PARTSBASE COM INC, S-1, 2000-01-10

PARTSBASE COM INC
S-1, 2000-01-10

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<PAGE>
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 10, 2000

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

PARTSBASE.COM, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
TEXAS 7379 76-0604158
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

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

7171 N. FEDERAL HIGHWAY, SUITE 100
BOCA RATON, FL 33487
(561) 443-3302
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------

ROBERT A. HAMMOND, JR.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PARTSBASE.COM, INC.
7171 N. FEDERAL HIGHWAY, SUITE 100
BOCA RATON, FL 33487
(561) 443-3302
(Name and address, including zip code, and telephone number, including area
code, of agent for service)
------------------------------

Copies to:

<TABLE>
<S> <C>
ROBERT M. STEINBERG, ESQ. JEFFREY R. HOULE, ESQ.
JEFFER, MANGELS, BUTLER & MARMARO LLP DANIEL S. BERGER, ESQ.
2121 AVENUE OF THE STARS, 10TH FLOOR GREENBERG TRAURIG, LLP
LOS ANGELES, CALIFORNIA 90067 1750 TYSONS BOULEVARD, SUITE 1200
(310) 203-8080 MCLEAN, VA 22102
FAX (310) 203-0567 (703) 749-1300
FAX (703) 749-1301
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. /X/

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/

Pursuant to Rule 416, there are also being registered hereby such additional
indeterminate number of shares of such Common Stock as may become issuable by
reason of stock splits, stock dividends and similar adjustments as set forth in
the provisions of the Representative's Warrant. / /

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C>
4,936,250 shares Common Stock, no par value (2)............. $69,107,500 $18,244.40
1 Representative's Warrant.................................. $50.00
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2) Consists of (i) 3,000,000 shares to be offered by the Registrant,
(ii) 450,000 shares subject to the underwriters' over-allotment option,
(iii) 150,000 shares issuable upon exercise of the Representative's Warrant,
and (iv) 1,336,250 shares issuable upon conversion of outstanding
convertible promissory notes and Series A Convertible Preferred Stock which
are being registered on behalf of the holders thereof but which are not
being underwritten.

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE

This Registration Statement contains two prospectuses.

The first prospectus forming a part of this Registration Statement is to be
used in connection with the underwritten initial public offering of 3,450,000
shares of the Registrant's common stock (including 450,000 shares of common
stock subject to the underwriters' over-allotment option), and immediately
follows this page.

The second prospectus forming a part of this Registration Statement is to be
used in connection with the sale from time to time by certain stockholders of
(i) 481,250 shares of common stock issuable upon the automatic conversion of
convertible promissory notes, and (ii) 855,000 shares of common stock issuable
upon the automatic conversion of Series A Convertible Preferred Stock.

The second prospectus will consist of (i) pages SS-1 and SS-2 (the front
cover page and inside front cover page of the second prospectus), (ii) pages 3
through 54 of the first prospectus (other than the sections entitled "Use of
Proceeds" and "Underwriting") and pages F-1 through F-17 of the first
prospectus, (iii) page SS-5 (which will appear in place of the section entitled
"Underwriting"), (iv) pages SS-3 and SS-4, and (v) page SS-6 (which is the back
cover page of the second prospectus).
<PAGE>
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED , 2000

PROSPECTUS

[LOGO]

3,000,000 SHARES OF COMMON STOCK

$ PER SHARE INITIAL PUBLIC OFFERING PRICE

PartsBase.com, Inc. is offering 3,000,000 shares of its common stock in an
initial public offering. Prior to this initial public offering, there has been
no public market for our common stock. We expect our initial public offering
price to be between $12.00 and $14.00 per share. We have filed an application
for our common stock to be quoted on the Nasdaq National Market under the symbol
"PRTS."

INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 7 FOR RISKS THAT YOU SHOULD CONSIDER BEFORE INVESTING IN THE SHARES OF
OUR COMMON STOCK.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- --------
<S> <C> <C>
Initial public offering price............................... $ $
Underwriting discounts and commissions...................... $ $
Proceeds, before expenses, to PartsBase.com................. $ $
</TABLE>

We have granted the underwriters a 45-day option to purchase up to an
additional 450,000 shares of common stock to cover over-allotments. The
underwriters expect to deliver shares of common stock to purchasers on or about
, 2000.

CRUTTENDEN ROTH INCORPORATED

The date of this prospectus is , 2000.
<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
Prospectus Summary.......................................... 3
Risk Factors................................................ 7
Use of Proceeds............................................. 20
Dividend Policy............................................. 20
Capitalization.............................................. 21
Dilution.................................................... 22
Selected Financial Data..................................... 23
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 24
Business.................................................... 28
Management.................................................. 38
Certain Relationships and Related Transactions.............. 45
Principal Stockholders...................................... 46
Description of Capital Stock................................ 48
Shares Eligible for Future Sale............................. 51
Underwriting................................................ 52
Legal Matters............................................... 54
Experts..................................................... 54
Where You Can Find More Information......................... 54
Index to Financial Statements............................... F-1
</TABLE>

2
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS
AND MAY NOT CONTAIN ALL THE INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND
OUR BUSINESS AND THIS OFFERING FULLY, YOU SHOULD READ THIS ENTIRE PROSPECTUS
CAREFULLY, INCLUDING THE FINANCIAL STATEMENTS AND THE RELATED NOTES BEGINNING ON
PAGE F-1. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS.
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT FROM
THAT CONTAINED IN THIS PROSPECTUS. IN THIS PROSPECTUS, ANY REFERENCES TO
"PARTSBASE.COM," THE "COMPANY," "WE," "OUR" AND "US" REFER TO
PARTSBASE.COM, INC.

OUR BUSINESS

PartsBase.com is 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 a
means for our over 13,000 members in more than 115 countries 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 1,200 suppliers, which we believe
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, Pratt & Whitney,
Northrup Grumman Aviation and United Parcel Service.

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 ("FAA") certified facilities, traders and brokers. Aerospace
Industries Association estimates that total exports and imports of aircraft
parts and products were approximately $29 billion in 1999. Furthermore, in
recent years, the airline industry has experienced rapid growth in business and
leisure travel. As a result, the world fleet of aircraft is projected to
increase from 12,600 aircraft in 1998 to 28,400 aircraft in 2018, according to
Boeing's 1999 Current Market Outlook (the "Boeing Report"). The increase in
travel and the number of aircraft have likely contributed to demand for aviation
parts and products as aircraft must be serviced at scheduled intervals. 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.
Forrester Research estimates that the business-to-business e-commerce market
will grow from $43 billion in 1998 to $1.3 trillion by 2003.

Our goal is to solidify a position as a leading aviation industry e-commerce
marketplace in order to capitalize on the continued expansion of the market for
aviation parts and products. Our solution 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. We
believe that the value of our e-marketplace grows substantially as each new
member brings additional parts, products, information and buying power to our
community.

OUR SOLUTION

Our solution is designed to streamline the procurement cycle for our members
by enabling them to source, bid parts and products, and eventually manage their
order payment online. Our target members are primarily the businesses that buy
and sell aviation parts, supplies and components in the global marketplace, and
our current members vary from small businesses to Fortune 500 companies such as
General Electric, Honeywell, AMR and Boeing. 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 membership, each of our
e-marketplace members can immediately participate as both a buyer and a seller.

3
<PAGE>
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 and proposed Web site features include:

- online buying and selling utilizing advanced parts search features,
inventory listings, and requests for quotations, also known as RFQs,
member access to detailed information regarding current and prior
transactions;

- online auctions for aviation parts and products;

- procurement controls providing members with the ability to control and
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.

In addition, we have recently signed an agreement with Tradex
Technologies, Inc., a subsidiary of Ariba, Inc., to install and implement
customized software that will allow for seamless online transactions. We have
also contracted with Trading Dynamics, Inc., another subsidiary of Ariba, Inc.,
to provide software for our auction platform. We expect that such software will
further enable online negotiating, pricing and bidding, as well as allow us to
act as a clearing house for products, and to allow our members to complete their
transactions online.

OUR BUSINESS STRATEGY

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:

- Achieving growth through transaction fees and other sources of
revenues;

- Strengthening the PartsBase.com brand;

- Increasing membership and market penetration;

- Establishing and expanding strategic sales and marketing relationships;

- Expanding our international presence; and

- Attracting and retaining members with new content, features and
services.

OUR HISTORY

We began operations in April 1996 under the name Aviation Parts Base, a
division of Aviation Laboratories, Inc. 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 headquarters are located at 7171
N. Federal Highway, Boca Raton, Florida 33487 and our telephone number is
(561) 443-3302. Our Web site address is WWW.PARTSBASE.COM. The information
contained on our Web site is not a part of this prospectus.

4
<PAGE>
THE OFFERING

Unless otherwise indicated, the following information assumes that the
underwriters do not exercise the over-allotment option to purchase up to 450,000
additional shares in the offering and reflects the automatic conversion of all
outstanding shares of preferred stock and all outstanding convertible notes into
shares of our common stock upon completion of this offering.

<TABLE>
<S> <C>
COMMON STOCK OFFERED BY US................... 3,000,000 shares

COMMON STOCK OUTSTANDING AFTER THIS 13,587,500 shares (1)
OFFERING...................................

USE OF PROCEEDS.............................. We intend to use substantially all the
proceeds of this offering for working capital
and general corporate purposes, including
information technology, expansion of sales
and marketing activities and future
acquisitions. We may also use a portion of
the net proceeds for the development of
business-to-business e-commerce solutions for
other industries.

SHARES BEING REGISTERED FOR THE ACCOUNT OF
CERTAIN STOCKHOLDERS....................... An additional 1,336,250 shares are being
registered pursuant to the registration
statement of which this prospectus is a part
on behalf of certain stockholders. Such
shares may not be sold, transferred or
assigned without the consent of the
underwriters during the 180 day period
following the effective date of this
offering. We will not receive any of the
proceeds from sales of such shares. Such
shares are not being underwritten by the
underwriters.

PROPOSED NASDAQ NATIONAL MARKET SYMBOL....... PRTS

RISK FACTORS................................. Investment in our common stock involves
significant risk and you could lose your
entire investment.
</TABLE>

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

(1) Excludes:

- 200,000 shares issuable upon exercise of outstanding stock purchase
warrants;

- 2,000,000 shares reserved for issuance under our Stock Option Plan, under
which options to acquire 994,375 shares are outstanding as of the date of
this prospectus; and

- 150,000 shares of common stock issuable upon exercise of stock purchase
warrants to be issued to Cruttenden Roth Incorporated, the representative
of the underwriters, upon completion of the offering at an exercise price
equal to 120% of the initial public offering price.

5
<PAGE>
SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1996 NINE MONTHS
(INCEPTION), YEAR ENDED ENDED
TO DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------------- -----------------------------
1996 1997 1998 1998 1999
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:

Net revenue............................ $ -- $ 2,861 $ 3,504 $ 800 $ 120,761

Cost of revenue........................ 16,842 104,041 43,462 34,112 585,419

Noncash compensation expense........... -- -- -- -- 114,400
---------- ---------- ---------- ---------- -----------

Total cost of revenue.................. 16,842 104,041 43,462 34,112 699,819
---------- ---------- ---------- ---------- -----------

Gross loss............................. (16,842) (101,180) (39,958) (33,312) (579,058)

Operating expenses
General and administrative........... 55,064 90,452 108,163 75,188 515,543
Noncash compensation expense......... 464,578
---------- ---------- ---------- ---------- -----------
Total operating expenses........... 55,064 90,452 108,163 75,188 980,121
---------- ---------- ---------- ---------- -----------

Operating loss..................... (71,906) (191,632) (148,121) (108,500) (1,559,179)
Other income (expense)
Interest expense..................... -- -- -- -- (800,511)
Interest income...................... -- -- -- -- 2,437
Total other income (expense)....... -- -- -- -- (798,074)
---------- ---------- ---------- ---------- -----------

Net loss (1)....................... $ (71,906) $ (191,632) $ (148,121) $ (108,500) $(2,357,253)
========== ========== ========== ========== ===========
Net loss per common share--basic and
diluted (1).......................... $ (0.24)
Weighted average common shares
outstanding--basic and diluted....... 9,958,250
</TABLE>

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
-------------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
---------- ---------- -----------
<S> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................... $ 257,796 $2,209,661 $36,479,661
Working capital (deficit)................................... (364,802) 1,587,063 35,857,063
Total assets................................................ 2,692,319 4,644,184 38,914,184
Convertible notes payable................................... 900,000 -- --
Total stockholders' equity.................................. 1,012,840 3,877,715 38,147,715
</TABLE>

The pro forma balance sheet data gives effect to the mandatory conversion of
all outstanding convertible notes into common stock under the terms of the
June 9, 1999 Private Placement, the issuance and mandatory conversion of the
convertible notes issued on November 10, 1999, and the issuance and mandatory
conversion of Series A convertible Preferred Stock into common stock.
Additionally, the pro forma as adjusted balance sheet data gives effect to the
sale of 3,000,000 shares of our common stock at an assumed initial public
offering price of $13.00 per share after deducting underwriters discounts and
commissions and estimated offering expenses.

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

(1) Since we have incurred net losses since inception, we would not have
incurred any income tax liabilities during the periods prior to
incorporation on April 27, 1999, and any deferred tax assets would have had
a corresponding valuation allowance and therefore pro forma presentation is
not required.

6
<PAGE>
RISK FACTORS

You should carefully consider the following risks, in addition to the other
information contained in this prospectus, before making any investment decision.
The risks described below are the most significant factors that make an
investment in our common stock speculative and risky. As a result of any of the
risks we encounter, our business, financial condition and results of operations
could be materially adversely affected. In addition, any of these adverse
effects could cause the trading price of our common stock to decline and you may
correspondingly lose all or some portion of your investment in us.

RISKS RELATED TO OUR BUSINESS

OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT OR IMPOSSIBLE FOR YOU TO
ACCURATELY EVALUATE OUR BUSINESS RESULTS AND FORECAST OUR FUTURE PROSPECTS.

Within the last 12 months, we began operating our business using a
subscription-based business model. Our limited history makes it difficult to
evaluate our future prospects. Our prospects are subject to risks and
uncertainties frequently encountered by start-up companies in new and rapidly
evolving markets such as the business-to-business e-commerce market. Many of
these risks are unknown, but some of these specific risks and difficulties
include:

- we may be unable to significantly increase and maintain customer
adoption and use of the Internet and our Web site as a means of
purchasing aviation parts and products;

- we may be unable to develop and enhance the PartsBase.com brand;

- we may be unable to maintain existing or establish new relationships
with buyers and sellers of aviation parts and products;

- we currently depend on revenues from subscription fees and we may be
unable to maintain subscription revenues or significantly increase
revenues from other sources;

- we may be unable to adapt to rapidly changing technologies and
developing markets;

- we may be unable to effectively manage our rapidly expanding operations
and the increasing use of our services;

- we may be unable to attract, retain and motivate qualified personnel,
particularly people who understand our industry;

- we may be unable to compete in a highly competitive market; and

- we may be unable to comply with applicable laws and regulations in
order to economically compete.

Our failure to identify the challenges and risks in this new market and
successfully address these risks would harm our business.

WE HAVE NEVER BEEN PROFITABLE, ANTICIPATE CONTINUED LOSSES AND CANNOT GUARANTEE
PROFITABILITY IN THE FUTURE, AND THEREFORE YOUR INVESTMENT CANNOT BE VALUED ON
THE BASIS OF OUR EARNINGS.

We have never been profitable and expect to continue to incur operating
losses on both a quarterly and annual basis for at least the foreseeable future.
We may be unable to ever achieve profitability in the future. We have incurred
net losses in each accounting period since we commenced operations in
April 1996, including a net loss of $2,357,253 for the nine month period ended
September 30, 1999. We expect to continue to make significant expenditures for
sales and marketing, information technology and general and administrative
functions. As a result, we will need to generate significant revenues to achieve
profitability. There can be no assurance that revenues will grow in the future
or that we will

7
<PAGE>
achieve sufficient revenues for profitability. If revenues grow more slowly than
we anticipate, or if operating expenses exceed our expectations, our business
would be severely harmed. We cannot be certain that we can sustain or increase
profitability in the future.

THE REVENUE AND PROFIT POTENTIAL OF OUR BUSINESS MODEL IS UNPROVEN SO WE MAY NOT
BE ABLE TO SUCCESSFULLY EXPAND OUR MEMBERSHIP BASE AND ESTABLISH ADDITIONAL
REVENUE SOURCES.

We currently generate revenues from e-commerce customers in the aviation
industry who subscribe to our service. Our business model is new to the aviation
industry and our ability to generate revenue or profits is unproven. We focus
and expect to continue to focus on the aviation industry and so our success is
dependent on our ability to expand our membership base within such 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 revenue
sources 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. Such 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. 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.

We face current and expect to face intense future competition from two main
sources:

- other companies with similar e-commerce offerings; and

- traditional suppliers and distributors of aviation parts.

We could face further competition in the future from traditional suppliers
and distributors that enter into business-to-business e-commerce over the
Internet either on their own or by partnering with other companies. For example,
Boeing and Oracle have recently entered into discussions to establish an
integrated online network to be used by Boeing suppliers for procurement and
other activities.

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.

Virtually all of our current competitors have longer operating histories,
larger customer bases and greater brand recognition than we have and their
financial, marketing, technical and other resources may exceed ours. In
addition, other e-commerce service providers may be acquired by, receive
investments from or enter into other commercial or strategic relationships with
large, well-established

8
<PAGE>
and well-financed companies. Therefore, our competitors may be able to devote
more resources to marketing, promotional campaigns, and product development than
we can, and they may adopt more aggressive pricing policies. These factors may
preclude us from competing effectively in the online aviation parts industry.

WE MAY NOT BE ABLE TO MAINTAIN ADEQUATE FINANCIAL RESOURCES AND COMPETENT
MANAGEMENT OR IMPLEMENT EFFECTIVE CONTROLS AND REPORTING SYSTEMS, SO WE MAY
INCUR UNNECESSARY EXPENSES AS OUR BUSINESS GROWS.

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 we
have grown our workforce substantially. We have grown from three employees in
January 1997 to 67 employees as of December 31, 1999. In addition, we plan to
continue to add to our sales and marketing, customer support and product
development personnel. Our rapid 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, we may be unable to operate with adequate,
accurate and timely financial and operational information and thus incur
unnecessary expenses as a result of our growth.

FUTURE GROWTH OF OUR OPERATIONS MAY MAKE ADDITIONAL CAPITAL OR FINANCING
NECESSARY, SO YOU MAY BECOME SUBJECT TO DILUTION OF YOUR INVESTMENT AND YOUR
RIGHTS AS A STOCKHOLDER MAY BE SUBORDINATED TO OTHER INVESTORS.

We anticipate that the proceeds of this offering, cash on hand and cash
equivalents will be adequate to meet our working capital needs for at least the
next 12 months. However, beyond that period, we may need to raise additional
funds in order to:

- finance unanticipated working capital requirements;

- develop or enhance existing services or products;

- fund costs associated with strategic marketing alliances;

- respond to competitive pressures; and

- acquire complementary businesses, technologies, content or products.

We cannot be certain that we will be able to obtain such funds on favorable
terms, if at all. If we decide to raise funds by issuing additional equity
securities, purchasers in this offering may experience additional dilution.
Issuance of additional equity securities may also involve granting preferences
or privileges ranking senior to those purchasers in this offering. If we cannot
obtain sufficient funds, we may not be able to grow our operations, take
advantage of future business opportunities or respond to technological
developments or competitive pressures.

THE UNPREDICTABILITY OF OUR QUARTERLY RESULTS MAY NEGATIVELY AFFECT THE TRADING
PRICE OF OUR COMMON STOCK AND HAMPER YOUR ABILITY TO SELL YOUR STOCK ON
FAVORABLE TERMS.

Our revenues and results of operations may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside of our
control. As a result, you should not rely on period-to-period comparisons of
revenues and results of operations as an indication of our future performance.
Some of the factors that may affect our revenues and results of operations
include:

- demand for and market acceptance of our solution;

- inconsistent growth, if any, of our subscriber base;

9
<PAGE>
- introduction of new services or enhancements by us or our competitors;

- changes in our pricing policy or those of our competitors;

- amount and timing of capital expenditures and other costs relating to
the expansion of our operations;

- timing and number of new hires;

- technical difficulties with our Web site; and

- general economic conditions.

We believe that our quarterly revenues, expenses and operating results are
likely to vary significantly in the future, that period-to-period comparisons of
results of operations are not necessarily meaningful and that, as a result, such
comparisons should not be relied upon as indications of our future performance.
Due to these and other factors, it is difficult to predict the effects of such
fluctuations on our business. If fluctuations in our operations cause our
operating results to fall below market analysts' expectations in some future
quarters, our stock price will likely decline.

IF WE CANNOT BUILD A CRITICAL MASS OF SELLERS, WE WILL NOT BE ABLE TO INCREASE
OUR VOLUME AND VARIETY OF PRODUCTS DISPLAYED AND DRAW MORE BUYERS.

Our business model depends in large part on our ability to build a critical
mass of parts, products and sellers. To attract and maintain sellers, we must
build a critical mass of buyers. However, buyers must perceive value in our
solution which, in part, depends upon the breadth of our product offerings from
our sellers. If we are unable to increase the number of sellers and draw more
buyers to our e-marketplace, we will not be able to benefit from any network
effect, where the value to each member in our e-marketplace increases with the
addition of each new member. Additionally, our public e-marketplace operates as
a bidding process allowing buyers to compare the prices of the same part or
product offered by multiple sellers. Because of the increased competition and
comparisons created by a bidding environment, some sellers may be reluctant to
join or continue as a member of our e-marketplace. To be an attractive venue for
buyers, we must add and retain a substantial number of sellers as members. If we
are unable to do so, the overall value of our e-marketplace may be harmed and
our business, revenues, financial condition and results of operations could be
negatively effected.

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. Generally, 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. If these 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 SO WE MAY BE UNABLE TO
INCREASE OUR REVENUES PAST A CERTAIN POINT UNLESS WE DEVELOP OTHER MEANS OF
GENERATING REVENUE.

A major element of our growth strategy is the expansion of our subscriber
base. Because our members are participants in the general market for aviation
parts, our e-marketplace is derivative of the larger aviation parts market and
our potential subscriber base is limited by the number of participants in the
larger market. Additionally, the barriers to entry which exist in the general
aviation parts market may limit the entry of additional subscribers into our
e-marketplace. Accordingly, the

10
<PAGE>
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 WE CANNOT TIMELY AND ACCURATELY ADD SELLER PRODUCT DATA TO OUR DATABASE, WE
MAY LOSE BUYERS AND POTENTIAL REVENUE.

Currently, we are responsible for loading seller product information into
our database and categorizing the information for search purposes. This process
entails a number of risks, including dependence on our sellers to provide us in
a timely manner with accurate, complete, and current information about their
products, and to promptly update this information when it changes. Timely
loading of these products and information in our database depends upon a number
of factors, including the file formats of the data provided to us by sellers and
our ability to further automate and expand our operations to accurately load
these data in our product database, the nature and timeliness of any of which
could delay the actual loading of these products.

IF OUR SELLERS DO NOT PROVIDE TIMELY AND PROFESSIONAL DELIVERY OF PRODUCTS TO
OUR BUYERS OUR BUSINESS MAY BE HARMED.

We rely on our sellers to deliver aviation 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 DEPEND HEAVILY ON THE CONTINUED EMPLOYMENT OF OUR EXECUTIVE OFFICERS AND ON
HIRING AND RETAINING QUALIFIED EMPLOYEES.

Our success is substantially dependent on the performance of our executive
officers. Our failure to successfully manage our executive personnel
requirements would have a negative effect on our business, revenues, financial
condition and results of operations. We may experience difficulty from time to
time in hiring the executive personnel necessary to support the growth of our
business. Only two of our current executive officers were employed by us or our
predecessor prior to May 1999. The loss of the services of any of our executive
officers or other key employees could have a negative effect on our business. In
particular, the loss of services of Robert A. Hammond, Jr., our President and
Chief Executive Officer, would have a detrimental effect on our business.
Mr. Hammond is the founder of PartsBase.com, Inc. and is primarily responsible
for our vision and future direction.

Our current and future operations also depend upon our ability to attract,
retain and motivate highly qualified managerial, technical, marketing and sales
personnel. Competition for qualified personnel is intense, particularly in the
e-commerce employment market. We cannot assure you that we will be able to
retain our existing employees or attract, retain and motivate highly qualified
personnel in the future. Our inability to retain or attract qualified personnel
could impair the growth of our business, promotion of our PartsBase.com brand
and e-marketplace, and adversely affect our business, financial condition and
results of operations.

WE MAY BE UNABLE TO IMPLEMENT ADEQUATE MEASURES TO MAINTAIN THE VALUE OF OUR
INTELLECTUAL PROPERTY AND INTERNET DOMAIN NAME AND PROTECT AGAINST THIRD PARTIES
WHO MAY TAKE ACTIONS NEGATIVELY AFFECTING OUR BUSINESS.

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.

11
<PAGE>
We own the federal trademark registration for "PARTSBASE," and we have applied
for federal trademark protection for "PARTSBASE.COM." However, we do not
currently own any federally registered copyrights or patents, and we rely on
general trademark and copyright law, trade secret protection and confidentiality
and/or license agreements with our employees, members and business partners to
protect our proprietary rights. Despite our precautions, unauthorized third
parties may infringe or misappropriate our intellectual property, copy certain
portions of our services or reverse engineer or obtain and use information that
we regard as proprietary. Additionally, the laws of some foreign countries do
not protect proprietary rights to the same extent as do the laws of the United
States. 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 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 which could create confusion that
diverts traffic away from our e-marketplace to other Web sites. The acquisition
and maintenance of Web addresses generally is regulated by governmental agencies
and their designees, and the regulation of Web addresses in the United States
and in foreign countries is subject to change. As a result, we may not be able
to acquire or maintain relevant Web addresses in all countries where we conduct
business. Furthermore, the relationship between regulations governing such
addresses and laws protecting proprietary rights is unclear.

OTHER PARTIES MAY ASSERT CLAIMS AGAINST US THAT WE ARE INFRINGING UPON THEIR
INTELLECTUAL PROPERTY RIGHTS.

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 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 business.

OUR BUSINESS MAY BE HARMED BY FRAUDULENT ACTIVITIES OF THIRD PARTIES ON OUR WEB
SITE.

Our future success will depend largely upon sellers reliably 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.

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<PAGE>
IF WE ARE UNABLE TO CONTINUE LICENSING THIRD-PARTY TECHNOLOGIES, WE MAY
EXPERIENCE DELAYS IN PRODUCT DEVELOPMENT WHICH COULD IN TURN RESULT IN A LOSS OF
MEMBERS AND SLOW OUR GROWTH.

We intend to continue to license technology from third parties, including
our Web server and encryption technology. Any transaction-based services that we
offer will be dependent upon our ability to license and customize third-party
software. Our inability to obtain any of these licenses could delay product
development until equivalent technology can be identified, licensed and
integrated. Any such delays in services could result in a loss of members, slow
our growth and severely harm our business. The e-commerce market is rapidly
evolving and we may need to license additional technologies to remain
competitive. We may not be able to license these technologies on terms favorable
to us or at all. In addition, we may fail to successfully integrate any licensed
technology into our services. These third-party licenses may expose us to
increased risks, including risks associated with the integration of new
technology, the diversion of resources from the development of our own
proprietary technology and our ability to generate revenues from new technology
sufficient to offset associated acquisition and maintenance costs.

IF WE EXPAND OUR INTERNATIONAL SALES AND MARKETING ACTIVITIES, OUR BUSINESS WILL
BE EXPOSED TO THE NUMEROUS RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS.

We have members in over 115 countries. We intend to expand our operations to
increase our presence in a number of international markets. International
operations are subject to many risks, including:

- the impact of recessions in economies outside the United States;

- changes in regulatory requirements;

- reduced protection for intellectual property rights in some countries;

- potentially adverse tax consequences;

- political and economic instability;

- fluctuations in currency exchange rates; and

- seasonal reductions in business activity during the summer months in
Europe and certain other parts of the world.

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<PAGE>
RISKS RELATED TO THE INTERNET AND E-COMMERCE INDUSTRIES

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

Unlike some other Internet companies and traditional suppliers and
distributors of aviation parts, our success depends on widespread use of and
growth in the use of the Internet for retrieving, sharing and transferring
information among businesses, buyers, sellers and partners. If the Internet
cannot accommodate growth in e-commerce or experiences periods of poor
performance, 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. A number of factors could prevent the acceptance and growth
of e-commerce, including the following:

- e-commerce is at an early stage and buyers may be unwilling to shift
their traditional purchasing to online purchasing;

- businesses may not be able to implement e-commerce applications on
these networks;

- increased government regulation or taxation may adversely affect the
viability of e-commerce;

- insufficient availability of telecommunication services or changes in
telecommunication services may result in slower response times; and

- adverse publicity and consumer concern about the reliability, cost,
ease of access, quality of services, capacity, performance and security
of e-commerce transactions could discourage its acceptance and growth.

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.

IF OUR MEMBERS BELIEVE THAT THERE ARE SECURITY RISKS RELATED TO E-COMMERCE,
THEIR USE OF OUR PRODUCTS AND SERVICES MAY DECLINE.

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 effect 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.
Anyone who is able to circumvent our security measures could misappropriate
proprietary and/or confidential member information, place false orders, or cause
interruptions in our operations. 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 our business.

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<PAGE>
IF WE FAIL TO MAINTAIN ACCURATE DATABASES, 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. We update and maintain extensive
databases of the products, services and e-marketplace transactions for our
members. Our computer systems and databases must allow for expansion, without
losing performance, as a member's business grows. Database capacity constraints
may result in problems with data maintenance and accuracy, which could in turn
cause a disruption in our service and our ability to provide accurate
information to our members. These problems may result in member dissatisfaction
with our service and in a loss of members.

WE MAY NOT BE ABLE TO KEEP UP WITH TECHNOLOGICAL ADVANCEMENTS.

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. Any difficulty keeping
pace with technological advancements could hurt the growth of our business and
retention of our members, and may materially adversely affect our business,
financial condition and results of operations.

WE MAY NOT BE ABLE TO ACCURATELY PREDICT THE RATE OF INCREASE IN THE USAGE OF
OUR E-MARKETPLACE WHICH MAY AFFECT OUR TIMING AND ABILITY TO EXPAND AND UPGRADE
OUR SYSTEMS.

Traffic in our e-marketplace may increase to the point where we might need
to upgrade some of our network hardware and software. In the future we may not
be able to accurately predict the rate of increase in the usage of our
e-marketplace. This may affect our timing and ability to expand and upgrade our
systems and network hardware and software capabilities to accommodate increased
use of our e-marketplace. If we do not appropriately upgrade our systems and
network hardware and software, we may experience downgraded service which could
damage our members' perception of our business and thus harm our business,
financial condition and results of operation.

IF WE ENCOUNTER SYSTEM FAILURE, SERVICE TO OUR MEMBERS COULD BE DELAYED OR
INTERRUPTED, 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 Houston,
Texas and Boca Raton, Florida. Although we periodically back up our databases to
tapes and store the backup tapes offsite, we have not maintained a redundant
site. Our systems and operations are vulnerable to damage or interruption from
human error, sabotage, fire, flood, hurricane, power loss, telecommunications
failure, and similar events. Although we have taken certain steps to prevent a
system failure, we cannot assure you that our measures will be successful and
that we will not experience system failures in the future. Moreover, we have
experienced delays and interruptions in our telephone and Internet access which
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

15
<PAGE>
business dramatically. In addition, we may move to third-party hosting of our
servers. We cannot assure you that this transition, if undertaken, could be
effected without interruptions. Further, any such third-party host could be
subject to the same risks of system failure as our current Web site.

OUR SERVICES DEPEND ON THE ERROR-FREE OPERATION OF COMPLEX SOFTWARE.

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. 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 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 such
information. In addition, we could be exposed to product liability claims
arising out of or relating to aviation parts and products sold through our Web
site. Such claims 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 such product liability
claims.

RISKS RELATED TO THIS OFFERING

OUR EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS WILL EXERCISE
SIGNIFICANT CONTROL OVER PARTSBASE.COM AND COULD LIMIT THE ABILITY OF OUR OTHER
STOCKHOLDERS TO INFLUENCE THE OUTCOME OF DIRECTOR ELECTIONS AND OTHER
TRANSACTIONS SUBMITTED TO A VOTE OF OUR STOCKHOLDERS.

We anticipate that our executive officers, directors and principal
stockholders will, in the aggregate, beneficially own approximately 68.4% of our
outstanding common stock following the completion of this offering (66.2% if the
underwriters' over-allotment option is exercised in full). These stockholders
will be able to exercise substantial influence over all matters requiring
approval by our stockholders, including the election of directors and approval
of significant corporate transactions. This concentration of ownership may also
have the effect of delaying or preventing a change in control of PartsBase.com.

YOU WILL EXPERIENCE IMMEDIATE DILUTION WITH RESPECT TO YOUR SHARES AND
ADDITIONAL DILUTION IF WE NEED MORE CAPITAL OR IF PERSONS HOLDING OPTIONS TO
PURCHASE OUR STOCK EXERCISE THEIR OPTIONS.

You will incur immediate and substantial dilution of $10.48 per share in the
net tangible book value of your shares as a result of this offering. We believe
that we have sufficient cash and cash equivalents to fund our operating and
investing activities for at least the next 12 months. However, we may need to
raise additional funds in the future through public or private financings, or
other arrangements. Historically we have financed our business and operations
through the sale of debt or equity securities. Such financing may not be
available in sufficient amounts, on terms acceptable to us or at all, and may be
dilutive to existing stockholders. In addition, to the extent that options or
warrants to purchase common stock are exercised, you may experience further
dilution.

16
<PAGE>
OUR STOCK HAS NOT BEEN PUBLICLY TRADED BEFORE THIS OFFERING, SO YOU MAY
EXPERIENCE SIGNIFICANT VOLATILITY IN THE MARKET VALUE OF YOUR SHARES AND MAY BE
UNABLE TO SELL OUR STOCK ON TERMS FAVORABLE TO YOU.

Our common stock has not been publicly traded, and an active trading market
may not develop or be sustained after this offering. We and the representative
of the underwriters have determined the initial public offering price. The price
at which our common stock will trade after this offering is likely to be highly
volatile and may fluctuate substantially due to factors such as:

- actual or anticipated fluctuations in our results of operations;

- changes in or failure by us to meet securities analysts' expectations;

- announcements of technological innovations;

- introduction of new services by us or our competitors;

- developments with respect to intellectual property rights;

- conditions and trends in the Internet and other technology industries;
and

- general market conditions.

In addition, the stock market has from time to time experienced significant
price and volume fluctuations that have affected the market prices for the
common stocks of technology companies, particularly Internet companies. These
broad market fluctuations may result in a material decline in the market price
of our common stock. In the past, following periods of volatility in the market
price of a particular company's securities, securities class action litigation
has often been brought against that company. We may become involved in this type
of litigation in the future. Litigation is often expensive and diverts
management's attention and resources which are needed to successfully run our
business. If an active public market in our stock does not develop, you may be
unable to sell your stock on favorable terms.

SHARES ELIGIBLE FOR FUTURE SALE BY OUR EXISTING STOCKHOLDERS MAY ADVERSELY
AFFECT OUR STOCK PRICE.

The market price of our common stock could drop due to the sales of a large
number of shares of our common stock or the perception that such sales could
occur. These factors could also make it more difficult to raise funds through
future offerings of common stock.

After this offering, 13,587,500 shares of common stock will be outstanding.
Of these shares, the 3,000,000 shares sold in this offering will be freely
tradable without restrictions under the Securities Act of 1933, except for any
shares purchased by our "affiliates," as defined in Rule 144 under the
Securities Act. The number of shares of common stock outstanding would increase
to 14,037,500 and the number of freely tradable shares would increase to
3,450,000 if the underwriters exercise their over-allotment option in full.
Simultaneously with this offering, we have registered for resale an aggregate of
1,336,250 shares on behalf of stockholders who acquired shares in connection
with private placements of convertible promissory notes and Series A Convertible
Preferred Stock in 1999.

Holders of all of our outstanding shares as well as each of our executive
officers and directors (regardless of whether they own shares), have entered
into lock-up agreements pursuant to which they have agreed not to sell, pledge,
assign or otherwise transfer, or agree to sell, pledge, assign or transfer any
of their shares of common stock for a period of 180 days after the date of this
prospectus without the prior written consent of Cruttenden Roth Incorporated, on
behalf of the underwriters. These individuals or entities may request that
Cruttenden Roth Incorporated consider an early release from their lock-up
agreement. Cruttenden Roth Incorporated may, at any time and without notice,
grant an early release for shares subject to these lock-up agreements. Giving
effect to these lock-up agreements and applicable legal restrictions, the number
of shares of common stock and the dates when these

17
<PAGE>
shares will become freely tradeable or saleable in the market (subject to volume
limitations and other requirements of Rule 144 applicable to affiliates and
certain other stockholders) is as follows:

<TABLE>
<CAPTION>
NUMBER OF SHARES DATE
- ---------------- ----
<C> <S>
3,000,000 shares At the date of this prospectus.
10,587,500 shares 180 days following the date of this prospectus.
</TABLE>

Upon expiration of the 180-day lock-up period, the shares registered on
behalf of private placement stockholders may be sold in the market pursuant to a
selling stockholder prospectus in the form accompanying the registration
statement of which this prospectus is a part. Shares subject to the 180-day
lock-up period, other than those that are registered on behalf of the private
placement stockholders, may be sold into the public market without registration
under the Securities Act in compliance with the volume limitations and other
applicable restrictions of Rule 144 under the Securities Act. Such shares must
be held for a period of at least one year before they are eligible for resale in
the public market pursuant to Rule 144.

After the date of this prospectus, we intend to file a registration
statement under the Securities Act to register all shares of common stock
issuable upon the exercise of outstanding stock options and reserved for
issuance under our stock option and stock bonus plans. This registration
statement is expected to become effective immediately upon filing, and subject
to the vesting requirements and exercise of the related options (as well as the
terms of the lock-up agreements), shares covered by this registration statement
will be eligible for sale in the public markets. See "Shares Eligible for Future
Sale."

SIGNIFICANT OWNERSHIP BY INSTITUTIONAL SHAREHOLDERS MAY REDUCE LIQUIDITY IN OUR
SHARES AND INCREASE VOLATILITY IN THE TRADING PRICE OF OUR COMMON STOCK.

Because mutual funds and other institutional investors tend to acquire and
hold relatively large blocks of stock that are not easily saleable in the public
market, the acquisition of a substantial portion of the shares offered hereby by
a limited number of institutional investors could effectively reduce the number
of shares available for trading in the public market. Such concentration of
institutional ownership could adversely affect the liquidity of any public
market for our shares. Such reduced liquidity could make it more difficult for
you to sell your stock at favorable prices and could result in increased
volatility in the trading price of our common stock. Moreover, in the event that
any such institutional investor elects to dispose of a large block of stock in
the public market, such sale could have a significant adverse effect on the
trading price of our common stock.

OUR MANAGEMENT WILL HAVE BROAD DISCRETION OVER THE USE OF THE NET PROCEEDS OF
THIS OFFERING AND MAY USE THE NET PROCEEDS FOR PURPOSES OTHER THAN THOSE
DESCRIBED IN THIS PROSPECTUS.

We have no current specific plans for the use of the net proceeds from this
offering. We intend generally to use the net proceeds from this offering for
working capital and general corporate purposes, which may include information
technology, the expansion of our sales and marketing activities and future
acquisitions. We have not yet determined the actual expected expenditures and
thus cannot estimate the amounts to be used for each specified purpose. The
actual amounts and timing of these expenditures will vary significantly
depending on a number of factors, including, but not limited to, the amount of
cash generated by our operations and the market response to the introduction of
any new service offerings. Depending on future developments and circumstances,
we may use some of the proceeds for uses other than those described above. Our
management will therefore have significant flexibility in applying the net
proceeds of this offering. Our success and growth depends on the beneficial use
of the net proceeds.

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<PAGE>
ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS, INDEMNIFICATION AGREEMENTS,
AND TEXAS BUSINESS CORPORATION LAW COULD DELAY OR PREVENT A POSSIBLE TAKEOVER,
EVEN IF A CHANGE IN CONTROL WOULD BE BENEFICIAL TO SOME STOCKHOLDERS.

Our Articles of Incorporation and Bylaws contain provisions that could
discourage potential acquisition proposals or proxy contests and might delay or
prevent a change in control. These provisions, our indemnification agreements
with our directors and executive officers and certain provisions of Texas
Business Corporation Law could make us less attractive to potential acquirers.
These provisions could also result in our stockholders being denied a premium
for, or receiving less for, their shares than they otherwise might have been
able to obtain in a takeover attempt.

OUR STOCKHOLDERS MAY HAVE DIFFICULTY IN RECOVERING MONETARY DAMAGES FROM OUR
DIRECTORS.

Our Articles of Incorporation contain a provision which eliminates the
personal liability of our directors for monetary damages to be paid to us and
our stockholders for some breaches of fiduciary duties. In addition, we have
entered into indemnification agreements with each of our directors and executive
officers regarding certain claims that may be asserted against directors or
officers. As a result of this charter provision and the indemnification
agreements, our stockholders may be unable to recover monetary damages against
our directors for their actions that constitute breaches of fiduciary duties,
negligence or gross negligence. Inclusion of this provision in our charter may
also reduce the likelihood of derivative litigation against our directors and
may discourage lawsuits against our directors for breach of their duty of care
even though some stockholder claims might have been successful and benefited
stockholders.

WE DO NOT INTEND TO PAY DIVIDENDS.

We have never paid dividends on our common stock. We do not intend to pay
dividends and for the foreseeable future purchasers should not expect to receive
dividends on our common stock.

WARNING REGARDING OUR USE OF FORWARD-LOOKING STATEMENTS.

This prospectus contains forward-looking statements which relate to possible
future events, our future performance and our future operations. In some cases,
you can identify forward-looking statements by our use of words such as "may,"
"will," "should," "anticipates," "believes," "expects," "plans," "future,"
"intends," "could," "estimate," "predict," "potential" or "continue," as well as
the negatives of these terms or other similar expressions. These forward-looking
statements are only our predictions. Our actual results could and likely will
differ materially from these forward-looking statements for many reasons,
including the risks described above and appearing elsewhere in this prospectus.
We cannot guarantee future results, levels of activity, performance or
achievements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus to conform them to actual results
or to changes in our expectations.

19
<PAGE>
USE OF PROCEEDS

Assuming a public offering price of $13.00 per share, the net proceeds to us
from the sale of 3,000,000 shares of common stock in this offering are
approximately $34,270,000 ($39,535,000 million if the underwriters'
over-allotment option is exercised in full), after deducting underwriting
discounts and commissions and estimated offering expenses.

We have no current specific plans for use of the net proceeds from this
offering. Our management will have broad discretion over the use of the net
proceeds. We intend to use the net proceeds of this offering for working capital
and general corporate purposes, which may include information technology, the
expansion of our sales and marketing activities and future acquisitions. We may
also use a portion of the net proceeds for the development of
business-to-business e-commerce solutions for other industries.

We have not yet determined the actual expected expenditures and thus cannot
estimate the amounts to be used for each purpose discussed above. The amounts
and timing of these expenditures will vary significantly depending on a number
of factors, including, but not limited to, the amount of cash generated by our
operations and the market response to our introduction of any new services.

In addition, we may use a portion of the net proceeds of this offering to
acquire or invest in businesses, products, services or technologies
complementary to our current business, through mergers, acquisitions, joint
ventures or otherwise. However, we have no specific agreements or commitments
and are not currently engaged in any negotiations with respect to these
transactions. We have not yet established criteria for evaluating acquisitions
or investments. We intend to invest the net proceeds of this offering in
short-term, interest bearing, investment grade securities or guaranteed
obligations of the U.S. government pending the above uses.

DIVIDEND POLICY

We have never declared or paid dividends on our capital stock and do not
anticipate declaring or paying any dividends in the foreseeable future. We
currently intend to retain any future earnings for the expansion of our
business.

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<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of PartsBase.com as of
September 30, 1999:

- on an actual basis;

- on a pro forma basis after giving effect to the issuance and mandatory
conversion of all outstanding convertible notes and all outstanding
Series A Convertible Preferred Stock under the terms of which they were
issued; and

- on a pro forma basis as adjusted to reflect our receipt of the net
proceeds from the sale of the 3,000,000 shares of common stock in this
offering at an assumed initial public offering price of $13.00 per share,
after deducting underwriting discounts and commissions and estimated
offering expenses.

You should read the capitalization table together with the sections of this
prospectus entitled "Selected Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our Financial
Statements, including the notes thereto included elsewhere in this prospectus.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1999
-------------------------------------------------
ACTUAL PRO FORMA PRO FORMA AS ADJUSTED
------ --------- ---------------------
<S> <C> <C> <C>
Convertible notes payable............................... $ 900,000 $ -- $ --
Stockholders' equity (deficit):
Series A convertible preferred stock, 2,000,000 shares
authorized, none issued and outstanding; pro forma--
1,000,000 shares authorized, none issued and
outstanding; pro forma as adjusted--1,000,000 shares
authorized, none issued and outstanding............... -- -- --
Common stock (class A), no par value; 20,000,000 shares
authorized, 9,958,250 shares issued and outstanding;
pro forma--20,000,000 shares authorized, 11,294,500(1)
shares issued and outstanding; pro forma as
adjusted--20,000,000 shares authorized, 14,294,500(1)
shares issued and outstanding(2)...................... -- -- --
Additional paid-in capital.............................. 7,196,767 $11,964,017 $46,234,017
Accumulated deficit..................................... (2,304,522) (4,206,897) (4,206,897)
Unearned compensation................................... (3,879,405) (3,879,405) (3,879,405)
----------- ----------- -----------
Total stockholders' equity.............................. 1,012,840 3,877,715 38,147,715
----------- ----------- -----------
Total capitalization.................................... $ 2,296,173 $ 3,877,715 $38,147,715
=========== =========== ===========
</TABLE>

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

(1) Outstanding shares does not reflect the cancellation in November 1999 of
707,000 shares of common stock outstanding under our Restricted Stock Bonus
Plan at September 30, 1999.

(2) The number of shares of common stock to be outstanding after this offering
is based on the number of shares outstanding as of September 30, 1999, and
does not include the following:

- 200,000 shares issuable upon exercise of an outstanding stock purchase
warrants;

- 2,000,000 shares reserved for issuance under our Stock Option Plan, under
which options to acquire 994,375 shares are outstanding as of the date of
this prospectus; and

21
<PAGE>
DILUTION

Purchasers of the common stock in this offering will experience immediate
and substantial dilution in the net tangible book value of the common stock from
the initial public offering price. Net tangible book value per share represents
the amount of our total tangible assets reduced by the amount of our total
liabilities, divided by the number of shares of common stock outstanding.

As of September 30, 1999, our pro forma net tangible book value was
$1,736,049, or $0.15 per share of common stock after giving effect to the
issuance and conversion of all outstanding Series A Convertible Preferred Stock
and convertible notes into shares of common stock.

As of September 30, 1999, our pro forma net tangible book value as adjusted
for the sale of the 3,000,000 shares offered in this offering and application of
the net proceeds of $34,270,000 (at the assumed initial public offering price of
$13.00 per share and after deducting the underwriting discounts and commissions
and estimated offering expenses), would have been approximately $2.52 per share.

This represents an immediate increase of $2.37 per share to existing
stockholders and an immediate and substantial dilution of $10.48 per share to
new investors purchasing common stock in this offering. The following table
illustrates this per share dilution:

<TABLE>
<CAPTION>
PER SHARE OF
COMMON
STOCK
--------------
<S> <C> <C>
Assumed initial public offering price....................... $13.00
Pro forma net tangible book value as of September 30,
1999.................................................... $0.15
Increase attributable to new investors.................... 2.37
Pro forma net tangible book value after the offering........ 2.52
------
Dilution to new investors................................... $10.48
======
</TABLE>

The following table summarizes, on a pro forma basis as of September 30,
1999, the differences between the total consideration paid and the average price
per share paid by the existing stockholders, including the conversion of
convertible notes and Series A Convertible Preferred Stock into common stock and
the new investors with respect to the number of shares of common stock purchased
from us based on the assumed initial public offering price of $13.00 per share
and before deducting the underwriting discounts and commissions and our
estimated offering expenses:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ---------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- -------- ----------- -------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders....... 11,294,500 79.0% $ 3,100,000 7.4% $ 0.27
New investors............... 3,000,000 21.0 39,000,000 92.6 $13.00
---------- ----- ----------- -----
Totals.................... 14,294,500 100.0% $42,100,000 100.0%
========== ===== =========== =====
</TABLE>

The above discussion and tables exclude:

- 200,000 shares issuable upon exercise of an outstanding stock purchase
warrants;

- 2,000,000 shares reserved for issuance under our Stock Option Plan, under
which options to acquire 994,375 shares are outstanding as of the date of
this prospectus; and

In addition, the above discussion does not reflect the cancellation in
November 1999 of 707,000 shares of common stock outstanding under our Restricted
Stock Bonus Plan at September 30, 1999.

22
<PAGE>
SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with the
financial statements and the related notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" appearing
elsewhere in this prospectus. The statement of operations data for the period
from April 1, 1996 (date of inception) to December 31, 1996 and the years ended
December 31, 1997 and 1998 and the nine months ended September 30, 1999, and the
balance sheet data at September 30, 1999 and December 31, 1996, 1997 and 1998
has been derived from the audited financial statements of PartsBase.com. We
believe the interim financial data reflect all adjustments necessary to present
fairly the results of operations for the nine months ended September 30, 1998.
These adjustments are of a normal recurring nature. The results of operations of
prior periods are not necessarily indicative of results that may be expected for
any other period. Our predecessor was founded in April 1996 under the name
Aviation Parts Base, a division of Aviation Laboratories, Inc., and began
accepting members to the database at such time. 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 Laboratories, Inc. On
April 27, 1999, Mr. Hammond transferred the assets of the division into and
incorporated PartsBase.com as a Texas corporation. The accounting for the
contribution of the division into the Company 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.

Cost of revenue........................ 16,842 104,041 43,462 34,112 585,419
Noncash compensation expense........... -- -- -- -- 114,400
---------- ---------- ---------- ---------- -----------
Total cost of revenue.................. 16,842 104,041 43,462 34,112 699,819
---------- ---------- ---------- ---------- -----------
Gross loss............................. (16,842) (101,180) (39,958) (33,312) (579,058)
Operating expenses
General and administrative........... 55,064 90,452 108,163 75,188 515,543
Noncash compensation expense......... 464,578
---------- ---------- ---------- ---------- -----------
Total operating expenses........... 55,064 90,452 108,163 75,188 980,121
---------- ---------- ---------- ---------- -----------
Operating loss..................... (71,906) (191,632) (148,121) (108,500) (1,559,179)
Other income (expense)
Interest expense..................... -- -- -- -- (800,511)
Interest income...................... -- -- -- -- 2,437
Total other income (expense)....... -- -- -- -- (798,074)
---------- ---------- ---------- ---------- -----------
Net loss (1)....................... $ (71,906) $ (191,632) $ (148,121) $ (108,500) $(2,357,253)
========== ========== ========== ========== ===========
Net loss per common share--basic and
diluted (1).......................... -- -- -- -- $ (0.24)
Weighted average common shares
outstanding--basic and diluted....... -- -- -- -- 9,958,250
</TABLE>

<TABLE>
<CAPTION>
AS OF
DECEMBER 31,
--------------------------------------------------------- AS OF
1996 1997 1998 SEPTEMBER 30, 1999
----------------- ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents........... $ -- $ -- $ -- $ 257,796
Working capital deficit............. (2,043) (1,709) (25,128) (364,802)
Total assets........................ 1,767 7,848 6,084 2,692,319
Convertible notes payable........... -- -- -- 900,000
Total stockholders' equity
(deficit)......................... (276) 6,139 (19,044) 1,012,840
</TABLE>

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

23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of
operations should be read together with the consolidated financial statements
and the related notes included elsewhere in this prospectus 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
prospectus.

OVERVIEW

PartsBase.com is an online provider of Internet business-to-business
e-commerce services for the aviation industry. Our e-commerce marketplace
provides a means for our members to buy and sell aviation parts and products in
an efficient, competitive and cost-effective manner. Our target members are
primarily the businesses that buy and sell aviation parts, supplies and
components in the global marketplace. We have designed our e-marketplace to meet
the needs of these customers and their industry.

We began operations in April 1996 as a division of Aviation
Laboratories, Inc. In April 1999, we incorporated PartsBase.com and acquired all
of the assets from Robert A. Hammond, Jr. In September 1999, we relocated the
company to Boca Raton, Florida. From April 1996 to October 1998, when we began
charging for our services, we were engaged in the development of our database
and developing our e-marketplace software and network infrastructure.

To date, substantially all of our revenue have come from annual subscription
fees for access to our e-marketplace. Most of our members are companies that
sell products and services to the aviation industry. Generally, our
subscriptions are entered into on an annual basis. Although we have executed a
few subscriptions of a longer duration, generally these contracts may be
terminated at any time.

In the future, we plan to derive revenue from sources other than
subscription fees within our e-marketplace, including transaction fees. In
addition, we intend to generate transaction fee revenue from transactions
consummated by our members with value added merchandise and service providers.
Also, we believe we will generate advertising fees from banner and classified
advertisements. We cannot assure you that we will be successful in generating
any of these additional revenue and fees.

Since our inception in April 1996, we have incurred significant net losses.
From inception through December 31, 1996, we had a net loss of $71,906. For the
years ended December 31, 1997 and 1998, our net losses were $191,632 and
$148,121, respectively. For the nine months ended September 30, 1998 and 1999,
we had net losses of $108,500 and $2,357,253, respectively.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1999

NET REVENUE. Our revenue consists of subscription fees charged to our
subscribers and, to a lesser extent, banner advertising revenue. Our net revenue
was $800 for the nine months ended September 30, 1998, and represented banner
advertising revenue compared to net revenue of $120,761 for the nine months
ended September 30, 1999, which consisted of $116,261 of subscription revenue
and $4,500 of bannner advertising revenue. We did not charge a subscription fee
during the nine months ended September 30, 1998.

COST OF REVENUE. Our cost of revenue consists of compensation for our sales
and marketing personnel, telephone expenses, Web site development, a proportion
of rent and office expenses and, to

24
<PAGE>
a lesser extent, bank and credit card processing charges. Our cost of revenue
increased from $34,112 for the nine months ended September 30, 1998, to $699,819
for the nine months ended September 30, 1999, including noncash compensation
expense of $114,400 related with the issuance of our restricted stock. This
increase is attributable to an increase in the size of our sales force from 1 at
September 30, 1998 to 40 at September 30, 1999. We plan to continue to increase
the size of our sales force. We expect that our sales and marketing expenditures
will increase significantly, both in absolute dollars and as a percentage of net
revenue, as we increase our marketing efforts and incur additional sales
commissions.

Our gross loss increased from $33,312 for the nine months ended
September 30, 1998 to $579,058 for the nine months ended September 30, 1999 as a
result of the factors described above.

GENERAL AND ADMINISTRATIVE EXPENSES. Our general and administrative
expenses increased from $75,188 for the nine months ended September 30, 1998, to
$515,543 for the nine months ended September 30, 1999. Our general and
administrative expenses for the nine months ended September 30, 1998 consisted
of personnel costs of $43,692 and costs allocated from our former parent of
$31,496 while expenses for the nine months ended September 30, 1999 consisted of
personnel costs of $189,283, amortization of deferred financing costs of
$97,716, advertising costs of $46,524 and other costs totaling $182,019. The
increase in personnel costs is attributable to the increase in the number of our
executive and administrative staff from one at September 30, 1998 to six at
September 30, 1999. The amortization of deferred financing costs relates to our
private placement of convertible notes which began in June 1999. We did not
begin incurring advertising costs until after September 30, 1998. Our costs
increased for the nine months ended September 30, 1999 over the same period in
1998 due to our expansion of a fully operational office in 1999. During 1998 we
were allocated costs incurred by our former parent. The overall increase in
costs corresponds to the increase in our revenues and marketing efforts. We
expect that our general and administrative expenses will increase in absolute
dollars as we continue to expand our operations but decrease as a percentage of
net revenues.

In connection with the issuance of our restricted stock, we recognized
noncash compensation expense of $464,578 which has been classified as a
component of operating expenses for the nine months ended September 30, 1999. We
did not have any noncash compensation expense for the same period of 1998.

INTEREST EXPENSE. Interest expense relates to the issuance of convertible
notes as part of our private placement from June 1999 through August 1999. Our
interest expense increased from $0 for the nine months ended September 30, 1998,
to $13,010 for the nine months ended September 30, 1999. Also included in
interest expense for the nine months ended September 30, 1999 is $787,500,
representing the beneficial conversion feature applicable to such convertible
notes. Prior to June 30, 1999, we did not have any debt.

YEARS ENDED DECEMBER 31, 1997 AND DECEMBER 31, 1998

NET REVENUE. Net revenue increased from $2,861 for 1997, which represented
banner advertising revenue, to $3,504 for 1998, which consisted of $800 in
banner advertising revenue and $2,704 in subscription revenue. We did not begin
charging subscription fees until November 1998.

COST OF REVENUE. Our cost of revenue decreased from $104,041 for the year
ended December 31, 1997, to $43,462 for the year ended December 31, 1998. Our
cost of revenue consisted of Web site development costs and communication
expenses. In 1998, we continued to upgrade our network capacity and
functionality. However, such activity was lower than in 1997.

GENERAL AND ADMINISTRATIVE EXPENSES. Our general and administrative
expenses increased from $90,452 for 1997 to $108,163 for 1998. Expenses
consisted of general and administrative personnel costs

25
<PAGE>
and an allocation of costs from our former parent. The increase was attributable
to more costs being allocated from our former parent in 1998 than in 1997.

PERIOD FROM APRIL 1, 1996 (DATE OF INCEPTION) THROUGH DECEMBER 31, 1996
AND YEAR ENDED DECEMBER 31, 1997

NET REVENUE. We did not have any revenue for the period from April 1, 1996
(date of inception) to December 31, 1996. Prior to that time, we were not
engaged in our basic service. In April 1996, we began Aviation PartsBase and
began offering our service at no charge. Net revenue for 1997 consisted of
banner advertising revenue of $2,681.

COST OF REVENUE. Our cost of revenue increased from $16,482 for the period
from April 1, 1996 (date of inception) to December 31, 1996, to $104,041 for the
year ended December 31, 1997. Our cost of revenue consisted of marketing, Web
site development and communications expenses. In 1997, we began to upgrade Web
site functionality. Our gross loss increased from $16,842 for the period from
April 1, 1996 (date of inception) to December 31, 1996 to $101,180 for 1997.

GENERAL AND ADMINISTRATIVE EXPENSES. Our general and administrative
expenses increased from $55,064 for the period April 1, 1996 to December 31,
1996 to $90,452 for 1997. Expenses consisted of general and administrative
personnel costs and an allocation of costs from our former parent. The increase
was attributable to an increase in the number of personnel from four in 1996 to
six in 1997 and to more costs being allocated from our former parent in 1997
than in 1996.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception in April 1996, we have had significant negative cash
flows from our operations. For the period from inception through December 31,
1996, we used $59,995 of cash for operations. For the years ended December 31,
1997 and 1998, we used $168,373 and $83,096 of cash, respectively, in our
operating activities. For the nine months ended September 30, 1998 and 1999, we
used a total of $352,126 and $76,894, respectively, of cash in our operating
activities. Cash used in operating activities in each period resulted from net
losses in those periods. For the nine months ended September 30, 1999, our cash
used in operating activities included increases in our trade accounts receivable
of $115,639. This reflects our efforts to expand the subscription base by
allowing for payment terms up to 60 days. Since our inception, we have used cash
totaling $253,256 in our investing activities, which have consisted of
expenditures for computer and related equipment, furniture and fixtures,
communication equipment and leasehold improvements as well as deposits on
various equipment leases. For the period from inception through December 31,
1996, we used $3,496 of cash for investing activities. For the years ended
December 31, 1997 and 1998, we used $8,476 and $688, respectively, of cash for
investing activities. For the nine months ended September 30, 1999, we used
$240,596 of cash for investing activities.

Since inception, we have financed our operations from the collection of
subscription fees and proceeds of convertible subordinated notes payable. Robert
A. Hammond, Jr., our principal stockholder and Chief Executive Officer, loaned
us $80,900. Between June 9, 1999 and August 31, 1999, we obtained financing in
the form of convertible notes payable totaling $900,000.

As of September 30, 1999, our principal source of liquidity was
approximately $257,796 of cash and cash equivalents. As of September 30, 1999,
we had no material commitments for capital expenditures, but we expect such
expenditures to be approximately $825,000 during the remainder of 1999. Such
expenditures will primarily be for computer equipment to expand and enhance our
network.

We believe that we have sufficient cash and cash equivalents to fund our
operating and investing activities for at least the next 12 months. However, we
may need to raise additional funds in future periods through public or private
financings, or other arrangements. Any additional financings, if

26
<PAGE>
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. If additional funds are raised through the issuance of equity
securities, additional dilution could result. In addition, any equity securities
issued might have rights, preferences or privileges senior to our common stock.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our convertible notes payable have a fixed rate and, therefore, do not
expose us to risk of earnings loss due to changes in market interest rates. The
market value of the convertible notes payable was $5,413,010 based on the market
value of the underlying common stock on September 30, 1999 plus unpaid interest
as of September 30, 1999.

RECENTLY ISSUED ACCOUNTING STANDARDS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives and
Hedging Activities," which establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives), and for hedging
activities. SFAS No. 133, as amended by SFAS No. 137, is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. We currently do
not engage in, nor expect to engage in, derivative or hedging activities, and
therefore we anticipate there will be no impact to our consolidated financial
statements.

In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued SOP 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. We adopted SOP 98-1 for the year ending December 31,
1999. Adoption of SOP 98-1 did not have a material impact on our financial
condition, results of operations or cash flows.

In April 1998, the AICPA issued SOP No. 98-5, Reporting on the Costs of
Start-Up Activities ("SOP 98-5"). SOP 98-5 requires that all start-up costs
related to new operations must be expensed as incurred. In addition, all
start-up costs that were capitalized in the past must be written off when SOP
98-5 is adopted. We adopted SOP 98-5 on January 1, 1999. The adoption of SOP
98-5 did not have a material impact on our financial position, results of
operations or cash flows.

27
<PAGE>
BUSINESS

OUR BUSINESS

PartsBase.com is an online provider of Internet business-to-business
e-commerce services for the aviation industry. Our global e-commerce marketplace
provides a means for our over 13,000 members in more than 115 countries to buy
and sell new, used and overhauled aviation parts and products in an efficient,
competitive and cost-effective manner. Our solution is designed to streamline
the procurement cycle for our members by enabling them to source, bid parts and
products and eventually manage their order payment online. We estimate that our
e-marketplace utilizes a database of approximately 1,200 suppliers, which we
believe 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, Pratt & Whitney,
Northrup Grumman Aviation and United Parcel Service.

Our goal is to solidify a position as a leading aviation industry e-commerce
marketplace in order to capitalize on the continued expansion of the
highly-fragmented market for aviation parts and products. Our solution 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. We believe that the value of our e-marketplace grows
substantially as each new member brings additional parts, products, information
and buying power to our community.

In addition, we have signed an agreement with Tradex Technologies, Inc., a
subsidiary of Ariba, Inc., to install and implement customized software that
will allow for seamless online transactions. We have also contracted with
Trading Dynamics, Inc., another subsidiary of Ariba, Inc., to provide software
for our auction platform. Tradex Technologies, Inc. and Trading Dynamics, Inc.
are providers of digital marketplace solutions and have contracted to supply us
with our transaction platform for our e-marketplace.

INDUSTRY BACKGROUND

GROWTH OF E-COMMERCE. The growth of the Internet and related technologies
has resulted in drastic changes in the way businesses and consumers communicate,
share information and conduct business. As Internet usage has increased, the
Internet has expanded from a medium primarily for publishing information to one
that enables more complex business-to-business communications and commerce. At
the same time, in response to increasing competitive pressures to lower costs,
decrease inventories and improve sales and marketing productivity, businesses
are increasingly replacing paper-based transactions with more efficient Internet
e-commerce solutions. Forrester Research estimates that the business-to-business
e-commerce market will grow from $43 billion in 1998 to $1.3 trillion by 2003.

The dynamics of business-to-business e-commerce relationships differ
significantly from those of other e-commerce relationships. We believe
business-to-business e-commerce solutions are likely to be most readily accepted
by industries characterized by a large number of buyers and sellers, a high
degree of fragmentation among buyers, sellers or both, significant dependence on
information exchange, large transaction volume and user acceptance of the
Internet.

AVIATION PARTS INDUSTRY. The worldwide market for aviation parts and
products is highly fragmented and parts are supplied by many types of suppliers,
including airlines, OEMs, numerous distributors, on-site airport maintenance
providers, also known as fixed base operators, FAA certified facilities, traders
and brokers. Aerospace Industries Association estimates that total exports and
imports of aircraft parts and products were approximately $29 billion in 1999.
Furthermore, in recent years, the airline industry has experienced rapid growth
in business and leisure travel. As a result, the world fleet of aircraft is
projected to increase from 12,600 aircraft in 1998 to 28,400 aircraft in 2018,
according to the Boeing Report. The increase in travel and the number of
aircraft have likely contributed to demand for aircraft parts and products as
aircraft must be serviced at scheduled intervals. In addition,

28
<PAGE>
management believes that as the age of the world fleet of aircraft increases,
demand for new, used and overhauled aircraft parts and products may increase.

Historically, airlines have controlled the majority of the aviation parts
and products inventory. Management believes airlines are beginning to reduce the
size of their parts inventories in an effort to reduce inventory carrying costs.
These inventory reductions have increased reliance by airlines on suppliers of
new, used and overhauled parts and products, many of which may be difficult to
obtain from manufacturers on a timely basis, if at all. If airlines demand time
responsive inventory procurement processes, responsibility for inventory storage
and handling may shift to suppliers.

Suppliers of aviation parts and products are geographically disperse and
because of the specialized and complex nature of such parts and products, the
particular part or product desired by a buyer may not be easily accessible.
Buyers often search for a specific part or product to meet the parameters for a
specific aircraft at a particular location. Buyers may spend several hours
examining multiple paper catalogs and other information from different suppliers
to identify the most appropriate part or product. After locating the desired
part or product, buyers place orders by telephone, fax, or e-mail and typically
must place orders with multiple suppliers in order to obtain parts or products
related to a single aircraft. Orders for aviation parts or products are
typically handled through internal, paper-based processes that require manual
preparation, written approval by purchasing managers and manual order tracking,
and billing and reporting across multiple departments within an organization. We
view current paper-based procurement processes as complex, cumbersome and
time-consuming. Paper-based orders also tend to be costly for buyers and sellers
to track and bill, and the decentralized order process does not facilitate the
collection of data that is necessary for efficient pricing and delivery.

OPPORTUNITY FOR BUSINESS-TO-BUSINESS E-COMMERCE SOLUTION. We believe the
fragmentation and complexities of the aviation industry and the current
paper-based purchasing processes create the need for a business-to-business
e-commerce solution that seamlessly brings together buyers and sellers of
aviation parts and products. To effectively address the needs of buyers and
sellers, it is important that the solution offers a neutral and fair marketplace
with accurate catalog descriptions of parts and products and such information
must also be fairly and accurately presented to buyers. In addition, the
solution should offer sellers an opportunity for incremental sales and the
ability to offer buyer-specific pricing.

Traditional purchasing methods also present a number of challenges to
sellers trying to reach buyers of aviation parts and products. Due to the high
cost of printing and distributing paper catalogs, sellers cannot
cost-effectively manage frequent updates and distribution of time-sensitive
information. We view these catalogs as cumbersome to search and limited in their
ability to provide depth of product and seller content. Sellers who are small in
size may have limited resources available to support the growing challenge of
marketing and selling to the highly fragmented worldwide market for aviation
parts and products. As a result, we believe traditional procurement and sales
methods are inefficient in many respects for both buyers and sellers.

TRADITIONAL ELECTRONIC PURCHASING. We believe the current methods which use
information technology to reduce inefficiencies in corporate purchasing have
limitations that prevent widespread adoption. Two such methods are conventional
Electronic Data Interchange, also known as EDI, and Enterprise Purchasing
Software Systems. EDI systems allow computers to exchange information in uniform
formats across private networks without human intervention. Because EDI systems
rely on the execution of pre-defined transactions, we believe they are generally
not well suited for dynamic procurement environments involving many buyers and
sellers of a wide variety of goods and services. By contrast, some vendors have
developed Enterprise Purchasing Software Systems designed to improve the
coordination of the purchasing function across large enterprises. However, both
EDI systems and Enterprise Purchasing Software Systems can be expensive to
license and/or install and may require users to pay ongoing maintenance and/or
transaction fees. Due to the expense and complexity of these

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systems, they are generally unsuitable for all but the largest organizations.
Furthermore, we believe that neither EDI nor Enterprise Purchasing Software
Systems offer a full spectrum of online procurement functions.

THE PARTSBASE.COM ADVANTAGE

The Internet provides a cost-effective medium for businesses, regardless of
size, to link directly to their communities of customers and other business
partners. Our solution takes advantage of the low costs and community building
nature of the Internet to support our business-to-business e-commerce
marketplace. Our e-marketplace offers targeted content and services to meet the
specific needs of our members. With a standard Internet connection, a Web
browser and a PartsBase.com membership, each of our e-marketplace members can
immediately participate as both a buyer and a seller.

Our solution is comprised of an e-marketplace where our members can buy and
sell a wide range of aviation parts and products over the Internet in an
efficient and cost-effective manner. We estimate that our e-marketplace utilizes
a database of approximately 37 million aviation parts and products from
approximately 1,200 suppliers. In addition, our advanced search functions enable
users to quickly and easily identify and locate the parts and products they
need. We have designed our e-marketplace to attract professionals responsible
for selecting and purchasing aviation parts and products. We believe our service
enables our members to quickly realize the benefits of increased efficiency,
faster turnaround and more timely information. Our solution is designed to
provide the following benefits to our members:

- 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.

REDUCED PROCUREMENT COSTS. By eliminating many costly and time-consuming
functions of the traditional procurement process, we believe our e-marketplace
allows our members to reduce operating costs and shorten cycle times in the
buying and selling processes. Rather than searching through several paper-based
catalogs, buyers can identify and locate products through a single electronic
database. Our solution enables buyers to rapidly prepare and broadly distribute
bid requests and allows sellers to respond to these bid requests in a timely and
efficient manner. Moreover, our solution allows buyers and sellers to
immediately access our e-marketplace without incurring the cost of additional
software and system maintenance.

MORE EFFICIENT PRICING AND BROADER PRODUCT CHOICES FOR BUYERS. By
automating the search and bid request process, our solution allows buyers to
identify sellers with desired inventory in our e-marketplace and to send out bid
requests efficiently. In addition, our e-marketplace allows buyers to expand the
number of sellers from which they request bids. Our database provides buyers
with the online ability to compare various products from an individual supplier
or multiple suppliers. As a result of increased access to sellers, product
availability and pricing information, we believe many of our members have
realized reductions in the cost of the parts and products they have purchased in
our e-marketplace.

ABILITY TO LOCATE THE MOST GEOGRAPHICALLY DESIRABLE PARTS. By providing
buyers access to a global e-marketplace for aircraft parts, we believe our
solution enables buyers to avoid the delays and costs associated with
traditional sourcing methods, which often require buyers to spend significant
time and resources searching for parts on a piecemeal basis via phone or fax
communication to regional

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suppliers. As a result, we believe that buyers are often unable to quickly
locate and receive needed parts at the best available price. With our solution,
we believe our members can locate and source needed parts and products in a
timely and cost-effective manner, regardless of where the buyer is located.

EXPANDED DISTRIBUTION OPPORTUNITIES FOR SELLERS. We believe that our
e-marketplace enables sellers to receive RFQs from buyers to whom they might not
otherwise have access. Sellers in our e-marketplace, regardless of their size
and marketing resources, can receive RFQs from buyers throughout the world.
Sellers whose size would prohibit them from actively participating in a
traditional marketplace thus have access to expanded distribution channels. We
also believe that our solution enables many of our sellers to offer, for the
first time, their goods and services for sale over the Internet. In addition, we
offer sellers the capability to update product information and introduce new
products without being limited by specific catalog publication cycles. As a
result, we believe our e-marketplace is an effective tool for sellers to achieve
broader marketing and sales exposure in their primary markets and to enter new
geographic markets on a cost-effective basis.

EASE OF USE AND BETTER ACCESS TO INFORMATION. With a standard Internet
connection and Web browser, our members are provided quick and easy access to
our e-marketplace from anywhere in the world. Our e-marketplace solution allows
sellers to control pricing and descriptive information about the aviation parts
and products they offer, helping to ensure that potential buyers obtain accurate
information on a 24-hour, 7-day a week basis. Moreover, our solution encourages
sellers to update their inventory regularly by displaying the most recent
inventory entries at the top of a list of those sellers with a particular part
in stock.

OUR SOLUTION

We currently offer a variety of services to our members. The following
summarizes some of our current and proposed services and features of our
e-marketplace:

- Online buying and selling;

- Transaction information;

- Online auctions;

- Procurement controls; and

- Community.

ONLINE BUYING AND SELLING. Our global e-marketplace enables our members
worldwide to interact as buyers and sellers, streamlining their purchase and
sale process over the Internet. In addition to searching by part number, our
members are able to utilize advanced search functions, such as Wildcard search,
Smart search and Keyword search, each of which allow members to use either a
description or a partial part number to locate the desired part. Also, members
using our e-marketplace's posting function can send an RFQ (including requests
for line item price quotes) to sellers who respond electronically with pricing
and availability information.

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TRANSACTION INFORMATION. Our e-marketplace will allow members to update
their inventory database information. After sellers respond with bids, buyers
can analyze the responses and select one seller's bid or to select items from
specific sellers. We intend to design our solution so that after a bid is
accepted, our e-marketplace will allow buyers to complete the purchase by
creating and sending electronic purchase orders and finalizing the payment and
delivery instructions. In addition, sellers will be able to electronically
disseminate accurate information in a timely and cost efficient manner.

ONLINE AUCTIONS. Our e-marketplace will allow us to host and administrate
various types of online auctions for aircraft parts and products. We believe
such auctions will provide buyers and sellers an efficient means to purchase and
sell such parts and products.

PROCUREMENT CONTROLS. A client password file is checked at each member
login and whenever members access the database. In the future, we intend to
implement controls which will allow members to limit their employees' access to
selected sellers, specific items, quantities and service features. Through such
protocols, control over corporate purchasing will be significantly enhanced
without the installation of expensive enterprise purchasing software systems.
Members will also be able to monitor employee requests for proposals and
purchase orders. We will also maintain records of procurement activity by our
members that can be used to verify or validate transactions.

COMMUNITY. In addition to providing community-building information such as
industry job and aircraft sales listings, as well as links to members and other
industry Web sites, we will continue to expand our services to help foster
interaction among our members. We plan to introduce additional features such as
industry trade news, discussion forums, chat rooms and bulletin boards, all of
which foster active community participation among our members. We expect to
continue to add features, content and services that enhance the benefits of
membership in our e-marketplace.

In addition to the foregoing, we have recently contracted with Tradex
Technologies, Inc., a multi-party e-commerce transaction software developer and
subsidiary of Ariba, Inc., for the installation and implementation of
transaction software. We have also contracted with Trading Dynamics, Inc.,
another subsidiary of Ariba, Inc., to provide software for our auction platform.
Such additional services are expected to enable us to offer competitive online
negotiation, pricing and bidding for products, and will allow us to act as a
virtual clearing house for products. In addition, once implemented, the
transaction software will enable our members to retrieve and review their
purchase and sale activity through keyword, date, seller or purchase order
number searches. This will enable buyers and sellers to utilize historical
transaction data in making future pricing and procurement decisions. In
addition, our solution will automatically generate inquiry and transaction
records facilitating improved documentation and auditing.

OUR BUSINESS STRATEGY

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

- achieving growth through transaction fees and other sources of revenue;

- strengthening the PartsBase.com brand;

- increasing membership and market penetration;

- establishing and expanding strategic sales and marketing relationships;

- expanding our international presence; and

- attracting and retaining members with new content, features and
services.

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ACHIEVING GROWTH THROUGH TRANSACTION FEES AND OTHER SOURCES OF
REVENUE. Substantially all of our current revenue is derived from subscription
fees from certain of our members. In order to expand our potential revenue base,
we have recently signed an agreement with Tradex Technologies, Inc. to install
and implement customized software that will allow for online transactions among
our members. We expect that such software will enable competitive online
negotiating, pricing, and bidding for products, and will allow us to act as a
virtual clearing house for parts and products. We believe that these features
will allow us to generate additional revenue through transaction fees charged to
our members. We may also generate additional revenue through the sale of banner
advertisements, classified advertisements and other electronic promotions, as
well as from fees for value-added services.

STRENGTHENING THE PARTSBASE.COM BRAND. We believe that the breadth of
features that we offer, the number of members in our e-marketplace and the goods
and services offered by these members provide us with an essential foundation
for a comprehensive e-commerce solution for the aviation industry. We plan to
expand and enhance our marketing initiatives to increase our brand awareness and
identity. These initiatives will include traditional and Internet-based
advertising targeted at selected audiences, interviews, articles in business
media and trade publications and direct sales and telemarketing.

INCREASING MEMBERSHIP AND MARKET PENETRATION. Since our inception in 1996,
we have grown our membership to over 13,000 by focusing on buyers and sellers in
all facets of the aviation industry. In order to continue our membership growth
and increase our worldwide market penetration, we intend to expand our sales and
marketing efforts through our multilingual internal sales force, indirect sales
channels and by leveraging our network of existing members.

ESTABLISHING AND EXPANDING STRATEGIC SALES AND MARKETING RELATIONSHIPS. We
intend to pursue strategic sales and marketing relationships to expand our
membership, extend our marketing reach, and further develop our e-marketplace in
a rapid and cost-effective manner. These expanded relationships, if successful,
will increase the breadth of information, goods and services available to our
members, thereby enabling us to attract and retain additional members.

EXPANDING OUR INTERNATIONAL PRESENCE. Our goal is to become the leading
e-marketplace for the aviation parts industry. We believe the international
scope of the Internet, the global reach of many of our customers and the
worldwide demand for aviation parts and products present opportunities to
further expand our e-marketplace internationally. Presently, we estimate that
approximately 25% of our members are based internationally or have international
operations. We plan to leverage our technology, expertise, and existing member
relationships to further expand our e-marketplace in other parts of the world.

ATTRACTING AND RETAINING MEMBERS WITH NEW CONTENT, FEATURES AND
SERVICES. We intend to continue increasing the number of members in our
e-marketplace by introducing additional services and features, such as our
online auction service, that appeal to the specific needs of our members. In
addition, we intend to offer e-commerce transaction services such as online
order payment processing.

OUR REVENUE SOURCES

To date, our primary source of revenue has been subscription fees paid by
certain of our members. In order to build the number of members in our
e-marketplace, we have and will continue to provide free membership. As
membership usage increases, we have and will continue to convert non-paying
members to paying members.

In order to expand our revenue base, we have recently contracted with Tradex
Technologies, Inc., a subsidiary of Ariba, Inc., for the installation and
implementation of transaction software that will allow us to implement an
auction feature whereby our members will be able to buy and sell aircraft parts
and products by engaging in competitive online negotiating, pricing and bidding.
This transaction software is

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designed to allow us to act as a virtual clearing house for aviation parts and
products sold in our e-marketplace. If such auctions are successfully developed
and implemented, we believe we will be able to charge a negotiated fee that will
vary based on the size, scope and price of the offered parts and products
thereby generating additional revenues.

We also plan to expand our revenue sources over time to include fees for
classified advertising as well as increased revenue from banner advertisements.
In addition, we believe our sources of revenue will increase as we expand the
scope of our value-added services.

OUR E-MARKETPLACE MEMBERS

Our target members are primarily the businesses that buy and sell aircraft
parts and products in the global marketplace. We have over 13,000 members
representing over 115 countries. Our members vary from small businesses and
individual aircraft owners to Fortune 500 companies. Some of our members
include:

A. J. Walter Aviation
AAR Cooper Aviation
AAXICO
ACES Airlines
Adria Airlines
Aero Group
AGES Group
Air Alfa Airlines
Air Atlantic Airlines
Airborne Express
Airmotive, Inc
Airspares UK
Alaska Airlines
Allied Signal Aerospace
American Aircarriers Support
American Helicopter
AMR Combs
Amway Corp
Arca Airlines
Avjet Trading
Banyan Air Service
Bell Air Charter
Bermuda Air Service
BF Goodrich Aerospace
Big Island Air
Boeing
Bombardier
British Aerospace
BAX Global
BWIA
California Propeller
Chrysler Pentestar
Colgan Air Services
Commander Aero Inc
Copenhagen Avionics A/S
D & D Aircraft Supply
Dallas Aerospace
Dee Electronics
Del Monte Aviation
Dyn Corp (NASA Houston)
ELECTROSONICS
Embraer
Executive Air Taxi
Falcon Air AB
FedEx
Fibraer Industria Aeronautica
Flight Safety international
Florida Jet Center
FLS Aerospace
Foremost Corporation
Galaxy Aerospace
Garrett Aviation Services
GE Engine Services Wales
General Electric Engine Services
Grimes Aviation
Hawker Pacific
Honeywell
Icelandair
Itapemirim Airlines
Jet Aviation
Keyson Airways
King Aerospace
Learjet, Inc.
Lider Taxi Aero
Lockheed Martin Services
Lone Star Mooney
Lord Corporation
Maine Aviation Group
Maritime Helicopters, Inc.
Memphis Group
Middle River Aircraft Services
Millennium Aviation
Million Air
Mobile Aerospace Engineering
Moog Aircraft Group
NASA Langley Research Center
Nell Joy Industries
New York State Police Aviation
Nordam
Northrup Grumman Aviation
Ohio State University Airport
Parker Hannifin
Pilkington
Pratt & Whitney
Precision Propeller Services
Rapco
Raytheon Aircraft Services
Reliant Airlines
Sabreliner Corporation
Sentry Aerospace Corporation
Singapore Technologies
Sundstrand Corp
Tag Aviation
Textron
Timken Aerospace
TPI Aviation
Unical Aviation
United Parcel Service
Universal Jet Aviation
U.S. Air Force
U.S. Coast Guard
U.S.A. Jet Airlines
Varig
Volvo Aero Corp.

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SALES AND MARKETING

We market our solution through our direct internal 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
sales shifts per day, allowing us to reach geographically diverse markets.
However, competition for sales personnel is intense, and we may not be able to
attract, assimilate or retain additional qualified personnel in the future.

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 leverage our existing membership base and engage in
marketing activities such as trade shows, speaking engagements and Web site
marketing. Our targeted industry segment advertising activities include on-line
business media and print advertisements in industry trade publications such as
Avionics, Aviation Maintenance, Overhaul & Maintenance, Aviation Maintenance and
Technology and Aviation Week.

We provide member service support from 6:00 am to 12:00 am, 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 worldwide sales and marketing group consisted of approximately 56
individuals as of December 31, 1999, all of whom are located at our Boca Raton,
Florida headquarters.

TECHNOLOGY AND OPERATIONS

Our e-marketplace technology serves as our enabling platform. Our Web site
technology resides on our servers located in Houston, Texas and Boca Raton,
Florida. Members access our service using a standard Web browser.

Our Web site architecture is scalable, enabling us to accommodate membership
growth. This scalability permits us to quickly add new members to our
e-marketplace without those members incurring infrastructure costs.

Our Internet service providers currently maintain three T3 Internet
connections. The client connections are load balanced over our presentation
layer servers. Database servers are configured to be fault-tolerant and their
hard drives can be swapped while the system is operating. These databases are
replicated on additional back-up servers for quick access.

Our software makes significant use of standard software programming
languages, interfaces and protocols, including Visual Basic, C++, HTTP and
Transact-SQL. The use of ODBC (Open Database Connectivity) compliant databases
and plug-in technologies allows integration with enterprise accounting and
management systems such as Oracle and other ODBC compliant systems. Data
transfer protocols such as EDI, OBI and XML are also supported.

We utilize firewalls and other restrictions and physical or electronic
separations to prevent harm to the service. Our servers add, update, and
retrieve data through procedures designed to prevent

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<PAGE>
improper access to data. Additionally, our staff has restricted access to our
e-marketplace data and network. Our servers are equipped with virus detection
and removal software.

In addition to the redundant database servers, all member data is backed-up
to tape on a daily basis.

We have designed our system to enable each member to maintain their
information on our databases so that other users can access the most current
data. In addition, by using custom interfaces, members can automate the process
of maintaining their data.

COMPETITION

The market for business-to-business e-commerce and Internet ordering and
purchasing is new and rapidly evolving, and competition is intense and is
expected to increase significantly in the future. We believe that the critical
success factors for companies seeking to enter our Internet business-to-business
e-marketplace include the following:

- significant existing customer base;

- user-friendly technology;

- breadth and depth of product and service offerings;

- competitive pricing of products and services;

- quality and reliability of the Internet purchasing solution;

- quality customer service and support; and

- brand recognition.

We face competition from two main areas: other businesses with e-commerce
offerings and traditional suppliers and distributors of aviation parts. We
believe companies that primarily focus on creating Internet purchasing solutions
for the aviation parts industry include Inventory Locator Service, a subsidiary
of Aviall, Inc., and AVSupport. Traditional suppliers and distributors,
including the AGES Group and Boeing, currently sell aviation parts through paper
catalogs and Web sites. Our current and potential competitors may have longer
operating histories, larger customer bases and greater brand recognition in
business and Internet markets and significantly greater financial, marketing,
technical and other resources than we do. In addition, other e-commerce service
providers may be acquired by, receive investments from or enter into other
commercial or strategic relationships with larger, well established and
well-financed companies as use of Internet and other online services increases.
For example, companies that control access to Internet service provider services
that are used to connect to our network could promote our competitors or charge
our clients substantial fees for Internet access. Therefore, certain of our
current and potential competitors may be able to devote significantly greater
resources to marketing and promotional campaigns, 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 our 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 certain pricing, service or marketing decisions or
acquisitions that could materially and adversely affect our business, financial
condition and results of operations.

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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 we have applied for federal trademark protection for
"PARTSBASE.COM.". We may seek additional trademarks in the future. Furthermore,
we may seek 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 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 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. These procedures must be
performed by certified technicians in approved repair facilities on set
schedules. 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, 1999, we had 70 full time employees. Of these, 56 were in
sales and marketing, seven were in programming, technical and customer support
and operations and seven were in administration, including finance. None of our
employees is represented by a labor union. We have not experienced any work
stoppages, and we consider our relations with our employees to be good.

FACILITIES

Our corporate headquarters are located at 7171 N. Federal Highway, Suite
100, Boca Raton, Florida 33487, where we lease approximately 4,600 square feet
of office space for a monthly rental fee of approximately $6,500 under a lease
that expires May 31, 2001, with an option to renew for a two year period. This
facility houses all of our operations, including the executive staff,
e-marketplace operations, customer support and programming and development. We
maintain our Web site in two locations, one in Houston, Texas and the second in
Boca Raton, Florida.

LEGAL PROCEEDINGS

In the ordinary course of business, we may be subject to claims and legal
proceedings. We are not currently a party to any legal proceedings.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of PartsBase.com and their ages as of
December 31, 1999, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
Robert A. Hammond, Jr.(1)............ 45 President, Chief Executive Officer and Chairman
Steven R. Spencer.................... 45 Chief Operating Officer and Director
Michael W. Siegel.................... 37 Chief Financial Officer
Yves C. Duplan....................... 38 Chief Technology Officer
Kevin J. Steil....................... 28 Chief Information Officer
Louis W. Storms IV................... 25 Director
Thomas C. Van Hare(1)(2)............. 38 Director
David G. Fessler(1)(2)............... 32 Director Nominee
Pierre A. Narath(1)(2)............... 36 Director Nominee
</TABLE>

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

(1) Member of the Compensation Committee of the Board of Directors effective
upon completion of this offering.

(2) Member of the Audit Committee of the Board of Directors effective upon
completion of this offering.

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 he sold to Suntory Bottled
Water Group in June 1999. Mr. Hammond received his Bachelor of Science degree in
Marketing from Syracuse University.

STEVEN R. SPENCER. Mr. Spencer joined us as Chief Operating Officer in
May 1999 and was elected to the Board of Directors in June 1999. Prior to
joining us, Mr. Spencer was a partner in Meridian Capital Group, Inc., where he
served as the Executive Vice President from December 1994 to March 1999.
Mr. Spencer left Meridian at the time it was purchased by E*Offering, an
Internet investment banking firm partially owned by E*Trade.

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, automotive, shipbuilding and other
industries. In addition, 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, 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.

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YVES C. DUPLAN. Mr. Duplan joined us in September 1999 as our Chief
Technology Officer, and has over 15 years of experience as a software developer
and project manager. From March 1996 to September 1999, he was a Senior Software
Developer with Office Depot Corporation where he was a member of a core
development team responsible for the design, evaluation, and implementation of
new technologies for backroom applications running in Office Depot stores. From
May 1990 to March 1996, Mr. Duplan was a Software Engineer/Project Leader for
Analyst International Corp, a consulting company, where he managed a team of
software developers. Mr. Duplan holds a Bachelor of Science in Computer
Engineering from Nova University.

KEVIN J. STEIL. Mr. Steil joined us in August 1999 as Chief Information
Officer. From February 1996 to August 1998, Mr. Steil was a developer for the
AGES Group, a division of Volvo that sells parts and ground support equipment to
the aviation industry. Mr. Steil was responsible for the design and
implementation of the AGES transactional Web site, as well as maintaining their
enterprise network. From May 1994 to January 1997, Mr. Steil served as internet
consultant for Infrastructure Inc. Mr. Steil received his Bachelor of Science in
marine biology from Florida Atlantic University in 1994 and Associates Degree in
computer science from Panama Canal College in 1991.

LOUIS W. STORMS IV. Mr. Storms was elected to our Board of Directors in
June 1999. Mr. Storms has served as a consultant to us since February 1999 and
in such capacity served as our interim Director of Technology until
August 1999. Mr. Storms is an author and expert in developing multi-tiered
distributed applications using Microsoft Windows DNA. His book, MICROSOFT
WINDOWS DNA EXPOSED, was published in April 1999 by a subsidiary of Macmillan
Computer Publishing. Mr. Storms is a founder and partner in Plan Three
Solutions, L.L.C., a software development company. From April 1998 to
September 1998 Mr. Storms acted as a consultant for Deloitte and Touche LLP, and
from June 1996 to March 1998, he served as a consultant in business valuations
and as a software consultant for Arthur Andersen LLP. In 1996, Mr. Storms
received a Bachelor of Business Administration from the University of Texas, at
Austin.

THOMAS C. VAN HARE. Mr. Van Hare was elected to our Board of Directors in
November 1999 and has extensive experience in commercial design and Internet
marketing. Mr. Van Hare is the President and Chief Executive Officer of Capstone
Internet Services, Inc., a graphic design and marketing company which he founded
in early 1994. Mr. Van Hare is a commercial pilot with multi-engine and
instrument ratings and has over three years of search and rescue experience.

DAVID G. FESSLER. Mr. Fessler has been elected as a member of our Board of
Directors effective upon completion of this offering. Since September 1999,
Mr. Fessler has served as the President and owner of ADGrant Systems and
Networking Corporation, a networking integration services company that currently
services the AGES Group and the University of Connecticut. Since January 1999,
he has served as the Vice President of Novus Holding Corporation, a holding
company for interests in Magellan Aircraft Sales and Leasing Corp. and
Fairdinkum Construction Company. In addition, since May 1999, Mr. Fessler has
served as a Board member of QODE.COM, an Internet bar coding company. From
May 1990 to August 1999, Mr. Fessler served as the Vice President of Technology
for the Information Systems Group of the AGES Group where he was responsible for
worldwide network and computer operations support.

PIERRE A. NARATH. Mr. Narath has been elected as a member of our Board of
Directors effective upon completion of this offering. Since January 1999,
Mr. Narath has served as the Chairman, Chief Executive Officer and President of
Touchstone Software Corp., an OTC Bulletin Board listed developer and publisher
of utility software used to set up, maintain, and manage personal computers and
networks. From May 1997 to November 1998, Mr. Narath served as Vice President of
Award Software International, Inc., a developer and marketer of system enabling
and management software for the global computing market that was acquired by
Phoenix Techologies, Inc., in 1998, and as President of

39
<PAGE>
Unicore Software, Inc., a software company acquired by Touchtone Software Corp.
in 1999. From February 1990 to May 1997, Mr. Narath founded and served as
President of Unicore Software, Inc.

BOARD COMMITTEES

We have established an Audit Committee and a Compensation Committee. The
audit committee 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 such 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, any major
accounting changes made or contemplated and the effectiveness and efficiency of
our internal accounting staff. The compensation committee 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 will be responsible for determining salaries,
incentives and other forms of compensation for our directors, officers and other
employees and administering various incentive compensation and benefit plans. We
did not have a compensation committee during 1999. Our Board of Directors was
responsible for these matters for that year. Upon completion of the offering,
our compensation committee will consist of Thomas Van Hare, David G. Fessler and
Robert A. Hammond, Jr. Mr. Hammond participates in all discussions and decisions
regarding salaries and incentive compensation for all employees and consultants
of PartsBase.com, except that he is excluded from discussions regarding his own
salary and incentive compensation. Other than Mr. Hammond, no member of the
compensation committee has at any time been an officer or employee of
PartsBase.com. No interlocking relationship exists between any member of our
compensation committee and any member of 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.

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

DIRECTOR COMPENSATION

Directors previously have received no cash compensation for serving on the
Board of Directors. Beginning upon completion of the offering, we will pay each
non-employee member of our Board of Directors a fee of $1,000 per Board or
committee meeting attended, plus all out-of-pocket expenses incurred in
connection with attending Board meetings. Mr. Storms received an option to
acquire 37,500 shares of our common stock at an exercise price of $0.63 per
share in November 1999. In addition, Mr. Van Hare received an option to acquire
10,000 shares of our common stock at an exercise price of $0.63 per share upon
his election to the Board of Directors in November 1999. With respect to
Mr. Fessler, Mr. Narath, or any future independent non-employee directors, upon
the effective date of their appointment to the Board of Directors, such
directors will be entitled to receive an option to purchase an aggregate of
10,000 shares of our common stock. The exercise price of such options shall be
the initial public offering price with respect to Mr. Fessler and Mr. Narath and
the fair market value of our common stock on the grant date with respect to any
future non-employee directors. Mr. Storms' options vested 21,875 at the time of
grant with the remainder vesting in five equal monthly installments following
the grant date. Mr. Van Hare's, Mr. Narath's and Mr. Fessler's options, as well
as any future independent non-employee director's options, shall become
exercisable as to one-third of the shares on the six-month anniversary of the
grant date, one-third on the first anniversary of the grant date, and the
remaining one-third on the second anniversary of the grant date. The options
will expire on the

40
<PAGE>
earlier of ten years from the date of grant or three months after the optionee
ceases to be a director. In addition, each of our non-employee directors will be
eligible to receive additional stock option grants in the future at the
discretion of the Board of Directors.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the compensation
during our fiscal year ended December 31, 1999 for our Chief Executive Officer
who is sometimes referred to as the "Named Executive Officer" here and elsewhere
in this prospectus. No other executive officer received salary and bonus in
excess of $100,000 during fiscal 1999.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------
OTHER ANNUAL
SALARY BONUS COMPENSATION
NAME AND POSITION YEAR ($) ($) ($)
- ----------------- -------- -------- -------- ------------
<S> <C> <C> <C> <C>
Robert A. Hammond, Jr.
Chief Executive Officer
and President......................... 1999 81,250(1) -- --(2)
</TABLE>

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

(1) Represents salary paid from June 1, 1999 through December 31, 1999. Mr.
Hammond's annual salary during such period was $150,000.

(2) Perquisites did not exceed the lesser of $50,000 or 10% of Mr. Hammond's
base salary in 1999.

STOCK OPTIONS

No stock options for our common stock were granted to the Named Executive
Officer during fiscal 1999. However, certain of our executive officers were
granted incentive stock options in fiscal 1999. See "--Employee Benefit Plans"
below.

EMPLOYMENT AGREEMENTS

In November 1999, we entered into employment agreements with each of our
executive officers other than Mr. Siegel, whose agreement is dated December 31,
1999. Such employment contracts have an initial term of two years but shall be
renewed for successive two year terms unless earlier terminated. The agreements
may be terminated by us or the employee with or without cause upon 30 days prior
written notice.

The employment contracts of the executive officers provide for the following
annual base salaries both prior and subsequent to completion of this offering:

<TABLE>
<CAPTION>
POST-OFFERING PRE-OFFERING
BASE SALARY BASE SALARY
------------- ------------
<S> <C> <C>
Robert A. Hammond, Jr................................ $250,000 $125,000
Steven R. Spencer.................................... $125,000 $ 84,000
Michael W. Siegel.................................... $141,000 $141,000(1)
Yves C. Duplan....................................... $ 95,000 $ 95,000
Kevin J. Steil....................................... $ 80,000 $ 80,000
</TABLE>

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

(1) Excludes a $30,000 signing bonus.

The base salaries of each executive officer may be increased in the
discretion of the Board of Directors or the Compensation Committee of the Board
of Directors. In addition to the base salaries

41
<PAGE>
described above, each of the executive officers 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. In addition,
Mr. Hammond, Mr. Spencer and Mr. Siegel receive automobile allowances of $1,000,
$750, and $750 per month, respectively.

Each of the employment agreements contain non-compete covenants that
prohibit the employee from directly or indirectly participating in businesses 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 months' salary in the event of a
termination of his employment for any reason other than cause, as defined in his
employment agreement.

KEY MAN INSURANCE

Prior to completion of this offering, we intend to acquire key man insurance
covering the life of Mr. Hammond in the amount of at least $2,000,000 and naming
PartsBase.com as beneficiary.

EMPLOYEE BENEFIT PLANS

STOCK OPTION PLAN

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 Code. Under the stock option plan 2,000,000 shares 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 certain amendments
must be approved by our stockholders.

Subsequent to this offering, the stock option plan will be administered by
our board of directors or the Compensation Committee of our board of directors.
The board or the Compensation Committee, as the case may be, will select the
participants and establish 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 Code, granted
under the stock option plan must be at least equal to 100% of the fair market
value of the option shares on the date of grant. The term of any incentive stock
option granted under the stock option plan may not exceed ten years. Where the
eligible stock option plan participant owns over 10% of the total combined
voting power of all classes of our stock; however, the exercise price must be at
least equal to 110% of the fair market value of the option shares on the date of
grant and the term cannot 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 shall be transferable by a grantee otherwise
than by will or by the laws of descent and distribution. Other terms and
conditions of each award are set forth in the grant agreement governing that
award and determined by the Board of Directors or the Compensation Committee as
administrators of the stock option plan.

42
<PAGE>
As of the date of this prospectus, non-qualified options to purchase a total
of 994,375 shares of common stock were outstanding under our stock option plan
at an exercise price of $0.63 per share and no options had been exercised. The
following of our executive officers and outside directors received non-qualified
stock option grants in November 1999 except for Mr. Siegel, whose grant was made
in January 2000.

<TABLE>
<CAPTION>
NAME NO. OF SHARES OPTION PRICE VESTING
- ---- -------------- ------------ -------
<S> <C> <C> <C>
Michael Siegel.... 75,000 shares $0.63 24 equal monthly installments

Yves C. Duplan.... 35,000 shares $0.63 833 upon grant, remainder in 22 monthly
installments of approximately 1,458 shares
followed by 2 monthly installments of
approximately 1,045 shares

Kevin Steil....... 10,000 shares $0.63 1,875 upon grant; remainder in 9 monthly
installments of 625 shares followed by 12
monthly installments of approximately 208
shares
</TABLE>

In addition, each of our non-employee directors has received a non-qualified
stock option grant upon his appointment to the Board of Directors. See
"--Director Compensation" above.

RESTRICTED STOCK BONUS PLAN

In May 1999, we adopted the PartsBase.com, Inc. Restricted Stock Bonus Plan,
or Stock Bonus Plan. The Stock Bonus Plan authorized us to award or grant to
employees, consultants, officers and directors (except persons serving as
directors only) shares of our common stock subject to a substantial risk of
forfeiture. Our board of directors had the sole authority to select
participants, to establish the terms and conditions of the stock and to grant
the stock.

Employees, including officers, directors (except directors who are not
employees) and outside consultants selected by our board of directors were
eligible to receive stock under the Stock Bonus Plan. The maximum number of
shares of common stock which could have been granted under the Stock Bonus Plan
was 1,200,000 shares. The vesting schedule of stock granted under the Stock
Bonus Plan was determined by our board of directors.

Stock grants under the Stock Bonus Plan vest in accordance with a schedule
established by our board of directors with respect to each individual grant. In
the event a stock grant recipient is terminated, any unvested portion of the
shares that were subject to the stock grant shall be canceled. Each such
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.

We terminated the Stock Bonus Plan in November 1999. Prior to termination,
stock grants totaling 1,108,500 shares were granted to an aggregate of 42
persons. Effective November 17, 1999 we entered into Restricted Stock
Cancellation Agreements with substantially all of the recipients who received
stock pursuant to the Stock Bonus Plan. The agreement calls for cancellation of
any stock received by the recipient and termination of the Restricted Stock
Agreement between the employee and us. 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 this
offering.

43
<PAGE>
In connection with the cancellation of the stock grants under our Stock
Bonus Plan, we issued an option to purchase one share of common stock for each
cancelled share of Stock Bonus Plan stock. The replacement options were granted
pursuant to our 1999 Stock Option Plan.

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
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 the 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.

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 proceeding 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.

44
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In June 1999, we completed a private placement (the "August Private
Placement") of $900,000 in 8% Convertible Secured Subordinated Notes due 2001
(the "August Notes"). GunnAllen Financial, Inc. acted as the placement agent
with respect to the August Private Placement and, as a result, received
(i) commissions equal to 10% of the gross proceeds, (ii) a non-accountable
expense allowance of 3% of the gross proceeds, and (iii) a warrant to purchase
up to 200,000 shares of our common stock at an exercise price of $2.00 per
share.

In November 1999, we issued an aggregate of $62,500 of notes having
substantially identical terms to the August Notes to two investors (the
"November Notes"), including $50,000 sold to the father of Mr. Duplan, one of
our executive officers.

The August Notes bear interest at an annual rate of 8% and are secured by
substantially all of our assets. Interest is payable in quarterly installments
commencing September 30, 1999 with all principal and interest due and payable on
December 31, 2001 unless prepaid by us or converted into our common stock. The
August Notes and the November Notes (collectively the "Notes") will
automatically convert into shares of our common stock at a conversion rate of
$2.00 upon closing of this offering. An aggregate of 481,250 shares will be
issued in connection with the conversion of the Notes. Subject to a lock-up
restriction pursuant to which holders will not be permitted to sell or transfer
shares for a period of 180 days following the effective date of this offering,
each holder of Notes was granted piggy-back registration rights to register for
resale the shares of common stock issuable upon conversion of the Notes.

In November 1999, we raised an additional $2,137,500 through a private
placement of 855,000 shares of Series A Convertible Preferred Stock at $2.50 per
share. In connection with such private placement, we paid a total placement fee
of $200,125 to three broker-dealers. The shares of Series A Preferred Stock will
automatically convert into an aggregate of 855,000 shares of common stock upon
completion of the offering. Subject to a lock-up restriction pursuant to which
holders will not be permitted to sell or transfer shares for a period of
180 days following the effective date of this offering, each holder of Series A
Preferred Stock was granted piggy-back registration rights to register for
resale in connection with this offering the shares of common stock issuable upon
conversion of such shares.

Metro Investments, LLC, a company controlled by Mr. Narath, one of our
Director Nominees, acquired 40,000 shares of Series A Convertible Preferred
Stock in connection with our November 1999 private placement. In addition,
Touchstone Software Corp., a publicly traded company of which Mr. Narath is an
officer, director and significant stockholder, acquired an additional 260,000
shares of Series A Convertible Preferred Stock in our November 1999 private
placement.

From time to time, Mr. Hammond, our President and Chief Executive Officer,
has made advances to us for expenses and short-term working capital needs. As of
September 30, 1999, such advances totaled $80,900, all of which was repaid in
full in November 1999.

In May through October 1999, we made stock grants to certain of our
employees, most of which were cancelled on November 17, 1999. A summary of such
grants is contained in "Management--Employee Benefit Plans" below.

A company owned and operated by Mr. Storms, one of our directors, provided
significant services designing and maintaining our Web site. We pay this company
for its continued services. During the nine months ended September 30, 1999, we
made total payments of $149,000 for Web site maintenance services. An additional
$13,999 was owed to this company as of September 30, 1999.

45
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding shares of our common
stock beneficially owned as of December 31, 1999, and as adjusted to reflect the
offering, by:

- 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 Officer.

- 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
December 31, 1999, 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. Unless otherwise indicated, each
person possesses sole voting and investment power with respect to the shares
identified as beneficially owned. Except as otherwise indicated in the table,
the address of the stockholders listed below is that of our principal executive
office. Directors not included in the table below do not hold our securities.
Shares beneficially owned prior to the offering are as adjusted to reflect and
include the automatic conversion upon the completion of the offering of:

- All outstanding Series A Convertible Preferred Stock into an aggregate
of 855,000 shares of common stock.

- All outstanding convertible notes into an aggregate of 481,250 shares
of common stock.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED PRIOR TO THE SHARES BENEFICIALLY
OFFERING OWNED AFTER THE OFFERING
------------------------- --------------------------
NAME AND ADDRESS (1) NUMBER PERCENT(2) NUMBER PERCENT(2)
- -------------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Robert A. Hammond, Jr............................. 9,000,000(3) 85.00 9,000,000(3) 66.24
Steven R. Spencer................................. 250,000(4) 2.34 250,000(4) 1.84
Louis W. Storms IV(5)............................. 34,375(6) * 34,375(6) *
Thomas Van Hare(7)................................ -- -- -- --
David G. Fessler(8)............................... -- -- -- --
Pierre A. Narath(9)............................... 40,000(10) * 40,000(10) *
All directors and executive officers as a group
(10 persons)(11)................................ 9,341,667 87.80 9,341,667 68.49
</TABLE>

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

* 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, 7171 N. Federal Highway, Suite 100, Boca Raton, Florida
33487.

(2) Percentages based on 10,587,500 shares outstanding prior to the offering and
13,587,500 shares outstanding immediately after the offering.

(3) 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.

(4) Consists of 250,000 shares issued to Mr. Spencer pursuant to the terms of
our Restricted Stock Bonus Plan but which are subject to the vesting and
forfeiture provisions of such Plan.

(5) Mr. Storms' address is 777 Dunlavy #9205, Houston, Texas 77019.

46
<PAGE>
(6) Consists of shares subject to stock options that are currently exercisable
or will become exercisable within 60 days following December 31, 1999.

(7) Mr. Van Hare's address is c/o Capstone Studio, 200 West Palmetto Park Rd.
Ste. 201, Boca Raton, Florida 33432.

(8) Mr. Fessler's address is 18350 Long Lake Drive, Boca Raton, Florida 33496.

(9) Mr. Narath's address is 1538 Turnpike Street, North Andover, Massachusetts
01845.

(10) Consists of shares of Series A Convertible Preferred Stock owned by
Metrotech Investments, a company controlled by Mr. Narath, which convert
into 40,000 shares of our common stock upon completion of this offering.
Excludes 10,000 shares that are the subject of stock options that are not
currently exercisable and 260,000 shares of Series A Convertible Preferred
Stock owned by Touchstone Software Corp., a company of which Mr. Narath is
an officer, director and significant stockholder.

(11) Includes 51,667 shares subject to options that are currently exerciseable
or will become exerciseable within 60 days following December 31, 1999.

47
<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

In our Articles of Incorporation, as revised, we are authorized to issue up
to 30,000,000 shares of common stock, no par value, and 2,000,000 shares of
preferred stock, no par value. Prior to this offering, 9,251,250 shares of
common stock were issued and outstanding and an additional 1,336,250 shares were
reserved for issuance upon conversion of 855,000 shares of outstanding Series A
Convertible Preferred Stock and convertible notes. An additional 994,375 shares
are reserved for issuance under the terms of outstanding options and warrants.
As of December 31, 1999, there were six record holders of our common stock.

The following description of our capital stock is a summary and is qualified
in its entirety by the provisions of our Articles of Incorporation, Bylaws and
applicable law. These documents have been filed as exhibits to the registration
statement, of which this prospectus is a part.

COMMON STOCK

The holders of common stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. Holders of common stock are
entitled to share in any and all dividends that our Board of Directors, in its
discretion, declares from funds legally available for that purpose. In the event
of any liquidation or dissolution of PartsBase.com, the holders of common stock
are entitled to participate in and share pro rata in the assets available for
distribution to stockholders. Any distribution would be subsequent to payment of
our liabilities and may be subject to any preferential rights of any preferred
stock or other senior security then outstanding. The holders of common stock
have no cumulative voting, preemptive or other subscription rights, and there
are no conversion rights or redemption or sinking fund provisions with respect
to the common stock. All outstanding shares of common stock are, and the shares
of common stock in this offering upon issuance and sale will be, fully paid and
non-assessable. The rights, preferences and privileges of the holders of common
stock are subject to, and may be adversely affected by, the rights of the
holders of any shares of preferred stock or senior securities which we may
designate in the future.

PREFERRED STOCK

Our Board of Directors is authorized, subject to any limitations prescribed
by Texas law, but without further action by our shareholders, to provide for the
issuance of up to 2,000,000 shares of preferred stock in one or more series, to
establish from time to time the number of shares to be included in each such
series and any qualifications, limitations, or restrictions thereof, and to
increase or decrease the number of shares of any such series (but not below the
number of shares of such series then outstanding) without any further vote or
action by the stockholders. The Board of Directors may authorize and issue
preferred stock with voting or conversion rights that could adversely affect the
voting power or other rights of common stockholders.

Simultaneously with the consummation of the offering, all 855,000 shares of
our outstanding Series A Convertible Preferred Stock will be converted into
855,000 shares of common stock and no shares of our preferred stock will remain
outstanding.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR ARTICLES OF INCORPORATION, BYLAWS AND
TEXAS LAW

Under the Texas Business Corporation Act, as amended, there are certain
provisions of our Articles of Incorporation and Bylaws that may be deemed to be
"anti-takeover" in nature that will be immediately applicable. These provisions
are:

- the requirement that we indemnify our directors and officers to the
fullest extent permitted by Texas law;

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<PAGE>
- the power of the Board of Directors to authorize the issuance of up to
2,000,000 shares of preferred stock and to determine the designations,
preferences, limitations and relative rights, including voting rights,
of those shares without further vote or action by the stockholders; and

- the elimination of preemptive rights to common stock.

Upon completion of this offering, we will be subject to Part Thirteen of the
Texas Business Corporation Act. Subject to certain exceptions, Part Thirteen
prohibits a publicly held Texas corporation from engaging in any business
combination with any affiliated shareholder for a period of three years
following the date that such shareholder became an affiliated shareholder,
unless: (1) prior to such date, the corporation's board of directors approved
either the business combination or the transaction that resulted in the
shareholder becoming an affiliated shareholder; or (2) the business combination
is approved by at least two-thirds of the outstanding voting shares that are not
beneficially owned by the affiliated shareholder or an affiliate or associate of
the affiliated shareholder at a meeting of shareholders called not less than six
months after the affiliated shareholder's share acquisition date.

In general, Part Thirteen defines an affiliated shareholder as any entity or
person beneficially owning 20% or more of the outstanding voting stock of the
issuing public corporation and any entity or person affiliated with or
controlling or controlled by such entity or person. Part Thirteen defines a
business combination to include, among other similar types of transactions, any
merger, share exchange, or conversion of an issuing public corporation involving
an affiliated shareholder. Part Thirteen may have the effect of inhibiting a
non-negotiated merger or other business combination that we may be involved in.

Our amended and restated articles of incorporation limit the liability of
our directors for monetary damages for an act or omission in the director's
capacity as a director, except to the extent otherwise required by the Texas
Business Corporation Act. Such limitation of liability does not affect the
availability of equitable remedies such as injunctive relief or rescission. Our
amended and restated articles of incorporation permit us to indemnify our
directors and officers to the fullest extent permitted by Texas law, including
in circumstances in which indemnification is otherwise discretionary under Texas
law.

Under Texas law, a corporation may indemnify a director or officer or other
person who was, is, or is threatened to be made a named defendant or respondent
in a proceeding because the person is or was a director, officer, employee or
agent of the corporation, if it is determined that such person:

- conducted himself or herself in good faith;

- reasonably believed, in the case of conduct in his or her official
capacity as a director or officer of the corporation, that his or her
conduct was in the corporation's best interests, and, in all other
cases, that his or her conduct was at least not opposed to the
corporation's best interests; and

- in the case of any criminal proceeding, had no reasonable cause to
believe that his or her conduct was unlawful.

Any such person may be indemnified against judgments, penalties (including
excise and similar taxes), fines, settlements and reasonable expenses actually
incurred by the person in connection with the proceeding. If the person is found
liable to the corporation or is found liable on the basis that personal benefit
was improperly received by the person, the indemnification is limited to
reasonable expenses actually incurred by the person in connection with the
proceeding, and must not be made in respect of any proceeding in which the
person is found liable for willful or intentional misconduct in the performance
of his or her duty to the corporation.

49
<PAGE>
Insofar as indemnification for liabilities under the Securities Act may be
permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, we have been informed that, in the opinion of the SEC,
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable. We have entered into indemnification agreements
with each of our directors that provide for indemnification and expense
advancement in addition to the indemnification provided by the amended and
restated articles and bylaws. We believe that these provisions and agreements
are necessary to attract and retain qualified directors.

The shares of Preferred Stock and the elimination of preemptive rights to
common stock were authorized for the purpose of providing the Board of Directors
with as much flexibility as possible to issue additional shares, without further
stockholder approval for proper corporate purposes, including financing,
acquisitions, stock dividends, stock splits, employee incentive plans and other
similar purposes. However, these additional shares may also be used by the Board
of Directors (if consistent with its fiduciary responsibilities) to deter future
attempts to gain control over PartsBase.com.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is U.S. Stock Transfer
Corporation.

50
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have outstanding 13,587,500 shares
of common stock. Of these shares, the 3,000,000 shares of common stock sold in
this offering will be freely tradable in the public market without restrictions
under the Securities Act. Any shares purchased in this offering by our
affiliates, as defined in Rule 144 under the Securities Act, may only be sold in
compliance with the applicable provisions of Rule 144 discussed below.

In general, under Rule 144, a person who has complied with the requirements
set forth below and has beneficially owned "restricted securities" for at least
one year, including a person who may be deemed an affiliate of us, is entitled
to sell, within any three-month period, the number of shares of common stock
that does not exceed the greater of:

- one percent of the then outstanding shares of our common stock; or

- the average weekly trading volume of our common stock on the Nasdaq
National Market during the four calendar weeks preceding the filing of
a notice on Form 144 with the Securities and Exchange Commission.

Sales under Rule 144 are subject to restrictions relating to manner of sale,
notice obligations and the requirements as to the availability of current public
information about us. Generally, a person who is not an affiliate of ours at any
time during the 90 days preceding a Rule 144 sale and who has beneficially owned
the shares for at least two years can sell without complying with the manner of
sale, notice, and volume requirements. As of December 31, 1999, the one-year
holding period had not expired with respect to any shares of our common stock.

Stockholders holding 10,587,500 shares, representing all of our outstanding
shares immediately prior to the offering, have agreed not to sell, pledge,
assign, or otherwise transfer, or agree to sell, pledge, assign or otherwise
transfer their shares without the prior written consent of Cruttenden Roth
Incorporated for a period of 180 days following the date of the final
prospectus.

Simultaneously with this offering, we have registered on behalf of certain
selling stockholders, an aggregate of 1,336,250 shares of our common stock. Upon
expiration of the 180 day lock-up period described above, these shares will be
eligible for resale in the public market.

51
<PAGE>
UNDERWRITING

Subject to the terms and conditions of our underwriting agreement, the
underwriters named below, for whom Cruttenden Roth Incorporated is acting as
sole representative, agreed to purchase from us, and we have agreed to sell to
the underwriters, the respective number of shares of common stock set forth
opposite each underwriter's name below:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
- ------------ ----------------
<S> <C>
Cruttenden Roth Incorporated................................
Total................................................. 3,000,000
=========
</TABLE>

Our underwriting agreement provides that the obligations of the underwriters
are subject to certain conditions precedent, including the absence of any
material adverse change in our business and the receipt of certificates,
opinions and letters from our counsel and independent public accountants. The
nature of the underwriters' obligation is such that they are committed to
purchase and pay for all the shares of common stock if any are purchased.

We have been advised by the representative that the underwriters propose to
offer the shares of common stock directly to the public on the terms set forth
on the cover page of this prospectus. The underwriters may allow selected
dealers a concession of not more than $. per share, and the underwriters may
allow, and such selected dealers may reallow, a concession of not more than $.
per share, to other dealers. After the initial public offering of the shares,
the public offering price and other selling terms may be changed by the
representatives. No change in such terms shall change the amount of proceeds to
be received by us as set forth on the cover page of this prospectus.

We have granted an option to the underwriters, exercisable for a period of
45 days after the date of this prospectus to purchase up to an additional
450,000 shares of common stock at the same price per share as the initial shares
to be purchased by the underwriters to cover overallotments, if any. To the
extent that the underwriters exercise this option, each of the underwriters will
be committed, subject to certain conditions, to purchase such additional shares
of common stock in approximately the same proportion as set forth in the above
table.

The representative of the underwriter has advised us that they do not expect
any sales of the shares of common stock offered hereby to be made to
discretionary accounts controlled by the underwriters.

We have agreed to pay the representative a nonaccountable expense allowance
equal to 3% of the aggregate price of the shares of common stock offered hereby
(including with respect to shares of common stock underlying the overallotment
option, if and to the extent it is exercised) set forth on the front cover of
this prospectus. The representative's expenses in excess of the nonaccountable
expense allowance, including legal expenses, will be borne by the
representative.

We have agreed to issue to the representative at the closing of the offering
warrants to purchase up to 150,000 shares of common stock at an exercise price
per share equal to 120% of the initial public offering price. The
representative's warrants are exercisable for a period of four years beginning
one year from the date of this prospectus.

The holder of the representative's warrants will have no voting, dividends
or other shareholder rights until the representative's warrants are exercised.
The terms of the representative's warrants were established as the result of
negotiations between the representative and us. If the representative's warrants
are exercised, the representative may realize additional compensation. By their
terms, the representative's warrants will be restricted from sale, transfer,
assignment or hypothecation, except to persons that are officers of either of
the representatives. The number of shares covered by the representative's
warrants and the exercise price are subject to adjustment to prevent dilution.
In

52
<PAGE>
addition, we have granted certain rights to the holder of the representative's
warrants to register the representatives' warrants and the common stock
underlying the representative's warrants under the Securities Act.

Total compensation to the representatives and the underwriters is as
follows:

- Commissions--$. per share of common stock sold;

- Nonaccountable expense allowance--$. per share of common stock sold; and

- Warrants to purchase up to 150,000 shares of common stock at 120% of the
per share offering

Our directors and officers and our shareholders have entered into lock-up
agreements with Cruttenden Roth Incorporated which provide that they will not
sell, pledge, assign or otherwise transfer, or agree to sell, pledge, assign or
otherwise transfer any of their shares for an initial period of 180 days after
the date of this prospectus without the prior written consent of Cruttenden Roth
Incorporated, on behalf of the underwriters. Cruttenden Roth Incorporated has no
present intention to release the locked-up shares prior to expiration of the
lock-up period although Cruttenden Roth Incorporated may release the locked-up
shares prior to the expiration of such period. The granting of any release would
be conditioned, in the judgment of Cruttenden Roth Incorporated, on such sale
not materially adversely impacting the prevailing trading market for the common
stock on the Nasdaq National Market System. Specifically, factors such as
average trading volume, recent price trends, and the need for additional public
float in the market for the common stock would be considered in evaluating such
a request.

Prior to the offering, there has been no established trading market for the
common stock. Consequently, the initial public offering price for the common
stock offered hereby has been determined by negotiations between the
representatives and us. Among the factors considered in such negotiations were
the preliminary demand for the common stock, the prevailing market and economic
conditions, our results of operations, estimates of our business potential and
prospects, the present state of our business operations, an assessment of our
management, the consideration of these factors in relation to the market
valuation of comparable companies in related businesses, the current condition
of the markets in which we operate, and other factors deemed relevant. There can
be no assurance that an active trading market will develop for the common stock
or that the common stock will trade in the public market after the offering at
or above the initial public offering price.

The representative has advised us that, pursuant to Regulation M under the
Securities Act, some persons participating in the offering may engage in
transactions, including stabilizing bids, syndicate covering transactions or the
imposition of penalty bids, that may have the effect of stabilizing or
maintaining the market price of the shares of common stock at a level above that
which might otherwise prevail in the open market. A "stabilizing bid" is a bid
for or the purchase of shares of common stock on behalf of the underwriters for
the purpose of fixing or maintaining the price of the common stock. A "syndicate
covering transaction" is the bid for or purchase of common stock on behalf of
the underwriters to reduce a short position incurred by the underwriters in
connection with the offering. A "penalty bid" is an arrangement permitting the
representative to reclaim the selling concession otherwise accruing to an
underwriter or syndicate member in connection with the offering if the common
stock originally sold by such underwriter or syndicate member purchased by the
representative in a syndicate covering transaction and has therefore not been
effectively placed by such underwriter or syndicate member. The representative
has advised us that such transactions may be effected on the Nasdaq National
Market System or otherwise and, if commenced, may be discontinued at any time.

The underwriting agreement provides that we will indemnify the underwriters
and their controlling persons against liabilities under the Securities Act or
will contribute to payments the underwriters and their controlling persons may
be required to make in respect thereof.

53
<PAGE>
LEGAL MATTERS

The legality of the securities in this offering has been passed upon for
PartsBase.com by Jeffer, Mangels, Butler & Marmaro LLP, Los Angeles, California.
Agreed upon legal matters will be passed upon for the underwriters by Greenberg
Traurig, LLP, McLean, Virginia.

EXPERTS

The financial statements as of September 30, 1999 and December 31, 1998 and
1997 and for the nine month period ended September 30, 1999, the years ended
December 31, 1998 and 1997 and the period from April 1, 1996 (date of inception)
to December 31, 1996 included in this prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein, and have been so included in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the
Securities Act with respect to the shares of common stock offered by this
prospectus. This prospectus does not contain all of the information set forth in
the registration statement, as some information is omitted in accordance with
the rules and regulations of the SEC. For further information with respect to us
and this offering, reference is made to the registration statement, including
the exhibits filed therewith, copies of which may be obtained at prescribed
rates from the SEC at the public reference facilities maintained by the SEC at
Judiciary Plaza Building, 450 Fifth Street, NW, Washington, D.C. 20549 and at
the SEC's regional offices located at Seven World Trade Center, Suite 1300, New
York, NY 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, IL 60661. The SEC maintains a Web site on the Internet that will
contain all future reports, proxy and information statements and other
information that we are required to file electronically with the SEC. The
address of the SEC's Web site is HTTP://WWW.SEC.GOV.

This prospectus includes statistical data regarding Internet usage and the
business-to-business e-commerce which were obtained from industry publications,
including reports generated by Forrester Research Inc., Boeing Corp. and
Aerospace Industries Association. These industry publications generally indicate
that they have obtained information from sources believed to be reliable, but do
not guarantee the accuracy and completeness of that information. While we
believe those industry publications to be reliable, we have not independently
verified the data included in the reports. We also have not sought, in all
instances, the consent of these organizations to refer to their reports in this
prospectus.

"PARTSBASE" is a trademark of PartsBase.com, Inc. We have applied for
federal trademark registration for "PARTSBASE.COM". All other trademarks or
service marks appearing in this prospectus are the property of their respective
holders.

54
<PAGE>
PARTSBASE.COM, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<S> <C>
Independent Auditor's Report................................ F-2

Balance Sheets.............................................. F-3

Statements of Operations.................................... F-4

Statements of Stockholders' Equity (Deficit)................ F-5

Statements of Cash Flows.................................... F-6

Notes to Financial Statements............................... F-7
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITOR'S 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, 1997 and 1998 and September 30, 1999 and the
related statements of operations, stockholders' deficit, and cash flows for the
period from April 1, 1996 (date of inception) to December 31, 1996, the years
ended December 31, 1997 and 1998 and the nine months ended September 30, 1999.
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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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, 1997 and 1998
and September 30, 1999 and the results of its operations and its cash flows for
the period from April 1, 1996 (date of inception) to December 31, 1996, the
years ended December 31, 1997 and 1998 and the nine months ended September 30,
1999 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

January 4, 2000
Houston, Texas

F-2
<PAGE>
PARTSBASE.COM, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
PRO FORMA
STOCKHOLDERS'
AS OF DECEMBER 31 AS OF EQUITY AT
------------------- SEPTEMBER 30, SEPTEMBER 30, 1999
1997 1998 1999 (NOTE 2)
-------- -------- ------------- -------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents....................... $ -- $ -- $ 257,796
Notes and accounts receivables.................. -- -- 115,639
Prepaids and other current assets............... -- -- 41,242
----------
Total current assets.......................... -- -- 414,677
Property, Plant and Equipment..................... 11,972 12,660 149,018
Accumulated depreciation........................ (4,124) (6,576) (13,042)
-------- -------- ----------
Net property, plant and equipment 7,848 6,084 135,976
Deferred financing costs, net of
amortization.................................... -- -- 2,040,288
Web site development costs, net of
amortization.................................... -- -- 92,096
Other assets...................................... -- -- 9,282
-------- -------- ----------
Total assets...................................... $ 7,848 $ 6,084 $2,692,319
======== ======== ==========

LIABILITIES
Current Liabilities:
Accounts payable................................ $ 1,709 $ 2,469 $ 91,232
Other accrued liabilities....................... -- -- 73,220
Deferred revenue................................ -- 22,659 525,019
Advances from stockholder....................... -- -- 80,900
Accounts payable--related party................. -- -- 9,108
-------- -------- ----------
Total current liabilities....................... 1,709 25,128 779,479
Convertible notes payable......................... -- -- 900,000
-------- -------- ----------
Total liabilities................................. 1,709 25,128 1,679,479

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, no par value; 1,000,000 shares
authorized, none issued and outstanding.......
Common stock, no par value; 20,000,000 shares
authorized issued and outstanding
September 30, 1999,-- 9,958,250 shares,
December 31, 1998 and 1997--none..............
Additional paid-in capital...................... 269,677 392,615 7,196,767 $11,964,017
Accumulated deficit............................. (263,538) (411,659) (2,304,522) (4,206,897)
Unearned compensation........................... -- -- (3,879,405) (3,879,405)
-------- -------- ---------- -----------
Total stockholders' equity (deficit).............. 6,139 (19,044) 1,012,840 $ 3,877,715
-------- -------- ---------- ===========
Total liabilities & stockholders' equity
(deficit)....................................... $ 7,848 $ 6,084 $2,692,319
======== ======== ==========
</TABLE>

F-3
<PAGE>
PARTSBASE.COM, INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1996 YEAR ENDED NINE MONTHS ENDED
(INCEPTION) TO DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, --------------------- -------------------------
1996 1997 1998 1998 1999
-------------- --------- --------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net revenue......................... $ -- $ 2,861 $ 3,504 $ 800 $ 120,761

Cost of revenue..................... 16,842 104,041 43,462 34,112 585,419
Noncash compensation expense........ -- -- -- -- 114,400
--------- --------- --------- --------- -----------
Total cost of revenue............. 16,842 104,041 43,462 34,112 699,819
Gross loss.......................... (16,842) (101,180) (39,958) (33,312) (579,058)
Operating expenses:
General and administrative........ 55,064 90,452 108,163 75,188 515,543
Noncash compensation expense...... -- -- -- -- 464,578
--------- --------- --------- --------- -----------
Total operating expenses........ 55,064 90,452 108,163 75,188 980,121
--------- --------- --------- --------- -----------
Operating loss.................. (71,906) (191,632) (148,121) (108,500) (1,559,179)
Other income (expense):
Interest expense.................. -- -- -- -- (800,511)
Interest income................... -- -- -- -- 2,437
-----------
Total other income (expense).... -- -- -- -- (798,074)
--------- --------- --------- --------- -----------
Net loss........................ $ (71,906) $(191,632) $(148,121) $(108,500) $(2,357,253)
========= ========= ========= ========= ===========
Net loss per common share--basic and
diluted........................... $ (0.24)
===========
Weighted average common shares
outstanding--basic and diluted.... 9,958,250
===========
</TABLE>

F-4
<PAGE>
PARTSBASE.COM, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
TOTAL
COMMON STOCK DIVISIONAL STOCKHOLDERS'
--------------------- ADDITIONAL UNEARNED RETAINED EQUITY EQUITY
SHARES AMOUNT PAID-IN-CAPITAL COMPENSATION DEFICIT (DEFICIT) (DEFICIT)
--------- --------- --------------- ------------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, April 1, 1996

Contribution from parent... $ 71,630 $ 71,630
Net loss................... $ (71,906) (71,906)
---------- ----------- ----------
Balance, December 31,
1996..................... 71,630 (71,906) (276)

Contribution from parent... 198,047 198,047
Net loss................... (191,632) (191,632)
---------- ----------- ----------
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........ 9,000,000

Restricted stock issued.... 958,250 4,458,383 $(4,458,383)
Recognition of unearned
compensation............. 578,978 578,978
Beneficial conversion
feature of convertible
notes.................... 787,500 787,500

Warrants issued............ 2,000,000 2,000,000

Net loss (April 27--
September 30, 1999)...... $(2,304,522) (2,304,522)
--------- ---------- ----------- ----------- ----------- ----------

Balance September 30,
1999..................... 9,958,250 $7,196,767 $(3,879,405) $(2,304,522) $ -- $1,012,840
========= ========== =========== =========== =========== ==========
</TABLE>

F-5
<PAGE>
PARTSBASE.COM, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
PERIOD FROM
APRIL 1, 1996 NINE MONTHS ENDED
(INCEPTION) TO YEAR ENDED DECEMBER 31, SEPTEMBER 30,
DECEMBER 31, ----------------------- -------------------------
1996 1997 1998 1998 1999
-------------- ---------- ---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss.......................... $(71,906) $(191,632) $(148,121) $(108,500) $(2,357,253)
Adjustments to reconcile net loss
to cash used in operating
activities:
Depreciation and amortization..... 1,729 2,395 2,453 1,819 115,741
Loss on property disposals........ -- -- -- -- 583
Recognition of unearned
compensation.................... -- -- -- -- 578,978
Noncash interest on convertible
notes........................... -- -- -- -- 787,500
Noncash costs allocated from
former parent................... 8,139 21,198 39,153 31,496 15,037
Changes in assets & liabilities:
Accounts receivable--trade,
net........................... -- -- -- -- (115,639)
Prepaids and other current
assets........................ -- -- -- -- (41,242)
Deferred charges & other
assets........................ -- -- -- -- (9,282)
Accounts payable................ 2,043 (334) 760 (1,709) 88,763
Other accrued liabilities....... -- -- -- -- 73,220
Deferred revenue................ -- -- 22,659 -- 502,360
Accounts payable--related
party......................... -- -- -- -- 9,108
-------- --------- --------- --------- -----------
Net cash used in operating
activities.................. (59,995) (168,373) (83,096) (76,894) (352,126)
-------- --------- --------- --------- -----------

Cash flow from investing activities:
Capital expenditures.............. (3,496) (8,476) (688) (688) (136,941)
Web site development costs........ -- -- -- -- (103,655)
-------- --------- --------- --------- -----------
Net cash used in investing
activities.................. (3,496) (8,476) (688) (688) (240,596)
-------- --------- --------- --------- -----------

Cash flow from financing activities:
Issuance of convertible notes..... -- -- -- -- 900,000
Debt issue costs.................. -- -- -- -- (138,004)
Advances from shareholders...... -- -- -- -- 80,900
Paid-in-capital................. 63,491 176,849 83,784 77,582 7,622
-------- --------- --------- --------- -----------
Net cash provided by financing
activities.................. 63,491 176,849 83,784 77,582 850,518
-------- --------- --------- --------- -----------
Net increase in cash and cash
equivalents....................... -- -- -- -- 257,796
Cash and cash equivalents at
beginning of period............... -- -- -- -- --
-------- --------- --------- --------- -----------
Cash and cash equivalents at end of
period............................ $ -- $ -- $ -- $ -- $ 257,796
======== ========= ========= ========= ===========

Noncash financing activities--
Warrants issued in connection with
issuance of the convertible
notes............................. -- -- -- -- $ 2,000,000
===========
</TABLE>

F-6
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS

1. BACKGROUND AND ORGANIZATION

PartsBase.com, Inc. (the "Company") is a provider of an e-commerce
Business-to-Business solution to the aviation parts industry. The Company
enables global aviation parts buyers and sellers to efficiently buy and sell
aviation parts and products worldwide through the Partsbase.com Web site, an
Internet based procurement solution.

The Company was incorporated in Texas on April 27, 1999 and prior to such
date operated as a division (the "Division") of Aviation Laboratories, Inc.
("Aviation Labs"). During this period, the Division did not have significant
sales and operating activities except for expenditures related primarily to the
design and development of its online database and Web site and the establishment
of relationships with industry buyers and sellers of aviation parts. 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 the Company. The Company has incurred operating losses to date and
had an accumulated deficit of approximately $2,305,000 at September 30, 1999.
The Company's activities have been primarily financed through private placements
of convertible subordinated debt. The Company is no longer in the development
stage.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accounting for the contribution of the Division into the Company 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. As
the Company has, in effect, reorganized from an S corporation to a C
corporation, additional paid-in capital has been reduced by the amount of the
accumulated deficit as of April 26, 1999 of $464,390.

The interim financial data and related notes for the nine month period ended
September 30, 1998 included herein are unaudited; however, in the opinion of
management such interim financial data includes all adjustments (consisting only
of normal recurring adjustments) necessary for a fair representation of the
results of the interim period.

CASH AND CASH EQUIVALENTS

Cash equivalents consist of investments in bank certificates of deposit and
other interest bearing instruments with initial maturities of three months or
less. Such investments are carried at cost, which approximates fair value. At
December 31, 1997 and 1998 the Company did not have any cash equivalents. At
September 30, 1999 the Company had $191,000 invested, through its Sweep Account,
in a government backed security. The sweep account earns interest at 4.5% per
annum and such investment matured on October 1, 1999.

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 September 30, 1999 the Company had approximately $292,000 in one
financial institution of which the excess over $100,000 is not covered by FDIC

F-7
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 performs
ongoing credit evaluations of its customers but does not require collateral. The
Company analyzes the need for reserves for potential credit losses and records
reserves when necessary. The Company has not had significant write-offs of bad
debt. No reserves were recorded as of December 31, 1997, 1998 and September 30,
1999.

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 determination of income.
Depreciation and amortization are computed using the straight-line method over
the following estimated service lives of the related assets:

<TABLE>
<S> <C>
Computer equipment.......................................... 5 years
Communication equipment..................................... 7 years
Furniture and fixtures...................................... 7 years
</TABLE>

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, $2,141,666, are recorded as a
deferred charge. All fees and issue costs are amortized over the term of the
related debt utilizing the straight-line method. Amortization of financing costs
related to the Private Placement amounted to approximately $114,000 for the nine
months ended September 30, 1999.

WEB SITE DEVELOPMENT COSTS

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 approximately $104,000 were capitalized during the
nine months ended September 30, 1999. No Web site development costs were
capitalized in prior periods. As of September 30, 1999, capitalized Web site
development costs, net of amortization, was approximately $92,000.

Amortization is computed on an enhancement-by-enhancement basis utilizing
the straight-line method over the estimated economic life of the enhancement,
which at September 30, 1999 is estimated to be 24 months.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments, including cash and cash equivalents,
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 have a

F-8
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

fair value of $5,413,010 based on the market value of the underlying common
stock on September 30, 1999 plus unpaid interest as of September 30, 1999.

PRO FORMA PRESENTATION

The unaudited pro forma presentation of shareholders' equity at September
30, 1999 gives effect to the mandatory conversion of all outstanding convertible
notes under the terms of the private placement agreement dated June 9, 1999 into
common stock (see Note 5), the issuance and mandatory conversion of the
convertible notes issued on November 10, 1999 (see Note 10) and the issuance and
mandatory conversion of the convertible preferred stock issued on November 22,
1999 (see Note 10) into common stock.

Since the Company has incurred net losses since inception, it would not have
incurred any income tax liabilities during the period prior to incorporation on
April 27, 1999, and any deferred tax assets would have had a corresponding
valuation allowance therefore pro forma presentation on net loss per share is
not required.

REVENUE RECOGNITION

Revenues are recognized, net of discounts, over the period services are
provided to subscribers. The Company does not charge initial sign-up fees to new
subscribers.

ACCOUNTING FOR STOCK-BASED COMPENSATION PLAN

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

The Company accounts for income taxes according to SFAS No. 109, "Accounting
for 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 operating loss and tax credit carryforwards. 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 income 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.

Prior to April 27, 1999, the date of incorporation, the Company, with the
consent of its stockholders, elected to be taxed under Section 1362 of the
Internal Revenue Code (the "Code") as an S corporation, which provides that, in
lieu of corporate income taxes, the stockholders account for the pro rata share
of the Company's items of income, deductions, losses, and credits. In connection
with

F-9
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

the incorporation of the Company (see Note 1), the Company, with the consent of
its stockholders, elected to be taxed under the provisions of Subchapter C of
the Code.

EARNINGS (LOSS) PER SHARE

The Company follows the provisions of SFAS No. 128, "Earnings Per Share." In
accordance with SFAS No. 128, basic earnings per share ("EPS") is computed by
dividing net loss applicable to common stock by the weighted average common
shares outstanding during the period. Shares of common stock options, warrants
or other common stock equivalents are considered outstanding for all periods
presented in the computation of basic and diluted EPS if issued for nominal
consideration. For the nine months ended September 30, 1999, the weighted
average common shares outstanding used to compute basic and diluted EPS includes
the effect of restricted common stock issued to employees.

The EPS computation excludes warrants to purchase 200,000 shares of common
stock at an exercise price of $2.00 per share that were issued in August 1999
and outstanding as of September 30, 1999 because such warrants were issued at
fair market value and were antidilutive.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles 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.

COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income." SFAS No. 130 establishes standards
for the reporting and display of comprehensive income and its components in a
full set of general purpose financial statements and is effective for fiscal
years beginning after December 15, 1997. The Company adopted SFAS No. 130 in the
year ended December 31, 1998. The Company had no comprehensive income items to
report for all periods presented.

SEGMENT INFORMATION

In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information." SFAS No.131 changes the way companies
report selected segment information in annual financial statements and requires
companies to report selected segment information in interim financial reports to
stockholders. The Company adopted SFAS No. 131 in the year ended December 31,
1998. The Company operates solely in one operating segment, the development and
marketing of an online marketplace for the purchasing and distribution of
products, and therefore there is no impact to the Company's financial statements
of adopting SFAS No. 131.

RECENTLY ISSUED ACCOUNTING STANDARDS

F-10
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

fiscal years beginning after June 15, 2000. 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
consolidated financial statements.

In March 1998, the American Institute of Certified Public Accountants
("AICPA") issued SOP 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. The Company implemented SOP 98-1 on January 1, 1999.
Adoption of SOP 98-1 did not have a material impact on the Company's financial
condition or results of operations.

In April 1998, the AICPA issued SOP No. 98-5, "Reporting on the Costs of
Start-Up Activities" ("SOP 98-5"). SOP 98-5 requires that all start-up costs
related to new operations must be expensed as incurred. In addition, all
start-up costs that were capitalized in the past must be written off when SOP
98-5 is adopted. The Company implemented SOP 98-5 on January 1, 1999. The
adoption of SOP 98-5 did not have a material impact on the Company's financial
position or results of operations.

3. PROPERTY AND EQUIPMENT

Property and equipment, consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------- --------------
1997 1998 1999
-------- -------- --------------
<S> <C> <C> <C>
Computer equipment............................ $11,972 $12,660 110,309
Telephone equipment........................... -- -- 26,850
Furniture and Fixtures........................ -- -- 11,859
------- ------- --------
11,972 12,660 149,018
Accumulated depreciation...................... (4,124) (6,576) (13,042)
------- ------- --------
$ 7,848 $ 6,084 $135,976
======= ======= ========
</TABLE>

Depreciation expense for the period from April 1, 1996 (date of inception)
to December 31, 1996, the years ended December 31, 1997 and 1998, and for the
nine months ended September 30, 1998 and 1999 amounted to $1,729, $2,395,
$2,452, $1,819 (unaudited) and $6,466, respectively.

4. ADVANCES FROM STOCKHOLDER

In May and June 1999, The Company's principal stockholder and Chief
Executive Officer (the "Principal Stockholder") provided funds to finance
development of the Company's product. As of September 30, 1999, the total
obligation to the Principal Stockholder was $80,900. The advances were non
interest bearing and did not have a stated maturity date. The advances were
repaid in November 1999.

5. 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

F-11
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

5. CONVERTIBLE NOTES PAYABLE (CONTINUED)

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 September 30, 1999 aggregated $13,010.
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.

6. STOCKHOLDERS' EQUITY

CAPITAL STOCK

The Company has authorized the issuance of 20,000,000 shares of common
stock, without par value, and 1,000,000 shares of preferred stock, without par
value. The Board of Directors have authority to establish series of unissued
shares of any class by fixing and determining the designations, preferences,
limitations and relative rights, including voting rights, of the shares of any
series. The Board of Directors shall have the authority to increase or decrease
the number of shares of such series to the fullest extent of the law. The number
of common shares outstanding, including restricted stock, at September 30, 1999,
is 9,958,250. At September 30, 1999, there were no preferred shares outstanding.

WARRANTS

In connection with the closing of the 8% Convertible Secured Subordinated
Notes private placement in August 1999, the underwriters were granted warrants
to purchase 200,000 shares of common stock of the Company at an exercise price
equal to $2.00 per share until the expiration date of September 1, 2002. The
warrants had a fair market value upon issuance of approximately $2,400,000. As
of September 30, 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 of the Company's common stock.

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

F-12
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. STOCKHOLDERS' EQUITY (CONTINUED)

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.

The Company terminated the Stock Bonus Plan in November 1999. In connection
with the cancellation of the stock grants under the Stock Bonus Plan, the
Company issued an option to purchase one share of common stock for each
cancelled share of Stock Bonus Plan stock. The replacement options were granted
pursuant to the Company's 1999 Stock Option Plan (see Note 10).

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.

During 1999, 958,250 shares of restricted common stock were awarded under
the Stock Bonus Plan. The restricted stock vests over a 24 month period from the
date of grant and all restricted stock carries full dividend and voting rights.
Unearned compensation of $4,458,383 was charged to stockholders' equity based
upon the market value of the Company's common stock at the date of the award.
Compensation expense of $578,978 was recognized in 1999 related to these stock
awards.

7. INCOME TAXES

The Company did not record any provision (benefit) for income taxes for the
nine months ended September 30, 1999, because it experienced a net loss and
generated a net operating loss of approximately $1,203,000 since incorporation
on April 27, 1999, which expires in 2019. The Company's utilization of its net
operating loss carryforward will be limited pursuant to Internal Revenue Code
Section 382 due to cumulative changes in ownership in excess of 50% within a
three-year period. Prior to April 27, 1999, the Company was not subject to
Federal income taxes.

A reconciliation of income tax benefit provided at the Federal statutory
rate (34%) to income tax benefit is as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1999
-------------------------
<S> <C> <C>
Net loss........................................... $(2,357,253)
Income tax benefit at statutory rate............... (801,466) (34.00%)
Loss attributable to operations prior to
inception........................................ 19,774 0.84%
Permanent difference relating to stock
compensation..................................... (338,127) (14.34%)
State income taxes................................. (82,504) (3.50%)
Change in valuation allowance...................... 1,202,308 51.00%
Other.............................................. 15 0.00%
----------- -------
$ -- 0.00%
=========== =======
</TABLE>

F-13
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

7. INCOME TAXES (CONTINUED)

The major tax effected components of the Company's net deferred tax
liability are as follows:

<TABLE>
<CAPTION>
SEPTEMBER 30,
1999
-------------
<S> <C>
Deferred tax assets:
Net operating loss carryforwards.......................... $ 1,203,221
Valuation allowance....................................... (1,202,308)
-----------
913
Deferred tax liabilities--
Differences between book and tax basis of property........ (913)
-----------
Total net deferred taxes.................................... $ --
===========
</TABLE>

8. RELATED PARTY TRANSACTIONS

CONTRACT SERVICES

A company owned and operated by one of the Company's directors and minority
stockholders provided significant services designing and maintaining the
Company's Web site. The Company pays this company for its continued services.
Payments totaling $0, $0, $0 and approximately $147,000 of which approximately
$104,000 has been capitalized as Web site development costs and approximately
$43,000 has been expensed as loss of revenue for the period from April 1, 1996
(date of inception) through December 31, 1996, for the years ended December 31,
1997 and 1998 and for the nine months ended September 30, 1999, respectively.
There was $13,999 owed to this company as of September 30, 1999, which is
included in accounts payables in the accompanying balance sheets.

DUE TO/FROM OTHER COMPANIES

The company in which PartsBase.Com, Inc. 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.Com, Inc. for net amounts
owed. At September 30, 1999, the Company owed a net amount aggregating $9,108.
At December 31, 1997 and 1998, there were no amounts due to the other company.

ALLOCATION OF COSTS INCURRED BY FORMER PARENT

The financial statements include costs incurred by Aviation Labs on the
Company's behalf. Such costs include administrative salaries, related payroll
taxes and benefits, utilities, office supplies and rent. These costs aggregated
$8,139, $21,198, $39,153 and $15,037 for the period from April 1, 1996 (date of
inception) to December 31, 1996, the years ended December 31, 1997 and 1998 and
the nine months ended September 30, 1999, 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-14
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

9. COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

The Company is party to several non-cancelable lease agreements for certain
equipment as well as its principal administrative offices. Rent expense under
non-cancelable operating leases totaled $0, $0, $0 and $27,699 for the period
from April 1, 1996 (date of inception) through December 31, 1996, for the years
ended December 31, 1997 and 1998, and for the nine month ended September 30,
1999, respectively. Minimum future lease obligations under non-cancelable
operating leases in effect at September 30, 1999, are as follows:

<TABLE>
<S> <C>
1999 (October 1 - December 31).............................. $ 19,590
2000........................................................ 73,596
2001........................................................ 49,064
2002........................................................ 0
2003........................................................ 0
2003........................................................ 0
--------
Total..................................................... $142,250
========
</TABLE>

10. SUBSEQUENT EVENTS

PRIVATE PLACEMENT--PREFERRED STOCK

Between November 1, 1999 and November 17, 1999, the Company sold 855,000
shares of its Series A Convertible Preferred Stock ("Convertible Preferred
Stock") at $2.50 per share for aggregate net proceeds of $1,902,375 after
commissions of $235,125. All of the shares are convertible at any time into
855,000 shares of the Company's common stock. Such shares are convertible upon
the completion of the Company's Initial Public Offering ("IPO") or at the
discretion of the shareholder if an IPO is not completed. The Convertible
Preferred Stock has 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, limited
to the amount of the proceeds received and was treated as a Preferred dividend
which was a reduction to income applicable to common shareholders at issuance.

PRIVATE PLACEMENT--CONVERTIBLE NOTES

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.

F-15
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

10. SUBSEQUENT EVENTS (CONTINUED)

OPTION GRANTS

In November 1999, the Company issued options to acquire 35,000 and 10,000
shares of common stock at an exercise price of $.63 per share to two executives
of the Company, respectively. One executive became vested in 833 options upon
grant with the remainder vesting in 22 monthly installments of approximately
1,458 options followed by 2 monthly installments of approximately 1,045 options.
The other executive became vested in 1,875 options upon grant with the remainder
vesting in 9 equal monthly installments of 625 options followed by 12 monthly
installments of approximately 208 options. Unearned compensation of $511,650 was
charged to stockholders' equity in November 1999 based on the market value of
the Company's common stock at the date of the award. Compensation expense of
approximately $54,000 was recognized in November and December 1999 related to
these options.

On December 31, 1999, the Company entered into an employment agreement with
an executive of the Company that provides for the grant on January 19, 2000 of
options to acquire 75,000 shares of common stock at an exercise price of $0.63
per share. The options will vest over 24 equal monthly installments beginning on
the date of grant. Assuming the market value of the Company's stock on the date
of grant is equal to the market value on December 31, 1999, unearned
compensation of $852,750 will be charged to stockholders' equity in January
2000.

INVESTMENT BANKING AGREEMENT

On October 7, 1999, the Company had entered into an agreement with an
investment banking group (the "Group") whereby such Group would act as the
exclusive financial advisor to the Company. Such services to be performed by the
Group would be in connection with the exploration of potential financing and
strategic transactions, including the private placement of debt or equity
capital, strategic mergers and acquisitions and or a public equity offering.
Immediately upon signing of the agreement the Group commenced work as the
Company's lead managing underwriter in a proposed public offering (the
"Offering") of the Company's common stock. In addition, the Group assisted the
Company, on a best efforts basis, in completing the private placement of the
Convertible Preferred stock.

The Company paid fees for services in connection with this agreement which
included a non-refundable initial cash fee of $35,000 which was intended to
offset non-accountable expenses related to the private capital offering, plus a
commission of $125,125 relating to the proceeds raised in the private placement
of equity and debt which is convertible into equity.

On or about December 3, 1999, this agreement was terminated. The Company is
currently working with a new investment banking firm in connection with a public
equity offering.

EMPLOYEE RESTRICTED STOCK GRANT TERMINATIONS

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

F-16
<PAGE>
PARTSBASE.COM, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

10. SUBSEQUENT EVENTS (CONTINUED)

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 $4,300,000 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 1,108,500 shares were granted to an aggregate of 42 persons, of which
1,075,250 were outstanding prior to such termination. 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.

1999 STOCK OPTION PLAN

On November 2, 1999 the Board of Directors adopted the PartsBase.com, Inc.
1999 Stock Option 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
common stock that may be issued upon the exercise of all options shall not
exceed 2,000,000 shares of common stock. The per share option price of the
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 common stock on the date of grant. Each option granted vests in accordance
with a vesting schedule established by the Board of Directors or a Committee of
the Board of Directors. Absent a specific determination of vesting, options
granted shall vest over a twenty-four month period and the period of exercise of
each option shall not exceed ten (10) years from date of grant. On November 16,
1999, the Company granted 95,375 nonqualified stock options in addition to the
824,000 options exchanged for the terminated stock grants for a total issuance
of 919,375 nonqualified stock options at an exercise price of $0.63 per share.
Unearned compensation of $1,084,414 was charged to stockholders' equity in
November 1999 in connection with the 95,375 options issued based on the market
value of the Company's common stock at the date of grant.

COMMON STOCK

On December 18, 1999, the Company's stockholders approved an amendment to
the Company's Articles of Incorporation increasing the authorized number of
common shares to 30 million and the authorized number of preferred shares to two
million.

F-17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

, 2000

[LOGO]

3,000,000 SHARES OF COMMON STOCK

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

PROSPECTUS
-------------

[LOGO]

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

YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN
THIS PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE SALE OF COMMON
STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AFTER THE
DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR SOLICITATION
OF AN OFFER TO BUY THE SHARES OF COMMON STOCK IN ANY CIRCUMSTANCES UNDER WHICH
THE OFFER OR SOLICITATION IS UNLAWFUL.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(This page has been intentionally left blank.)
<PAGE>
INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT IS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SS-1
<PAGE>
SUBJECT TO COMPLETION DATED , 2000

PROSPECTUS

PARTSBASE.COM, INC.

1,336,250 Shares of Common Stock

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

This Prospectus relates to the registration by PartsBase.com, Inc., at our
expense, for the account of certain selling security holders of 1,336,250 shares
of our common stock. The shares are not being underwritten in this offering and
we will not receive any proceeds from the sale of shares by the selling
stockholders. Subject to lock-up restrictions imposed on the selling
stockholders by the managing underwriter of our initial public offering, the
shares may be sold by the selling stockholders, or their respective transferees,
commencing on the date of this Prospectus.

Concurrently with this offering, we are offering 3,000,000 shares of our
common stock in an initial public offering pursuant to a separate Prospectus.
This Prospectus, except for this cover page, the back cover page, and the
information contained in this Prospectus under the heading "Selling
Stockholders" and "Plan of Distribution" is substantially the same as the
Prospectus being used in connection with our initial public offering. This
Prospectus includes certain information (including any and all information
relating to our proposed underwritten initial public offering and the
underwriters thereof) that may not be pertinent to the sale of shares by the
selling stockholders.

Prior to this offering, there has been no public market for the Common
Stock. [Our common stock has been approved for listing on the Nasdaq National
Market under the symbol "PRTS."]

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

INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 8 FOR RISKS THAT YOU SHOULD CONSIDER BEFORE INVESTING IN THE
SHARES OF OUR COMMON STOCK.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS IS
TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE DATE OF THIS PROSPECTUS IS , 2000

SS-2
<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
Prospectus Summary..........................................
Risk Factors................................................
Dividend Policy.............................................
Capitalization..............................................
Dilution....................................................
Selected Financial Data.....................................
Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................
Business....................................................
Management..................................................
Certain Relationships and Related Transactions..............
Principal Stockholders......................................
Selling Stockholders........................................
Description of Capital Stock................................
Shares Eligible for Future Sale.............................
Plan of Distribution........................................
Legal Matters...............................................
Experts.....................................................
Where You Can Find More Information.........................
Index to Financial Statements............................... F-1
</TABLE>

SS-2
<PAGE>
SELLING STOCKHOLDERS

The following table provides information regarding the beneficial ownership
of shares by the selling stockholders as of the date of this prospectus and as
adjusted to reflect the sale of all of their respective shares. The shares
listed below represent shares of common stock issuable upon the mandatory
conversion of convertible promissory notes and/or Series A Convertible Preferred
Stock. Such conversion occurred simultaneously with the effective date of the
registration statement of which this prospectus is a part.

Except as disclosed in footnote (5) to the table below, no selling
stockholder has had any position, office or other material relationship with us
within the past three years. The selling stockholders are participating in this
offering pursuant to contractual registration rights granted to the selling
stockholders in connection with the private placement of convertible promissory
notes and/or Series A Convertible Preferred Stock. In connection with such
private placements, we agreed to file and maintain the effectiveness of the
registration statement of which this prospectus is a part, and to pay all fees
and expenses incident to the registration of this offering, including all
registration and filing fees, all fees and expenses of complying with state
securities laws, all costs of preparation of the registration statement and fees
and disbursements of our counsel and independent public accountants.

<TABLE>
<CAPTION>
AMOUNT OF PERCENTAGE OF AMOUNT OF
SHARES OWNED SHARES OWNED AMOUNT OF SHARES OWNED
NAMES OF SELLING BEFORE BEFORE SHARES BEING AFTER
STOCKHOLDER(1) OFFERING OFFERING(2) REGISTERED OFFERING(3)
- -------------- ------------ ------------- ------------ ------------
<S> <C> <C> <C> <C>
Jeff London................................ 12,500 * 12,500 0
Justina O. Kaduru.......................... 12,500 * 12,500 0
Blaize Kaduru.............................. 25,000 * 25,000 0
Jesse Greenfield IRA, Delaware Chart
Guarantee and Trust TTEE................. 100,000 * 100,000 0
Doublas L. Flaute.......................... 25,000 * 25,000 0
Boris L. Miles............................. 12,500 * 12,500 0
James M. Terrell........................... 12,500 * 12,500 0
Steven J. Schwartz and Traci Schwartz...... 12,500 * 12,500 0
Michael Turnamian.......................... 12,500 * 12,500 0
Richard Turnamian and Sonia Turnamian...... 6,250 * 6,250 0
Alex P. Macar, Trustee for the LeGreff
Trust.................................... 12,500 * 12,500 0
Phillip Walker............................. 6,250 * 6,250 0
William Metzger and Katharine Metzger...... 12,500 * 12,500 0
William H. Metzger MD, Inc Retirement
Trust.................................... 12,500 * 12,500 0
Duni Hebron................................ 22,500 * 22,500 0
Patrick E. Aneji........................... 12,500 * 12,500 0
Fred Goldin................................ 6,250 * 6,250 0
Nick A. Baki............................... 12,500 * 12,500 0
Kevin J. Walls............................. 75,000 * 75,000 0
Alvin Galuten (4).......................... 25,000 * 25,000 0
John T. Echols............................. 6,250 * 6,250 0
Richard S. Greene.......................... 12,500 * 12,500 0
Phillip Ward............................... 6,250 * 6,250 0
Harbor Consulting, Inc..................... 6,250 * 6,250 0
Moliere Duplan............................. 25,000 * 25,000
Scott R. and Deborah M. Dingle............. 6,250 * 6,250
Greenfield Children's Partnership.......... 100,000 * 100,000 0
Justin Wilber.............................. 5,000 * 5,000 0
Paul Bratsos............................... 5,000 * 5,000 0
</TABLE>

SS-3
<PAGE>

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

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

(1) Information set forth in the table regarding the Selling Stockholder Shares
is provided to the best of our knowledge based on information furnished to
us by the selling stockholders and/or available to us through its stock
ledgers.

(2) Percentages based on 10,587,500 shares of common stock outstanding
immediately prior to the offering, assuming that all outstanding convertible
notes and Series A Convertible Preferred Stock have been converted into an
aggregate of 1,336,250 shares of common stock.

(3) Assumes that each selling stockholder sells all of the shares held by such
selling stockholder.

(4) Includes 12,500 shares owned by Alvin Galuten IRA.

(5) Metro Investments, LLC is controlled by Pierre Narath, who has been
appointed as a member of our board of directors effective upon completion of
our initial public offering. Mr. Narath is an officer, director and
significant stockholder of Touchstone Software Corporation.

SS-4
<PAGE>
PLAN OF DISTRIBUTION

TRANSACTIONS. The selling stockholders may offer and sell the common stock
in one or more of the following transactions (which may incur block
transactions):

- in the over-the-counter market,

- in negotiated transactions, or

- in a combination of any of these transactions.

PRICES. The selling stockholders may sell their shares at any of the
following prices:

- fixed prices that may be changed,

- market prices prevailing at the time of sale,

- prices related to prevailing market prices, or

- negotiated prices.

DIRECT SALES; AGENTS, DEALERS AND UNDERWRITERS. The selling stockholders
may effect transactions by selling shares in any of the following ways:

- directly to purchasers, or

- to or through agents, dealers or underwriters designated from time to
time.

Agents, dealers or underwriters may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling stockholders
and/or the purchasers of shares for whom they act as agent or to whom they sell
as principals, or both. The selling stockholders and any agents, dealers or
underwriters that act in connection with the sale of shares might be deemed to
be "underwriters" within the meaning of Section 2(11) of the Securities Act, and
any discount, concession or commission received by them and any profit on the
resale of shares as principal might be deemed to be underwriting discounts or
commissions under the Securities Act.

STATE SECURITIES LAW. Under the securities laws of some states, the selling
stockholders may only sell the shares in those states through registered or
licensed brokers or dealers. In addition, in some states, the selling
stockholders may not sell shares unless they have been registered or qualified
for sale in that state or an exemption from registration or qualification is
available and satisfied.

EXPENSES; INDEMNIFICATION. We will not receive any of the proceeds from the
sale of the common stock sold by the selling stockholders hereunder and will
bear all expenses related to the registration of this offering but will not pay
for any underwriting or brokerage commissions, fees or discounts, if any. We
will indemnify the selling stockholders against some civil liabilities,
including some liabilities that may arise under the Securities Act.

SS-5
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN
THIS PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR THE SALE OF COMMON
STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AFTER THE
DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR SOLICITATION
OF AN OFFER TO BUY THESE SHARES IN ANY CIRCUMSTANCES UNDER WHICH THE OFFER OR
SOLICITATION IS UNLAWFUL.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
PROSPECTUS SUMMARY.............................

RISK FACTORS...................................

DIVIDEND POLICY................................

CAPITALIZATION.................................

SELECTED FINANCIAL DATA........................

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

BUSINESS.......................................

MANAGEMENT.....................................

CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS.................................

PRINCIPAL STOCKHOLDERS.........................

SELLING STOCKHOLDERS...........................

DESCRIPTION OF CAPITAL STOCK...................

SHARES ELIGIBLE FOR FUTURE SALE................

PLAN OF DISTRIBUTION...........................

LEGAL MATTERS..................................

EXPERTS........................................

WHERE YOU CAN FIND MORE INFORMATION............

INDEX TO FINANCIAL STATEMENTS.................. F-1
</TABLE>

1,336,250 SHARES OF
COMMON STOCK

PARTSBASE.COM, INC.

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

PROSPECTUS

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

, 2000

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

SS-6
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table indicates the expenses to be incurred in connection with
the offering described in this Registration Statement, all of which will be paid
by us. All amounts are estimates, other than the Securities and Exchange
Commission registration fee, the National Association of Securities
Dealers, Inc. fee and the Nasdaq listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 18,245
National Association of Securities Dealers, Inc. fee........ $ 30,500
Nasdaq listing fee.......................................... $ 90,500
Representative's non-accountable expense allowance.......... $1,170,000
Accounting fees and expenses................................ $ 150,000
Legal fees and expenses..................................... $ 150,000
Director and officer insurance expenses..................... $ 100,000
Printing and engraving expenses............................. $ 90,000
Transfer agent and registrar fees and expenses.............. $ 15,000
Blue Sky fees and expenses (including counsel fees)......... $ 20,000
Miscellaneous expenses...................................... $ 165,755
Total................................................. $2,000,000
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article 2.02A of the Texas Business Corporation Act, or TBCA, provides, in
relevant part, as follows:

"Subject to the provisions of Section B and C of this Article, each
corporation shall have the power:

(16) To indemnify directors, officers, employees, and agents of the
corporation, and to purchase and maintain liability insurance for those
persons."

As permitted by Section G of Article 2.02-1 of the TBCA or any successor
statute, the Company's Articles of Incorporation and Bylaws (a) makes mandatory
the indemnification permitted under Section B of Article 2.02 as contemplated by
Section G thereof; (b) makes mandatory the payment or reimbursement of the
reasonable expenses incurred by a former or present director who was, is, or is
threatened to be made a named defendant or respondent in a proceeding upon such
director's compliance with the requirements of Section K of Article 2.02; and
(c) extends the mandatory indemnification referred to in Section (a) above and
the mandatory payment or reimbursement of expenses referred to in Section (b)
above (i) to all former or present officers of the Company and (ii) to all
persons who are or were serving at the request of the Company as a director,
officer, agent, employee, partner, member or trustee of another corporation,
partnership, limited liability corporation, joint venture, trust or other
enterprise, to the same extent that the Company is obligated to indemnify and
pay or reimburse expenses to directors.

Pursuant to policies of Directors and Officers Liability and Company
Reimbursement insurance with total limits of $5 million, the directors and
officers of the Company are insured, subject to the limits, retention,
exceptions and other terms and conditions of such policies, against liability
for any actual or alleged error or misstatement or misleading statement or act
or omission or neglect or breach of duty while acting in their capacities as
directors or officers of the Company.

II-1
<PAGE>
The Company has entered into indemnity agreements with its directors and
certain officers pursuant to which the Company generally is obligated to
indemnify its directors and such officers to the full extent permitted by the
TBCA, as described above.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In April 1999, the Company issued an aggregate of 9,000,000 shares of Common
Stock to Robert Hammond, Jr., the Company's CEO and President, and a limited
partnership controlled by Mr. Hammond is the sole general partner, in connection
with the formation of the Company. The consideration for such shares was the
contribution of the initial operating assets of the Company. The issuance of
such shares was exempt from the registration requirements of the Securities Act
of 1933, as amended, pursuant to Section 4(2) thereof.

In June 1999, the Company issued 250,000 shares of Common Stock to one
officer and director of the Company as a stock grant pursuant to the Company's
Restricted Stock Bonus Plan. The issuance of such shares was exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof.

In August and September 1999, the Company issued an aggregate of 1,250
shares of Common Stock to three employees as a stock grant pursuant to the
Company's Restricted Stock Bonus Plan. The issuance of such shares was exempt
from the registration requirements of the Securities Act pursuant to Rule 701
thereof.

In November 1999 through January 2000, the Company issued options to
purchase an aggregate of 994,375 shares of Common Stock at an exercise price of
$0.63 per share. Such options were issued to an aggregate of 55 employees in
accordance with the Company's Stock Option Plan. Such options were issued in
reliance on the exemption afforded by Rule 701 of the Securities Act.

In the August Private Placement, the Company issued an aggregate of $900,000
of convertible promissory notes to approximately 24 accredited investors. Such
promissory notes will be converted into an aggregate of 450,000 shares of the
Company's Common Stock upon the closing of this offering. The issuance of the
promissory notes was exempt from the registration requirements of the Securities
Act pursuant to Rule 506 of Regulation D promulgated thereunder. See "Certain
Relationships and Related Transactions."

In August 1999, in connection with the private placement of convertible
promissory notes described above, the Company issued a warrant to purchase up to
200,000 shares of its Common Stock at an exercise price of $2.00 to the
broker-dealer through which the private placement was conducted. The issuance of
such warrant was exempt from the registration requirements of the Securities Act
pursuant to Rule 506 of Regulation D promulgated thereunder.

In November 1999, the Company issued an aggregate of $62,500 of convertible
promissory notes to 2 accredited investors. Such promissory notes will be
converted into an aggregate of 31,250 shares of the Company's Common Stock upon
the closing of this offering. The issuance of these promissory notes was exempt
from the registration requirements of the Securities Act pursuant to
Section 4(2) thereof.

In November 1999, the Company issued an aggregate of 855,000 shares of its
Series A Convertible Preferred Stock to approximately 21 accredited investors.
Such shares of preferred stock will be converted into an aggregate of 855,000
shares of the Company's Common Stock upon the closing of this offering. The
issuance of the Series A Preferred Stock was exempt from the registration
requirements of the Securities Act pursuant to Rule 506 of Regulation D
promulgated thereunder. See "Certain Relationships and Related Transactions."

II-2
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<C> <S>
1.1 Form of Underwriting Agreement*

3.1 Certificate of Incorporation*

3.2 Bylaws*

4.1 Form of Common Stock Certificate*

4.2 Form of Representative's Warrant*

4.3 Warrant Agreement, dated as of August 31, 1999, in favor of
Gunn Allen*

4.4 Form of Subscription Document for August 1999 Private
Placement*

4.5 Form of Subscription Document for November 1999 Private
Placement*

4.6 Form of Convertible Promissory Note*

5.1 Opinion of Jeffer, Mangels, Butler & Marmaro LLP*

10.1 PartsBase.com, Inc. Restricted Stock Bonus Plan *

10.2 PartsBase.com, Inc. Stock Option Plan

10.3 Lease Agreement with respect to office space in Boca Raton,
Florida*

10.4 Form of Indemnification Agreement*

10.5 Employment Agreement of Robert Hammond, Jr.*

10.6 Employment Agreement of Steven Spencer*

10.7 Employment Agreement of Kevin Steil*

10.8 Employment Agreement of Michael Siegel*

10.9 Employment Agreement of Yves Duplan*

10.10 Consulting Agreement with Plan Three Solutions, L.L.C.*

10.11 Software License Agreement with Tradex Technologies, Inc.*

10.12 Software License Agreement with Trading Dynamics, Inc.*

23.1 Consent of Jeffer, Mangels, Butler & Marmaro LLP (included
in Exhibit 5.1)*

23.2 Consent of Deloitte & Touche LLP

23.3 Consent of Pierre A. Narath as Director Nominee

23.4 Consent of David G. Fessler as Director Nominee

24.1 Power of Attorney (included in Part II--Signatures of this
Registration Statement)

27.1 Financial Data Schedule
</TABLE>

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

* To be filed by amendment

II-3
<PAGE>
ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement).
Notwithstanding the forgoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering
price set forth in "Calculation of Registration Fee" table in
the effective registration statement: and

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(b) The undersigned registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreements,
certificates in such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.

(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(d) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it
was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.

II-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boca Raton, State of
Florida, on January 10, 2000.

<TABLE>
<S> <C> <C>
PARTSBASE.COM, INC.

By: /s/ ROBERT A. HAMMOND, JR.
-----------------------------------------
Robert A. Hammond, Jr.,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
Robert A. Hammond, Jr. and Steven Spencer, or either of them, as his or her true
and lawful attorney-in-fact and agent, acting alone, with full powers of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) and additions to this Registration Statement, any
Amendments thereto and any Registration Statement for the same offering which is
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, each acting alone, full powers and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all said attorney-in-fact
and agent, acting alone, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of PartsBase.com, Inc. in the capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT A. HAMMOND, JR.
------------------------------------------- Director, Chief Executive January 10, 2000
Robert A. Hammond, Jr. Officer and President

/s/ STEVEN R. SPENCER
------------------------------------------- Director, Chief Operating January 10, 2000
Steven R. Spencer Officer

/s/ MICHAEL NAPARSTEK
------------------------------------------- Controller (acting principal January 10, 2000
Michael Naparstek accounting officer)

/s/ THOMAS VAN HARE
------------------------------------------- Director January 10, 2000
Thomas Van Hare

/s/ LOUIS W. STORMS IV
------------------------------------------- Director January 10, 2000
Louis W. Storms IV
</TABLE>

II-5

<PAGE>

EXHIBIT 10.2

PARTSBASE.COM, INC.

1999 STOCK OPTION PLAN

1. PURPOSE. The purpose of this PartsBase.com, Inc. 1999 Stock
Option Plan ("Plan") is to further the growth and development of PartsBase.com,
Inc., a Texas corporation (the "Company"), and its subsidiaries by providing,
through ownership of stock of the Company, an incentive to officers, directors,
outside consultants and employees who are in a position to contribute materially
to the prosperity of the Company, to increase such persons' interests in the
Company's welfare, to encourage them to continue their services to the Company
or its subsidiaries, and to attract individuals of outstanding ability to render
services to and enter the employment of the Company or its subsidiaries. This
Plan shall be effective on the Effective Date (as provided in Section 10) and
shall apply to options granted on or after the Effective Date.

2. INCENTIVE AND NON-QUALIFIED STOCK OPTIONS. Two types of
Stock Options (referred to herein as "Options" without distinction between such
two types) may be granted under the Plan: Options intended to qualify as
Incentive Stock Options under Section 422 of the Code and Non-Qualified Stock
Options not specifically authorized or qualified for favorable income tax
treatment by the Code.

3. DEFINITIONS. The following definitions are applicable to
the Plan:

3.1 BOARD. The Board of Directors of the Company.

3.2 CODE. The Internal Revenue Code of 1986, as amended
from time to time.

3.3 COMMON STOCK. The shares of Common Stock of the
Company.

3.4 COMPANY. PartsBase.com, Inc., a Texas corporation.

3.5 CONSULTANT. An individual or entity that renders
professional services to the Company as an independent contractor and is not an
employee or under the direct supervision and control of the Company.

3.6 DISABLED OR DISABILITY. For the purposes of Section
7.4, a disability of the type defined in Section 22(e)(3) of the Code. The
determination of whether an individual is Disabled or has a Disability is
determined under procedures established by the Plan Administrator for purposes
of the Plan.

<PAGE>

3.7 FAIR MARKET VALUE. For purposes of the Plan, the
"fair market value" per share of Common Stock of the Company at any date shall
be (a) if the Common Stock is listed on an established stock exchange or
exchanges or the Nasdaq National Market, the closing price per share on the last
trading day immediately preceding such date on the principal exchange on which
it is traded or as reported by Nasdaq, or (b) if the Common Stock is not then
listed on an exchange or the Nasdaq National Market, but is quoted on the Nasdaq
Small Cap Market, the Nasdaq Electronic Bulletin Board or the National Quotation
Bureau pink sheets, the average of the closing bid and asked prices per share
for the Common Stock as quoted by Nasdaq or the National Quotation Bureau, as
the case may be, on the last trading day immediately preceding such date, or (c)
if the Common Stock is not then listed on an exchange or the Nasdaq National
Market, or quoted by Nasdaq Small Cap Market, the NASD's Electronic Bulletin
Board, or the National Quotation Bureau, an amount determined in good faith by
the Plan Administrator.

3.8 INCENTIVE STOCK OPTION. Any Stock Option intended to
be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.

3.9 NON-EMPLOYEE DIRECTOR. A "non-employee director"
within the meaning of Rule 16b-3(b)(3)(i) promulgated by the Securities and
Exchange Commission.

3.10 NON-QUALIFIED STOCK OPTION. Any Stock Option that
is not an Incentive Stock Option.

3.11 OPTIONEE. The recipient of a Stock Option.

3.12 PLAN. The PartsBase.com, Inc. 1999 Stock Option
Plan, as amended from time to time.

3.13 PLAN ADMINISTRATOR. The Board or the Committee
designated pursuant to Section 4 to administer, construe and interpret the terms
of the Plan.

3.14 STOCK OPTION OR OPTION. Any option to purchase
shares of Common Stock granted pursuant to Section 7.

4. ADMINISTRATION.

4.1 ADMINISTRATION BY BOARD. Subject to Section 4.2
hereof, the Plan Administrator shall be the Board of Directors of the Company
(the "Board") during such periods of time as all members of the Board are
"outside directors" as defined in Treas. Regs. '1.162-27(e)(3) ("outside
directors"). Anything to the contrary notwithstanding, the requirement that all
members of the Board be outside directors shall not apply for any period of time
prior to the date the Company's Common Stock becomes registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended. Subject to the
provisions of the Plan, the Plan Administrator shall have authority to construe
and interpret the Plan, to promulgate, amend, and rescind rules and regulations
relating to its administration, from time to time to

-2-

<PAGE>

select from among the eligible employees, directors and non-employee
consultants (as determined pursuant to Section 5) of the Company and its
subsidiaries those employees, directors and consultants to whom Stock Options
will be granted, to determine the timing and manner of the grant of the
Options, to determine the exercise price, the number of shares covered by and
all of the terms of the Stock Options, to determine the duration and purpose
of leaves of absence which may be granted to Stock Option holders without
constituting termination of their employment for purposes of the Plan, and to
make all of the determinations necessary or advisable for administration of
the Plan. The interpretation and construction by the Plan Administrator of
any provision of the Plan, or of any agreement issued and executed under the
Plan, shall be final and binding upon all parties. No member of the Board
shall be liable for any action or determination undertaken or made in good
faith with respect to the Plan or any agreement executed pursuant to the Plan.

4.2 ADMINISTRATION BY COMMITTEE. The Board may, in its
sole discretion, delegate any or all of its duties as Plan Administrator and,
subject to the provisions of Section 4.1 of the Plan, at any time the Board
includes any person who is not an outside director, the Board shall delegate all
of its duties as Plan Administrator during such period of time to a Compensation
Committee or a separate Stock Option Committee (the "Committee") of not fewer
than two (2) members of the Board, all of the members of which Committee shall
be persons who, in the opinion of counsel to the Company, are outside directors
and Non-Employee Directors, to be appointed by and serve at the pleasure of the
Board. From time to time, the Board may increase or decrease (to not less than
two members) the size of the Committee, and add additional members to, or remove
members from, the Committee. The Committee shall act pursuant to a majority
vote, or the written consent of a majority of its members, and minutes shall be
kept of all of its meetings and copies thereof shall be provided to the Board.
Subject to the provisions of the Plan and the directions of the Board, the
Committee may establish and follow such rules and regulations for the conduct of
its business as it may deem advisable. No member of the Committee shall be
liable for any action or determination undertaken or made in good faith with
respect to the Plan or any agreement executed pursuant to the Plan.

5. ELIGIBILITY. Any employee or director (including any
officer or director who is an employee) of the Company or any of its
subsidiaries shall be eligible to receive an Option under the Plan; provided,
however, that no person who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any of its
parent or subsidiary corporations shall be eligible to receive an Incentive
Stock Option under the Plan unless at the time such Incentive Stock Option is
granted the Option price (determined in the manner provided in Section 7.2) is
at least 110% of the fair market value of the shares subject to the Option and
such Option by its terms is not exercisable after the expiration of five years
from the date such Option is granted. An employee may receive more than one
Option under the Plan. Non-Employee Directors shall be eligible to receive
Non-Qualified Stock Options on such terms as the Plan Administrator may
determine, subject to the restrictions on exercise described in Section 7.5
below. In addition, Non-Qualified Stock Options may be granted to Consultants
who are selected by the Plan Administrator.

-3-

<PAGE>

6. SHARES SUBJECT TO OPTIONS. The stock available for grant of
Options under the Plan shall be shares of the Company's authorized but unissued,
or reacquired, Common Stock. The aggregate number of shares which may be issued
pursuant to exercise of Options granted under the Plan, as amended, shall not
exceed 2,000,000 shares of Common Stock (subject to adjustment as provided in
Section 7.13), including shares previously issued under the Plan. In the event
that any outstanding Option under the Plan for any reason expires or is
terminated, the shares of Common Stock allocable to the unexercised portion of
the Option shall again be available for Options under the Plan as if no Option
had been granted with respect to such shares.

7. TERMS AND CONDITIONS OF OPTIONS. Options granted under the
Plan shall be evidenced by agreements (which need not be identical) in such form
and containing such provisions which are consistent with the Plan as the Plan
Administrator shall from time to time approve. Such agreements may incorporate
all or any of the terms hereof by reference and shall comply with and be subject
to the following terms and conditions:

7.1 NUMBER OF SHARES SUBJECT TO OPTION. Each Option
agreement shall specify the number of shares subject to the Option.

7.2 OPTION PRICE. The purchase price for the shares
subject to any Option shall be determined by the Plan Administrator at the time
of grant. Anything to the contrary notwithstanding, the purchase price for the
shares subject to any Incentive Stock Option shall not be less than 100% of the
Fair Market Value of the shares of Common Stock of the Company on the date the
Stock Option is granted. In the case of any Option granted to an employee who
owns stock possessing more than 10% of the total combined voting power of all
classes of stock of the Company or any of its parent or subsidiary corporations,
the Option price shall not be less than 110% of the fair market value per share
of the Common Stock of the Company on the date the Option is granted. For
purposes of determining the stock ownership of an employee, the attribution
rules of Code Section 424(d) shall apply.

7.3 NOTICE AND PAYMENT. Any exercisable portion of a
Stock Option may be exercised only by:

(a) delivery of a written notice to the Company,
prior to the time when such Stock Option becomes unexercisable under Section
7.4, stating the number of shares being purchased and complying with all
applicable rules established by the Plan Administrator;

(b) payment in full of the exercise price of such
Option by, as applicable, delivery of (i) cash or check for an amount equal
to the aggregate Stock Option exercise price for the number of shares being
purchased, (ii) in the discretion of the Plan Administrator, upon such terms
as the Plan Administrator shall approve, a copy of instructions to a broker
directing such broker to sell the Common Stock for which such Option is
exercised, and to remit to the Company the aggregate exercise price of such
Stock Option (a "cashless exercise"), or (iii) in the discretion of the Plan
Administrator, upon such terms as the

-4-
<PAGE>

Plan Administrator shall approve, shares of the Company's Common Stock owned
or purchasable upon exercise of the Option by the Optionee, duly endorsed for
transfer to the Company, with a Fair Market Value on the date of delivery
equal to the aggregate purchase price of the shares with respect to which
such Stock Option or portion is thereby exercised (a "stock-for-stock
exercise");

(c) payment of the amount of tax required to be
withheld (if any) by the Company or any parent or subsidiary corporation as a
result of the exercise of a Stock Option. At the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, the
Optionee may pay all or a portion of the tax withholding by (i) cash or check
payable to the Company, (ii) cashless exercise, (iii) stock-for-stock
exercise, or (iv) a combination of one or more of the foregoing payment
methods; and

(d) delivery of a written notice to the Company
requesting that the Company direct the transfer agent to issue to the
Optionee (or to his designee) a certificate for the number of shares of
Common Stock for which the Option was exercised or, in the case of a cashless
exercise, for any shares that were not sold in the cashless exercise.

Notwithstanding the foregoing, the Company, in its sole discretion, may extend
and maintain, or arrange for the extension and maintenance of, credit to any
Optionee to finance the Optionee's purchase of shares pursuant to exercise of
any Stock Option, on such terms as may be approved by the Plan Administrator,
subject to applicable regulations of the Federal Reserve Board and any other
laws or regulations in effect at the time such credit is extended.

7.4 TERM OF OPTION. No Incentive Stock Option shall be
exercisable after the expiration of the earliest of (a) ten years after the date
the Option is granted, (b) three months after the date the Optionee's employment
with the Company and its subsidiaries terminates, if such termination or
cessation is for any reason other than Disability or death, (c) one year after
the date the Optionee's employment with the Company and its subsidiaries
terminates, if such termination or cessation is a result of death or Disability;
provided, however, that the Option agreement for any Option may provide for
shorter periods in each of the foregoing instances. In the case of an Incentive
Stock Option granted to an employee who owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or any of
its parent or subsidiary corporations, the term set forth in (a), above, shall
not be more than five years after the date the Option is granted.

7.5 EXERCISE OF OPTION. No Option shall be exercisable
during the lifetime of an Optionee by any person other than the Optionee.
Subject to the foregoing, the Plan Administrator shall have the power to set the
time or times within which each Option shall be exercisable and to accelerate
the time or times of exercise; provided, however, the Option shall provide the
right to exercise at the rate of at least 20% per year over four years from the
date the Option is granted. Unless otherwise provided by the Plan Administrator,
each Option granted under the Plan shall become exercisable on a cumulative
basis as to one-quarter (1/4) of the total number of shares covered thereby at
any time after one year from the date the Option is granted and an additional
one-quarter (1/4) of such total number of shares at

-5-

<PAGE>

any time after the end of each consecutive one-year period thereafter until
the Option has become exercisable as to all of such total number of shares.
To the extent that an Optionee has the right to exercise an Option and
purchase shares pursuant thereto, the Option may be exercised from time to
time by written notice to the Company, stating the number of shares being
purchased and accompanied by payment in full of the exercise price for such
shares.

7.6 NO TRANSFER OF OPTION. No Option shall be
transferable by an Optionee otherwise than by will or the laws of descent and
distribution.

7.7 LIMIT ON INCENTIVE STOCK OPTIONS. The aggregate
fair market value (determined at the time the Option is granted) of the stock
with respect to which Incentive Stock Options granted after 1986 are
exercisable for the first time by an Optionee during any calendar year (under
all Incentive Stock Option plans of the Company and its subsidiaries) shall
not exceed $100,000. To the extent that the aggregate Fair Market Value
(determined at the time of the Stock Option is granted) of the Common Stock
with respect to which Incentive Stock Options are exercisable for the first
time by an Optionee during any calendar year (under all Incentive Stock
Option plans of the Company and any parent or subsidiary corporations)
exceeds $100,000, such Stock Options shall be treated as Non-Qualified Stock
Options. The determination of which Stock Options shall be treated as
Non-Qualified Stock Options shall be made by taking Stock Options into
account in the order in which they were granted.

7.8 RESTRICTION ON ISSUANCE OF SHARES. The issuance
of Options and shares shall be subject to compliance with all of the
applicable requirements of law with respect to the issuance and sale of
securities, including, without limitation, any required qualification under
state securities laws. If an Optionee acquires shares of Common Stock
pursuant to the exercise of an Option, the Plan Administrator, in its sole
discretion, may require as a condition of issuance of shares covered by the
Option that the shares of Common Stock shall be subject to restrictions on
transfer. The Company may place a legend on the certificates evidencing the
shares, reflecting the fact that they are subject to restrictions on transfer
pursuant to the terms of this Section. In addition, the Optionee may be
required to execute a buy-sell agreement in favor of the Company or its
designee with respect to all or any of the shares so acquired. In such event,
the terms of such agreement shall apply to such shares.

7.9 INVESTMENT REPRESENTATION. Any Optionee may be
required, as a condition of issuance of shares covered by his or her Option,
to represent that the shares to be acquired pursuant to exercise of the
Option will be acquired for investment and without a view to distribution
thereof; and in such case, the Company may place a legend on the certificate
evidencing the shares reflecting the fact that they were acquired for
investment and cannot be sold or transferred unless registered under the
Securities Act of 1933, as amended, or unless counsel for the Company is
satisfied that the circumstances of the proposed transfer do not require such
registration.

-6-

<PAGE>

7.10 RIGHTS AS A SHAREHOLDER OR EMPLOYEE. An
Optionee or transferee of an Option shall have no right as a stockholder of
the Company with respect to any shares covered by any Option until the date
of the issuance of a share certificate for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether cash, securities,
or other property) or distributions or other rights for which the record date
is prior to the date such share certificate is issued, except as provided in
Section 7.13. Nothing in the Plan or in any Option agreement shall confer
upon any employee any right to continue in the employ of the Company or any
of its subsidiaries or interfere in any way with any right of the Company or
any subsidiary to terminate the Optionee's employment at any time.

7.11 NO FRACTIONAL SHARES. In no event shall the
Company be required to issue fractional shares upon the exercise of an Option.

7.12 EXERCISABILITY IN THE EVENT OF DEATH. In the
event of the death of the Optionee, any Option or unexercised portion thereof
granted to the Optionee, to the extent exercisable by him or her on the date
of death, may be exercised by the Optionee's personal representatives, heirs,
or legatees subject to the provisions of Section 7.4 hereof.

7.13 RECAPITALIZATION OR REORGANIZATION OF COMPANY.
Except as otherwise provided herein, appropriate and proportionate
adjustments shall be made in the number and class of shares subject to the
Plan and to the Option rights granted under the Plan, and the exercise price
of such Option rights, in the event that the number of shares of Common Stock
of the Company are increased or decreased as a result of a stock dividend
(but only on Common Stock), stock split, reverse stock split,
recapitalization, reorganization, merger, consolidation, separation, or like
change in the corporate or capital structure of the Company. In the event
there shall be any other change in the number or kind of the outstanding
shares of Common Stock of the Company, or any stock or other securities into
which such common stock shall have been changed, or for which it shall have
been exchanged, whether by reason of a complete liquidation of the Company or
a merger, reorganization, or consolidation of the Company with any other
corporation in which the Company is not the surviving corporation or the
Company becomes a wholly-owned subsidiary of another corporation, then if the
Plan Administrator shall, in its sole discretion, determine that such change
equitably requires an adjustment to shares of Common Stock currently subject
to Options under the Plan, or to prices or terms of outstanding Options, such
adjustment shall be made in accordance with such determination.

To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustments shall be made by the
Plan Administrator, the determination of which in that respect shall be
final, binding, and conclusive. No right to purchase fractional shares shall
result from any adjustment of Options pursuant to this Section. In case of
any such adjustment, the shares subject to the option shall be rounded down
to the nearest whole share. Notice of any adjustment shall be given by the
Company to each Optionee whose Options shall have been so adjusted and such
adjustment (whether or not notice is given) shall be effective and binding
for all purposes of the Plan.

-7-

<PAGE>

In the event of a complete liquidation of the Company or a
merger, reorganization, or consolidation of the Company with any other
corporation in which the Company is not the surviving corporation or the
Company becomes a wholly-owned subsidiary of another corporation, any
unexercised Options theretofore granted under the Plan shall be deemed
canceled unless the surviving corporation in any such merger, reorganization,
or consolidation elects to assume the Options under the Plan or to issue
substitute Options in place thereof; provided, however, that, notwithstanding
the foregoing, if such Options would be canceled in accordance with the
foregoing, the Optionee shall have the right, exercisable during a
fifteen-day period ending on the fifth day prior to such liquidation, merger,
or consolidation, to exercise such Option in whole or in part without regard
to any installment exercise provisions in the Option agreement.

7.14 MODIFICATION, EXTENSION, AND RENEWAL OF
OPTIONS. Subject to the terms and conditions and within the limitations of
the Plan, the Plan Administrator may modify, extend, or renew outstanding
Options granted under the Plan and accept the surrender of outstanding
Options (to the extent not theretofore exercised). The Plan Administrator
shall not, however, without the approval of the Board, modify any outstanding
Incentive Stock Option in any manner which would cause the Option not to
qualify as an Incentive Stock Option within the meaning of Section 422 of the
Code. Notwithstanding the foregoing, no modification of an Option shall,
without the consent of the Optionee, alter or impair any rights of the
Optionee under the Option.

7.15 OTHER PROVISIONS. Each Option may contain such
other terms, provisions, and conditions not inconsistent with the Plan as may
be determined by the Plan Administrator.

8. TERMINATION OR AMENDMENT OF THE PLAN. The Board may at
any time terminate or amend the Plan; provided that, without approval of the
holders of a majority of the shares of Common Stock of the Company
represented and voting at a duly held meeting at which a quorum is present
(which shares voting affirmatively also constitute a majority of the required
quorum) or by the written consent of a majority of the outstanding shares of
Common Stock, there shall be, except by operation of the provisions of
Section 7.13, no increase in the total number of shares covered by the Plan,
no change in the class of persons eligible to receive Options granted under
the Plan, no reduction in the exercise price of Options granted under the
Plan, and no extension of the latest date upon which Options may be
exercised; and provided further that, without the consent of the Optionee, no
amendment may adversely affect any then outstanding Option or any unexercised
portion thereof.

9. INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Plan Administrator, the
members of the Plan Administrator administering the Plan shall be indemnified
by the Company against reasonable expense, including attorney's fees,
actually and necessarily incurred in connection with the defense of any
action, suit, or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option granted
thereunder, and against all amounts paid by them in

-8-

<PAGE>

settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a
judgment in any action, suit, or proceeding, except in relation to matters as
to which it shall be adjudged in such action, suit, or proceeding that such
member is liable for negligence or misconduct in the performance of his
duties, provided that within 60 days after institution of any such action,
suit, or proceeding, the member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.

10. EFFECTIVE DATE AND TERM OF PLAN. This Plan shall become
effective (the "Effective Date") on the date of adoption by the Board of
Directors. No options granted under the Plan will be effective unless the
Plan is approved by stockholders of the Company within 12 months of the date
of adoption. Unless sooner terminated by the Board in its sole discretion,
the Plan will expire on December 31, 2008.

IN WITNESS WHEREOF, the Company by its duly authorized
officer, has caused this Plan to be executed at Boca Raton, Florida, as of
this 16th day of November, 1999.

PARTSBASE.COM, INC.

By: \S\ ROBERT A. HAMMOND, JR.
-------------------------------
Robert A. Hammond, Jr.

-9-

<PAGE>

EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of PartsBase.com on Form
S-1 of our report dated January 4, 2000, appearing in this prospectus, which is
part of this Registration Statement and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.

DELOITTE & TOUCHE LLP
Houston, Texas

January 7, 2000

<PAGE>

EXHIBIT 23.3

CONSENT OF DIRECTOR NOMINEE

The undersigned hereby consents to be named as a prospective
director in the Registration Statement on Form S-1 of PartsBase.com, Inc., a
Texas corporation, relating to an initial public offering of Common Stock by
such corporation, and agrees to serve in such capacity, if and when duly
elected, from and after the effective date of such Registration Statement.

Dated: January 5, 2000

\S\ PIERRE NARATH
------------------------------
PIERRE NARATH

<PAGE>

EXHIBIT 23.4

CONSENT OF DIRECTOR NOMINEE

Dated: January 6, 2000

\S\ DAVID FESSLER
------------------------------
DAVID FESSLER

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C> <C> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS 12-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999 DEC-31-1999 DEC-31-1999
<PERIOD-START> APR-01-1996 JAN-01-1997 JAN-01-1998 JAN-01-1999
<PERIOD-END> DEC-31-1996 DEC-31-1997 DEC-31-1998 SEP-30-1999
<CASH> 0 0 0 257,796
<SECURITIES> 0 0 0 0
<RECEIVABLES> 0 0 0 115,639
<ALLOWANCES> 0 0 0 0
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 0 0 0 414,677
<PP&E> 3,496 11,972 12,660 149,018
<DEPRECIATION> (1,729) (4,124) (6,576) (13,042)
<TOTAL-ASSETS> 1,767 7,848 6,084 2,692,319
<CURRENT-LIABILITIES> 2,043 1,709 25,128 779,479
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0 0 0 0
0 0 0 0
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<TOTAL-LIABILITY-AND-EQUITY> 1,767 7,848 6,084 2,692,319
<SALES> 0 2,861 3,504 120,761
<TOTAL-REVENUES> 0 2,861 3,504 120,761
<CGS> 16,842 104,041 43,462 585,419
<TOTAL-COSTS> 16,842 104,041 43,462 699,819
<OTHER-EXPENSES> 55,064 90,452 108,163 980,120
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 0 0 0 798,074
<INCOME-PRETAX> (71,906) (191,632) (148,121) (1,559,179)
<INCOME-TAX> 0 0 0 0
<INCOME-CONTINUING> (71,906) (191,632) (148,121) (1,559,179)
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> (71,906) (191,632) (148,121) (1,559,179)
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</TABLE>