<PAGE>

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

                                   FORM 10-QSB


  /X/    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001

                                       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:
                      19762 MACARTHUR BOULEVARD, SUITE 332,
                            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 31, 2001: 16,070,238

Transitional Small Business Disclosure Format (check one):    Yes /X/   No / /

                                       1



<PAGE>
PART I  FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>

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

                                                                               December 31,
                                                                                   2001
                                                                                 Unaudited
                                                                               ------------
<S>                                                                            <C>
ASSETS

Current assets
   Cash                                                                        $       561
   Inventory                                                                        40,090
   Prepaid expenses                                                                  2,589
                                                                               ------------
     TOTAL CURRENT ASSETS                                                           43,240

Property and equipment net of accumulated
     depreciation and amortization of $39,609                                       51,562

Other assets                                                                        82,885
                                                                               ------------
TOTAL ASSETS                                                                   $   177,687
                                                                               ============

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
   Accounts payable                                                            $   197,778
   Due to shareholders and officers                                                194,171
   Accrued expenses                                                                572,864
   Convertible notes payable                                                     1,037,676
   Unearned revenue                                                                200,000
                                                                               ------------
     TOTAL CURRENT LIABILITIES                                                   2,202,489

Long-term liabilities
   Convertible notes payable                                                       682,324
   Unearned revenue                                                                500,000
                                                                               ------------
     TOTAL LONG-TERM LIABILITIES                                                 1,182,324
                                                                               ------------
     TOTAL LIABILITIES                                                           3,384,813

Shareholders' equity (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 at December 31, 2001                                                1,607
   Additional paid-in capital                                                    6,668,151
   Treasury stock, at cost; 10,213 shares at December 31, 2001                     (30,000)
   Stock subscription receivable                                                   (25,000)
   Deficit accumulated during the development stage                             (9,821,884)
                                                                               ------------
      TOTAL SHAREHOLDERS' EQUITY (DEFICIENCY)                                   (3,207,126)
                                                                               ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)                        $   177,687
                                                                               ============


                  See accompanying notes to unaudited financial statements
</TABLE>

                                              2
<PAGE>
<TABLE>

                                                   NURESCELL INC.
                                        (A Company in the Development Stage)
                                              STATEMENTS OF OPERATIONS
                                                     (unaudited)
<CAPTION>
                                                                                                       Cumulative
                                                                                                     For the period
                                   For the three  For the three  For the nine     For the nine        May 12, 1998
                                   months ended   months ended   months ended     months ended    (Date of Inception)
                                   December 31,   December 31,   December 31,     December 31,     to December 31,
                                       2001           2000           2001              2000                2001
                                     Unaudited      Unaudited      Unaudited        Unaudited           Unaudited
                                   -------------  -------------   ------------   ---------------     ---------------
<S>                                <C>            <C>              <C>            <C>                 <C>
SALES                              $          -   $      7,265     $    4,895     $      7,265        $     18,511
COST OF SALES                                 -              -              -                -              21,850
                                   -------------  -------------  -------------    -------------       -------------
GROSS PROFIT (LOSS)                           -          7,265          4,895            7,265              (3,339)

OPERATING EXPENSES
Bad debts                                 8,700              -          8,700                -               8,700
Inventory write down                     24,448              -         24,448                -              24,448
Research and development                      -              -        399,764            1,795             468,191
General and administrative              121,629        248,932        334,279        1,101,866           8,070,286
Depreciation                              3,889          3,782         11,668           11,306              40,831
                                   -------------  -------------  -------------    -------------       -------------
TOTAL EXPENSES                          158,666        252,714        778,859        1,114,967           8,612,456
                                   -------------  -------------  -------------    -------------       -------------
LOSS FROM OPERATIONS                   (158,666)      (245,449)      (773,964)      (1,107,702)         (8,615,795)

OTHER INCOME (EXPENSE)
Interest income (expense)               (35,997)       (53,151)       (69,410)        (232,637)           (777,711)
License fee revenue                      50,000         50,000        150,000          100,000             300,000
Loss on abandonment of software               -              -              -                -              (6,778)
Gain on conversion of debt                    -              -              -          280,000             280,000
Termination fee                               -              -     (1,000,000)               -          (1,000,000)
                                   -------------  -------------  -------------    -------------       -------------
TOTAL OTHER INCOME (EXPENSE)             14,003         (3,151)      (919,410)         147,363          (1,204,489)
                                   -------------  -------------  -------------    -------------       -------------

LOSS BEFORE INCOME TAXES               (144,663)      (248,600)    (1,693,374)        (960,339)         (9,820,284)
                                   -------------  -------------  -------------    -------------       -------------

PROVISION FOR INCOME TAXES                    -              -              -                -               1,600
                                   -------------  -------------  -------------    -------------       -------------
NET LOSS                           $   (144,663)  $   (248,600)  $ (1,693,374)    $   (960,339)       $ (9,821,884)
                                   =============  =============  =============    =============       =============

BASIC AND DILUTED LOSS/SHARE       $      (0.09)  $      (0.02)  $      (0.11)    $      (0.06)       $      (0.61)
                                   =============  =============  =============    =============       =============
WEIGHTED AVERAGE NUMBER OF
   COMMON SHARES OUTSTANDING         16,070,238     15,683,288     16,070,238       15,503,449          16,054,943
                                   =============  =============  =============    =============       =============



                              See accompanying notes to unaudited financial statements
</TABLE>

                                                          3
<PAGE>
<TABLE>

                                                           NURESCELL INC.
                                                (A COMPANY IN THE DEVELOPMENT STAGE)
                                           STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIENCY)
                                FOR THE PERIOD MAY 12, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 2001
                                                             (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>
Issuance of common stock
  Cash - Founding Shareholders (May and
    June 1998 at $.001 per share)                  2,500,000  $   250    $    2,250  $       -  $         $         -  $     2,500
  Purchase of Technology (June 1998 at $.0001)    10,000,000    1,000        (1,000)         -         -            -            -
  Cash - $1.00 per share (August 1998)               498,000       50       497,950          -         -            -      498,000
  Cash - $5.00 per share, net of issuance cost
    (September 1998)                                  79,000        8       349,992          -         -            -      350,000
  Common stock subscriptions                           5,000        -        25,000          -         -            -       25,000
Fair value of options                                      -        -        30,000          -         -            -       30,000
Net loss, as restated for March 31, 1999                   -        -             -          -         -     (674,526)    (674,526)
                                                 ------------ --------  ------------ ---------- --------- ------------ ------------
BALANCE, MARCH 31, 1999                           13,082,000    1,308       904,192          -         -     (674,526)     230,974

Issuance of common stock
  Consulting services (May 1999 through
     December 1999 at $1.12 - $3.50 per share)       692,000       69     1,591,138          -         -            -    1,591,207
  Exercise of stock options (October 1999 at
     $.50 per share))                                120,000       12        59,988          -         -            -       60,000
  Exercise of stock options (January 2000 at
     $1.00 per share)                                 15,000        2        14,998          -         -            -       15,000
  Exercise of stock options (March 2000 at
     $2.00 per share)                                 10,000        1        19,999          -         -            -       20,000
  Settlement of related party accruals (January
     2000 at $2.13 per share)                        524,226       52     1,113,928          -         -            -    1,113,980
  Award to directors and officers (January 2000
    at $2.13 per share)                              734,562       74     1,560,870          -         -            -    1,560,944
  Cash (April 1999 at $5.00)                          14,000        1        69,999          -         -            -       70,000
Purchase of 10,213 shares of Treasury stock
    at $2.94 per share                                     -        -             -          -   (30,000)           -      (30,000)
Fair value of options                                      -        -       691,756          -         -            -      691,756
Fair value of warrants                                     -        -       102,696          -         -            -      102,696
Net loss                                                   -        -             -          -         -   (6,416,192)  (6,416,192)
                                                 ------------ --------  ------------ ---------- --------- ------------ ------------
BALANCE, MARCH 31, 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
     $0.29 per share)                                336,950       34       100,000          -         -            -      100,034
  To 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                                                   -        -             -          -         -   (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                                                   -        -             -          -         -   (1,693,374)  (1,693,374)
                                                 ------------ --------  ------------ ---------- --------- ------------ ------------
BALANCE, DECEMBER 31, 2001                        16,070,238  $ 1,607   $ 6,668,151  $ (25,000) $(30,000) $(9,821,884) $(3,207,126)
                                                 ============ ========  ============ ========== ========= ============ ============


                                      See accompanying notes to unaudited financial statements

</TABLE>

                                                                  4
<PAGE>
<TABLE>

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

<CAPTION>

                                                                                                            Cumulative
                                                                                                          For the period
                                                                For the nine          For the nine          May 12, 1998
                                                                months ended          months ended      (Date of Inception)
                                                                December 31,          December 31,        to December 31,
                                                                   2001                  2000                   2001
                                                                 Unaudited             Unaudited             Unaudited
                                                               -------------         -------------         -------------
<S>                                                            <C>                   <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                       $ (1,693,374)         $   (960,339)         $ (9,821,884)
Adjustments:
     Depreciation                                                    11,668                11,306                40,831
     Bad debts                                                        8,700                     -                 8,700
     Inventory write down                                            24,448                     -                24,448
     Amortization of license fee revenue                           (150,000)             (100,000)             (300,000)
     Accrued termination fee                                      1,000,000                     -             1,000,000
     Amortization of discount on notes payable and
       deferred financing cost                                            -                25,068               658,052
     Gain on conversion of debt                                           -              (280,000)             (280,000)
     Loss on abandonment of computer software                             -                     -                 6,778
     Issuance of stock for services                                       -                98,692             4,328,631
     Compensatory element of stock issuances                              -               362,676               888,146
     (Increase) decrease in:
       Accounts receivable                                          434,480              (548,259)              (11,480)
       Inventory                                                     (4,646)              (46,586)              (64,538)
       Other prepaid expenses                                         7,543                 6,955                   191
     Increase (decrease) in:
       Accounts payable                                              42,279                51,436               197,778
       Accrued expenses                                             184,220                77,781               572,864
       Unearned revenue                                                   -             1,000,000             1,000,000
                                                               -------------         -------------         -------------
          Net Cash Flows Used by Operating Activities              (134,682)             (301,270)           (1,751,483)
                                                               -------------         -------------         -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                                  -               (28,213)              (99,171)
     Other assets                                                    (2,000)              (58,676)              (82,885)
                                                               -------------         -------------         -------------
          Net Cash Flows Used by Investing Activities                (2,000)              (86,889)             (182,056)
                                                               -------------         -------------         -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of common stock                                   -                 7,500             1,010,500
     Proceeds from issuance of notes                                      -               375,000               875,000
     Proceeds from shareholders and officer loans                   123,385                 7,010               194,171
     Debt issuance costs                                                  -                     -              (145,571)
                                                               -------------         -------------         -------------
          Net Cash Flows Provided by Financing Activities           123,385               389,510             1,934,100
                                                               -------------         -------------         -------------
Net increase (decrease) in cash                                     (13,297)                1,351                   561
Cash at beginning of period                                          13,858                26,945                     -
                                                               -------------         -------------         -------------
Cash at end of period                                          $        561          $     28,296          $        561
                                                               =============         =============         =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
     Cash paid for interest                                    $          -          $          -          $      7,359
                                                               =============         =============         =============
     Cash paid for taxes                                       $          -          $          -          $      1,600
                                                               =============         =============         =============
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITY
     Issuance of common stock for services                     $          -          $     96,892          $  2,056,127
                                                               =============         =============         =============

                                 See accompanying notes to unaudited financial statements

                                                            5
</TABLE>
<PAGE>

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

NOTE 1: MANAGEMENT REPRESENTATION

The financial statements included herein have been prepared by Nurescell Inc.
(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 has been omitted pursuant to such rules and regulations. In the
opinion of management, the financial statements reflect all adjustments
necessary to state fairly the financial position and results of operations as of
and for the periods indicated. These financial statements should be read in
conjunction with the audited financial statements and notes for the fiscal year
ended March 31, 2001 included in the Company's annual report on Form 10-KSB. 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 $9,821,884 and a stockholders' deficit
of $3,207,126 as of December 31, 2001. The Company's capability 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 stockholders (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.

OTHER ASSETS: Other assets consist of patent application and associated legal
costs. Upon commencement of operations, all costs associated with obtaining
patents will be amortized on a straight-line basis over the remaining patent
lives once the patent is obtained. The Company will evaluate the recoverability
of these costs on an annual basis by comparing the estimated net realizable
value of the patents to their carrying value.

RECENT ACCOUNTING PRONOUNCEMENTS: In July 2001, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards No.
141 ("SFAS 141"), "Business Combinations" which supersedes Accounting Principles
Board ("APB") Opinion No. 16, "Business Combinations." SFAS 141 requires the
purchase method of accounting for business combinations initiated after June 30,
2001 and eliminates the pooling-of-interests method. In addition, SFAS 141
establishes specific criteria for the recognition of intangible assets
separately from goodwill and requires unallocated negative goodwill to be
written off immediately as an extraordinary gain. The provisions of SFAS 141
have been adopted as of July 1, 2001. Management believes that the
implementation of this standard will have no impact on the Company's results of
operations and financial position.

In July 2001, the FASB also issued Statement of Financial Accounting Standards
No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets," which is effective
for fiscal years beginning after December 15, 2001. SFAS 142 supersedes APB
Opinion No. 17 "Intangible Assets" and requires, among other things, the
discontinuance of amortization related to goodwill and indefinite lived
intangible assets. These assets will then be subject to an impairment test at
least annually. In addition, the standard includes provisions upon adoption for
the reclassification of certain existing recognized intangibles as goodwill,
reassessment of the useful lives of existing recognized intangibles and
reclassification of certain intangibles out of previously reported goodwill.

                                 6


<PAGE>

The Company is required to complete transition impairment tests no later than
December 31, 2002. Any impairment resulting from these transition tests will be
recorded as of January 1, 2002 and will be recognized as the cumulative effect
of a change in accounting principle. The Company will not be able to determine
if an impairment will be required until completion of such impairment tests.

In October 2001, the FASB issued Statement of Financial Standards No. 144 ("SFAS
144"), "Accounting for the Impairment or Disposal of Long-Lived Assets," which
supersedes Statement of Financial Accounting Standards No. 121 ("SFAS 121"),
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" and certain provisions of APB Opinion No. 30, "Reporting Results
of Operations Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions." SFAS
144 requires that long-lived assets to be disposed of by sale, including
discontinued operations, be measured at the lower of carrying amount or fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations. SFAS 144 also broadens the reporting requirements of
discontinued operations to include all components of an entity that have
operations and cash flows that can be clearly distinguished, operationally and
for financial reporting purposes, from the rest of the entity. The provisions of
SFAS 144 are effective for fiscal years beginning after December 15, 2001.
Management does not believe that this statement will have a material effect on
the Company's results of operations and financial position.

NOTE 4: INVENTORIES

Inventories consisted of the following at December 31, 2001:

               Raw material                                  $      40,090
                                                             --------------
                                                             $      40,090
                                                             ==============

NOTE 5: OTHER ASSETS

Other assets of $82,885 consist of legal fees incurred for obtaining patents in
the United States and abroad. At December 31, 2001, patents had been granted in
the United States of America and Pakistan.

NOTE 6: DUE TO SHAREHOLDERS AND OFFICERS

Due to shareholders and officers at December 31, 2001 consist of $115,546 in
short term cash advances from Advanced Technology Industries, Inc. ("ATI") (a
major shareholder which owns the Company to which the Company's technology is
licensed). This advance is non-interest bearing. See Note 11. 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 December 31,
2001 was $1,597. Total interest accrued on this note is $6,451. 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 7: 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 $385,000 and bearing interest at 8% per annum ("December
note" and "February note"). Interest for the December and February notes is due
quarterly beginning March 31, 2000 and June 30, 2000, respectively. For both
notes, the Company recorded an original issue discount of $270,000, legal fees
in the amount of $28,500, and finders' fee in the amount of $50,000.
Additionally, a refundable prepaid fee of $25,000 was withheld by Triton to
reserve an equity credit line, which the Company has decided not to pursue.
These costs were recorded as additional debt discount and were amortized to
interest expense immediately in fiscal 2000.

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 June 30, 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.


                                   7


<PAGE>

Interest on the notes can be paid in shares of the Company's Common Stock at the
discretion of the Company, as defined in the agreement. The notes are due
December 11, 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 January 31, 2002. Any remaining principal balance and
accrued interest is due and payable on September 30, 2004. 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.

Debt Payout Schedule

            Twelve Months Ended December 31,
     2002          2003          2004          Total

$  1,037,676   $ 314,314     $ 368,010     $ 1,720,000

NOTE 8: SHAREHOLDERS' EQUITY

No stock, options or warrants were issued and no corresponding expense was
recorded for the three months ended December 31, 2001.

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                               250,000
     Warrants to purchase common stock                              198,000
     Common stock reserved for the conversion of
       note payable to ATI                                       15,000,000
     Convertible note payable (assumed conversion at
       December 31, 2001 market price at discount)               22,800,000
                                                                 ----------
      Total at December 31, 2001                                 38,248,000
                                                                 ===========

The following is a summary of stock options activity from March 31, 2001
through December 31, 2001:


                                            Shares       Weighted-Average Price
                                           ---------     ----------------------
Outstanding, March 31, 2001                 457,500             $1.46
  Granted                                         -                 -
  Exercised                                       -                 -
  Expired/Cancelled                        (207,500)                -
                                          ----------            ------
  Balance at December 31, 2001              250,000             $1.64
                                          ==========            ======

The following table summarizes information about stock options outstanding at
December 31, 2001:


  Shares                            Weighted
  Under                             Average
  Option      Exercise Price      Exercise Price
  -------     --------------       --------------

   60,000         $0.50           $     0.50
  190,000         $2.00                 2.00
 --------                         -----------
  250,000                         $     1.64
 ========                         ===========





                                    8


<PAGE>

The following is a summary of all warrants granted to shareholders, consultants
and others to acquire the Company's common stock for the period ended March 31,
2001 through December 31, 2001:
                                            Shares
                                           Subject to             Price
                                           Warrants               Range
                                          ----------          --------------

          Balance, March 31, 2001           198,000           $ 1.00 - $4.00
             Granted                              -
             Exercised                            -
                                           ---------
          Balance at December 31, 2001      198,000           $  .50 - $4.00
                                           =========

During the nine months ended December 31, 2000, the warrants for 98,000 shares
were repriced from $1.00 to $.50. These warrants had the expiration date
extended until May 31, 2002.

The following table summarizes information about stock warrants outstanding at
December 31, 2001:


                                   Weighted
                                   Average
Total             Exercise         Exercise
Warrants           Price            Price
--------------   ----------      ----------

198,000           $.50 - $4.00     $2.05
-------
198,000
=======


NOTE 9: ACCRUED EXPENSES

Accrued expenses consist of the following at December 31, 2001:

     Accrued Directors Fees               $  46,000
     Accrued Salary                         360,875
     Accrued Interest                       145,877
     Accrued Payroll Taxes                    8,862
     Other Advances                          11,250
                                          ----------
                                          $ 572,864
                                          ==========

NOTE 10: RELATED PARTY TRANSACTIONS

The Company has received advances from two of its major shareholders totaling
$179,423 (See Note 6).

The Company has also entered into a consulting contract 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 three months ended December 31, 2001. The amount accrued to
this director for his services for the three months ended December 31, 2001 was
$6,000.

The Company has entered into certain transactions with related companies ATI and
ATI Nuklear AG. The Company and ATI share a commonality of management. See Note
11 for a description of those transactions.

NOTE 11: ATI NUKLEAR 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. In connection with the AG License, ATI Nuklear AG was to
pay a total of $1,000,000 through August 20, 2001.

                                  9


<PAGE>

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 $115,546 through December 31, 2001 (see Note
6).

As a result of the modification of the AG License, the Company incurred an
additional chargeback of $399,764, classified as research and development, for
the nine months ended December 31, 2001. A total 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 expenses in the
accompanying Statement of Operations for the nine months ended December 31,
2001.

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
7 to the Financial Statements.

                                       10


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

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 is presently focused on
marketing its product to the medical and nuclear industries. From inception to
December 31, 2001, the Company has obtained approximately $908,000 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 $729,000 through the issuance of
convertible promissory notes (the "Notes"). Finally, the Company has received
$522,557 in advances and incurred $568,300 in licensing fee and various expense
chargebacks from a major shareholder through December 31, 2001. Through December
31, 2001, 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
$1,693,374 for the nine months ended December 31, 2001. From May 12, 1998
(inception) through December 31, 2001, the Company has had a cumulative loss of
$9,821,884. To date the Company has concluded negotiations for the distribution
of its product in Europe, Russia, and the United Kingdom, however, its product
has not yet been commercialized in those territories.

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 NINE-MONTH PERIODS ENDED DECEMBER 31, 2001 AND
2000: Net sales of $ 4,895 for the nine-month period ended December 31, 2001
were $2,370 lower than the net sales of $7,265 for the nine-month period ended
December 31, 2000. This is due primarily to reduced market demand for the
Company's products.

Operating expenses of $778,859 for the nine-month period ended December 31, 2001
were significantly lower than the operating expenses of $1,114,967 for the
nine-month period ended December 31, 2000, due primarily to decreases in general
and administrative expenses which were primarily attributable to a significant
reduction in personnel, which resulted in a decrease in overhead, including
salaries, bonuses, stock options, rent, travel, and legal expenses.

Interest expense of $69,410 for the nine-month period ended December 31, 2001
was $163,227 lower than the interest expense of $232,637 for the nine-month
period ended December 31, 2000 due to the complete amortization of the
unamortized discounts on the two notes payable to Triton during the year ended
March 31, 2001.

Licensing fees generated revenue of $150,000 in the nine months ended December
31, 2001, which was $50,000 higher than the licensing fee revenue for the nine
months ended December 31, 2000 due to the license agreement between the Company
and ATI Nuklear AG. See Note 11 to the Company's Financial Statements.


                                       11


<PAGE>

As a result of the above factors, the net loss for the nine-month period ended
December 31, 2001 was $1,693,374, or $0.11 per share, as compared to a net loss
of $960,339 or $0.06 per share for the nine-month period ended December 31,
2000.

FINANCIAL POSITION. Total assets decreased from $671,177 at March 31, 2001 to
$177,687 at December 31, 2001. The decrease is primarily attributed to a
decrease in cash of $13,297 and a decrease in accounts receivable of $443,180
(due to the change in the ATI agreement), a write down of obsolete inventory of
$24,448, offset in part by an decrease in prepaid expenses of $7,543 and an
increase in other assets of $2,000.

Total liabilities increased from $2,184,929 at March 31, 2001 to $3,384,813 at
December 31, 2001. The increase is primarily attributed to an increase in
amounts payable to ATI of $1,000,000 (due to the change in the ATI agreement),
an accounts payable increase of $42,279, an increase in accrued expenses of
$184,220 offset in part by a decrease in unearned revenue of $150,000 as a
result of the Company's revised agreement with ATI.

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 $561 at December 31, 2001.

The Company's cash flow used in operating activities decreased from $301,270 for
the nine-month period ended December 31, 2000 to $134,682 for the nine-month
period ended December 31, 2001. This decrease is primarily attributed to a
decrease in the Company's operating expenses, such as rent, salaries, taxes,
phone, travel, and utilities.

During the nine-month period ended December 31, 2001, the Company has obtained
liquidity primarily from the proceeds received from borrowings and advances from
ATI, summarized in the first paragraph of this Item discussion.

On January 31, 2002, the Company defaulted on its first payment with respect to
two convertible notes payable to Triton Private Equity Fund. Both parties have
entered into discussions to remedy the default, and no action against the
Company is pending at this time. See the discussions "Defaults upon Senior
Securities" and Note 7 to the Financial Statements.

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

The Company's financial statements for the quarter ended December 31, 2001 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, 2001, 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.



                                       12

<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On October 19, 2001, the Company was served in a California Superior Court
action filed on June 13, 2001 by Robert B. Reeves against the Company, Adrian
Joseph, individually and as Trustee of the Adrian Joseph Separate Property
Trust, Douglas S. Denhart and The Foundation Group. The complaint alleges that
the Defendants committed acts of deceit and fraud in connection with the sale of
shares of Company common stock owned by Mr. Joseph and sold through Mr. Denhart
to Mr. Reeves. Mr. Reeves requested $25,000 in rescission rights and punitive
damages. The Company was dismissed without prejudice from the proceedings on
December 12, 2001.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

No unregistered securities were sold in the quarter ended December 31, 2001.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

The Company is in default with respect to the payment of interest on the
promissory notes described in Note 7 to the financial statements which are part
of this report. The total unpaid interest on those promissory notes to date is
$119,428.

The Company has not made its first payment under the note payable to ATI of
$32,182 due on January 31, 2002.


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

Not applicable.

ITEM 5.   OTHER INFORMATION

Not applicable.




                                       13

<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)  The following Exhibits are attached hereto:

       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)

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


                                       14



<PAGE>

         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 have been retained.

                                       15



<PAGE>

          (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 September 30, 2000 (File No.
               0-25377)


(b)     The Company filed the following reports on Form 8-K during the relevant
Quarter:

1.      Form 8-K filed November 16, 2001 regarding the Company's change
in accountant (Item 4).

2.      Form 8-K/A filed November 27, 2001 amending Form 8-K regarding
Company's change in accountant (Item 4).



                                       16


<PAGE>


                                 SIGNATURES

     In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized, in Irvine, California, on the 22nd day of February, 2002.

                           NURESCELL INC.

                           By: /s/ JOHN LONGENECKER
                              -------------------------------------------
                              John Longenecker, President and Chief Executive
                              Officer,

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




                                       17