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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

       Date of Report (Date of earliest event reported): February 3, 2005


                        CAPE COASTAL TRADING CORPORATION
             (Exact name of registrant as specified in its charter)


        Delaware                     000-50995                 52-2372260
--------------------------------------------------------------------------------
(State or other jurisdiction   (Commission File Number)     (I.R.S. Employer
    of incorporation)                                     Identification Number)

       8550 West Bryn Mawr, Suite 200
             Chicago, Illinois                                      60631
  (Address of principal executive offices)                       (Zip Code)

                                 (773) 272-5000
              (Registrant's telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))

<PAGE>

Item 3.02.  Unregistered Sales of Equity Securities.

      On February 3, 2006, Cape Coastal Trading Corporation ("CCTR" or the
"Company") completed a second round of financing with certain accredited
investors (the "Second Closing"). The Second Closing was the continuation of a
private offering of the Company's common stock and warrants to acquire shares of
the Company's common stock through the sale of investment units offered to
accredited investors (the "Units"). Each Unit was sold at a purchase price of
$4.50 per Unit, and consisted of one share of common stock and a warrant to
purchase 1/4 share of common stock at an exercise price of $5.85 per share. In
the Second Closing, the Company issued a total of 3,000,000 shares of common
stock and warrants to purchase 750,002 shares of common stock to various
accredited investors for aggregate consideration of $13.5 million. The sale of
the Units to accredited investors was consummated according to the terms of a
Securities Purchase Agreement dated December 22, 2005, a form of which was
included as an exhibit with the Company's Current Report on 8-K filed with the
Securities and Exchange Commission (the "SEC") on January 5, 2006 (the
"Securities Purchase Agreement").

      On February 6, 2006, the Company issued a press release announcing the
Second Closing and the issuance of the common stock and warrants to the
investors in the Second Closing. A copy of the press release is attached hereto
as Exhibit 99.1 and incorporated herein by reference.

      As reported on the Company's Current Report on Form 8-K, filed with the
SEC on January 5, 2006, on December 29, 2005, CCTR issued 10 million shares of
common stock to accredited investors for a total price of $45 million, which
consideration included cancellation of $15.5 million of our debt (the "First
Closing"). The accredited investors in the First Closing included Petters Group
Worldwide, LLC, which was issued 1,111,111 shares of common stock in the First
Closing, 1,000,001 of which were subject to redemption, and Petters Company,
Inc., which was issued 1,222,223 shares of common stock in the First Closing,
all of which were subject to redemption. On February 6, 2006, in connection with
the Second Closing, the Company redeemed 1,000,001 shares of common stock from
Petters Group Worldwide, LLC for $4.5 million and 1,222,223 shares from Petters
Company, Inc. for $5.5 million.

      On February 6, 2006, in connection with the Second Closing, the Company
additionally redeemed a total of 444,444 shares of common stock, for $2 million,
from Robert Tomlinson, CCTR's President and Chief Executive Officer, and Timothy
Takesue, CCTR's Executive Vice President, Merchandising. Of the 444,444 redeemed
shares of common stock, the Company redeemed 222,222 shares of common stock for
$1 million from each of Messrs. Tomlinson and Takesue. These shares were issued
to Messrs. Tomlinson and Takesue in connection with the merger of uBid
Acquisition Co., Inc. with uBid, Inc. on December 29, 2005, whereby uBid, Inc.
became a wholly-owned subsidiary of the Company.

      Calico Capital Group, LLC served as the Company's financial advisor for
the private offering described herein. In the Second Closing, CCTR issued
600,667 shares of common stock to Calico Capital Group, LLC. The Company's
placement agents in the First Closing and Second Closing were SG Cowen & Co.,
LLC and ThinkEquity Partners LLC (the "Placement Agents"). In the Second
Closing, CCTR issued to the Placement Agents warrants to acquire 90,000 shares
of common stock for five years at an exercise price $4.50 per share, and fees of
$1.0 million.

      The private offerings and related transactions discussed above are exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act"), or Rule 506 of Regulation D, promulgated by the SEC.
With respect to the issuance of securities in connection with the Second
Closing, no general solicitation was made by us or any person acting on our
behalf; the securities were sold subject to transfer restrictions, and the
certificates for the shares and warrants contained an appropriate legend stating
that such securities have not been registered under the Securities Act and may
not be offered or sold absent registration or an exemption therefrom.

<PAGE>

      Under the terms of the Securities Purchase Agreement, the Company is
obligated to file a registration statement on Form S-1 within forty five (45)
days of the First Closing, covering the resale of shares of common stock issued
in the First Closing and Second Closing, as well as shares of common stock
underlying the warrants issued in the First Closing and the Second Closing.

      No underwriters were involved in connection with any of the sales of
securities discussed above.

Item 9.01.  Financial Statements and Exhibits.

      (d)   Exhibits.

      99.1  Press release, dated February 6, 2006, announcing the Second
            Closing.

<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.



                                    CAPE COASTAL TRADING CORPORATION


                                    By: /s/ Robert H. Tomlinson, Jr.
                                        -------------------------------------
                                        Robert H. Tomlinson, Jr.
Dated: February 9, 2006                 President and Chief Executive Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v035025_ex99-1.txt
<TEXT>

                                                                    EXHIBIT 99.1
                                                                   PRESS RELEASE


           Cape Coastal Trading Corporation Completes Second Offering
                       And Closes the Private Placement of
                Common Stock and Warrants Totaling $58.5 Million


Chicago, IL, February 6, 2006 - Cape Coastal Trading Corporation (OTC BB: CCSR)
whose uBid, Inc. subsidiary is one of the leading online auction companies in
the U.S., announced today it has raised an additional $13.5 million and sold
3,000,000 shares of common stock at $4.50 per share and 750,000 warrants
exercisable at $5.85 per share as part of a second closing of the private
placement that initially closed on December 29, 2005. This additional funding
completes a total capital raise of $58.5 million.

On December 29th, the company completed a $45 million private placement
involving the sale of 10,000,000 shares of Cape Coastal Trading Corporation
common stock to a group of institutional and accredited investors at $4.50 per
share. The Company also issued warrants to purchase an additional 2,500,000
shares of Cape Coastal Trading Corporation common stock exercisable at $5.85 per
share. The proceeds from both the first and second closings of the financing of
approximately $58.5 million are being used for the retirement of all debt, the
redemption of secondary shares and for general working capital purposes. SG
Cowen & Co. was the lead placement agent and ThinkEquity Partners was a
co-agent. Calico Capital Group, LLC acted as financial advisor for this
transaction.

"We are very pleased to complete the second tranche of the overall transaction
which puts uBid in a strong financial position with a diverse institutional
ownership base," said Robert H. Tomlinson, CEO of Cape Coastal Trading
Corporation. "uBid.com now has the ability to execute our vision for a
certified, fraud-free online marketplace which further differentiates us,
especially in light of the recent national news surrounding fraud and
counterfeit product sales on eBay, our direct competitor," he added.

About uBid, Inc.

On December 29th, 2005, uBid, Inc. merged with a subsidiary of Cape Coastal
Trading Corporation (OTC BB: CCSR) and survived the merger as a wholly-owned
subsidiary of Cape Coastal Trading Corporation. Cape Coastal Trading Corporation
plans to change its name to uBid.com Holdings, Inc and continue uBid's business
as its sole business operation. uBid, Inc. operates an online marketplace
located at www.uBid.com offering new, close-out, overstock and refurbished
merchandise to both consumers and businesses through a trusted auction style and
fixed price format. uBid.com provides consumers the opportunity to bid on or buy
a wide variety of popular, brand name products at significant discounts.
uBid.com's unique platform enables only certified suppliers and manufacturers a
more efficient and economical channel for maximizing revenue of their surplus
merchandise. Furthermore, uBid.com offers consumers a trusted buying
environment, eliminating potential fraud by certifying all its merchants and
processing 100% of all transactions between buyers and sellers.

Founded in 1997, uBid's predecessor completed an initial public offering in
December 1998 and was subsequently acquired by CMGI, Inc. (Nasdaq: CMGI) in
April 2000. In April 2003, uBid.com became a majority-owned subsidiary of the
Petters Group Worldwide, LLC. Both CMGI and Petters Group Worldwide are
shareholders in the surviving public entity.

<PAGE>

SEC Filings and Forward-Looking Statements

Additional information regarding uBid's private placement, the merger with Cape
Coastal Trading Corporation, the disposition of Cape Coastal Trading
Corporation's prior operating business, uBid's business and uBid's officers and
directors is contained in a Report on Form 8-K to be filed with the Securities
and Exchange Commission on January 5, 2006 by Cape Coastal Trading Corporation.

Certain statements made in this release are forward-looking statements,
including the statement that "uBid now has the ability to execute our vision for
a certified online, fraud-free online marketplace which further differentiates
us, especially in light of the recent national news surrounding fraud and
counterfeit product sales on eBay, our direct competitor." Forward-looking
statements are based on the then-current expectations, beliefs, assumptions,
estimates and forecasts about the business of uBid,Inc. and the industries and
markets in which uBid,Inc. operates. These statements are not guarantees of
future performance and involve risks, uncertainties and assumptions, which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or implied by these forward-looking
statements. Factors which may affect uBid, Inc.'s business, financial condition
and operating results include the effects of changes in the economy, consumer
spending, the financial markets and the industries in which uBid,Inc. and its
partners operate, changes affecting the Internet and e-commerce, the ability of
uBid,Inc. to develop and maintain relationships with strategic partners and
suppliers and the timing of its establishment or extension of its relationships
with strategic partners, the ability of uBid, Inc. to timely and successfully
develop, maintain and protect its technology and product and service offerings
and execute operationally, the ability of uBid, Inc. to attract and retain
qualified personnel, the ability of uBid,Inc. to successfully integrate its
acquisitions of other businesses, if any, and the performance of acquired
businesses. uBid, Inc. and Cape Coastal Trading Corporation expressly disclaim
any intent or obligation to update these forward-looking statements, except as
otherwise specifically stated by uBid, Inc. or Cape Coastal Trading Corporation.

Contact:

Anthony Priore
Chief Marketing Officer
Tel:  773-272- 4446
Fax: 773-272-4055
tpriore@ubid.com

This press release shall not constitute an offer to sell or the solicitation of
an offer to buy any of uBid's securities.

</TEXT>
</DOCUMENT>
</SUBMISSION>
