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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2002

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______

Commission File Number 0-28536

NEW CENTURY EQUITY HOLDINGS CORP.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization) 		74-2781950
(I.R.S. Employer
Identification Number)

10101 Reunion Place, Suite 450, San Antonio, Texas
(Address of principal executive offices) 		78216
(Zip code)

(210) 302-0444
(Registrant's telephone number, including area code)

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

     Indicated below is the number of shares outstanding of the registrant’s only class of common stock at October 28, 2002:



Title of Class
Common Stock, $0.01 par value 		Number of Shares
Outstanding
34,217,620




NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES

INDEX
    PAGE

PART I FINANCIAL INFORMATION

Item 1. Interim Condensed Consolidated Financial Statements (Unaudited)  
  Condensed Consolidated Balance Sheets – September 30, 2002 and December 31, 2001 3
  Condensed Consolidated Statements of Operations – For the Quarters and Nine Months
   Ended September 30, 2002 and 2001		 4
  Condensed Consolidated Statements of Cash Flows – For the Nine Months Ended
   September 30, 2002 and 2001		 5
  Notes to Interim Condensed Consolidated Financial Statements 6
Item 2.
 		 Management’s Discussion and Analysis of Financial Condition and Results
   of Operations		 14
Item 3. Quantitative and Qualitative Disclosure about Market Risk 16
Item 4. Controls and Prodedures 16

PART II OTHER INFORMATION

Item 1. Legal Proceedings 17
Item 6. Exhibits and Reports on Form 8-K 17

SIGNATURE   18
CERTIFICATION   19

2



PART I FINANCIAL INFORMATION

Item 1. Interim Condensed Consolidated Financial Statements

NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)


September 30,
2002
    December 31,
2001
    (Unaudited)          
ASSETS
Current assets:
  Cash and cash equivalents $ 9,169     $ 8,649  
  Accounts receivable, net   971       1,431  
  Inventory   485       1,042  
  Prepaid and other assets   249       444  
 
   
 
   Total current assets   10,874       11,566  
Property and equipment, net   525       769  
Other assets, net   185       838  
Investments in affiliates   10,634       26,404  
 
   
 
  Total assets $ 22,218     $ 39,577  
 
   
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable $ 665     $ 534  
  Accrued liabilities   1,162       1,153  
  Revolving credit note   262       88  
  Net current liabilities from discontinued operations   131       259  
 
   
 
   Total current liabilities   2,220       2,034  
Executive deferred compensation and other liabilities   39       759  
Long-term debt to minority stockholders, net of discount and minority
  interest in consolidated affiliate   265       207  
 
   
 
   Total liabilities   2,524       3,000  
Commitments and contingencies
Minority interest in consolidated affiliate   —       1,228  
Stockholders’ equity:
  Preferred stock, $0.01 par value, 10,000,000 shares authorized;
   no shares issued or outstanding at September 30 or December 31   —       —  
  Common stock, $0.01 par value, 75,000,000 shares authorized;
   34,217,620 and 34,205,920 shares issued and outstanding at
   September 30 and December 31, respectively   342       342  
  Additional paid-in capital   70,346       70,342  
  Accumulated deficit   (50,994 )     (35,335 )
 
   
 
   Total stockholders’ equity   19,694       35,349  
 
   
 
    Total liabilities and stockholders' equity $ 22,218     $ 39,577  
 
   
 

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

3



NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)


Quarter Ended
September 30,
   Nine Months Ended
September 30,
2002
   2001
2002
   2001
Operating revenues   $ 889     $ 169     $ 2,319       $ 440  
Cost of revenues     983       188       1,727         564  
   
   
   
     
 
  Gross (loss) profit     (94 )     (19 )     592         (124 )
Selling, general and administrative expenses     1,069       2,274       3,764         6,766  
Research and development expenses     285       —       1,296         —  
Depreciation and amortization expenses     65       551       218         1,593  
Impairment loss     —       4,651       —         4,651  
   
   
   
     
 
  Operating loss from continuing operations     (1,513 )     (7,495 )     (4,686 )       (13,134 )
   
Other income (expense):  
  Interest (expense) income, net     (169 )     351       (478 )       962  
  Equity in net loss of affiliates     (1,189 )     (7,041 )     (17,745 )       (15,229 )
  Consulting income     938       938       2,814         2,814  
  Realized gains on available-for-sale securities     —       553       —         566  
  Other income, net     48       670       649         676  
  Minority interest in consolidated affiliate     543       —       1,611         —  
   
   
   
     
 
   Total other income (expense), net     171       (4,529 )     (13,149 )       (10,211 )
   
   
   
     
 
Loss from continuing operations before income  
  tax (expense) benefit     (1,342 )     (12,024 )     (17,835 )       (23,345 )
Income tax (expense) benefit     —       (200 )     —         638  
   
   
   
     
 
  Net loss from continuing operations     (1,342 )     (12,224 )     (17,835 )       (22,707 )
   
Discontinued operations:  
  Net income from disposal of discontinued  
   operations     —       —       2,176         1,500  
   
   
   
     
 
   Net loss   $ (1,342 )   $ (12,224 )   $ (15,659 )     $ (21,207 )
   
   
   
     
 
Basic and diluted:  
  Net loss from continuing operations per  
   common share   $ (0.04 )   $ (0.35 )   $ (0.52 )     $ (0.64 )
  Net income from disposal of discontinued  
   operations per common share     —       —       0.06         0.04  
   
   
   
     
 
   Net loss per common share   $ (0.04 )   $ (0.35 )   $ (0.46 )     $ (0.60 )
   
   
   
     
 
Weighted average common shares outstanding     34,218       34,646       34,216         35,142  
   
   
   
     
 

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

4



NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


Nine Months Ended
September 30,
2002
    2001
Cash flows from operating activities:          
Net loss from continuing operations $ (17,835 )   $ (22,707 )
Adjustments to reconcile net loss from continuing operations to net cash
  provided by (used in) operating activities:
  Depreciation and amortization expenses   279       1,593  
  Impairment loss   —       4,651  
  Equity in net loss of affiliates   17,745       15,229  
  Amortization of discount on long-term debt to minority stockholders   551       —  
  Realized gains from sale of available-for-sale securities   —       (566 )
  Minority interest in consolidated affiliate   (1,611 )     —  
  Changes in operating assets and liabilities:
   Decrease in accounts receivable   460       4,458  
   Decrease in inventory   521       —  
   Decrease (increase) in prepaid and other assets   841       (151 )
   Increase in accounts payable   132       114  
   Decrease in accrued liabilities   (764 )     (1,907 )
   Increase (decrease) in other liabilities and other noncash items   369       (43 )
 
   
 
    Net cash provided by continuing operating activities   688       671  
    Net cash provided by (used in) discontinued operating activities   2,047       (3,940 )
 
   
 
     Net cash provided by (used in) operating activities   2,735       (3,269 )
 
Cash flows from investing activities:
  Purchases of property and equipment   (6 )     (615 )
  Investments in available-for-sale securities   —       (16,500 )
  Proceeds from sale of available-for-sale securities   —       17,265  
  Investment in consolidated affiliate   —       1,379  
  Investments in and advances to affiliates   (3,849 )     (15,000 )
  Redemption of investments in affiliates   1,471       —  
  Other investing activities   (9 )     (72 )
 
   
 
   Net cash used in investing activities   (2,393 )     (13,543 )
 
Cash flows from financing activities:
  Proceeds from issuance of common stock   4       14  
  Purchases of treasury stock   —       (1,314 )
  Borrowings on revolving credit note   353       —  
  Repayments on revolving credit note   (179 )     —  
 
   
 
   Net cash provided by (used in) financing activities   178       (1,300 )
 
   
 
Net increase (decrease) in cash and cash equivalents   520       (18,112 )
Cash and cash equivalents, beginning of period   8,649       36,478  
 
   
 
Cash and cash equivalents, end of period $ 9,169     $ 18,366  
 
   
 
Supplemental disclosure of financial information:
  Cash paid for interest $ 31     $ —  
  Cash paid for income taxes $ —     $ 500  

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

5



NEW CENTURY EQUITY HOLDINGS CORP. AND SUBSIDIARIES
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1. Basis of Presentation

     The interim condensed consolidated financial statements included herein have been prepared by New Century Equity Holdings Corp. and subsidiaries, formerly known as Billing Concepts Corp., (collectively, the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, the accompanying interim condensed consolidated financial statements reflect all adjustments, of a normal recurring nature, that are necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for such periods. It is recommended that these interim condensed consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001. Results of operations for the interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year.

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A