representative  of the effects on reported net
loss for future years.


                                      F-16
<PAGE>

Note 8 - INCOME TAXES

     The Company did not record any benefits for income taxes for the year ended
December  31,  2000  because  it  incurred  a  current  net  operating  loss  of
approximately  $6,587,000.  In years prior to  December  31,  2000,  the Company
incurred net operating losses totaling approximately  $2,454,000.  The Company's
net operating losses will fully expire in the year 2020.

     The Company's  effective tax rate for the year ended  December 31, 2000 and
1999 is comprised of the following items:

<TABLE>
<CAPTION>
                                                       Year Ended                      Year Ended
                                                    December 31, 2000               December 31, 1999
                                                 ----------------------          ----------------------
<S>                                              <C>        <C>                  <C>        <C>
     Statutory U.S. income tax rate               34.00%    $(4,574,353)          34.00%    $(2,010,432)
     Stock compensation                            0.00%             --            4.50%       (266,137)
     Operations prior to inception                 0.00%             --           (0.33)%        19,774
     Nondeductible permanent items                (0.09)%        12,286           (0.00)%            --
     Change in valuation allowance               (33.95)%     4,567,071          (41.66)%     2,463,662
     Other                                         0.04%         (5,004)           3.49%       (206,867)
                                                   ----     -----------            ----    -----------
                                                   0.00%    $        --            0.00%   $        --
                                                   ====     ===========            ====    ===========
</TABLE>

Temporary differences and carryforwards that cause significant portions of
deferred tax assets and liabilities are as follows:

                                                December 31,       December 31,
                                                    2000               1999
                                                -----------        -----------
     Deferred tax assets:
     Net operating loss                         $ 3,401,807        $ 2,472,090
     Deferred revenue                             1,211,468                 --
     Stock compensation                           2,349,149                 --
     Allowance for bad debts                         83,373                 --
     Deferred rent                                   33,512                 --
                                                -----------        -----------
       Total deferred tax assets                  7,079,309          2,472,090
                                                -----------        -----------

     Deferred tax liabilities:
     Property and equipment                           7,068                798
     Web development costs                           33,878                 --
                                                -----------        -----------
       Total deferred tax liabilities                40,946                798
                                                -----------        -----------

       Less: Valuation allowance                 (7,038,363)        (2,471,292)
                                                -----------        -----------

     Net deferred tax asset                     $        --        $        --
                                                ===========        ===========

Management  believes  there is no  assurance  that  the  Company  will  generate
sufficient taxable income to utilize all of its deferred tax assets.  Therefore,
a  valuation  allowance  has been  established  to offset the net  deferred  tax
assets.


                                      F-17
<PAGE>

Note 9 - RELATED PARTY TRANSACTIONS

Contract Services

     A company owned and operated by one of the Company's  former  directors and
minority  stockholders  provided  significant services designing and maintaining
the Company's web site during 1999.  Services  performed  totaled  $260,000,  of
which  approximately  $216,075 was capitalized as web site development costs and
approximately  $40,000 was expensed as cost of sales for the year ended December
31, 1999. There was $37,350 owed to this company as of December 31,1999 which is
included in accounts  payable in the accompanying  balance sheets.  Such company
did not provide  any  services  during 2000 and there were no amounts  owed this
company as of December 31, 2000.

     In  addition,  a company  owned and  operated  by another of the  Company's
directors  provided  services  in  connection  with the design of the  Company's
advertising  brochures  and  other  marketing  materials.  The  total  amount of
payments  made by the Company for such  services  performed  for the years ended
December 31, 2000 and 1999 was $34,200 and $53,263 respectively,  and there were
no amounts owed this company as of December 31, 2000 and 1999, respectively.

Due to/from Other Companies

     The company, in which PartsBase had previously operated as a division until
April 26, 1999,  collected  sales revenues and paid certain costs on its behalf.
The other  company then billed  PartsBase  for net amounts owed. At December 31,
2000,  there were no amounts due to such  company.  At December  31,  1999,  the
Company owed a net amount aggregating $9,108.

Allocation of Costs Incurred by Former Parent

     The financial  statements  include  costs  incurred by Aviation Labs on the
Company's behalf in 1999 and 1988. Such costs include  administrative  salaries,
related payroll taxes and benefits,  utilities,  office supplies and rent. These
costs  aggregated  $15,037 and $39,153 for the years ended December 31, 1999 and
1998, respectively.  The Company used a proportional cost allocation methodology
based on the ratio of the number of employees dedicated to the operations of the
Company to the total number of employees of Aviation Labs.  Management  believes
such allocation to be reasonable.


                                      F-18
<PAGE>

NOTE 10 - Quarterly Financial Information (Unaudited)

                         (000's, except per share data)

<TABLE>
<CAPTION>
                                                      First         Second           Third          Fourth
                                                     Quarter        Quarter         Quarter         Quarter
                                                     -------        -------         -------         -------
<S>                                                  <C>            <C>             <C>             <C>
Net revenues:
  2000 .......................................       $   550        $   935         $ 1,200         $ 1,413
  1999 .......................................            14             23              85             240
Gross loss:
  2000 .......................................          (845)           (13)           (434)         (3,060)*
  1999 .......................................             4            (41)           (427)         (2,385)**
Operating loss:
  2000 .......................................        (3,593)        (3,131)         (3,993)         (4,499)*
  1999 .......................................           (43)          (137)         (1,380)         (3,483)**
Net loss:
  2000 .......................................        (3,577)        (2,531)         (3,341)         (4,005)
  1999 .......................................           (43)          (137)         (2,178)         (3,555)
Net loss per share:
Basic
  2000 .......................................         (0.36)         (0.18)          (0.24)          (0.25)
  1999 .......................................         (0.00)         (0.01)          (0.24)          (0.59)
Diluted
  2000 .......................................         (0.36)         (0.18)          (0.24)          (0.25)
  1999 .......................................         (0.00)         (0.01)          (0.24)          (0.59)
</TABLE>

*    Includes   reclassification  of  approximately  $2,308,000  of  stock-based
     compensation expense from operating expenses to cost of revenues.

**   Includes   reclassification  of  approximately  $1,799,000  of  stock-based
     compensation expense from operating expenses to cost of revenues.

The  information  for 1998 is not presented due to the fact that the Company was
not an SEC registrant, and as such did not keep records on a quarterly basis.

NOTE 11 - Convertible Notes Payable

     For the period from June 9, 1999 to August 31, 1999, the Company, through a
Private Placement, sold and issued 8% Convertible Secured Subordinated Notes due
and payable  December 31, 2001 totaling  $900,000 (the  "Convertible  Notes") to
several  investors.  Terms of the  Convertible  Notes provide for interest at 8%
payable quarterly. All principal and unpaid interest is due and payable December
31, 2001, if there is no  conversion.  Each note is convertible at any time into
common  stock at a conversion  price of $2.00 per share at the holder's  option.
The Convertible  Notes  automatically  convert upon the filing and closing of an
initial public offering of the Company's  common stock with gross proceeds of $5
million  or  more  or  upon   certain   mergers   and   consolidations   of  the
Company.Accrued  interest  payable on such notes at December 31, 1999 aggregated
$18,641.  The Convertible  Notes have a beneficial  conversion  feature totaling
$787,500,  measured as the difference  between the conversion price of $2.00 per
share and the fair value of the underlying  common stock at the time of issuance
limited to the amount of proceeds  received.  The beneficial  conversion feature
has been recorded as a charge to interest expense with a corresponding credit to
additional paid-in capital.  The value of the beneficial  conversion feature was
recognized immediately because the Convertible Notes are immediately convertible
at the option of the holder.  The Convertible Notes are secured by substantially
all of the Company's assets.


                                      F-19
<PAGE>

     In November 1999, the Company issued an additional  $62,500 of notes having
substantially  identical terms to the  Convertible  Notes to an aggregate of two
investors,  including  $50,000  sold  to the  father  of  one  of the  Company's
executive officers.  The Convertible Notes have a beneficial  conversion feature
of $62,500 measured as the difference  between the conversion price of $2.00 per
share and the fair value of the underlying stock at time of issuance, limited to
the amount of  proceeds.  At the time of  issuance,  the  beneficial  conversion
feature was  recorded as a charge to interest  expense and with a  corresponding
credit to additional  paid-in  capital.  The value of the beneficial  conversion
feature was recognized immediately because the Convertible Notes are immediately
convertible at the option of the holder.

     As discussed in Note 7 herein,  all of the Convertible Notes were converted
to shares of common stock of the Company during fiscal 2000.

Note 12 - Restricted Stock Bonus Plan

     In May 1999, the Company adopted the PartsBase.com,  Inc.  Restricted Stock
Bonus Plan ("Stock  Bonus  Plan").  Under the Stock Bonus Plan,  the Company was
authorized to award or grant to employees,  consultants,  officers and directors
(except  persons  serving as directors only) shares of common stock subject to a
substantial risk of forfeiture. The Board of Directors had the sole authority to
select  participants,  to  establish  the terms  and  conditions  of the  stock,
including  vesting  provisions,  and to grant the stock.  The maximum  number of
shares of common stock which could have been granted  under the Stock Bonus Plan
was 1,200,000 shares.  In the event a stock grant recipient was terminated,  any
unvested  portion  of the  shares  that  were  subject  to the  stock  grant was
canceled.  Each stock grant  recipient has all the rights of a shareholder  with
respect to stock received pursuant to the Stock Bonus Plan,  including the right
to vote such shares and receive all dividends and other distributions.

     On November 17, 1999 the Company  entered into an agreement with all of the
employees  who received  restricted  stock awards.  The agreement  calls for the
employee to return all shares  received and the  termination  of the  Restricted
Stock  Agreement  between  the  employee  and the  Company  as it relates to the
restricted  stock award. As part of the terminated  restricted  stock award each
employee  participating  in the  restricted  stock grant plan  received  one (1)
nonqualified  option  to  purchase  one (1)  share  of  common  stock  for  each
restricted stock terminated.  The options granted are part of the PartsBase.Com,
Inc.  1999 Stock  Option Plan and vest over a  twenty-four  month period and the
period of exercise  shall not exceed ten (10) years from date of the grant.  The
options were granted at $0.63 per share.  The number of options  granted as part
of this  agreement  totaled  824,000.  As a  result  of the  termination  of the
restricted  stock and issuance of the  nonqualified  stock  options,  additional
unearned  compensation of approximately  $3,500,000 was charged to stockholders'
equity in November 1999. The additional unearned  compensation was determined as
the amount by which the  intrinsic  value of the  options  issued  exceeded  the
amount  of  unearned  compensation  recorded  prior  to the  termination  of the
restricted  stock based on the market value of the Company's common stock at the
date of grant.  Prior to  termination,  stock  grants  totaling  1,075,250  were
outstanding.   An  aggregate  of  251,250  shares  of  restricted  stock  remain
outstanding  under the Stock Bonus  Plan.  Such stock is held by a total of four
persons,  including  250,000  shares  held by Steven  Spencer,  a  director  and
executive  officer.  Mr.  Spencer's  stock grant  vested with  respect to 50,000
shares upon commencement of employment.  The remaining 200,000 shares vest in 24
equal monthly  installments;  provided,  however,  that vesting shall accelerate
with respect to 100,000 shares upon  completion of an initial  public  offering.
The remaining  100,000  shares vest in equal monthly  installments  over the two
year period beginning with the commencement of Mr. Spencer's employment.



                                      F-20
<PAGE>


     The  Company  applies  the  provisions  of  APB  No.  25  and  its  related
interpretations  in accounting  for its employee  stock grant plan. As the stock
grants  were  recorded  at their fair  value at the date of grant,  compensation
expense  recognized  was no  different  than  what  would  have  been  otherwise
recognized under the fair value based method defined in SFAS No. 123.








                                      F-21
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION
------            -----------

1.1(3)         Form of Underwriting Agreement

3.1(3)         Form of Amended and Restated Articles of Incorporation

3.2(3)         Form of Amended and Restated Bylaws

4.1(3)         Form of Common Stock Certificate

4.2(3)         Form of Representative's Warrant

4.3(2)         Form of Warrant Agreement, dated as of August 31, 1998, in favor
               of Gunn Allen

4.4(2)         Form of Subscription Document for August 1999 Private Placement

4.5(2)         Form of Subscription Document for November 1999 Private Placement

4.6(2)         Form of convertible Promissory Note

10.1(2)        PartsBase.com, Inc. Amended Restricted Stock Bonus Plan

10.2(1)        PartsBase.com, Inc. Stock Option Plan

10.3(2)        Lease Agreement with respect to office space in Boca Raton,
               Florida

10.4(3)        Form of Indemnification Agreement

10.5(2)        Employment Agreement of Robert Hammond, Jr.

10.6(2)        Employment Agreement of Steven Spencer

10.7(2)        Employment Agreement of Kevin Steil

10.8(2)        Employment Agreement of Michael Siegel

10.9(2)        Employment Agreement of Yves Duplan

10.10(2)       Consulting Agreement with Plan Three Solutions, L.L.C.

10.11(2)       Software License Agreement with Tradex Technologies, Inc.

10.12(2)       Software License Agreement with Trading Dynamics, Inc.


<PAGE>

10.13(4)       Sublease Agreement dated April 2000 between Alamo Rent-A-Car LLC
               and the Company

10.14(4)       Content License and Reseller Agreement between USA Information
               Systems, Inc. and the Company

10.15(6)       Amendment to the Content License and Reseller Agreement between
               USA Information Systems, Inc. and the Company

17.1(5)        Resignation letter of Louis W. Storms IV as a member of the
               company's Board of Directors

23.1(6)        Independent Auditors' Consent

----------

(1)  Incorporated  by reference to the  Registrant's  Registration  Statement on
     Form S-1 (File No.  333-94337),  filed on  January  10,  2000 and  declared
     effective on March 21, 2000.

(2)  Incorporated  by  reference  to  the  Registrant's  Amendment  No.1  to the
     Registration Statement on Form S-1 (File No. 333-94337),  filed on February
     22, 2000 and declared effective on March 21, 2000.

(3)  Incorporated  by  reference  to  the  Registrant's  Amendment  No.2  to the
     Registration Statement on Form S-1 (File No. 333-94337), filed on March 16,
     2000 and declared effective on March 21, 2000.

(4)  Incorporated  by  reference  to the  Registrant's  Form 10-Q for the period
     ended June 30, 2000 filed on August 14, 2000.

(5)  Incorporated  by reference to the  Registrant's  Form 8-K dated October 26,
     2000 and filed on December 6, 2000.

(6)  Filed herewith.