<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.


                                   FORM 10-QSB


                QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                /X/ FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002

                                       OR

       / / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                         COMMISSION FILE NUMBER 0-25377

                                 NURESCELL INC.

A NEVADA CORPORATION                            IRS EMPLOYER IDENTIFICATION NO.:
                                                         33-0805583


                          PRINCIPAL EXECUTIVE OFFICES:
                          2030 MAIN STREET, SUITE 1300,
                            IRVINE, CALIFORNIA 92612
                                 (949) 752-0071
                               -------------------


CHECK WHETHER REGISTRANT (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(d) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH SHORTER
PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.

                                 YES /X/ NO / /

 NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AT DECEMBER 10, 2002: 16,060,025

   TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE): YES /X/ NO / /





<PAGE>

                                 NURESCELL INC.
                          (A Development Stage Company)

                              INDEX TO FORM 10-QSB

                               SEPTEMBER 30, 2002




                                                                       Page Nos.
                                                                       ---------

PART I - FINANCIAL INFORMATION

    ITEM I - FINANCIAL STATEMENTS                                         2-11

    ITEM 2. - Management's Discussion and Analysis of Financial
             Condition and Plan of Operation                             12-14

    ITEM 3. - Controls and Procedures                                       14

PART II - Other Information

    ITEM 1. - Legal Proceedings                                             14

    ITEM 2. - Changes in Securities and Use of Proceeds                     14

    ITEM 3. - Defaults Upon Senior Securities                               14

    ITEM 4. - Submission of Matters To A Vote Of Security Holders           14

    ITEM 5. - Other Information                                             14

    ITEM 6. - Exhibits and Reports on Form 8-K                           14-16

              Signatures and Required Certification                      17-19








<PAGE>

PART I - FINANCIAL STATEMENTS

<TABLE>
                                 NURESCELL INC.
                      (A Company in the Development Stage)
                             CONDENSED BALANCE SHEET
<CAPTION>

                                                                              At
                                                                     September 30, 2002
                                                                        (Unaudited)
                                                                       -------------
<S>                                                                    <C>
ASSETS

Current assets
   Inventory                                                           $    10,022
                                                                       ------------
     TOTAL CURRENT ASSETS                                                   10,022

Property and equipment net of accumulated
     depreciation and amortization of $51,274                               39,897
                                                                       ------------

TOTAL ASSETS                                                           $    49,919
                                                                       ============

LIABILITIES AND SHAREHOLDERS' DEFICIENCY

Current liabilities
   Convertible notes payable                                           $ 1,720,000
   Accounts payable                                                        264,484
   Due to shareholders and officers                                        249,531
    Accrued expenses                                                     1,295,426
   Unearned revenue                                                        200,000
                                                                       ------------
     TOTAL CURRENT LIABILITIES                                           3,729,441

Unearned revenue                                                           350,000
                                                                       ------------
     TOTAL LIABILITIES                                                   4,079,441

Shareholders' deficiency
   Preferred stock, $.001 par value; authorized - 1,000,000 shares;
     issued and outstanding - none                                              --
   Common stock, $.0001 par value; authorized - 50,000,000 shares;
     16,070,238 shares issued and 16,060,025 shares outstanding              1,607
   Additional paid-in capital                                            6,668,151
   Stock subscription receivable                                           (25,000)
   Treasury stock, at cost; 10,213 shares at September 30,2002             (30,000)
   Deficit accumulated during the development stage                    (10,644,280)
                                                                       ------------
      TOTAL SHAREHOLDERS' DEFICIENCY                                    (4,029,522)
                                                                       ------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIENCY                         $    49,919
                                                                       ============

              See accompanying notes to condensed financial statements


                                          2
</TABLE>


<PAGE>
<TABLE>


                                          NURESCELL INC.
                               (A Company in the Development Stage)
                                CONDENSED STATEMENTS OF OPERATIONS

<CAPTION>

                                                                                   Cumulative
                                                                                 For the period
                                                For the six     For the six     May 12, 1998
                                                months ended    months ended   (Date of Inception)
                                            September 30,2002  September 30,2001 to September 30,2002
                                                (Unaudited)      (Unaudited)       (Unaudited)
                                               -------------    -------------    -------------
<S>                                            <C>              <C>              <C>
SALES                                          $          -     $      4,895     $     18,511
COST OF SALES                                             -                -           21,850
                                               -------------    -------------    -------------
GROSS PROFIT (LOSS)                                       -            4,895           (3,339)
OPERATING EXPENSES
   Bad debts                                              -                -            8,700
   Loss on inventory write down                           -                -           54,515
   Write off of intangible assets                         -                -           87,944
   Research and development                               -          399,764          472,476
   General and administrative                       191,161          212,649        8,398,323
   Depreciation                                       7,778            7,779           52,496
                                               -------------    -------------    -------------
TOTAL EXPENSES                                      198,939          620,192        9,074,454
                                               -------------    -------------    -------------
LOSS FROM OPERATIONS                               (198,939)        (615,297)      (9,077,793)

OTHER INCOME (EXPENSE)
   Interest income                                        -                -            8,440
   Interest expense                                 (98,760)         (33,416)      (1,296,549)
   Loss on abandonment of computer software               -                -           (6,778)
   License fee revenue                              100,000          100,000          450,000
   Termination fee                                        -       (1,000,000)      (1,000,000)
   Gain on conversion of debt                             -                -          280,000
                                               -------------    -------------    -------------
TOTAL OTHER INCOME (EXPENSE)                          1,240        (933,416)      ( 1,564,887)
                                               -------------    -------------    -------------
NET LOSS BEFORE TAXES                              (197,699)      (1,548,713)     (10,642,680)

PROVISION FOR INCOME TAXES                                -                -            1,600
                                               -------------    -------------    -------------
NET LOSS                                       $   (197,699)      (1,548,713)     (10,644,280)
                                               =============    =============    =============

BASIC AND DILUTED LOSS PER SHARE               $      (0.01)    $      (0.10)
                                               =============    =============

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                     16,060,025       16,060,025
                                               ==============   ==============

                     See accompanying notes to condensed financial statements


                                                 3

</TABLE>


<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)
                       CONDENSED STATEMENTS OF OPERATIONS




                                              For the three      For the three
                                              months ended        months ended
                                            September 30,2002  September 30,2001
                                               (Unaudited)        (Unaudited)
                                               ------------      ------------

SALES                                          $         -       $         -
COST OF SALES                                            -                 -
                                               ------------      ------------
GROSS PROFIT (LOSS)                                      -                 -

OPERATING EXPENSES
   Bad debts                                             -                 -
   Loss on inventory write down                          -                 -
   Write off of intangible assets                        -                 -
   Research and development                              -                 -
   General and administrative                      125,194           125,983
   Depreciation                                      3,889             3,847
                                               ------------      ------------
TOTAL EXPENSES                                     129,083           129,830
                                               ------------      ------------
LOSS FROM OPERATIONS                              (129,083)         (129,830)

OTHER INCOME (EXPENSE)
   Interest income                                       -                 -
   Interest expense                                (19,563)          (16,327)
   License fee revenue                              50,000            50,000
   Termination fee                                       -        (1,000,000)
                                               ------------      ------------
TOTAL OTHER INCOME (EXPENSE)                        30,437          (966,327)
                                               ------------      ------------
NET LOSS BEFORE TAXES                              (98,646)       (1,096,157)

PROVISION FOR INCOME TAXES                               -                 -
                                               ------------      ------------
NET LOSS                                       $   (98,646)       (1,096,157)
                                               ============      ============

BASIC AND DILUTED LOSS PER SHARE               $     (0.01)      $     (0.07)
                                               ============      ============

WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING                    16,060,025        16,060,025
                                               ============      ============

            See accompanying notes to condensed financial statements


                                        4



<PAGE>
<TABLE>

                                                           NURESCELL INC.
                                                    (A DEVELOPMENT STAGE COMPANY)
                                           CONDENSED STATEMENT OF SHAREHOLDERS' DEFICIENCY
                                  FOR THE PERIOD APRIL 1, 2000 (DATE OF INCEPTION) TO September 30, 2002
                                                            (UNAUDITED)
<CAPTION>

                                                       COMMON STOCK    ADDITIONAL
                                                   -------------------   PAID IN   STOCK SUB   TREASURY   ACCUMULATED
                                                      SHARES   AMOUNT    CAPITAL   RECEIVABLE   STOCK       DEFICIT        TOTAL
                                                   ----------- ------- ----------- ---------  ---------  -------------  ------------
<S>                                                <C>         <C>     <C>         <C>        <C>        <C>            <C>
BALANCE, April 1, 2000                             15,191,788   1,519   6,129,564        --    (30,000)    (7,090,718)     (989,635)

Issuance of common stock
  Exercise of stock options (May 2000 at
     $1.00 per share)                                   7,500       1       7,499        --         --             --         7,500
  Exercise of stock options (June 2000 at
     $0.25 per share)                                 100,000      10      24,990   (25,000)        --             --            --
  Settlement of lawsuit (August 2000 at
     $1.03 per share)                                  34,000       3      35,058        --         --             --        35,061
  Settlement of lawsuit (February 2001 at
     $0.34 per share)                                  50,000       5      17,185        --         --             --        17,190
  Conversion of debt (August 2000 at $0.53
     per share)                                       250,000      25     132,475        --         --             --       132,500
  Conversion of debt (January 2001 at
     $0.59 per share)                                 336,950      34     100,000        --         --             --       100,034
  Stock issued for services to an employee
     (August 2000 at $0.62 per share)                 100,000      10      62,490        --         --             --        62,500
Fair value of options and warrants                         --      --     158,890        --         --             --       158,890
Net loss for the year ended March 31, 2001                 --      --          --        --         --     (1,037,792)   (1,037,792)
                                                   ----------- ------- ----------- ---------  ---------  -------------  ------------
BALANCE, MARCH 31, 2001                            16,070,238   1,607   6,668,151   (25,000)   (30,000)    (8,128,510)   (1,513,752)

Net loss for the year ended March 31, 2002                 --      --          --        --         --     (2,318,071)    2,318,071)
                                                   ----------- ------- ----------- ---------  ---------  -------------  ------------
BALANCE, MARCH 31, 2002                            16,070,238   1,607   6,668,151   (25,000)   (30,000)   (10,446,581)   (3,831,823)

Net loss for six months ended September 30, 2002           --      --          --        --         --       (197,699)     (197,699)
                                                   ----------- ------- ----------- ---------  ---------  -------------  ------------
BALANCE. September 30, 2002                        16,070,238  $1,607  $6,668,151  $(25,000)  $(30,000)  $(10,644,280)  $(4,029,522)
                                                   =========== ======= =========== =========  =========  =============  ============




                                      See accompanying notes to condensed financial statements

                                                                               5
</TABLE>


<PAGE>
<TABLE>

                                                       NURESCELL INC.
                                            (A Company in the Development Stage)
                                             CONDENSED STATEMENTS OF CASH FLOWS

<CAPTION>

                                                                                                            Cumulative
                                                                                                          For the period
                                                                For the six           For the six         May 12, 1998
                                                                months ended          months ended      (Date of Inception)
                                                             September 30, 2002    September 30, 2001  to September 30, 2002
                                                                (Unaudited)           (Unaudited)           (Unaudited)
                                                               -------------         -------------       -----------------
<S>                                                            <C>                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                       $   (197,699)         $ (1,548,713)         $(10,644,280)
Adjustments:
     Depreciation                                                     7,778                 7,779                52,496
     Bad debts                                                            -                     -                 8,700
     Inventory write down                                                 -                     -                54,515
     Write-off of intangible assets                                       -                     -                87,944
     Amortization of discount on notes payable and
       deferred financing cost                                            -                     -               556,579
     Loss on abandonment of computer software                             -                     -                 6,778
     Issuance of stock for services                                       -                     -             4,380,882
     Gain on conversion of debt                                           -                     -              (280,000)
     Fair value of options and warrants                                   -                     -               880,646
     (Increase) decrease in:
       Accounts receivable                                                -               431,700                (8,700)
       Inventory                                                          -                (4,646)              (64,537)
       Other prepaid expenses                                             -                 5,271                     -
     Increase (decrease) in:
       Accounts payable                                               7,440                 7,304                264,484
       Accrued expenses                                             244,577                89,501              1,295,426
       Accrued termination fee                                            -             1,000,000              1,000,000
       Unearned revenue                                            (100,000)             (100,000)               550,000
                                                               -------------         -------------         --------------
          Net Cash Flows Used by Operating Activities               (37,904)             (111,804)            (1,859,067)
                                                               -------------         -------------         --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                                  -                     -                (99,171)
     Other assets                                                         -                (2,000)               (87,944)
                                                               -------------         -------------         --------------
          Net Cash Flows Used by Investing Activities                     -                (2,000)              (187,115)
                                                               -------------         -------------         --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of common stock                                   -                     -              1,018,000
     Proceeds from issuance of notes                                      -                     -                875,000
     Proceeds from shareholders and officer loans                    37,904                99,946                249,531
     Prepaid Finance Costs                                                -                     -                (96,349)
                                                               -------------         -------------         --------------
          Net Cash Flows Provided by Financing Activities            37,904                99,946              2,046,182
                                                               -------------         -------------         --------------
Net increase (decrease) in cash                                           -               (13,858)                     -
Cash at beginning of period                                               -                13,858                      -
                                                               -------------         -------------         --------------
Cash at end of period                                          $          -          $          -          $           -
                                                               =============         =============         ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash paid for interest                                    $          -          $          -          $       7,359
                                                               =============         =============         ==============
     Cash paid for taxes                                       $          -          $          -          $       1,600
                                                               =============         =============         ==============

                                  See accompanying notes to condensed financial statements

                                                            6
</TABLE>


<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS



NOTE 1: DESCRIPTION OF BUSINESS AND MANAGEMENT REPRESENTATION

Nurescell Inc. (the "Company") was incorporated in Nevada on May 12, 1998 for
the purpose of developing and commercially exploiting a proprietary radiation
shielding technology (the "Nurescell Technology") for use by the nuclear power
industry and others producing, handling or storing radioactive materials. The
Nurescell Technology material, which is comprised of a unique composite of
materials, is designed for incorporation into the structural components of new
and existing nuclear reactors and other facilities in order to provide a
cost-effective safeguard from the lethal effect of radiation while achieving a
minimal disruption to existing facilities. It is also being designed as a
containment material, which will provide an alternative to the conventional
technologies currently used to transport and store ever-increasing amounts of
spent nuclear fuel and other radioactive waste. In addition, it is expected to
provide shielding material for various other purposes, including nuclear
accelerator and defense research applications. The Nurescell Technology is based
upon a proprietary formulation that was acquired from Adrian A. Joseph, the
Company's former chief executive officer and majority stockholder in June 1998.

The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. However, the Company
believes that the disclosures are adequate to make the information presented not
misleading. It is suggested that the financial statements be read in conjunction
with the audited financial statements and notes for the fiscal year ended March
31, 2002 included in the Company's annual report on Form 10-KSB. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation, have been included. The interim
results are not necessarily indicative of the results for the full year.

NOTE 2: GOING CONCERN

The Company has accumulated net losses of $10,644,280 and a shareholders'
deficiency of $4,029,522 as of September 30, 2002. The Company's capacity to
operate as a going-concern is dependent on its ability to obtain adequate
financing to fund its operations until the Company is able to generate
commercial revenues sufficient to fund ongoing operations. These factors, among
others, raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

NOTE 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

EARNINGS PER SHARE: Basic Earnings per Share ("EPS") is calculated by dividing
income available to common shareholders (the "numerator") by the weighted
average number of common shares outstanding (the "denominator") during the
period. The computation of diluted EPS is similar to the computation of basic
EPS except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the dilutive potential common
shares (that is, securities such as options, warrants, convertible securities,
or contingent stock agreements) had been issued. In addition, in computing the
dilutive effect of convertible securities, the numerator is adjusted to add back
(a) any convertible preferred dividends and (b) the after-tax amount of interest
recognized in the period associated with any convertible debt. The computation
of diluted EPS shall not assume conversion, exercise, or contingent issuance of
securities that would have an antidilutive effect on EPS.


NOTE 4: INVENTORIES

Inventories consisted of the following at September 30, 2002:

               Raw material                       $      10,022
                                                  --------------
                                                  $      10,022
                                                  ==============


                                        7


<PAGE>


                                 NURESCELL INC.
                      (A Company in the Development Stage)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


NOTE 5: DUE TO SHAREHOLDERS AND OFFICERS

Due to shareholders at September 30, 2002 consist of $170,906 in short term cash
advances from Advanced Technology Industries, Inc. ("ATI") (a major shareholder)
to whom the Company's technology is licensed. This advance is non-interest
bearing. See Note 10. Also included in the balance is a $63,877 cash advance
from Mr. Adrian Joseph, a shareholder and former officer of the Company, payable
on demand, and bearing interest at 10% per annum. Interest accrued on this loan
for the three months ended June 30, 2002 was $1,597. Total interest accrued on
this note is $9,645. Also included in the balance is a $14,748 cash advance from
Mr. James Samuelson, a current officer and director of the Company. This advance
is non-interest bearing and is payable on demand.

NOTE 6: CONVERTIBLE NOTES PAYABLE

On December 15, 1999 and February 8, 2000, respectively, the Company signed
convertible promissory notes to Triton Private Equities Fund, L.P. ("Triton"),
each with a face value of $385,000 and bearing interest at 8% per annum
("December Note" and "February Note"). Interest for the December and February
notes were due quarterly beginning March 31, 2000 and June 30, 2000,
respectively. Total interest accrued on both notes as of September 30, 2002 was
$162,627. The Company is also liable for certain penalties due to a breach of
registration rights agreement in connection with above notes. Total penalties
accrued amounted to $463,658 as of September 30, 2002. Both interest and
penalties are included in accrued expenses as of September 30, 2002.

The December note has a warrant feature for 25,000 shares of the Company's
common stock at $2.25 per share, with a three-year expiration date. The February
note has a warrant feature for 75,000 shares of the Company's common stock at
$4.00 per share, also with a three-year expiration date. Accounting Principles
Board Opinion No. 14 requires that separate amounts attributable to the debt and
the purchase warrant be computed and accounting recognition be given to each
component. At March 31, 2000, the Company recorded an additional debt discount
of $102,676 related to the value of the warrants, which was amortized
immediately to interest expense in fiscal 2000. The warrants were valued at fair
value at the grant date using the Black-Scholes pricing model.

Interest on the notes can be paid in shares of the Company's common stock at the
discretion of the Company, at the same rate as discussed below. The notes became
due December 01, 2001. The holder of the December note and the February note can
convert it to the Company's common stock at its option, at any time. The holder
is entitled to convert all or a portion of the original principal face amount of
each note into shares of common stock at a conversion price for each share of
common stock equal to the lesser of (a) one hundred twenty-five percent (125%)
of the closing price of the Company's common stock at the date of the note or
(b) 95% of the average of the three lowest bid prices of the Company's common
stock for twenty (20) trading days prior to the conversion date. The Company is
in default as to the principal and interest payable.

The Company executed a $1 million secured convertible promissory note payable to
ATI Nuklear AG (formerly known as Nurescell AG) bearing interest at 8% per
annum, with principal and interest to be paid in 32 equal monthly payments of
$34,805 each, beginning on November 30, 2001. Any remaining principal balance
and accrued interest is due and payable on September 30, 2004. Payments can be
paid in cash or unrestricted shares of the Company's common stock at a
conversion price equal to the average of the last sale prices of the Company's
common stock as reported in the public market during the ninety trading days
just prior to the date the payament is due.The note is secured by (i) 15,000,000
shares of the Company's common stock and, (ii) a first priority security
interest in the Company's technology and (iii) all royalties due to ATI Nuklear
AG. The Company did not make scheduled monthly payments and is in default as to
the principal and interest payments. Interest accrued on this note payable as of
September 30, 2002 amounted to $80,000 and is included in accrued expenses in
the accompanying balance sheet.

                                        8


<PAGE>


                                 NURESCELL INC.
                      (A Company in the Development Stage)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


NOTE 7:  ACCRUED EXPENSES

Accrued expenses consist of the following at September 30, 2002:

              Accrued directors' fees                            $   58,000
              Accrued salary                                        473,626
              Accrued interest and penalties ($80,000
                related parties)                                    717,506
              Accrued payroll taxes                                   5,862
              Miscellaneous & Other advances                         40,432
                                                                 ----------
                                                                 $1,295,426
                                                                 ==========
NOTE 8: SHAREHOLDERS' DEFICIENCY

No stock, options or warrants were issued and no corresponding expense was
recorded for the six months ended September 30, 2002.

Warrants to purchase 100,000 shares of the Company's Common Stock were
outstanding at September 30, 2002. Warrants outstanding were not included in the
computation of diluted loss per common share because the effect would be
antidilutive.

Securities that could potentially dilute basic earnings per share (EPS) in the
future, and were not included in the computation of diluted EPS because to do so
would have been anti-dilutive for the periods presented, consist of the
following:

     Options to purchase common stock                                    -
     Warrants to purchase common stock                                100,000
     Common stock reserved for the conversion of
       note payable to ATI                                         15,000,000
     Convertible notes payable and accrued interest (assumed
       conversion at September 30, 2002 market price at discount) 206,592,000
                                                                  -----------
      Total at September 30, 2002                                 221,692,000
                                                                  ===========

The following is a summary of stock options activity from March 31, 1999 through
September 30, 2002:

                                                                Weighted Average
                                             Number of Shares        Prices
                                             ----------------   ----------------

     Balance outstanding at March 31, 1999        484,000            $0.63
       Granted                                    661,000            $1.24
       Exercised                                 (145,000)           $0.66
       Expired                                       -                 -
                                                ---------
     Balance outstanding at March 31, 2000      1,000,000            $1.03
       Granted                                    150,000            $0.83
       Exercised                                 (107,500)           $0.30
       Expired                                   (585,000)             -
                                                ---------
     Balance outstanding at March 31, 2001        457,500            $1.46
       Granted                                       -                 -
       Exercised                                     -                 -
       Expired                                   (207,500)             -
                                                ---------
     Balance outstanding at March 31, 2002        250,000            $1.64
       Granted                                       -                 -
       Exercised                                     -                 -
       Expired                                   (250,000)           (1.64)
                                                ---------
     Balance outstanding at September 30, 2002       -               $ -
                                                =========

                                        9




<PAGE>


                                 NURESCELL INC.
                      (A Company in the Development Stage)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


NOTE 8: SHAREHOLDERS' EQUITY (Continued)

The following is a summary of all warrants granted to shareholders, consultants
and others to acquire the Company's common stock as of September 30, 2002:

                                    Number of Shares
                                       Subject to
                                        Warrants        Price Range
                                    ----------------  --------------

         Balance - April 1, 1999            98,000         $0.50
           Granted                         100,000    $2.25 - $4.00
           Exercised                          -
                                         ---------
         Balance - March 31, 2000          198,000     $0.50 - $4.00
           Granted                            -
           Exercised                          -
           Expired                            -
                                         ---------
         Balance - March 31, 2001          198,000     $0.50 - $4.00
           Granted                            -
           Exercised                          -
                                         ---------
         Balance - March 31, 2002          198,000     $0.50 - $4.00
           Granted                            -
           Exercised                          -
           Expired                         (98,000)        $0.50
                                         ---------
         Balance - September 30, 2002      100,000     $2.25 - $4.00
                                         =========


The following table summarizes information about stock warrants outstanding at
September 30, 2002:

<TABLE>
<CAPTION>
                                              Outstanding                             Exercisable
                                --------------------------------------          -----------------------
                                                            Weighted                          Weighted
                                  Total                      Average              Total        Average
                                  Number                    Exercise             Number       Exercise
   Ranges of Exercise Prices    Outstanding                  Price             Exercisable     Price
   -------------------------    -----------                 --------           -----------    --------
<S>                               <C>                         <C>                 <C>           <C>

         $2.25 - $4.00            100,000                     $3.56               100,000       $3.56
                                 ---------                                       ---------

                                  100,000                                         100,000
                                 =========                                       =========
</TABLE>

The above warrants expire as follows; 25,000 on December 15, 2002 (exercise
price of $2.25) and 75,000 on February 8, 2003 (exercise price of $4.00)

NOTE 9: RELATED PARTY TRANSACTIONS

The Company has received advances from two of its shareholders totaling $234,783
(See Note 5).

The Company has also entered into consulting contracts with one of its directors
as a means of inducing the director to devote additional time and effort to the
Company over and above the time normally expected of a director. This contract
provides for payments of $2,000 per month to said director under contract, and
has no stated termination date but is cancelable by either party on 30 days
written notice. The amount paid by the Company under this contract was $0 during
the six months ended September 30, 2002. The amount accrued to this director for
his services for the six months ended September 30, 2002 was $6,000.

The Company has entered into certain transactions with related companies, ATI
and ATI Nuklear AG. The Company and ATI share a common management (see Note 10
for a description of those transactions).

                                       10




<PAGE>


                                 NURESCELL INC.
                      (A Company in the Development Stage)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS


NOTE 10 - NURESCELL AG

Effective August 15, 2000, the Company entered into a licensing agreement (the
"AG License"), whereby the Company granted to ATI Nuklear AG (a German company
then owned 51% by the Company and 49% by ATI) the exclusive right and license to
market and sell the Company's technology for a period of five years in a
specified territory. As consideration for the license, ATI Nuklear AG was to pay
a total of $1,000,000 through August 20, 2001. The Company recorded this
transaction as a deferred revenue to be recognized over the period of 5 years
(the term of the AG License). As of September 30, 2002, $450,000 has been
recognized as revenue, which leaves a unearned revenue of $550,000 remaining, of
which $200,000 is current. In connection with the licensing agreement, the
Company incurred $399,764 of research and development expenses which were paid
on its behalf by ATI. The license agreement allows these expenses to be offset
against the $1,000,000 receivable from ATI for the sale of the license.

On June 11, 2001, the Company entered into an agreement to modify the AG License
(the "Modification Agreement"). The Modification Agreement granted to Nurescell
AG an exclusive, transferable, right and license to market, distribute,
sublicense, sell, transfer and, otherwise, commercially market the Company's
technology and products in the European Union, the British Isles, Russian
Federation, Uzbekistan, Krygikistan, Afghanistan, Pakistan, Kazakhstan, Iran,
Turkey, Ukraine, the Baltic Republics, Georgia, Poland, Hungary, Czech Republic,
Slovakia, Slovenia, Egypt, South Africa, Israel, Algeria, Libya, the UAE, Iraq,
Lebanon, Saudi Arabia and Kuwait.

Under the Modification Agreement, ATI Nuklear AG is to pay the Company a royalty
in the amount of 8% of the net sales of the technology. In the event that the
technology or products are incorporated into another product, the royalty is to
be computed on the entire price of the products, as well as the coating or
application of the product on another substance or substances. Under the terms
of the Modification Agreement, the Company also agreed to relinquish all
ownership in ATI Nuklear AG, as well as execute a convertible promissory note
for all amounts advanced by ATI Nuklear AG under the AG License (the
"Convertible Note"). As part of the agreement, ATI agreed to continue to finance
certain amounts of the Company's continued monthly operations on a non-interest
bearing basis, advancing a total of $170,906 through September 30, 2002 (see
Note 5 and 10).

A termination fee of $1,000,000 has been recorded as a note payable to ATI under
the Modification Agreement. This amount is not a recurring expense and,
accordingly, has been classified as other expense in the accompanying statement
of operations for the year ended March 31, 2002.

As of September 30, 2001, the Company, ATI and ATI Nuklear AG modified the
Modification Agreement, the result of which was, among other things, (i) the
Company was released from any and all past, present and future obligations,
whether past due or otherwise, with respect to the funding of ATI Nuklear AG,
(ii) the Company agreed that all payments required of ATI Nuklear AG, pursuant
to the AG License (other than the 8% royalty payments), were deemed paid in
full, (iii) the Convertible Note was cancelled and (iv) the Company executed a
$1 million secured convertible promissory note payable to ATI Nuklear AG (see
Note 6 to the financial statements).

                                       11



<PAGE>

PLAN OF OPERATION

The Company is a development stage company, with its operations to date
principally consisting of research, development and testing and marketing of its
technology (the "Nurescell Technology"). The Company's product is intended to be
marketed to the medical and nuclear industries. From inception to September 30,
2002, the Company has obtained approximately $908,500 in financing through the
sale of equity securities through two private offerings (the "Offerings"), each
of which has been completed, approximately $102,500 through the exercise of
stock options, and another $875,000 through the issuance of convertible
promissory notes (the "Notes"). Finally, the Company has received $577,884 in
advances and incurred $568,300 in licensing fee and various expense chargebacks
from a major shareholder through September 30, 2002. The Company utilized all of
these proceeds to (i) commence and pursue patent applications for the Nurescell
Technology, (ii) identify, negotiate and finalize suitable research, development
and testing contracts, (iii) identify, negotiate and finalize marketing
consulting contracts and (iv) provide working capital for the ongoing
administrative and financing acquisition costs of the Company.

The Company has incurred losses since inception, including a net loss of
$197,699 for the six months ended September 30, 2002. From May 12, 1998
(inception) through September 30, 2002, the Company has had a cumulative loss of
$10,644,280. The Company has concluded negotiations for the distribution of its
product in Europe, Russia, and the United Kingdom.

To date, the Company has not generated any significant revenue from its
Technology. There can be no assurance that the Company will ever generate any
revenue, or if generated, revenue will be sufficient to cover operating
expenses, debt payments and accrued expenses. This report has been prepared
under the assumption that the Company continues as a going concern and will
raise sufficient financing to continue operations. There can be no assurance
that the Company will successfully raise necessary funds to continue operations.
If the Company is unable to raise necessary funds, it will be required to
discontinue operations or seek protection under federal bankruptcy laws.

This section contains forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this section
should be read as being applied to all related forward-looking statements
wherever they appear in this document.

RESULTS OF OPERATIONS FOR THE SIX-MONTH PERIODS ENDED September 30, 2002 AND
2001: Net sales of $ 0 for the six-month period ended September 30, 2002 and for
the six-month period ended September 30, 2001. As the Company is still in the
development stage, revenue generated since inception has been minimal.

Operating expenses of $198,939 for the six-month period ended September 30, 2002
were significantly lower than the operating expenses of $620,192 for the
six-month period ended September 30, 2001, due primarily to decreases in general
and administrative expenses which were primarily attributable to a significant
decrease in overhead, including salaries, rent, travel, and legal expenses.

Interest expense of $98,760 for the six-month period ended September 30, 2002
was $65,344 higher than the interest expense of $33,416 for the six-month period
ended September 30, 2001 due to the imposition of penalties by Triton for
failure to register the shares of common stock and stock purchase warrants as
required under convertible debenture.

Licensing fees generated revenue of $100,000 in the six months ended September
30, 2002, and for the six months ended September 30,. The Company during the six
months ended September 30, 2001 incurred a $1,000,000 termination fee charge
from ATI Nuklear AG.

                                       12




<PAGE>

As a result of the above factors, the net loss for the six-month period ended
September 30, 2002 was $197,699, or $0.01 per share, as compared to a net loss
of $1,548,713 or $0.10 per share for the six-month period ended September 30,
2001.

FINANCIAL POSITION. Total assets decreased from $57,697 at March 31, 2002 to
$49,919 at September 30, 2002. The decrease is primarily attributed to a
depreciation expense of $7,888.

Total liabilities increased from $3,889,520 at March 31, 2002 to 4,070,441 at
September 30, 2002. The increase in primarily attributed to a increase in
accrued expenses of $249,294, a increase in due to shareholders of $37,904, a
increase in accounts payable of $7,440 offset in part by a decrease in unearned
revenue of $100,000.

Shareholders' deficit increased from $3,831,823 at March 31, 2002 to $4,029,522
at September 30, 2002. The decrease is caused by the net loss of $197,699 for
the three-month period ended September 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES. The Company requires significant funding for
continued operations and to engage in continued marketing and sales activity.
The amount of expenditures required to maintain operations far exceeds existing
cash, which was $(132) at September 30, 2002.

The Company's cash flow used in operating activities decreased from $121,831 for
the six-month period ended September 30, 2001 to $37,187 for the six-month
period ended September 30, 2002. This is primarily attributed to chargebacks to
the Company attributed to the "ATI" agreement at September 30, 2001, offset in
part by a decrease in the Company's other operating expenses, such as rent,
salaries, taxes, phone, travel, and utilities.

During the six-month period ended September 30, 2002, the Company has obtained
liquidity primarily from the proceeds received from advances from ATI and
shareholders.

The Company anticipates that the proceeds to be received from ATI and
Shareholders, will be sufficient to fund the Company's operations and capital
requirements until at least December 31, 2002. There can be no assurance,
however, that such funds will be sufficient to fund the Company's operations and
capital requirements until December 31, 2002 or that such funds will not be
expended prior thereto due to unanticipated changes in economic conditions or
other unforeseen circumstances.

                                       13



<PAGE>

The Company's financial statements for the quarter ended September 30, 2002 have
been prepared assuming the Company will continue as a going-concern. As noted in
the Company's financial statements for the year ended March 31, 2002, as filed
with the Company's report on Form 10-KSB for that period, the presence of
significant losses, negative cash flows and limited working capital, together
with the uncertainties associated with the ability of the Company to obtain
additional capital, raise substantial doubts as to the Company's ability to
continue as a going-concern. The Company's ability to continue as a
going-concern will be questionable until such time as it is able to generate
sufficient revenues in excess of expenses to sustain its normal business
activities. Until that time, the Company will depend on its ability to raise
additional capital through either loans or equity or debt offerings. At this
time, the Company expects that it will need approximately $750,000 in additional
funding over the next two years in order to complete the necessary marketing of
its Nurescell Technology. There can, however, be no guarantee that such
financing will be obtained or that any additional financing will be available on
terms favorable to the Company or its shareholders, if at all. If sufficient
funds are not available when needed, the Company will be required to severely
curtail its operations, which would have a material adverse effect on the
Company's business, operating results and financial condition or seek protection
under federal bankruptcy laws.

ITEM 3.  CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures. The Company's Chief
Executive Officer and Chief Financial Officer have conducted an evaluation of
the Company's disclosure controls and procedures as of a date (the "Evaluation
Date") within 90 days before the filing of this quarterly report. Based on their
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
have concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the applicable Securities and Exchange Commission rules and forms.

(b) Changes in Internal Controls and Procedures. Subsequent to the Evaluation
Date, there were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls, nor were any
corrective actions required with regard to significant deficiencies and material
weaknesses.

                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     We are periodically subject to litigation which is routine, in the ordinary
course of business and not material to the Company.

      On December 15, 1999 and February 8, 2000, respectively, the Company
signed convertible promissory notes to Triton Private Equities fund, L.P.
("Triton"), each with a face value of $385,000 and bearing interest at 8% per
annum ("December Note" and "February Note"). On December 1, 2001 the Company has
defaulted with respect to two convertible notes payable to Triton Private Equity
Fund. Both parties have entered into discussions to remedy the default. Failure
to reach a remedy may result in litigation against the Company.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

The Company is in default with respect to the payment of interest on the
promissory notes described in Note 6 to the financial statements which are part
of this report. The total unpaid interest on those promissory notes to date is
$208,227.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

The Company is currently in default upon the Triton December Note, February Note
and ATI Note, each referenced in Note 6 to the financial statements which are
part of this report. The Company has entered into negotiations with both Triton
and ATI as an attempt to remedy the defaults. The discussions include a possible
restructuring of the Company, whereby, it would cease its current line of
business and focus on acquiring a new business focus.

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

None.

ITEM 5. OTHER INFORMATION.

None.

                                       14

<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

         (A) Reports on 8-K:

On September 13, 2002, the Company filed a Current Report of Form 8-K disclosing
a change in its certifying accountants from Grassi & Co., CPA's P.C., to Marcum
& Kliegman, LLP.

         B) Exhibits. The following exhibits are included as part of this
         report:



INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS.

     The following exhibits are included as part of this Report:

       EXHIBIT NO.  DESCRIPTION
       -----------  -----------


          3.1       Articles of Incorporation, as amended(1)

          3.2       Bylaws(1)

          4.1       Form of Class "A" Common Stock Purchase Warrant
                    Certificate (1)

          4.2       Form of Class "B" Common Stock Purchase Warrant
                    Certificate (1)

          4.3       Form of $385,000 Series 1999-A Convertible Promissory Note
                    due December 1, 2001 (2)

          4.4       Form of $385,000 Series 2000-A Convertible Promissory Note
                    due December 1, 2001 (6)

          4.5       Form of Warrant issued to Triton Private Equities Fund, L.P.
                    on December 15, 1999 (2)

          4.6       Form of Warrant issued to Triton Private Equities Fund, L.P.
                    on February 8, 2000 (6)

          4.7       Secured Promissory Note dated September 30, 2001 for
                    $1,000,000 from the Company to ATI Nuklear AG

          4.8       Securities Purchase Agreement between the Company and Triton
                    Private Equities Fund, L.P. dated December 15, 1999 (2)

          4.9       Securities Purchase Agreement between the Company and Triton
                    Private Equities Fund, L.P. dated February 8, 2000 (6)

          4.10      Registration Rights Agreement between the Company and Triton
                    Private Equities Fund, L.P. dated December 15, 1999 (2)

          4.11      Registration Rights Agreement between the Company and Triton
                    Private Equities Fund, L.P. dated February 8, 2000 (6)

          4.12      Promissory Note dated April 6, 2000 for $165,000 from the
                    Company to the Glenn A. Cramer Separate Property Trust (6)

          4.13      Promissory Note dated May 1, 2000 for $82,500 from the
                    Company to the Glenn A. Cramer Separate Property Trust (6)

          4.14      Promissory Note dated June 1, 2000 for $82,500 from the
                      Company to the Glenn A. Cramer Separate Property Trust (6)

          10.1      Employment Agreement between the Company and Adrian A.
                    Joseph, dated May 15, 1998 (1)

          10.2      Sale of Technology between the Company and Adrian A. Joseph
                    dated June 12, 1998 (1)

          10.3      Employment Agreement between the Company and Sharon Nitka
                    dated June 1, 1998 (1)

          10.4      Consulting Agreement between the Company and John
                    Longenecker dated June 26, 1998 (1)

          10.5      Consulting Agreement between the Company and William A.
                    Wilson dated June 10, 1998 (1)

          10.6      Consulting Agreement between the Company and Rita Lavelle
                    dated June 1, 1998 (1)

          10.7      Form of Stock Option Agreement between the Company and its
                    officers and directors (1)

          10.8      1998 Stock Option Plan (1)

                                       15




<PAGE>
          10.9      Form of Indemnification Agreement between the Company and
                    its officers and directors (1)

          10.10     Letter of Understanding for Proposed Agreement Between the
                    Company and Performance Improvement International dated
                    March 1, 1999 (3)

          10.11     Research Plan submitted by the University of Missouri to the
                    Company (3)

          10.12     Consulting Agreement between the Company and Dr. Chong Chiu
                    dated June 25, 1999 (4)

          10.13     Investment Banking Services Agreement between the Company
                    and National Capital Merchant Group, Ltd. dated June 30,
                    1999 (4)

          10.14     Employment Agreement between the Company and Harold L. Rapp
                    dated August 6, 1999 (5)

          10.15     Consulting Agreement between the Company and Shelby T.
                    Brewer dated December 1, 1999 (6)

          10.16     Employment Agreement between the Company and William Wilson
                    dated March 1, 2000 (6)

          10.17     Consulting Agreement between the Company and Robert Merriman
                    dated as of June 9, 2000 (6)

          10.18     Investment Agreement between the Company and Nurescell AG
                    Dated August 15, 2000 (7)

          10.19     License Agreement between the Company and Nurescell AG
                    dated as of August 15, 2000 (7)

          10.20     Transaction Restructure Agreement between the Company,
                    Advanced Technology Industries, Inc. and ATI Nuklear AG
                    dated as of September 30, 2001


          (1)  Incorporated by reference from the Company's Registration
               Statement on Form 10-SB (File No. 0-25377). Exhibit numbers from
               that Registration Statement has been retained.

          (2)  Incorporated by reference from the Company's Report on Form
               10-QSB for the quarter ended December 31, 1999 (File No. 0-25377)

          (3)  Incorporated by reference from Amendment No. 1 to the Company's
               Registration Statement on Form 10-SB (File No. 0-25377). Exhibit
               numbers from that Registration Statement have been retained.

          (4)  Incorporated by reference from the Company's Report on Form
               10-QSB for the quarter ended June 30, 1999 (File No. 0-25377)

          (5)  Incorporated by reference from the Company's Report on Form
               10-QSB for the quarter ended September 30, 1999 (File No.
               0-25377)

          (6)  Incorporated by reference from the Company's Report on Form
               10-KSB for the year ended March 31, 2000 (File No.
               0-25377)

          (7)  Incorporated by reference from the Company's Report on Form
               10-QSB for the quarter ended June 30, 2000 (File No.
               0-25377)

          (8)  Incorporated by reference from the Company's Report on Form
               10-QSB for the quarter ended September 30, 2000 (File No.
               0-25377)

          (9)  Incorporated by reference from the Company's Report on Form
               10-QSB for the quarter ended December 31, 2000 (File No.
               0-25377)


                                       16



<PAGE>



                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Newport Beach, State of California, on the 19th
day of December, 2002.

                                NURESCELL INC.

                                By: /s/ JAMES SAMUELSON
                                    --------------------------------------------
                                    James Samuelson, Chief Financial Officer and
                                    acting President


     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

SIGNATURE                           TITLE
---------                           -----



/s/ JAMES SAMUELSON              Chief Financial Officer and acting President
-------------------------
* JAMES SAMUELSON






                                       17




<PAGE>



           CERTIFICATION OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER
           Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James Samuelson, certify that:

(1) I have reviewed this quarterly report on Form 10-QSB of Nurescell, (the
"Company");

(2) Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

(3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Company as of, and for, the periods presented in this quarterly report;

(4) The Company's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

         (a)      designed such disclosure controls and procedures to ensure
                  that material information relating to the Company is made
                  known to us by others within those entities, particularly
                  during the period in which this quarterly report is being
                  prepared;

         (b)      evaluated the effectiveness of the Company's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         (c)      presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

(5) The Company's other certifying officer and I have disclosed, based on our
most recent evaluation, to the Company's auditors and the audit committee of the
Company's board of directors (or persons fulfilling the equivalent function):

         (a)      all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the Company's
                  ability to record, process, summarize and report financial
                  data and have identified for the Company's auditors any
                  material weaknesses in internal controls; and

         (b)      any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Company's internal controls; and

(6) The Company's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: December 19, 2002             By: /s/ JAMES SAMUELSON
                                    --------------------------------------------
                                    Chief Financial Officer and acting President



                                       18