<SUBMISSION>
<ACCESSION-NUMBER>0001026506-01-500006
<TYPE>NT 10-Q
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20010630
<FILING-DATE>20010815
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>EGGHEAD COM INC/DE
<CIK>0001026506
<ASSIGNED-SIC>5961
<IRS-NUMBER>770408319
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>NT 10-Q
<ACT>34
<FILE-NUMBER>000-29184
<FILM-NUMBER>1715957
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1350 WILLOW ROAD
<STREET2>SUITE 100
<CITY>MENLO PARK
<STATE>CA
<ZIP>94025
<PHONE>6504702400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1350 WILLOW ROAD
<CITY>MENLO PARK
<STATE>CA
<ZIP>94025
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ONSALE
<DATE-CHANGED>19961216
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>ONSALE INC
<DATE-CHANGED>19961216
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>NT 10-Q
<SEQUENCE>1
<FILENAME>formnt.htm
<DESCRIPTION>BODY
<TEXT>
<font FACE="Times New Roman" SIZE="3">

<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>
<DIV align=left>
<HR align=left SIZE=2 width="100%">
</DIV>



<B><P ALIGN="CENTER">SECURITIES AND EXCHANGE COMMISSION</P>
<P ALIGN="CENTER">Washington, DC 20549</P>
<P ALIGN="CENTER">FORM 12b-25</P>
<P ALIGN="CENTER">Notification of Late Filing</P>
</B><P ALIGN="CENTER">&#9;Commission File Number <U>&#9;000-29184&#9;</P>
</U><P ALIGN="CENTER">&nbsp;</P>
<P>(Check One):</P>
<FONT FACE="Wingdings"><P>o</FONT> Form 10-K and Form 10-KSB &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT FACE="Wingdings">o</FONT> Form 20-F &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT FACE="Wingdings">o</FONT> Form  11-K&#9;</P>
<FONT FACE="Wingdings"><P>x</FONT> Form 10-Q and Form 10-QSB&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT FACE="Wingdings">o</FONT> Form N-SAR</P>
<P>&nbsp;</P>
<P>For Period Ended <U>June 30, 2001&#9;</P>
</U><FONT FACE="Wingdings"><P>o</FONT> Transition Report on Form 10-K and 10-KSB</P>
<FONT FACE="Wingdings"><P>o</FONT> Transition Report on Form 20-F</P>
<FONT FACE="Wingdings"><P>o</FONT> Transition Report on Form 11-K</P>
<FONT FACE="Wingdings"><P>o</FONT> Transition Report on Form 10-Q and Form 10-QSB</P>

<FONT FACE="Wingdings"><P>o</FONT> Transition Report on Form N-SAR</P>
<P>For the Transition Period Ended <U>&#9;</P>
</U><I><P>Read Attached Instruction Sheet Before Preparing Form. Please Print or
Type.</P>
</I><P>&#9;Nothing in this form shall be construed to imply that the Commission
has verified any information contained herein.</P>
<P>&#9;If the notification relates to a portion of the filing checked above,
identify the item(s) to which the notification relates:____________________________</P>
<B><P>&nbsp;</P>
<P>PART I -- REGISTRANT INFORMATION</P><DIR>
<DIR>

</B><P>Full name of the Registrant:&#9;Egghead.com, Inc.<br>
Former name if applicable: Onsale, Inc.<br>
Address of principal executive office: &#9;1350 Willow Road,  Menlo Park, California &nbsp;&nbsp;
94025</P>

</DIR>
</DIR>

<B><P>PART II - RULE 12b-25(b) AND (c)</P>
</B><P ALIGN="JUSTIFY">If the subject report could not be filed without
unreasonable effort or expense and the registrant seeks relief pursuant to Rule
12b-25(b), the following should be completed. </P>
<P>(Check box if appropriate)</P>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=637>
<TR><TD WIDTH="8%" VALIGN="TOP">
<P><B>&#9;<FONT FACE="Wingdings">x</FONT> </B></TD>
<TD WIDTH="92%" VALIGN="TOP"><DIR>

<P>(a)&#9;The reasons described in reasonable detail in Part III of this form
could not be
eliminated without unreasonable effort or expense;
</TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<P>&#9;<FONT FACE="Wingdings">o</FONT> </TD>
<TD WIDTH="92%" VALIGN="TOP"><DIR>

<P>(b)&#9;The subject annual report, semi-annual report, transition report on
Form 10-K, <BR>
10-KSB, 20-F, 11-K or Form N-SAR, or portion thereof will be filed on or <BR>
before the 15th calendar day following the prescribed due date; or the subject
<BR>
quarterly report or transition report on Form 10-Q, 10-QSB, or portion
thereof<BR>
will be filed on or before the fifth calendar day following the prescribed
due<BR>
date; and</DIR>
</TD>
</TR>
<TR><TD WIDTH="8%" VALIGN="TOP">
<B><P>&#9;<FONT FACE="Wingdings">o</FONT> </B></TD>
<TD WIDTH="92%" VALIGN="TOP"><DIR>

<P>(c)&#9;The accountant's statement or other exhibit required by Rule 12b-25(c)
has<BR>
been attached if applicable. </DIR>
</TD>
</TR>
</TABLE>

<B><P>&nbsp;</P>
<P>PART III - NARRATIVE</P>
</B><P>State below in reasonable detail the reasons why Form 10-K, 10-KSB, 11-K,
20-F, 10-Q, 10-QSB, N-SAR or the transition report portion thereof could not be
filed  within the prescribed time period. (Attach extra sheets if needed.)</P>

<P>&#9;On August 15, 2001, Egghead.com, Inc. ("<B><I>Registrant</B></I>")
intens to file a voluntary petition for Chapter 11 bankruptcy protection in the United
States Bankruptcy Court for the Northern District of California. Registrant
plans to manage its assets as a debtor-in-possession and intends to proceed with
a structured sale of its assets. On August 15, 2001, Registrant announced that
it had entered into an agreement with Fry's Electronics to acquire assets of
Registrant, subject to Bankruptcy Court approval, as part of a sale of all of its assets.</P>

<P>&#9;In order for Registrant's independent auditors to review the financial
statements contained in the Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 2001 (the <B><I>"Form 10-Q"</B></I>), Registrant must provide
valuation information regarding its assets, in order to measure the impairment
of goodwill triggered by its insolvency. Registrant is unable without
unreasonable effort and expense to provide such a valuation of all of its
assets, which maked it impossible for Registrant to file the Form 10-Q by the
August 14, 2001 deadline.</P>

<P>On August 15, 2001, Registrant intends to submit a "no-action" letter
request, requesting that the Staff of the Securities and Exchange Commission
indicate that it would not recommend enforcement action if Registrant followed
certain modified reporting procedures in lieu of filing regular periodic reports
specified under Section 13(a) of the Securities Exchange Act of 1934 and the
rules promulgated thereunder.  If the no-action letter request is granted,
Registrant will not file the Form 10-Q.  If the request is not granted,
Registrant will endeavor to file the Form 10-Q within a reasonable period of
time, taking into account Registrant's limited financial and human resources.
Registrant expects that the filing of the Form 10-Q will not be possible
without unreasonable effort or expense.</P>


<B><P>PART IV - OTHER INFORMATION</P>
</B><P>(1)&#9;Name and telephone number of person to contact in regard to this
notification.</P>

<P>&nbsp;
<TABLE COLS=2 WIDTH="100%">
<TR>
<TD>
<font size="3">
<U><P>Mark C. Shepherd</U><br>
<font size="2">(Name)</P>
</font>
</TD>
<TD>
<font size="3">
<U><P>(650) 470-2499</U><br>
<font size="2">(Area Code) (Telephone Number)</P>
</font>
</TD>
</TR>
</TABLE>


<P>(2)&#9;Have all other periodic reports required under Section 13 or 15(d) or
the Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
of 1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If the answer is no,
identify report(s).</P>
<FONT FACE="Wingdings"><P ALIGN="RIGHT">x</FONT> Yes <FONT FACE="Wingdings">o</FONT> No</P>

<P>(3)&#9;Is it anticipated that any significant change in results of operations
from the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?</P>
<FONT FACE="Wingdings"><P ALIGN="RIGHT">x</FONT> Yes <FONT FACE="Wingdings">o</FONT> No</P>

<P>If so, attach an explanation of the anticipated change, both
narratively and quantitatively, and, if appropriate, state the reasons why a
reasonable estimate of the results cannot be made.</P>
<P>Please refer to <U>Attachment A</U>.</P>

<U> <P ALIGN="CENTER">Egghead.com, Inc.&#9;</P>
</U><P ALIGN="CENTER">(Name of Registrant as Specified in Charter)<br>
has caused this notification to be signed on its behalf by the undersigned
thereunto duly authorized.</P>

<P>&nbsp;
<TABLE COLS=2 WIDTH="100%">
<TR>
<TD>
<font size="3">
<P>Date: August 15, 2001
</font>
</TD>
<TD>
<font size="3">
<P>By: <U>/s/ Mark C. Shepherd<br>
</U>Mark C. Shepherd<br>
<I>Executive Vice President and<br>
Chief Financial Officer</P> </I>
</font>
</TD>
</TR>
</TABLE>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>



<U><P ALIGN="CENTER">Attachment A</P>
</U><P>&nbsp;</P>
<B><P>Results of Operations</P>
</B><P>Registrant's revenue decreased $69.1 million, or 53.3%, for the quarter
ended June 30, 2001 compared with the quarter ended June 30, 2000, and decreased
by $135.9 million, or 48.2%, for the six months ended June 30, 2001 compared to
the six months ended June 30, 2000. These declines were attributable to a
general downturn in the U.S. economy, significantly weakened demand for
technology products (particularly computers), and Registrant's cash
constraints, which limited our ability to obtain products for sale.</P>

<P>Gross profit as a percentage of total revenue for the quarter ended June 30,
2001 was 11.0%, compared with 6.8% in the prior year period, and was 11.0% for
the six months ended June 30, 2001, compared to 6.3% for the six-month period in
the prior year. These increases in gross margin resulted from higher prices on
new, excess and close-out merchandise sold in fixed price formats, and
limited the quantities of auction merchandise available for bid at any one
time.</P>

<P>Operating expenses constituted 22.6% of revenue for the quarter ended June
30, 2001, compared with 20.8% of revenue for the quarter ended June 30, 2000,
while declining by approximately $13.2 million in absolute amounts. Operating
expenses constituted 21.7% of revenue for the six months ended June 30, 2001 and
21.9% of revenue for the six months ended June 30, 2000, while declining by
$27.8 million in absolute amounts. The declines in operating expenses reflect
Registrant's widespread cost cutting efforts, including reductions in force
from 593 employees at December 31, 2000 to 598 employees at March 31, 2001 and
337 employees at June 30 2001. Severance and related costs in the quarter ended
June 30, 2001 were $944,000.</P>

<P>Loss from operations for the quarter ended June 30, 2001 was $7.0 million,
compared to a loss from operations of $18.2 million for the quarter ended June 30, 2000.
Net loss for the quarter ended June 30, 2001 was $4.7 million, compared to a
loss of $17.6 million in the comparable quarter in 2000. Net loss in the quarter
ended June 30, 2001 included a one-time gain of approximately $2.3 million
related to our agreement to sell our equity interest in Onsale Japan K.K. in
exchange for forgiveness of all principal and interest of a promissory note
payable by Registrant.</P>

<B><P>Cash Flow</P>
</B><P>Cash and cash equivalents for the period ended June 30, 2001 were $4.6
million compared to $32.6 million at the fiscal year end of December 31, 2000.
Approximately $1.2 million of our cash balances on those dates was restricted
cash, which primarily served as collateral for our leases on our office and
warehouse in Vancouver, Washington. Subsequent to June 30, 2001 restricted cash
has been reduced to approximately $750,000.</P>

<B><P>Subsequent Events</P>
</B><P>Since June 30, 2001 Registrant has experienced a rapid and unexpected
decline in revenues related to further reduced demand for its products.
Registrant believes this reduced demand is related to continued weakness in the
U.S. economy. In addition, Registrant believes that its reduced revenues
reflect Registrant's lack of cash resources with which to secure products for
resale. This reduction in revenue has severely hampered Registrant's cash flow.
Registrant's efforts to locate financing were not successful. Registrant's
efforts to merge with another Registrant have not been  successful. Registrant
agreed to sell a substantial portion of its assets to Fry's Electronics under
an arrangement to be approved  by the bankruptcy court. Registrant will file
a voluntary petition for protection under the federal bankruptcy laws and
sell its assets and wind up its affairs under those laws.</P>

<P>Registrant's auditors have informed it that as a result of its insolvency and
bankruptcy petition it will be necessary for Registrant to conduct a valuation
of its assets in order to determine an appropriate charge to reflect impairment
of goodwill.  Registrant is unable to conduct such a valuation of its assets
without unreasonable effort and expense.  Registrant has provided in this
filing a discussion of its financial condition and results of operations for
the quarter ended June 30, 2001 without giving effect to any such impairment
charge.

<P>&nbsp;</P>
<P ALIGN="CENTER">&nbsp;</P>
<FONT SIZE=2><P ALIGN="CENTER">Egghead.com, Inc.<br>
                  Consolidated Balance Sheets<br>
              (In thousands, except per share data)<br>
                  (unaudited)</P></FONT>

<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=2 CELLPADDING=7 WIDTH=612>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=9>
<P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P ALIGN="CENTER">June 30,</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P ALIGN="CENTER">December 31,</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=11><DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT SIZE=2><P>ASSETS</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</DIR>
</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=11><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=11><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=11><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Current assets:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=25>
<FONT SIZE=2><P>Cash and cash equivalents*</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=25>
<FONT SIZE=2><P ALIGN="RIGHT">$ 3,512</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=25><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=25>
<FONT SIZE=2><P ALIGN="RIGHT">$ 31,466</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Short-term investments</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">1,150</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">1,166</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Accounts receivable, net of allowances of $1,639 and
$1,953</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">11,964</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">15,490 </FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Merchandise inventory</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">2,875</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">6,123</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Prepaid expenses and other current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">1,589</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">3,658</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Total current assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">21,090</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">57,903</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Property and equipment, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">13,517</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">13,294 </FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Other assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">706</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">772</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Total assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">$ 35,313</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">$ 71,969</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<DIR>
<DIR>
<DIR>
<DIR>

<B><FONT SIZE=2><P>LIABILITIES AND STOCKHOLDERS' EQUITY
</DIR>
</DIR>
</DIR>
</DIR>
</B></FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Current liabilities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Accounts payable</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">$ 15,162</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">$ 26,330</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Accrued expenses</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">&#9;14,044</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">&#9;21,292</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Deferred revenue </FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">-</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">&#9; 3,108 </U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=9>
<FONT SIZE=2><P>Total current liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=9>
<U><FONT SIZE=2><P ALIGN="RIGHT">29,206</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=9><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=9>
<U><FONT SIZE=2><P ALIGN="RIGHT">50,730</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Long-term liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">&#9; -</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">&#9; 2,348</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Stockholders' equity:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Convertible preferred stock, $0.001 par value;
2,000,000</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>shares authorized: no shares issued and outstanding</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Common stock, $0.001 par value; 98,000,000 shares</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>authorized; 42,932,669 and 42,857,483 shares issued</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>and outstanding, respectively</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">43</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">42</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Additional paid-in capital</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">349,685</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P ALIGN="RIGHT">349,625</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Accumulated deficit</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">(343,621</U>)</FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">(330,776</U>)</FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Total stockholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">6,107</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">18,891</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>Total liabilities and stockholders' equity</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">$ 35,313</U></FONT></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8>
<U><FONT SIZE=2><P ALIGN="RIGHT">$ 71,969</U></FONT></TD>
</TR>
<TR><TD WIDTH="60%" VALIGN="TOP" HEIGHT=8>
<FONT SIZE=2><P>_____________________________</P>
<P>* Includes restricted cash of approximately $1.2 million as of June 30, 2001
and December 31, 2000</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="4%" VALIGN="TOP" HEIGHT=8><P></P></TD>
<TD WIDTH="19%" VALIGN="TOP" HEIGHT=8><P></P></TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4 HEIGHT=8><P></P></TD>
</TR>
</TABLE>
</CENTER></P>

<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>


<FONT SIZE=2><P ALIGN="CENTER">Egghead.com, Inc.<br>
                  Consolidated Statements of Operations<br>
              (In thousands, except per share data)<br>
                  (unaudited)</P></FONT>
<TABLE BORDER CELLSPACING=1 CELLPADDING=5 WIDTH=700>
<TR><TD WIDTH="41%" VALIGN="TOP" HEIGHT=26>
<P></TD>
<TD WIDTH="30%" VALIGN="TOP" COLSPAN=4 HEIGHT=26>
<FONT SIZE=2><P ALIGN="CENTER">Three Months Ended</P>
<U><P ALIGN="CENTER">June 30,</U></FONT></TD>
<TD WIDTH="29%" VALIGN="TOP" COLSPAN=4 HEIGHT=26>
<FONT SIZE=2><P ALIGN="CENTER">Six Months Ended</P>
<U><P ALIGN="CENTER">June 30,</U></FONT></TD>
</TR>

<TR><TD WIDTH="41%" VALIGN="BOTTOM" HEIGHT=19>
<FONT SIZE=2><P>&#9;&nbsp;</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><U><P ALIGN="CENTER">2001</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><U><P ALIGN="CENTER">2000</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><U><P ALIGN="CENTER">2001</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><U><P ALIGN="CENTER">2000</U></FONT></TD>
</TR>

<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Revenue:</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM" HEIGHT=19>
<FONT SIZE=2><P>&#9;Online</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$ 58,957</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$ 125,688</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$ 141,568</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=19><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=19>
<FONT SIZE=2><P ALIGN="RIGHT">$ 273,063</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Commission and other revenue</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">1,650</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">4,062</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">4,340</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">8,736</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;&#9;Total revenue</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">60,607</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">129,750</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">145,908</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">281,799</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Cost of online revenue</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">53,927</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">120,980</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">129,804</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">264,183</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Gross profit:</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Online</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">5,030</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,708</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11,764</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">8,880</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Commission and other revenue</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">1,650</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">4,062</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">4,340</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">8,736</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;&#9;Total gross profit</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">6,680</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">8,770</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">16,104</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">17,616</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Operating expenses:</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Sales and marketing</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">7,383</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">18,688</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">18,984</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">40,595</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;General and administrative</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,212</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">4,588</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">8,133</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11,290</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM" HEIGHT=18>
<FONT SIZE=2><P>&#9;Engineering</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">2,120</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">3,688</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="14%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">4,595</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP" HEIGHT=18><P></P></TD>
<TD WIDTH="13%" VALIGN="TOP" HEIGHT=18>
<FONT SIZE=2><P ALIGN="RIGHT">7,594</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Merger costs</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">-</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">-</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">-</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">2,488</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9; Total operating expenses</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">13,715</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">26,964</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">31,712</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">61,967</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Loss from operations</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(7,035)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(18,194)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(15,608)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(44,351)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Equity in net loss of joint venture</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(371)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(571)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Interest and other income, net</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">2,306</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">904</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">2,758</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">2.202</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Net loss</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ ( 4,729</U>)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (17,661</U>)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (12,850</U>)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (42,720</U>)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Net loss per share:</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Basic and diluted</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (0.11</U>)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (0.44</U>)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (0.30</U>)</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ (1.13</U>)</FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>Weighted average common shares:</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<FONT SIZE=2><P>&#9;Basic and diluted</FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">42,933</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">40,237</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">42,915</U></FONT></TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">37,886</U></FONT></TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="41%" VALIGN="BOTTOM">
<P>&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="14%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="1%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="13%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
</TABLE>
</P>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>


<FONT SIZE=2><P ALIGN="CENTER">Egghead.com, Inc.<br>
                  Consolidated Statements of Cash Flows<br>
                           (In thousands)<br>
                            (unaudited)</P></FONT>

<P ALIGN="CENTER"><CENTER><TABLE BORDER CELLSPACING=2 CELLPADDING=7 WIDTH=564>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P ALIGN="CENTER">Six Months Ended</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="43%" VALIGN="TOP" COLSPAN=3>
<FONT SIZE=2><P ALIGN="CENTER">June 30,</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2001</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="CENTER">2000</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Cash flows from operating activities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P>&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Net loss</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ (12,850)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">$ (42,720)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Adjustments to reconcile net loss to net cash
used in operating activities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Equity in net loss of joint venture</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">571</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Interest on long-term liabilities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">11</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">14</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Gain on sale of interest in Onsale Japan</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(2,223)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Foreign currency transaction gains</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(136)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Depreciation and amortization</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,402</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,080 </FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Changes in assets and liabilities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Accounts receivable, net</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,526</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(1,682)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Merchandise inventory</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">3,248</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,783</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Prepaid expenses and other assets</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">2,135</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(68)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Accounts payable</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(11,168)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(18,740)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Accrued expenses</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(7,248)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(5,106)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Deferred revenue</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(3,108)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(3,198)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Reserves and liabilities related to restructuring</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">-</U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(157)</U></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Net cash used in operating activities </FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(25,411</U>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(66,223</U>)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Cash flows from investing activities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Purchase of short-term available for sale
investments</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">-</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(2,726)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Proceeds from sales of short-term available-for-sale
investments</FONT></TD>
<TD WIDTH="18%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT">16</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="BOTTOM">
<FONT SIZE=2><P ALIGN="RIGHT">12,416</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Purchase of property and equipment</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(2,625</U>)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(2,386</U>)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Net cash provided by (used in) investing activities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">(2,609) </U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">7,304</U></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Cash flows from financing activities:</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Proceeds from issuance of common stock </FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">66</U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">23,571</U></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Net cash provided by financing activities</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">66</U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">23,571</U></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Net decrease in cash and cash equivalents</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(27,954)</FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<FONT SIZE=2><P ALIGN="RIGHT">(35,348)</FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Cash and cash equivalents at beginning of period</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">31,466</U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">68,223</U></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<FONT SIZE=2><P>Cash and cash equivalents at end of period</FONT></TD>
<TD WIDTH="18%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ 3,512</U></FONT></TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<U><FONT SIZE=2><P ALIGN="RIGHT">$ 32,875</U></FONT></TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD WIDTH="57%" VALIGN="TOP">
<P>&nbsp;</TD>
<TD WIDTH="18%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="6%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
<TD WIDTH="19%" VALIGN="TOP">
<P ALIGN="RIGHT">&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<P>&nbsp;</TD>
</TR>
<TR><TD VALIGN="TOP" COLSPAN=4>
<P>&nbsp;</TD>
</TR>
</TABLE>
</CENTER></P>

<B><FONT SIZE=2><P ALIGN="CENTER">&nbsp;</P>
</B><P>&nbsp;</P></FONT>


<br>
<br>
<br>
<HR WIDTH="85%">
<br>
<br>
<br>


</BODY>
</HTML>

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