<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K/A

[ X ] Annual  Report  Pursuant  to  Section  13 or  15(d)  of the  Securities
      Exchange Act of 1934

                   For the fiscal year ended December 31, 1999

                                       or

[   ] Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
      Exchange Act of 1934

                  For the transition period from _____ to _____

                         Commission file number 0-28088


                               STYLECLICK.COM INC.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

          California                                    95-4145930
-------------------------------------     -------------------------------------
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
   incorporation or organization)

 3861 Sepulveda Blvd., Culver City                        90230
-------------------------------------     -------------------------------------
(Address of principal executive offices)                (Zip Code)


Registrant's telephone number, including area code (310) 751-2100
                                                   ---------------

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

   Title of each class              Name of each exchange on which registered:

      Common Stock                             Nasdaq National Market
-------------------------           ----------------------------------------


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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (sect.  229.405 of this chapter) is not contained herein,  and
will not be  contained,  to the best of  registrant's  knowledge,  in definitive
proxy or information  statements  incorporated  by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.[ ]

The  aggregate  market  value of voting  and  non-voting  common  stock  held by
non-affiliates  of the registrant was  $70,229,579  based on the average bid and
asked  prices of $12.41  per share as quoted on the  NASDAQ  National  Market on
March 27,  2000.  As of March  27,  1999,  there  were  7,722,930  shares of the
Company's common stock outstanding.

<PAGE>

                                     PART II

Item 5. Market for Registrant's Common Stock and Related Stockholder Matters

Trading Prices of Securities

Since  July 19,  1999,  the  Company's  common  stock has  traded on the  Nasdaq
National  Market under the symbol  "IBUY".  From March 1996 until July 19, 1999,
the Company's common stock traded on the Nasdaq National Market under the symbol
"MODA".  The  following  table sets forth the high and low sales  prices for the
Company's common stock for the fiscal years ended December 31, 1998 and 1999, as
reported by Nasdaq:
<TABLE>
<CAPTION>
                                                             Sales Prices
                                                          High         Low
    <S>                                                  <C>          <C>
    Fiscal Year Ended December 31, 1998
    1st Quarter                                          20-1/4         11
    2nd Quarter                                          24-7/8       13-3/4
    3rd Quarter                                          23-5/8       10-7/8
    4th Quarter                                          24-3/4          6
    Fiscal Year Ended December 31, 1999
    1st Quarter                                          21-1/2       11-5/8
    2nd Quarter                                          15-1/8        8-3/8
    3rd Quarter                                          12-1/4        6-3/4
    4th Quarter                                            15          6-1/4

</TABLE>
At December  31,  1999,  the Company had  approximately  3,500  shareholders  of
record.  The Company did not declare or pay dividends on its common stock during
1998 or 1999 and does not intend to pay dividends in the foreseeable future.

Recent Sales of Unregistered Securities

During 1999 the Company sold the following  securities which were not registered
under the Securities Act of 1933, as amended (the "1933 Act"):

(a)  In March  1999,  the Company  issued  warrants to a third party to purchase
     250,000  shares of common  stock at an exercise  price of $16.80 per share.
     Such warrants were issued in consideration of business  promotion  services
     to be  provided  to the  Company  and were  fully  vested  and  immediately
     exercisable  on the grant date,  and expire in March 2004. In October 1999,
     the Company changed the exercise price to $10.86 per share of common stock,
     which was 110% of the then-current market value.

(b)  In April 1999, in  consideration  of a waiver of the future royalties to be
     paid to its project  co-developer,  the Company issued to such co-developer
     (i) 455,218 shares of common stock, (ii) warrants,  expiring in April 2000,
     to purchase  189,674  shares of common stock at an exercise price of $13.18
     per share,  (iii)  warrants,  expiring in July 2000,  to  purchase  189,674
     shares of common  stock at an  exercise  price of $13.18 per share and (iv)
     warrants,  expiring in April 2004,  to  purchase  159,326  shares of common
     stock at an exercise price of $10.98 per share.

                                       1
<PAGE>

(c)  In April 1999, in  consideration  of $7,721,510 the Company received in net
     proceeds  from a private  placement of its  securities  (after paying costs
     associated  with the  offering),  the Company  issued to four  investors an
     aggregate  of (i)  776,827  shares  of the  Company's  common  stock,  (ii)
     warrants,  expiring in April 2000,  to  purchase  323,677  shares of common
     stock at an exercise price of $13.18 per share, (iii) warrants, expiring in
     July 2000, to purchase  323,677 shares of common stock at an exercise price
     of $13.18 per share, and (iv) warrants, expiring in April 2004, to purchase
     271,889 shares of common stock at an exercise price of $13.73 per share. In
     consideration  of services  rendered to the Company by two placement agents
     in connection  with this private  placement,  the Company issued  warrants,
     expiring in April 2004,  to purchase  15,536  shares of common  stock at an
     exercise price of $10.98 per share.

(d)  During 1999, in  consideration  for services  provided to the Company,  the
     Company  issued (i)  warrants to an outside  promotion  agency  expiring in
     December  2003,  to purchase  8,333  shares of common  stock at an exercise
     price of $16.68 per share,  (ii)  warrants,  expiring in January  2004,  to
     purchase  8,333 shares of common  stock at an exercise  price of $20.00 per
     share, (iii) warrants,  expiring in February 2004, to purchase 8,333 shares
     of common stock at an exercise  price of $16.00 per share,  (iv)  warrants,
     expiring in March  2004,  to purchase  8,333  shares of common  stock at an
     exercise  price of $11.56 per share,  and (v)  warrants,  expiring in April
     2004,  to purchase  8,335  shares of common  stock at an exercise  price of
     $11.88 per share.

(e)  In June 1999, in consideration  for services  provided to the Company,  the
     Company issued warrants to an Internet portal company  expiring in December
     2001, to purchase up to 100,000 shares of common stock at an exercise price
     of $12.34 per share.

(f)  In June, July and August 1999, in  consideration  for services  provided to
     the Company, the Company issued warrants to purchase an aggregate of 30,000
     shares of common stock to a financial  advisor for services provided to the
     Company.  The warrants had an exercise price of $13.00 per common share and
     expire in June, July and August 2002, respectively.

(g)  In October 1999, in consideration of services rendered to the Company,  the
     Company granted to three non-employee directors ten-year warrants, expiring
     October  2009,  to purchase a total of 45,000  shares of common stock at an
     exercise price of $7.50 per share.


Exemption  from  the  registration  provisions  of the  1933  Act for all of the
transactions described above is claimed pursuant to Section 4(2) of the 1933 Act
and/or Rule 504 of Regulation D promulgated  thereunder on the grounds that such
transactions  did not  involve  any  public  offering.  The  purchasers  in such
transactions   represented   their  intention  to  acquire  the  securities  for
investment  only and not with a view to the  distribution  thereof.  Appropriate
legends were affixed to the  certificates  evidencing the  securities  issued in
such transactions. All purchasers either received adequate information about the
Company  or had  access to such  information.  The  Company  filed  Registration
Statements  on  Form  S-3  covering  the  resale  of  securities  referenced  in
paragraphs  (b),  (c),  (d),  and (f).  All net  proceeds  from the sale of such
securities will go to the selling shareholder who offered and sold their shares.

                                       2
<PAGE>
<TABLE>
<CAPTION>
Item 6. Selected Financial Data

                                              Years Ended December 31,
                                 -----------------------------------------------
                                   1999      1998      1997      1996      1995
                                 -----------------------------------------------
                                       (In thousands, except per share data)
 <S>                             <C>       <C>       <C>       <C>       <C>
 Net revenues                    $ 6,174   $ 6,681   $ 4,450   $ 3,370   $ 1,905
 Net income (loss)               (15,879)   (9,688)      354       646         8
 Total assets                     15,047    13,050    21,404     7,182     1,864
 Long-term debt                        -         -         -         -     4,545
 Per common share:
 Net income (loss) - Basic        (2.24)     (1.59)     0.07      0.20      0.00
            (loss) - Diluted      (2.24)     (1.59)     0.06      0.20      0.00
 Cash dividends declared              -          -         -         -         -
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

The  following  discussion  should  be read in  conjunction  with the  financial
statements  and the notes thereto  appearing  elsewhere in this Form 10-K.  This
discussion   contains   forward-looking   statements   that  involve  risks  and
uncertainties.  Our actual results may differ  materially from those anticipated
in these forward-looking  statements as a result of certain factors,  including,
but not limited to, those set forth below and elsewhere in this Form 10-K.

General

The  Company  is in  the  business  of  developing,  marketing,  and  supporting
electronic commerce Internet web-sites,  Internet related software  applications
and business and consumer software products based on its proprietary  technology
for  managing  product  information.  The  Company has three  principal  product
groups:  electronic  commerce  Internet  web-sites,  software  including  CD-ROM
products  and  applications  including  computer  aided  design  and  electronic
merchandising products, referred to as business software products.

Since 1998,  the Company has  divested  many of its products in the business and
consumer  software  product groups and has shifted its primary business focus to
the emerging Internet  electronic  commerce market.  The Company is focusing its
technology on building and managing  electronic commerce Internet sites, such as
comparative search and shopping solutions aimed at facilitating  businesses' use
of electronic commerce to reach consumers in the apparel, footwear, accessories,
cosmetics and home furnishing industries.

Revenues  generated from the Company's  electronic  commerce Internet  web-sites
include revenues received from:

o        web-site development and maintenance fees
o        project participation fees for managing product information
o        on-line advertising revenue
o        commissions from sales on websites
o        commissions on sales by affiliates through the Styleclick.com website

                                       3
<PAGE>
Revenues from web development are recognized  based upon the  accomplishment  of
contractual  milestones in a manner that matches revenue with the related costs.
Web-site  development and maintenance fees and on-line  advertising  revenue are
recognized over the terms of the corresponding  contracts.  Commissions fees are
recognized   based  on  a  percentage   of  gross   revenues  from  the  related
transactions. From website sales are recognized upon notification of shipment of
the vendors' products by the Company's  fulfillment warehouse or the participant
vendors.   Commissions  on  sales  by  affiliates  are  recognized   based  upon
notification of the sales information by the Company's vendors,  the independent
Internet traffic tracking companies or the Company's on-line tracking reports.

Revenues  generated from the Company's consumer CD-ROM products include revenues
received in connection  with sales of the Company's  developed  consumer  CD-ROM
products  and  vendor   participation   in  the   Company's   developed   CD-ROM
applications.  Sales of the  products  are  recognized  at the time of shipment.
Revenues  from  CD-ROM   participation   fees  are  recognized  based  upon  the
accomplishment  of contractual  milestones in a manner that matches revenue with
the related cost.

Revenues  generated  from  the  Company's  business  software  products  include
revenues  received  in  connection  with  sales and  licenses  of the  Company's
developed business software products and software  maintenance  revenues.  Sales
and  licenses of the products are  recognized  at the time of shipment.  Revenue
generated from software  maintenance is recognized on a straight-line basis over
the term of the corresponding contract, which is generally twelve months.

Results of Operations

The following  table sets forth selected  items from the Company's  statement of
operations for the years ended 1999, 1998 and 1997 and the percentages that such
items bear to net revenues:
<TABLE>
<CAPTION>
                                             Year Ended December 31,
                          ------------------------------------------------------
                                  1999              1998             1997
                          -----------------  ----------------  -----------------
                                              (in thousands)
<S>                       <C>       <C>      <C>      <C>      <C>      <C>
Net revenues
  Product sales           $  3,387    54.9%  $ 3,477    52.0%  $ 2,379    53.5%
  Service revenues           2,787    45.1     3,204    48.0     2,071    46.5
                          --------  -------  -------  -------  -------  -------
                          $  6,174   100.0   $ 6,681   100.0   $ 4,450   100.0
Cost of sales
  Product sales                124     2.0        81     1.2        87     1.9
  Service revenues             544     8.8         1       -         -       -
                          --------  -------  -------  -------  -------  -------
                               668    10.8        82     1.2        87     1.9
                          --------  -------  -------  -------  -------  -------
Gross profit                 5,506    89.2     6,599    98.8     4,363    98.1
Operating costs and
   expenses:
Selling, general and
   administrative           13,362   216.4     8,291   124.1     3,394    76.3
Research and product
   development               6,054    98.1     3,541    53.0       172     3.9
Merger related costs           405     6.6         -       -         -       -
Amortization of software
   development costs         1,842    29.8     4,890    73.2       774    17.4
                          --------  -------  -------  -------  -------  -------
     Total operating
       costs and expenses   21,663   350.9    16,722   250.3     4,340    97.6
                          --------  -------  -------  -------  -------  -------
Income (loss) from
   operations              (16,157) (261.7)  (10,123) (151.5)       23     0.5
Investment and other
   income, net                 278     4.5       435     6.5       331     7.5
                          --------  -------  -------  -------  -------  -------
  Net income (loss)       $(15,879) (257.2%) $(9,688) (145.0%) $   354     8.0%
                          ========  =======  =======  =======  =======  =======
 </TABLE>
                                        4
<PAGE>

1999 Compared with 1998

Net Revenues

Revenues  in the amount of  $4,810,000,  or 78% of total  revenues  for the year
ended  December 31, 1999 were earned from three sources which cannot be expected
to reoccur,  including  product  development  fees ($400,000,  or 8%),  web-site
development  fees  ($910,000,  or 19%)  and the sale of the  Company's  business
software product line ($3,500,000,  or 57% of revenues).  Net revenues decreased
$507,000, or 8%, to $6,174,000 in 1999 from $6,681,000 in 1998. The decrease was
primarily  due to a  decrease  of  $4,368,000  in  revenues  from the  Company's
consumer  CD-ROM  products,  a decrease  of $54,000 in  revenues  from  training
services and a decrease of $128,000 in maintenance  fees.  These  decreases were
offset by an increase of $1,887,000 in sales of the Company's  business software
products,  an increase of  $1,623,000 in revenues  generated  from the Company's
electronic  commerce Internet  web-sites and an increase of $533,000 in revenues
from consulting services.

Product sales  decreased to  $3,387,000 in 1999 from  $3,477,000 in 1998, or 3%.
The decrease in product  sales is primarily  due to a decrease of  $1,980,000 in
CD-ROM  consumer  product sales,  a decrease of $128,000 in maintenance  product
sales and an increase of $1,887,000 in business product sales.  Service revenues
decreased to $2,787,000 in 1999 from $3,204,000 in 1998, or 13%. The decrease in
service revenues is primarily due to a decrease of $2,388,000 in CD-ROM consumer
service sales,  offset by increases in electronic  commerce  service revenues of
$1,623,000 and consulting  and training  services of $479,000.  The decreases in
product sales and service revenues are more fully described below.

Service  revenues  generated  from the Company's  electronic  commerce  Internet
web-sites  were  $1,623,000 in 1999 as compared to no such revenue  generated in
1998. The $1,623,000 in revenues primarily  consisted of revenues generated from
web-site  development and maintenance fees, project  participation fees, on-line
advertising revenue, digital content generation fees, transactional revenues and
product referral fees.

Revenues  generated from consumer CD-ROM  products  decreased to $0 in 1999 from
$1,980,000 in 1998 due to the one-time sale of The Company's 3-D Home  Interiors
product to its publisher in 1998.

Service revenues generated from consumer CD-ROM products  decreased  $2,388,000,
or 80%, to $607,000 in 1999 from $2,995,000 in 1998, primarily due to a decrease
of $1,200,000 in connection with The Company's  developing  CD-ROM  applications
and  $793,000 in lower CD-ROM  participation  revenue in  connection  with those
CD-ROM   applications.   The  decrease  in  developing  CD-ROM  application  and
participation  revenues  resulted  from The  Company's  strategy  to  shift  its
marketing  focus to Internet  electronic  commerce  during  1999.  In  addition,
$395,000 of service  revenue  generated  in  connection  with  consumer  product
developing services provided to one of The Company's major customers in 1998 was
not repeated in 1999.

Sales of  business  software  products,  which  were  primarily  product  sales,
increased  $1,887,000,  or 135%, to  $3,285,000 in 1999 from  $1,398,000 in 1998
primarily  due to the sale of two of the  Company's  business  software  product
lines and the license of certain  related  technologies  for an up-front  fee of
$3,000,000 in 1999. In March 1999,  the Company  entered into an agreement  with
one of its major competitors.  Under the agreement,  the Company sold two of its

                                       5
<PAGE>

business  software  product  lines and licensed its  cataloging  software to the
buyer  for an  up-front  fee of  $3,000,000,  additional  support  fees of up to
$1,000,000,  and a contingent  payment of up to  $1,000,000  depending on future
sales  over the next 24 months  generated  from the  product  lines  sold to the
buyer.  Except for support services,  the Company has no further  obligations to
this buyer,  including further  development of the products sold or the software
licensed,  as all  development has been completed on such products and software.
The sale of these  product  lines was part of the overall shift in the Company's
primary  business focus from the business  software  product  marketplace to the
emerging  consumer  Internet  electronic  commerce market. As such, the revenues
recognized   from  the  sale  did  not  arise  from,  and  are  not  necessarily
representative of, the Company's ongoing business.  As a result of the sale, the
Company  generated  less  revenue  from its  business  software  products in the
remaining period of 1999 as compared to the comparable period in 1998.

Revenues from consulting services were $538,000 in 1999 and $5,000 in 1998.

Revenues from training services  decreased  $54,000,  or 73%, to $20,000 in 1999
from $74,000 in 1998, and maintenance  fees, which were primarily product sales,
decreased $128,000, or 56%, to $101,000 in 1999 from $229,000 in 1998, primarily
due to the Company's  overall shift in its primary  business focus away from the
business  software  products,  as discussed above,  from which most training and
maintenance fees were generated.

Cost of Sales

Costs of sales are comprised primarily of product fulfillment costs, credit card
processing fees, direct shipping material and product royalties  associated with
the respective  revenues.  Cost of sales increased  $586,000 to $668,000 in 1999
from  $82,000 in 1998  primarily  due to $117,000  in cost of sales  incurred in
connection  with the  $3,000,000  sale and  license of certain of the  Company's
business  software  products in 1999 and a $475,000  non-cash  charge to royalty
expense.  The Company issued stock and warrants to Intel, the Company's  project
co-developer,  valued at  $5,539,000  in exchange for future  royalties  through
December  2007.  Such  amount  was  recorded  as prepaid  royalties  and will be
continuously  amortized at $158,000 per quarter  until  December  2007.  No such
costs of sales were incurred in 1998.

Selling, General and Administrative Expenses

Selling,  general and administrative  expenses increased $5,071,000,  or 61%, to
$13,362,000  in 1999  from  $8,291,000  in 1998  due to the  following  factors.
Personnel  costs  increased  $1,627,000,  or 58%,  to  $4,418,000  in 1999  from
$2,791,000 in 1998. The increase in personnel costs resulted  primarily from the
hiring of additional  personnel in late 1998 to support the Company's  increased
operating  activities,  increasing  the total number of employees from 121 as of
December 31, 1998 to 157 as of December  31, 1999,  and $200,000 of bonuses paid
to the  Company's  executives  in  1999.  Additionally,  certain  related  costs
including travel,  marketing,  telephone,  office supplies  expenses,  taxes and
licenses,  repair and maintenance and depreciation expense increased $3,571,000,
or 102%,  to  $7,076,000  in 1999 from  $3,505,000  in 1998.  Of that  increase,
$3,522,000 was related to an increase in the Company's  marketing  activities in
1999 to support its new electronic commerce products. Additionally, professional
services including accounting, legal and consulting services increased $693,000,
or  75%,  to  $1,612,000  in  1999  from  $919,000  in  1998.  The  increase  in
professional services was primarily due to the Company's increased  requirements
for these  services  in 1999  compared  to 1998,  resulting  from the  Company's

                                       6
<PAGE>

increased  operating  activities in the emerging  electronic commerce market and
support of its new electronic  commerce  products and dispositions of certain of
the  Company's  business  software  product  lines.  Finally,  bad debt  expense
decreased  $857,000,  or 93%,  to $60,000 in 1999 from  $917,000  in 1998.  Such
decrease was primarily  attributable  to the  additional bad debt reserve in the
amount of $865,000 recorded by the Company during 1998 upon the Company's review
of certain specific accounts. No such additional reserve was recorded in 1999.

Research and Product Development

The Company incurred $7,177,000 of research and product development expenditures
in 1999, of which  $1,123,000  was  capitalized  in  connection  with two of the
Company's  Internet shopping  websites and $6,054,000 was expensed,  compared to
$6,592,000 in 1998, of which  $3,051,000  was  capitalized  and  $3,541,000  was
expensed. The 9% increase in research and product development  expenditures from
1998  to 1999  was  primarily  due to the  hiring  of  additional  personnel  in
connection with the further  development of the Company's  Internet  application
projects.  In  1999,  in  accordance  with SOP  98-1,  The  Company  capitalized
$1,123,000  in  software  development  costs  including  $1,041,000  incurred in
developing two of The Company's  Internet shopping websites and $82,000 incurred
on two projects  including  certain  shopping  features  and an online  tracking
program. In 1998, in accordance with FAS 86, The Company capitalized  $3,051,000
in software  costs  including  $1,985,000  incurred in  developing  two consumer
CD-ROM projects, $557,000 incurred in developing five business software products
and $509,000 incurred in developing an The Company Internet shopping website.

Merger Related Costs

The Company incurred $405,000 of expense in connection with its merger plan with
Internet  Shopping  Network,  LLC in the fourth quarter of 1999. No such expense
was incurred in 1998.  The $405,000  expense was primarily  related to legal and
accounting   services.   Costs  related  to  merger  are  expected  to  increase
significantly in the first and second quarter of 2000.

Amortization of Software Development Costs

The amortization of software development costs decreased $3,048,000,  or 62%, to
$1,842,000  in 1999  from  $4,890,000  in 1998  due  primarily  to a  $3,443,000
write-off of capitalized  software cost in 1998 as compared to 1999.  $1,038,000
of the total write-off was related to the exclusive  license of the Company's 3D
Home Interiors product to its Company's publisher.  The remaining $2,405,000 was
primarily  attributable to the software capitalized prior to 1998 in relation to
certain business  software  products which the Company is exiting as a result of
its new business strategy to target the emerging  electronic commerce market. In
1999, the Company  wrote-off a total of $250,000 of  capitalized  software cost.
The  write-off  was  related to the product  lines sold to one of the  Company's
competitors in the first quarter of 1999.

Investment and Other Income

Investment and other income decreased $157,000, or 36%, to $278,000 in 1999 from
$435,000 in 1998 due to the  decrease in income  generated  from a money  market
account in which the Company's funds are maintained.  The decrease resulted from
a lower  average cash balance  maintained in this account in 1999 as compared to
1998.
                                       7
<PAGE>


Income Taxes

The Company  recorded no provision  for income taxes in 1999 and 1998 due to net
operating losses in both years.

Net Loss

Net loss increased $6,191,000, or 64%, to $15,879,000 in 1999 from $9,688,000 in
1998 primarily due to a $507,000 decrease in net revenue, a $586,000 increase in
costs of sales,  a  $5,071,000  increase in selling  general and  administrative
expenses, a $2,513,000 increase in research and development, a $405,000 increase
in merger  related  costs,  a $3,048,000  decrease in  amortization  of software
development costs and a $157,000 decrease in investment income.

1998 Compared with 1997

Net Revenues

Net revenues increased $2,231,000, or 50%, to $6,681,000 in 1998 from $4,450,000
in 1997.  The increase was primarily due to an increase in the revenues from the
Company's  consumer  CD-ROM  products,  an  increase  of $5,000 in revenue  from
training  services,  and an  increase  of $71,000  in  maintenance  fees.  These
increases  were  offset by a  decrease  of  $887,000  in sales of the  Company's
business  software  products  and  a  decrease  of  $131,000  in  revenues  from
consulting services.

Product sales  increased to $3,477,000 in 1998 from  $2,379,000 in 1997, or 46%.
The increase in product  sales is primarily  due to an increase of $1,980,000 in
CD-ROM consumer product sales, a decrease of $887,000 in business product sales,
and an  increase  of $71,000 in  maintenance  product  sales.  Service  revenues
increased to $3,204,000 in 1998 from $2,071,000 in 1997, or 55%. The increase in
service  revenues  is  primarily  due to an  increase  of  $1,193,000  in CD-ROM
consumer  service  sales,  offset by various minor  decreases in consulting  and
training  services  of  $126,000.  The  increases  in product  sales and service
revenues are more fully described below.

Revenues generated from consumer CD-ROM products increased to $1,980,000 in 1998
from $0 in 1997 due to the one-time  sale of The  Company's  3-D Home  Interiors
product to its publisher in 1998.

Service revenue generated from consumer CD-ROM products increased  $1,193,000 or
66%, to $2,995,000 in 1998 from  $1,802,000 in 1997.  The increase was primarily
due to  $1,600,000  of  revenue  generated  in  connection  with  the  Company's
developing two CD-ROM applications,  $395,000 of revenue generated in connection
with consumer product developing services provided to one of the Company's major
customers  and  $1,000,000  CD-ROM  participation  revenue  generated  from  the
Company's consumer CD-ROM  applications in 1998. No such revenues were generated
in 1997.  The increase was offset by a total of $1,802,000  in service  revenues
generated in 1997 which were not repeated in 1998,  including a one-time payment
of  $1,500,000  in  connection   with  the  Company's   fulfillment  of  certain
obligations under an agreement with Intel in connection with the  co-development
of consumer software.

Sales of  business  software  products,  which  were  primarily  product  sales,
decreased  $887,000,  or 39%,  to  $1,398,000  in 1998 from  $2,285,000  in 1997
primarily due to $400,000 in the foreign sales generated by two of the Company's
major  customers in Europe in 1997,  which sales were not repeated in 1998.  The
remaining  decrease resulted from the Company's  strategy to shift its marketing
focus to Internet electronic commerce.

                                       8
<PAGE>

Cost of Sales

Cost of sales  associated with the Company's  CD-ROM consumer  products does not
have a major impact on the total cost of sales since an insignificant  amount of
cost of sales was incurred in connection  with the CD-ROM  consumer  products in
1998 and no such cost of sales was incurred in 1997.

Selling, General and Administrative Expenses

Selling,  general and administrative expenses increased $4,897,000,  or 144%, to
$8,291,000  in  1998  from   $3,394,000  in  1997.   Personnel  costs  increased
$1,218,000,  or 78%, to $2,791,000 in 1998 from $1,573,000 in 1997. The increase
in personnel costs resulted from the hiring of additional personnel in late 1997
and 1998 to support the Company's increased operating activities, increasing the
total number of employees  from 86 as of December 31, 1997 to 121 as of December
31, 1998.  Additionally,  certain  related costs  including  travel,  marketing,
telephone,  office supplies expenses, taxes and licenses, repair and maintenance
and depreciation  expense increased  $2,253,000,  or 180%, to $3,505,000 in 1998
from  $1,252,000  in  1997.  $1,420,000  of such  increase  was  related  to the
Company's  increasing marketing activities in 1998 to support its new electronic
commerce products.  Also, professional services including accounting,  legal and
consulting  services  increased  $477,000,  or 108%,  to  $919,000  in 1998 from
$442,000 in 1997. The increase in professional services was primarily due to the
Company's  increased  requirements  for these  services in 1998 compared to 1997
resulting from the Company's increased operating  activities.  Finally, bad debt
expense increased $865,000,  or 1,663%, to $917,000 in 1998 from $52,000 in 1997
due to the  Company's  decision  in 1998 to  increase  its bad debt  reserve  by
$865,000 due to the Company's  increasing sales volume, and based on a review of
specific accounts.

Research and Product Development

The Company  incurred  $6,592,000 of research and product  development  costs in
1998, as compared to $3,000,000 in 1997. In 1998,  $3,051,000 of such costs were
capitalized as software  development  costs,  while in 1997,  $2,828,000 of such
costs were capitalized as software  development costs. The remaining  $3,541,000
of research and product  development  costs in 1998 were  expensed,  compared to
$172,000  in  1997.  The 122%  increase  in  research  and  product  development
expenditure  from 1997 to 1998 was  primarily  due to the  hiring of  additional
personnel  to perform  software  programming  services  in  connection  with the
further  development of the Company's business  software,  consumer software and
Internet products.  A lower percentage of research and development  expenditures
were  capitalized  in 1998 as compared to 1997 due  primarily  to the  Company's
completion of two of its major  projects at the beginning of 1998. A significant
portion of the research and development  product expenses  incurred prior to the
completion of those two major projects was  capitalized as software  development
costs. In 1998, in accordance with FAS 86, the Company capitalized $3,051,000 in
software costs including  $1,985,000  incurred in developing two consumer CD-ROM
projects,  $557,000  incurred in developing five business  software products and
$509,000 incurred in developing an the Company's  Internet shopping website.  In
1997, in accordance with FAS 86, the Company capitalized  $2,828,000 in software
costs  including  $2,084,000  incurred  in  developing  nine  business  software
products and $744,000 incurred in developing two consumer CD-ROM projects.

                                       9
<PAGE>
Amortization of Software Development Costs

The amortization of software development costs increased $4,116,000, or 532%, to
$4,890,000  in 1998 from  $774,000 in 1997  partially  because the Company began
marketing and amortizing  development costs associated with several new versions
of software  products in late 1997 and in 1998. In addition,  the Company took a
one-time  charge  to  write  off a  total  of  $3,443,000  of its  research  and
development  cost in 1998. Of the total write-off  $1,038,000 was related to the
exclusive  license of the Company's 3D Home Interiors  product to its publisher.
The remaining  $2,405,000  write-off was primarily  attributable to the software
capitalized  prior to 1998 in  relation  to  certain  products  in the  business
software  market  which the  Company is exiting as a result of its new  business
strategy to target the emerging electronic commerce market.

Investment and Other Income

Investment and other income increased $104,000, or 31%, to $435,000 in 1998 from
$331,000 in 1997. This increase is due to the increase in income  generated from
a money  market  account in which the  proceeds  received  in July 1997 upon the
exercise by warrant  holders of the Company's  public  warrants  after notice of
redemption was given in June 1997, along with other amounts, are maintained.

Income Taxes

The Company  recorded no provision  for income taxes in 1998 and 1997 due to net
operating losses in 1998 and the utilization of net operating loss carryforwards
in 1997.

Net Income (Loss)

Net income (loss)  decreased  $10,042,000  to  $9,688,000  net loss in 1998 from
$354,000  net  income in 1997  primarily  due to a  $2,231,000  increase  in net
revenue, a $4,897,000 increase in selling general and administrative expenses, a
$3,369,000  increase in  research  and  development,  a  $4,116,000  increase in
amortization of software development costs and a $104,000 increase in investment
income.

                                       10
<PAGE>

Liquidity and Capital Resources

The Company's ratio of current assets to current liabilities decreased to 2.6 on
December 31, 1999 from 10.12 at December 31,  1998.  The decrease was  primarily
due to a 32%  decrease  in  the  Company's  current  assets  balance  and a 167%
increase in its current  liabilities  balance from December 31, 1998 to December
31, 1999.  The 32% decrease in current  assets  balance was  primarily  due to a
$4,947,608  decrease in cash.  The decease was offset by a $157,104  increase in
accounts receivable, a $1,396,080 increase in prepaid expenses and other current
assets,  a $632,988  increase in deferred  royalties and a $467,496  increase in
deferred advertising and promotion. The 167% increase in current liabilities was
primarily due to a $1,275,530 increase in accounts payable and accrued expenses.

The  Company's  cash balance  decreased  $4,947,608,  or 78%, to  $1,395,991  at
December  31, 1999 from  $6,343,599  at December  31,  1998  primarily  due to a
decrease of $13,492,734 resulting from cash used by the Company in its operating
activities and a decrease of $894,820  resulting from cash used for the purchase
of fixed assets.  Such  decreases were offset by an increase of $422,750 in cash
received  by the  Company in  connection  with stock  options  exercised  by the
Company's  employees in 1999,  $6,000 received by the Company in connection with
warrants exercised by its IPO principal underwriter,  $1,250,000 received by the
Company in connection with warrants exercised by one of its outside  consultants
and net proceeds of $7,761,196  received by the Company in  connection  with the
issuance of 776,827 shares of its common stock in April 1999.

The  Company's  accounts  receivable  balance  increased  $157,104,  or 18%,  to
$1,042,091  at December  31,  1999 from  $884,987 at  December  31,  1998.  This
increase  was  primarily  due to a $450,000  receivable  balance at December 31,
1999,  which was related to the revenue  generated  in late 1999 from one of the
Company's major customers.  The increase was offset by a decrease resulting from
the  collection  during  1999  from  two of the  Company's  major  customers  of
approximately  $259,000 in accounts  receivable  from such customers at December
31, 1998.

The  Company's  prepaid  expenses and other  current  assets  balance  increased
$1,396,080 to $1,793,181 at December 31, 1999 from $397,101 at December 31, 1998
primarily due to a $3,414,286  prepayment  recorded in 1999 in connection with a
two-year  electronic  commerce  marketing  agreement entered into by the Company
with an Internet portal company as a prepayment of future marketing expense.  Of
this amount, $1,925,000 was expensed in 1999.

The Company had  $5,063,930 in deferred  royalties at December 31, 1999 compared
to none at December 31, 1998. In April 1999, the Company recorded  $5,538,674 in
deferred  royalties in  connection  with the  issuance of 455,218  shares of the
Company's common stock and warrants to purchase a total of 538,674 shares of the
Company's  common  stock to Intel,  its project  co-developer.  Of this  amount,
$474,744 was expensed in 1999.

The Company had  $1,012,917 in deferred  advertising  and  promotion  expense at
December 31, 1999  compared to none at December 31, 1998.  In 1999,  the Company
recorded  $1,402,500 in deferred  advertising and promotion  expenses related to
the issuance of warrants to purchase a total of 250,000  shares of the Company's
common stock in consideration of business  promotion  services to be provided to
the Company. Of this amount, $389,583 was expensed in 1999.

                                       11
<PAGE>

The Company's accounts payable and accrued expenses balance increased $1,275,530
to $1,778,728 at December 31, 1999 from $503,198 at December 31, 1998  primarily
due to a $176,554  increase in accrued legal service fees from December 31, 1998
to December 31, 1999 and a $245,264 increase in accrued bonuses primarily due to
$200,000 in bonuses accrued for the Company's executive officers at December 31,
1999. Finally,  the total balance from the year-end  outstanding bills increased
$730,495  from  December  31,  1998  to  December  31,  1999  primarily  due  to
advertising  bills in a total amount of $588,223  recorded in late 1999 and paid
subsequent  to December  31, 1999.  No such bills were  recorded at December 31,
1998.

From 1997 to 1999 the Company spent between  $616,000 and  $1,558,000 on capital
expenditure.  Should the merger not be completed,  the Company  expects to spend
approximately $1 million on capital expenditures in 2000. However,  there are no
material commitments for these expenditures at this time.

The Company's total shareholders'  equity balance increased $761,779,  or 6%, to
$13,071,470 at December 31, 1999 from $12,309,691 at December 31, 1998 primarily
due to  $7,761,196  in net  proceeds  received  from the  issuance of a total of
776,827  shares of the Company's  common stock to four of its investors in April
1999,  $422,750  in proceeds  received  from the  exercise  of stock  options to
purchase a total of 44,500 shares of the Company's  common stock by 18 employees
during  1999,  $6,000 in  proceeds  received  from the  exercise  of warrants to
purchase a total of 1,000 shares of the Company's  common stock by its principal
underwriter  of its  initial  public  offering  and  $1,250,000  received by the
Company  in  connection  with  warrants  exercised  by  an  outside  consultant.
Additionally,  an increase of $5,538,674 resulted from the Company's issuance to
Intel in April 1999 of 455,218  shares of the its common  stock and  warrants to
purchase a total of 538,674 shares of the Company's  common stock.  Finally,  an
increase  of  $1,662,500  resulted  from the  Company's  issuance of warrants to
purchase  466,667  shares of common stock in 1999 in  consideration  of business
promotion and consulting services provided,  or to be provided,  to the Company.
The increase was offset by a net operating  loss in the amount of $15,879,341 in
1999.

As of December 31, 1999,  employee  stock options to purchase a total of 946,286
shares with a weighted  average  exercise price of $11.11 per share and warrants
to purchase a total of  2,225,969  shares of the  Company's  common stock with a
weighted average exercise price of $13 per share were exercisable. Approximately
$40  million  will be received if all of such stock  options  and  warrants  are
exercised  in the future.  However,  the  exercise  of these  stock  options and
warrants is subject to various conditions,  including the Company's stock market
price,  the  option/warrant   holders'   willingness  to  exercise  and  certain
restrictive trading regulations.

In January  2000,  the Company  and USA  Network,  Inc.  ("USAi")  announced  an
agreement  to form a new company by merging the  Company and  Internet  Shopping
Network,  an indirect wholly owned  subsidiary of USAi. The new company will own
and operate  the  combined  properties  of the  Company  and  Internet  Shopping
Network. Under the terms of the agreement,  USAi will also invest $40 million in
cash,  contribute  $10 million in dedicated  media and will receive  warrants to
purchase  additional  shares of the new  company.  Upon both the  closing of the
transaction and on a fully diluted basis, USAi will own approximately 75% of the
new company and the Company's  shareholders will own  approximately  25%. In the
interim,   USAi  has  extended  a  $10  million  bridge  loan  to  the  Company.
Consummation of the merger is subject to various conditions,  including approval
by the Company's shareholders and the receipt of required regulatory approvals.

                                       12
<PAGE>

The Company  anticipates  continuing  to use its capital  primarily  to fund the
activities related to the design,  development,  marketing, sales and support of
the Company's electronic commerce websites.  Together with its existing capital,
the $10  million  credit  term  provided  by USAi  and  anticipated  funds  from
operations,  the Company believes that its capital  resources will be sufficient
to  provide  its  anticipated   cash  needs  for  working  capital  and  capital
expenditures for at least the next 12 months.  The Company expects the merger to
be  completed  in the  second or third  quarter  of 2000.  If the  merger is not
completed and cash  generated  from  operations is  insufficient  to satisfy the
Company's capital  requirements,  the Company may have to sell additional equity
or  debt  securities  or  obtain  credit  facilities,  assuming  it can do so on
acceptable terms.

Effect on the Company if  Contemplated  Transactions  Are Not Approved or Do Not
Occur

If the Company  shareholders  do not approve the proposed  merger of the Company
with a  subsidiary  of USAi and the Company  enters into a business  combination
transaction  with a third  party  or a third  party  acquire  15% or more of the
assets or outstanding securities of the Company, then:

o    USAi may  exercise  its option to purchase  19.9% of the  Company's  common
     stock at $17.50 per share;

o    The Company must repay any  outstanding  portion of the $10 million loan to
     USAi within 45 days; and

o    The Company must pay ISN a termination fee of $5.5 million.

The Company's  continuation  as a going concern is dependent upon the success of
its merger  with the  Internet  Shopping  Network or the  raising of  additional
capital either through sale of equity or through sale of convertible securities,
both of which would  dilute  existing  stockholders  ownership  of the  Company.
Additionally,  the  Company  may be forced to cut back on  operations  including
laying off employees,  decreasing  marketing  programs and  eliminating  certain
development activities.

Item 7A. Quantitative and Qualitative Disclosure of Market Risk

     None.

Item 8. Financial Statements and Supplementary Data

     See  index to financial statements on page 23.

                                       13
<PAGE>






                          Audited Financial Statements
                               Styleclick.com Inc.

                  Years ended December 31, 1999, 1998 and 1997
                       with Report of Independent Auditors


                                       14
<PAGE>


                               Styleclick.com Inc.

                          Audited Financial Statements


                  Years ended December 31, 1999, 1998 and 1997




                                    Contents

Report of Independent Auditors.....................................16

Audited Financial Statements

Balance Sheets.....................................................18
Statements of Operations...........................................19
Statements of Stockholders' Equity.................................20
Statements of Cash Flows...........................................21
Notes to Financial Statements......................................23




                                       15
<PAGE>


                         Report of Independent Auditors


Board of Directors and Stockholders
Styleclick.com Inc.

     We have audited the accompanying  balance sheet of Styleclick.com Inc. (the
"Company")  as of December 31, 1999 and the related  statements  of  operations,
stockholders'  equity,  and cash  flows of the  Company  for the year then ended
December 31, 1999.  Our audits also  included the financial  statement  schedule
listed in the Index at Item 14(d).  These financial  statements and schedule are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audit.

     We conducted our audit in  accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audit provides a reasonable  basis
for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the  financial  position of  Styleclick.com  Inc. at
December 31, 1999,  and the results of its operations and its cash flows for the
year ended December 31, 1999, in conformity with accounting principles generally
accepted in the United  States.  Also,  in our  opinion,  the related  financial
statement  schedule,   when  considered  in  relation  to  the  basic  financial
statements  taken as a whole,  presents  fairly  in all  material  respects  the
information set forth therein.


                                               /s/ERNST & YOUNG LLP
                                               -----------------------------
                                                  Ernst & Young LLP


Los Angeles, California
February 21, 2000

                                       16
<PAGE>


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
Styleclick.com Inc. (formerly ModaCAD, Inc.)

We have audited the accompanying  balance sheet of Styleclick.com Inc. (formerly
ModaCAD,  Inc.)  as  of  December  31,  1998,  and  the  related  statements  of
operations, stockholders' equity and cash flows for each of the two years in the
period ended December 31, 1998. Our audits also included the financial statement
schedule listed in the Index at Item 14(d).  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Styleclick.com  Inc. (formerly
ModaCAD,  Inc.) as of December 31, 1998,  and the results of its  operations and
its cash flows for each of the two years in the period  ended  December 31, 1998
in  conformity  with  generally  accepted  accounting  principles.  Also, in our
opinion,  the related  financial  schedule,  when  considered in relation to the
basic  financial  statements  taken as a whole,  presents fairly in all material
respects the information set forth therein.




/s/ SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
    ----------------------------------------
    Singer Lewak Greenbaum & Goldstein LLP


Los Angeles, California
March 16, 1999 (except for Note 11,
As to which the date is May 19, 1999)

                                       17
<PAGE>
                               Styleclick.com Inc.

                                 Balance Sheets

<TABLE>
<CAPTION>
                                                            December 31,
                                                        1999           1998
                                                   -----------------------------
<S>                                                <C>              <C>
Assets
Current assets:
   Cash and cash equivalents                       $ 1,395,991      $ 6,343,599
   Accounts receivable, net of allowance
     for doubtful accounts of $242,229
     and $132,500 at December 31, 1999
     and 1998, respectively
                                                       799,862          752,487
   Deferred royalties                                  632,988                -
   Deferred advertising and promotion                  467,496                -
   Prepaid expenses and other current assets         1,793,181          397,101
                                                   -----------------------------
Total current assets                                 5,089,518        7,493,187

Capitalized computer software development
   costs, net of accumulated amortization
   of $7,880,904 and $6,039,105 at
   December 31, 1999 and 1998, respectively          2,294,914        3,014,043
Fixed assets, net of accumulated depreciation
   of $1,823,850 and $1,069,832 at
   December 31, 1999 and 1998, respectively          2,600,458        2,459,656
Deferred royalties, non-current                      4,430,942                -
Deferred advertising and promotion, non-current        545,421                -
Other assets                                            85,663           83,055
                                                   -----------------------------
 Total assets                                      $15,046,916      $13,049,941
                                                   =============================

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable and accrued expenses           $ 1,778,728      $   503,198
   Deferred income                                     196,718          237,052
                                                   -----------------------------
Total current liabilities                            1,975,446          740,250

Commitments (Note 3)

Stockholders' equity:
   Common stock; No par value; 15,000,000 shares
      authorized, 7,673,515 shares and 6,143,374
      shares issued and outstanding at December 31,
      1999 and 1998, respectively                   43,216,747       26,575,627
   Accumulated deficit                             (30,145,277)     (14,265,936)
                                                   -----------------------------
Total stockholders' equity                          13,071,470       12,309,691
                                                   -----------------------------
Total liabilities and stockholders' equity         $15,046,916      $13,049,941
                                                   =============================

</TABLE>
See accompanying notes to financial statements.
                                       18
<PAGE>
                               Styleclick.com Inc.

                            Statements of Operations

<TABLE>
<CAPTION>
                                                Years ended December 31,
                                           1999          1998           1997
                                       -----------------------------------------
<S>                                    <C>           <C>           <C>
Net revenues
    Product sales                      $  3,386,521  $  3,477,208  $  2,378,726
    Service revenues                      2,787,403     3,204,072     2,071,131
                                       -----------------------------------------
                                          6,173,924     6,681,280     4,449,857
Cost of sales
    Product sales                           124,187        81,161        87,470
    Service revenues                        543,514           974             -
                                       -----------------------------------------
                                            667,701        82,135        87,470
                                       -----------------------------------------
Gross profit                              5,506,223     6,599,145     4,362,387

Operating costs and expenses:
Selling, general and administrative      13,361,980     8,290,979     3,393,765
Research and product development          6,054,105     3,541,300       171,769
Merger related costs                        405,333             -             -
Amortization of software development
   costs                                  1,841,798     4,889,986       774,135
                                       -----------------------------------------
Total operating costs and expenses       21,663,216    16,722,265     4,339,669
                                       -----------------------------------------

Operating (loss) profit                 (16,156,993)  (10,123,120)       22,718
                                       -----------------------------------------

Other income (expense):
   Loss in equity investment                      -       (55,324)            -
   Other income                                   -         2,067        11,190
   Investment income                        277,652       488,738       320,367
                                       -----------------------------------------
Total other income (expense)                277,652       435,481       331,557
                                       -----------------------------------------
Net (loss) income                      $(15,879,341) $ (9,687,639) $    354,275
                                       =========================================

Basic (loss) income per share          $      (2.24) $      (1.59) $       0.07
                                       =========================================

Diluted (loss) income per share        $      (2.24) $      (1.59) $       0.06
                                       =========================================

Weighted average shares outstanding       7,092,374     6,088,247     4,800,918
                                       =========================================

</TABLE>
See accompanying notes to financial statements.

                                      19
<PAGE>
                               Styleclick.com Inc.

                       Statements of Stockholders' Equity

<TABLE>
<CAPTION>
                                   Common Stock       Accumulated
                            -------------------------
                               Shares       Amount       Deficit      Total
                            ------------ ------------ ------------ ------------
<S>                         <C>         <C>          <C>           <C>
Balance at January 1, 1997    3,865,790 $ 11,593,905 $ (4,932,572) $  6,661,333
   Issuance of common stock
     for stock options
     exercised                   29,000      149,376            -       149,376
   Warrants exercised         2,128,184   13,369,126            -    13,369,126
   Warrant redemption cost            -     (167,055)           -      (167,055)
   Issuance of  warrants
     for services                     -      572,000            -       572,000
   Net income                         -            -      354,275       354,275
                             ------------ ------------ ------------ ------------
Balance at December 31, 1997  6,022,974   25,517,352   (4,578,297)   20,939,055
   Issuance of common stock
     for stock options
     exercised                   94,000      837,875            -       837,875
   Warrants exercised            26,400      158,400            -       158,400
   Issuance of  warrants
     for services                     -       62,000            -        62,000
   Net loss                           -            -   (9,687,639)   (9,687,639)
                             ------------ ------------ ------------ ------------
Balance at December 31, 1998  6,143,374   26,575,627  (14,265,936)   12,309,691
   Issuance of  common stock    779,423    7,761,196            -     7,761,196
   Issuance of common stock
     for stock options
     exercised                   44,500      422,750            -       422,750
   Issuance of common stock
     for services
                                455,218    5,000,000            -     5,000,000
   Warrants exercised           251,000    1,256,000            -     1,256,000
   Issuance of  warrants
     for services                     -    2,201,174            -     2,201,174
   Net loss                           -            -  (15,879,341)  (15,879,341)
                             ------------ ------------ ------------ ------------
Balance at December 31, 1999  7,673,515  $43,216,747  $(30,145,277) $13,071,470
                             ============ ============ ============ ============
</TABLE>

See accompanying notes to financial statements.

                                       20
<PAGE>
                               Styleclick.com Inc.

                            Statements of Cash Flows
<TABLE>
<CAPTION>
                                                Years ended December 31,
                                           1999          1998           1997
                                       -----------------------------------------
<S>                                    <C>           <C>            <C>
Operating activities
Net (loss) income                      $(15,879,341) $ (9,687,639)  $   354,275
Adjustments to reconcile net (loss)
   income to net cash used in
   operating activities
     Depreciation                           754,018       292,671        65,665
     Amortization of capitalized
        software development costs        1,841,797     4,889,986       774,135
     Capitalized computer software
        development costs                (1,122,668)   (2,895,512)   (2,682,956)
     Amortization of deferred costs
        for services rendered               974,327        62,000        12,000
     Fixed assets acquired in exchange
        for sales                                 -      (275,000)            -
     Loss in equity investment                    -        55,324             -
     Changes in operating assets
        and liabilities:
       Accounts receivable, net             (47,375)    1,408,665      (818,299)
       Prepaid expenses and other
          current assets                 (1,246,080)      350,675       (34,343)
       Other assets                          (2,608)        8,593       (69,208)
       Accounts payable and
          accrued expenses                1,275,530       142,477       (10,022)
       Deferred income                      (40,334)      132,772        29,501
                                       -----------------------------------------
Net cash used in operating activities   (13,492,734)   (5,514,988)   (2,379,252)

Investing activities
Purchase of fixed assets                   (894,820)   (1,557,680)     (616,166)
                                       -----------------------------------------
Net cash used in investment activities     (894,820)   (1,557,680)     (616,166)

Financing activities
Payments on officers/stockholders
   note payable                                   -             -       (75,000)
Stock options exercised                     422,750       837,875       149,376
Warrants exercised                        1,256,000       158,400    13,369,126
Issuance of common stock                  7,761,196             -      (167,055)
                                       -----------------------------------------
Net cash provided by
   financing activities                   9,439,946       996,275    13,276,447
Net (decrease) increase in
   cash and cash equivalents             (4,947,608)   (6,076,393)   10,281,029
                                       -----------------------------------------
Cash and cash equivalents at
   beginning of year                      6,343,599    12,419,992     2,138,963
                                       -----------------------------------------
Cash and cash equivalents at
   end of year                         $  1,395,991  $  6,343,599  $ 12,419,992
                                       =========================================
</TABLE>
See accompanying notes to financial statements.

                                       21
<PAGE>


                               Styleclick.com Inc.

                            Statements of Cash Flows



Supplemental disclosure of noncash transactions

During 1999, the Company recorded  deferred  royalties and deferred  advertising
and promotion  costs of $7,141,174  due to the issuance of 455,218 shares of the
Company's  common stock,  warrants to purchase a total of 538,674  shares of the
Company's common stock to a project  co-developer,  and the issuance of warrants
to  purchase  a total  of  350,000  shares  of the  Company's  common  stock  in
consideration of business  promotional  services to be provided for the Company.
During 1999, $914,327 of such costs were expensed.

During the years ended  December 31,  1999,  1998 and 1997,  the Company paid no
income taxes or interest.


See accompanying notes to financial statements.

                                       22
<PAGE>


                               Styleclick.com Inc.

                          Notes to Financial Statements


1. Line of Business and Basis of Presentation

Styleclick.com Inc. ("Styleclick" or the "Company"),  formerly known as Modacad,
Inc., was  incorporated in California on February 4, 1988. The Company is in the
business  of  developing,   marketing,   and  supporting   electronic   commerce
("E-commerce") Internet web-sites;  Internet enabled applications;  and business
and consumer software products,  based on its proprietary technology for content
management, including modeling and rendering technology.

Beginning  in 1999,  the Company  shifted its  primary  business  focus from the
business-to-business  marketplace to the emerging consumer  Internet  E-commerce
market. In connection with this shift in focus, the Company divested many of its
products in the  business-to-business  and consumer software product groups. The
Company is  focusing  its  technology  to build and deploy  E-commerce  Internet
sites, such as comparative  search and shopping  solutions aimed at facilitating
businesses'  use of  electronic  commerce  to reach  consumers  in the  apparel,
footwear, accessories, cosmetics and home furnishings industries. As a result of
the Company's shift in business focus, revenue of approximately $2.6 million and
$400,000 recorded in 1998 and 1997, respectively, are not expected to reoccur in
future period.

The accompanying  financial  statements have been prepared on the basis that the
Company will continue as a going concern which  contemplates  the realization of
assets and the satisfaction of liabilities in the normal course of business.  As
shown in the accompanying financial statements, the Company incurred significant
operating  losses and negative cash flows from operations for the last two years
and is currently being advanced funds by USA Networks, Inc. ("USAi") pursuant to
USAi's $10 million line of credit  extended to the Company in  contemplation  of
the Company's merger with the Internet Shopping Network (see Note 11).

The Company's  continuation  as a going concern is dependent upon the success of
its merger with the Internet  Shopping Network or the raising of additional debt
or  equity  financing.  The  Company  believes  that the  proceeds  from  USAi's
investment,  in addition to revenue  generated  from  expansion of the Company's
services in the market place will support the Company's operations through 2000.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

The Company  considers all  highly-liquid  investments  purchased  with original
maturities of three months or less to be cash equivalents.

                                       23
<PAGE>

                               Styleclick.com Inc.

                          Notes to Financial Statements

2. Summary of Significant Accounting Policies (continued)

Software Development Costs

Prior to 1999,  software  development  costs were capitalized in accordance with
Statement of Financial  Accounting Standards No. 86, "Accounting for the Cost of
Computer Software to Be Sold,  Leased,  or Otherwise  Marketed ("SFAS No. 86")".
Under  SFAS  No.  86,  software  development  costs  were  capitalized  upon the
establishment of technological feasibility and discontinued when the product was
available  for sale.  Capitalized  software  development  costs  were  comprised
primarily of direct overhead, payroll costs and consultants' fees of individuals
working  directly on the  development of specific  software  products.  Software
development costs capitalized under SFAS 86 prior to 1999 were primarily related
to products for external  sales.  The products  developed for external sales are
categorized in two groups:  consumer CD-ROM  applications and business  software
products.  Consumer CD-ROM  applications  are developed to be used by individual
consumers.  Business software  products,  including  computer aided designed and
electronic  merchandising  products,  are  developed  to be used for  commercial
purposes.  In late 1998,  the  Company  incurred  $508,671  in costs  related to
internally  development  software primarily for the development of the Company's
Internet shopping web-site. The amount of software development costs capitalized
under SFAS 86 was $0 and  $3,050,471  for the years ended  December 31, 1999 and
1998, respectively.


In late  1998,  the  Company  shifted  its  marketing  focus  into the  Internet
e-commerce  business.  Accordingly,  the  Company  has  developed  its  computer
software  particularly for internal use and adopted  Statement of Position 98-1,
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal  Use  ("SOP  98-1")".  SOP 98-1  identifies  three  stages of a typical
software development project: preliminary project stage, application development
stage and the post-  implementation  stage. As required by SOP 98-1, the Company
capitalizes certain qualifying costs incurred during the application development
stage,  primarily  payroll costs and  consultants'  fees of individuals  working
directly on the development of specific  software  projects.  All other internal
use  development  costs  are  expensed  as  incurred.  The  amount  of  software
development costs capitalized under SOP 98-1 was $1,122,668 and $0 for the years
ended December 31, 1999 an 1998, respectively.

Software development costs have all been incurred internally. The carrying value
of  software  and  development  costs is  periodically  reviewed,  and a loss is
recognized when the value of estimated undiscounted cash flow benefit related to
the asset falls below the unamortized cost, consistent with the Company's policy
regarding long-lived assets.  During 1998, an impairment of capitalized computer
software  development  costs of approximately  $3,443,000 was recognized and has
been included in amortization of capitalized  software  development costs in the
statement of operations.  Of the total write-off,  $1,038,000 was related to the
exclusive  license of the Company's 3D Home Interiors  product to its publisher,
which  represented  the reminder of all capitalized  costs  associated with such
prodcut.  The  remaining  $2,405,000  write-off was  primarily  attributable  to
software  capitalized  prior to 1998 in  relation  to  certain  products  in the
business  software  market  which  the  Company  exited  as a result  of its new
business strategy to target the emerging E-commerce market.

Amortization  of  capitalized  software  development  costs  is  provided  on  a
project-by-project basis on the straight-line method over the estimated economic
life of the products (not to exceed three years).

                                       24
<PAGE>

                               Styleclick.com Inc.

                          Notes to Financial Statements

2. Summary of Significant Accounting Policies (continued)

Software Development Costs (continued)

In March 2000,  Emerging  Issues  Task Force 00-2 (EITF  00-2),  Accounting  for
Website Development Costs was issued.  EITF 00-2 is effective  prospectively for
all costs incurred for quarters  beginning after June 30, 2000 and addresses how
an entity should account for costs  incurred to develop a web-site.  The Company
does not expect the adoption of EITF 00-2 to have a material impact,  if any, on
its financial position or results of operations.

Fixed Assets

Furniture and equipment are recorded at cost.  Depreciation is computed by using
the  straight-line   method  over  an  estimated  useful  life  of  five  years.
Maintenance and minor replacements are charged to expense as incurred. Gains and
losses on disposals of fixed assets are included in the results of operations.

Revenue Recognition

Business Services

The Company  recognizes  revenues  generated  from vendor  participation  in the
Company's CD-ROM applications  ("CD-ROM  participation  fees") and the Company's
on-line shopping Internet web-sites  ("project  participation  fees") based upon
the  accomplishment  of contractual  milestones in a manner that matches revenue
with the related costs. Revenue generated from services provided to customers in
the  development  and  maintenance  of  their  Internet   web-sites   ("web-site
development and maintenance  fees") is recognized based on the accomplishment of
contractual  milestones in a manner that matches revenue with the related costs.
Generally,  the terms of contracts  that  generate  CD-ROM  participation  fees,
project  participation  fees, and web-site  development and maintenance fees are
short term in nature (twelve months or less).

Barter

To date,  the Company has entered into several barter  transaction  arrangements
where by it receives certain non-monetary benefits. To date, the Company has not
recognized any revenue under these contracts  because it does not have a history
of receiving cash for similar transactions.

Internet Applications

Revenue  generated  from the  Company's  fulfillment  services  provided  to the
Company's on-line shopping Internet web-site participant vendors ("transactional
revenue") is recognized based on a percentage of gross revenues from the related
transactions  upon  notification  of  shipment of the  vendors'  products by the
Company's fulfillment warehouse or the participant vendors.

Revenue  generated  from  referral  of vendors'  products to Internet  consumers
through the Company's on-line shopping  Internet  web-sites  ("product  referral
fees") are  recognized  based on a percentage of gross revenues from the related
transactions  based upon notification of the respective sales information by the
Company's  vendors,  the independent  Internet traffic tracking companies or the
Company's on-line tracking reports.
                                       25
<PAGE>

                               Styleclick.com Inc.

                          Notes to Financial Statements

2. Summary of Significant Accounting Policies (continued)

Revenue Recognition (continued)

Other

Revenue generated from advertising on the Company's  on-line shopping  web-sites
("on-line   advertising   revenue")  is   recognized   over  the  terms  of  the
corresponding  contracts,  which is generally twelve months,  on a straight-line
basis.

Consumer Software, CD-ROM Applications

The Company recognizes revenues related to product sales,  software licenses and
software  maintenance  in  accordance  with  the  SOP  97-2,  "Software  Revenue
Recognition." Revenue related to product sales and software licenses is recorded
net of estimated  allowances  and returns at the time of the product or software
is delivered,  the Company has no remaining  obligations and  collectibility  is
deemed probable.  Software  maintenance revenue  representing  revenue generated
from post contract customer support is recognized on a straight-line  basis over
the term of the corresponding contract, which is generally twelve months.

Cost of Sales

Costs of sales are comprised primarily of product fulfillment costs, credit card
processing fees, direct shipping material and product royalties  associated with
the respective revenues.  Product fulfillment costs include processing costs for
purchase  orders  and  merchandise   storage  fees  charged  by  a  third  party
fulfillment  warehouse  with whom the Company has a  contract.  Direct  shipping
material  includes  freight,  packaging  and postage  costs.  Product  royalties
represent the royalty  expense  incurred in connection  with the respective sold
products.

Impairment of Long-Lived Assets

In accordance  with SFAS No. 121.  "Accounting  for the Impairment of Long-Lived
Assets and Long-Lived Assets to Be Disposed Of" the Company periodically reviews
long-lived  assets for impairment  whenever  events or changes in  circumstances
indicate  that  the  carrying  amount  of  an  asset  may  not  be  recoverable.
Recoverability  of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows (on an undiscounted  basis)
expected  to be  generated  by the asset.  If such assets are  considered  to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceeds the fair value of the assets.

Advertising Expense

The cost of  advertising  is expensed as incurred.  Advertising  expense for the
years  ended  December 31,  1999,  1998 and 1997 was  $4,513,918,  $992,217  and
$19,629, respectively and is included in the statement of operations as selling,
general and administrative expense.

                                       26
<PAGE>


                               Styleclick.com Inc.

                          Notes to Financial Statements

Research and Development Costs

Research and development  costs are charged to expense as incurred.  These costs
consist primarily of salaries, consulting fees and direct overhead.

2. Summary of Significant Accounting Policies (continued)

Stock-Based Compensation

The Company  accounts for  stock-based  compensation  arrangements in accordance
with the  provisions  of  Accounting  Principles  Board Opinion No. 25 (APB 25),
"Accounting  for Stock Issued to  Employees,"  and complies with the  disclosure
provisions  of  Statement of Financial  Accounting  Standards  No. 123 (SFAS No.
123), "Accounting for Stock-Based Compensation." The Company accounts for equity
securities issued to non-employees in accordance with the provisions of SFAS No.
123.  All stock  options are issued at an exercise  price at or above the deemed
fair value of the Company's stock.

Income Taxes

The Company accounts for income taxes under the liability  method,  and deferred
tax assets  and  liabilities  are  recognized  for the  future tax  consequences
attributed to differences  between the financial  statement  carrying amounts of
existing  assets and liabilities  and their  respective tax bases.  Deferred tax
assets and  liabilities  are measured  using enacted tax rates in effect for the
year in which  those  temporary  differences  are  expected to be  recovered  or
settled.  Deferred tax assets are reduced by a valuation  allowance when, in the
opinion of  management,  it is more likely than not that some  portion or all of
the deferred tax assets will not be realized.

Net Income (Loss) Per Share

Basic net income (loss) per share excludes  dilution and is computed by dividing
net income (loss) by the weighted  average  number of common shares  outstanding
during the reported  period.  Diluted net income  (loss) per share  reflects the
potential  dilution that could occur if stock options and other  commitments  to
issue common stock were exercised using the treasury stock method.

Fair Value of Financial Instruments

The Company  measures its financial  assets and  liabilities in accordance  with
generally accepted accounting  principles.  The Company's financial  instruments
include cash and cash  equivalents  and accounts  receivable  and their carrying
amounts approximate fair value.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of
credit risk consist of cash and trade  receivables.  The Company places its cash
with high quality financial  institutions.  Amounts of $1,106,074 and $6,026,869
held in a money market account were fully insured at December 31, 1999 and 1998,
respectively.  The  Company  extends  credit  based  on  an  evaluation  of  the
customer's financial condition, generally without requiring collateral. Exposure
to losses on receivables is principally  dependent on each customer's  financial
condition.  The Company  monitors its exposure for credit  losses and  maintains
allowances for anticipated losses.

                                       27
<PAGE>

                               Styleclick.com Inc.

                          Notes to Financial Statements

2. Summary of Significant Accounting Policies (continued)

Segment and Related Information

The Company views its  operations as  principally  one segment and the financial
information   disclosed  herein  materially  represents  all  of  the  financial
information related to the Company's  principal  operating segment.  The Company
manages its online  business as one combined  entity,  allocates  resources  and
analyzes information used to operate the business on a combined basis.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Recently Issued Accounting Pronouncement

In December  1999, the  Securities  and Exchange  Commission  staff issued Staff
Accounting  Bulletin (SAB) 101,  Revenue  Recognition  in Financial  Statements,
further amended by SAB 101A. SAB 101 spells out four basic criteria that must be
met before a company can record revenue and contains numerous  examples,  in the
form of questions and answers,  that  illustrate how the SEC staff applies basic
revenue  recognition  criteria in certain facts and circumstances.  SAB 101 also
provides  guidance on the disclosures  companies should make about their revenue
recognition  policies and the impact of events and trends on revenue. SAB 101and
SAB 101A is  effective  for  companies  with  calendar  year-ends  in the second
quarter of 2000. The Company  analyzed the impact of SAB 101 and does not expect
it to have a material effect on its financial position and results of operation.

3. Fixed Assets

Fixed assets at December 31, 1999 and 1998 consisted of the following:
<TABLE>
<CAPTION>

                                                     1999              1998
                                                --------------------------------
<S>                                             <C>              <C>
Computer equipment and software                 $ 3,365,275      $  2,607,578
Office equipment                                    318,204           233,652
Furniture and fixtures                              268,969           255,510
Leasehold improvements                              471,860           432,748
                                                --------------------------------
                                                  4,424,308         3,529,488
Less accumulated depreciation                     1,823,850         1,069,832
                                                --------------------------------
                                                $ 2,600,458      $  2,459,656
                                                ================================
</TABLE>
Depreciation  expense for the years ended  December 31,  1999, 1998 and 1997 was
$754,018,  $447,628  and  $210,712,  respectively,  of which  $0,  $154,957  and
$145,047,  was capitalized as software  development  costs during 1999, 1998 and
1997, respectively.

                                       28
<PAGE>

                               Styleclick.com Inc.

                          Notes to Financial Statements

4. Commitments

Leases

The Company leases certain  facilities for its corporate and operations  offices
under long-term,  non-cancelable operating lease agreements which expire through
April 30, 2006.

Future minimum  aggregate lease payments under  non-cancelable  operating leases
with initial or remaining terms of one year or more at December 31, 1999 were as
follows:
<TABLE>
<CAPTION>
  Years ending                           Sub-lease rental
   December 31,     Operating leases           income              Total
-----------------   -----------------    -----------------    -----------------
<S>                 <C>                  <C>                  <C>
      2000            $   559,135           $ 105,000           $   454,135
      2001                528,375             105,000               423,375
      2002                487,259              52,500               434,759
      2003                446,142                   -               446,142
      2004                406,891                   -               406,891
   Thereafter             541,326                   -               541,326
                    -----------------    -----------------    -----------------
                      $ 2,969,128           $ 262,500           $ 2,706,628
                    =================    =================    =================

</TABLE>
Rent  expense  for  the  years  ended  December 31,  1999,  1998  and  1997  was
approximately $468,557, $451,253 and $192,000, respectively.

Employment Agreements

In 1998,  the Company  entered into two new employment  agreements,  expiring on
December 31, 2005,  with two key officers of the Company.  Under the agreements,
these  officers  receive  aggregate  annual  salaries  of  $400,000  and monthly
aggregate automobile allowances of $1,200. In addition,  these officers received
aggregate signing bonuses of $200,000.  Further, the Company shall pay an annual
performance  bonus to each officer for each calendar year of the employment term
in an amount determined by the Compensation Committee of the Board of Directors.
In 1999, the Company amended these two employment  agreements to increase annual
salaries  paid to these  officers to an aggregate  amount of $460,000  effective
January 1, 2000 and awarded $200,000 performance bonuses to these officers.

In connection with the employment agreements, the same key officers were granted
five-year  options to  purchase  up to an  aggregate  of  400,000  shares of the
Company's  common  stock at an exercise  price of $15.88.  Such options vest and
become exercisable over the next three years and contain accelerated vesting and
exercisability criteria based on achieving certain operating results. Options to
purchase  133,332  shares are vested and became  exercisable  as of December 31,
1999 and  options to  purchase  133,334  and  133,334  shares will be vested and
become exercisable as of December 31, 2000 and 2001, respectively.

In July 1999,  the Company  entered into a new  employment  agreement with a key
officer of the company that expires on June 30, 2002.  Under the agreement,  the
officer receives an annual salary of $125,000 and a monthly automobile allowance
of $400.

                                       29
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements

4. Commitments (continued)

E-Commerce Marketing Agreement

In  June  1999,  the  Company  entered  into a  two-year  interactive  marketing
agreement with an Internet Portal company (the  "Portal").  Under the agreement,
the Portal will promote the Company's  E-commerce  Internet  web-site in several
areas of the Portal's  Internet  web-sites.  In consideration of such promotion,
the Company will make payments to the Portal totaling up to $7.5 million in cash
through January 2001. In addition,  in June 1999, the Company issued warrants to
the  Portal to  purchase  100,000  shares of the  Company's  common  stock at an
exercise  price of $12.34 that expire in December  2001.  The fair value of such
warrants was $200,000 based on the promotional services received.  The aggregate
consideration of $7.7 million,  including cash payments and warrants issued,  is
being amortized to expense over the two year term of the marketing agreement. As
of December 31, 1999, the Company had paid  $3,214,286 in cash to the Portal and
recognized  $1,925,000 of amortization  expense in 1999. The remaining amount of
$1,489,286 is included in prepaid expenses and other assets.

5. Stockholders' Equity

Common Stock and Warrants

In November  1997,  the Company  issued a warrant to purchase  126,316 shares of
common stock to its project co-developer  ("Co-developer") for services provided
to the Company.  The warrant  expires in November 2002 and has an exercise price
of $19.00 per share of common stock.  Under the Project  Development  Agreement,
the Company had an obligation to the  Co-developer  for certain royalty payments
in the form of cash and common stock purchase warrants.

In April  1999,  the  Company  entered  into a Stock and  Warrant  Purchase  and
Investor Rights Agreement  ("Purchase  Agreement") with the Co-developer.  Under
the Purchase Agreement, the Company issued 455,218 shares of common stock to the
Co-developer.  Further,  in return  for  termination  of the  Company's  royalty
obligation  to the  Co-developer,  the  Company  issued  warrants to purchase an
aggregate of 538,674  shares of common stock with exercise  prices  ranging from
$10.98 to $13.18. The warrants expire as follows:  189,674 shares in April 2000,
189,674  shares in July 2000 and 159,326  shares in April 2004. The value of the
common  stock and warrants of  approximately  $5.5 million has been based on the
expected  future  royalty  obligation  and will be  amortized  over the original
royalty term through December 2007.

Concurrent  with the Purchase  Agreement,  the Company entered into a Securities
Purchase  Agreement with each of four investors.  Under the Securities  Purchase
Agreement,  the  investors  purchased  an  aggregate  of  776,827  shares of the
Company's  common stock and warrants to purchase an aggregate of 919,243  shares
of common stock with exercise  prices  ranging from $13.18 to $13.73 that expire
as follows:  323,677  shares in April  2000,  323,677  shares in July 2000,  and
271,889 shares in April 2004.

As a result of this  offering,  the Company  received net proceeds of $7,721,510
after paying costs associated with the offering.  The Company issued warrants to
purchase  15,536 shares of common stock at an exercise price of $10.98 per share
to two  placement  agents in  connection  with the  Purchase  Agreement  and the
Securities Purchase Agreement. The warrants expire in April 2004.

                                       30
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements

5. Stockholders' Equity (continued)

Warrants

In connection with the Company's  initial public offering ("IPO") in March 1996,
the  Company  issued to the  principal  underwriter  unit  purchase  warrants to
purchase  140,000  units  at a per  unit  exercise  price of  $6.00.  Each  unit
consisted of one share of common stock and one redeemable warrant exercisable to
purchase one share of common stock at an exercise price of $9.10 per share. Such
unit purchase warrants are exercisable for a four-year period, which began March
27, 1997. In 1997, the underwriter (or assignees of the underwriter) exercised a
portion  of the  warrants  to  purchase  an  aggregate  of 88,300  shares of the
Company's common stock and 88,300  redeemable common stock purchase warrants for
an aggregate  exercise  price of $529,800.  The  underwriter  (or its assignees)
further  exercised  redeemable common stock purchase warrants to purchase 30,800
shares of the Company's common stock for $280,280.  In 1998, the underwriter (or
its assignees)  exercised  redeemable common stock purchase warrants to purchase
an aggregate of 26,400  shares of the Company's  common stock for  $158,400.  In
1999, the underwriter (or its assignees)  exercised a portion of its warrants to
purchase an aggregate of 1,000  shares of the  Company's  common stock and 1,000
redeemable common stock purchase warrants for $6,000.

In December  1996,  the Company  issued  warrants to purchase  250,000 shares of
common stock to an outside consultant for services provided to the Company.  The
warrants had an exercise price of $5.00 per share and were to expire in December
1999. In 1999,  the warrant  holder  exercised its warrants to purchase  250,000
shares of the Company's common stock for $1,250,000.

In July 1997, the Company issued  warrants to purchase  100,000 shares of common
stock to a financial advisor for services provided to the Company.  The warrants
expire in July 2002 and have an exercise  price of $14.38 per common  share.  In
accordance  with SFAS No. 123,  the Company  valued  these  warrants at $36,000,
which was the  current  market  value of the  services  rendered  by the warrant
holder.  Such amount was  recognized  as consulting  expense  during 1998. As of
December 31, 1999, these warrants had not been exercised.

In June 1998,  the Company issued  warrants to purchase  50,000 shares of common
stock to an outside promotion agency for services  provided to the Company.  The
warrants  expire in May 2003 and have an  exercise  price of $17.75  per  common
share. In December 1998, the Company issued warrants to purchase 8,333 shares of
commons  stock to the same  agency for  services  provided to the  Company.  The
warrants expire in November 2003 and have an exercise price of $20.00 per common
share.  During  1999,  the Company  issued  warrants to purchase an aggregate of
41,667 shares of common stock with exercise prices ranging from $11.56 to $20.00
that expire in January 2004 through May 2004. In  accordance  with SFAS No. 123,
the Company valued these warrants at $15,000, which was the current market value
of the  services  rendered by the  warrant  holder.  During  1999 and 1998,  the
Company recognized  $15,000 and $21,000,  respectively,  of promotional  expense
related to these warrants. As of December 31,  1999, these warrants had not been
exercised.

                                       31
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements

5. Stockholders' Equity (continued)

Warrants (continued)

In March 1999, the Company issued warrants to a third party to purchase  250,000
shares of common stock at an exercise  price of $16.80 per share.  Such warrants
were issued in  consideration of business  promotion  services to be provided to
the Company and were fully vested and immediately exercisable on the grant date,
and expire in March 2004.  In October  1999,  the Company  changed the  exercise
price to $10.86 per share of common  stock,  which was 110% of the  then-current
market value. In accordance with SFAS No. 123, the Company valued these warrants
using an option  pricing model and recorded  $1,402,500 as deferred  advertising
and  promotion  services  to be  amortized  over  the  three-year  term  of  the
advertising and promotion services,  of which $389,583 was expensed during 1999.
As of December 31, 1999, these warrants had not been exercised.

In June,  July and August  1999,  the  Company  issued  warrants  to purchase an
aggregate of 30,000  shares of common stock to a financial  advisor for services
provided to the Company. The warrants had an exercise price of $13.00 per common
share and expire in June, July and August 2002. In accordance with SFAS No. 123,
the Company  valued these warrants at $45,000 which was the current market value
of the services  rendered by the warrant  holder.  Such amount was recognized as
consulting expense during 1999. As of December 31,  1999, these warrants had not
been exercised.

The Company has granted non-employee directors warrants to purchase an aggregate
of 77,000 shares of common stock at exercise  prices ranging from $4.25 to $9.50
that expire at various  times from May 2001 through  October  2009.  Warrants to
purchase  4,000  common  shares  were  canceled  in July  1999  when  one of the
directors  was not  re-elected  during the  Company's  1999 annual  shareholders
meeting.  These  warrants have been accounted for under the provisions of APB 25
as allowed under SFAS No. 123.

                                       32
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements

6. Stock Option Plan

In 1995,  the Company  adopted the 1995 Stock  Option  Plan (the  "Plan")  which
expires in 2006. The Plan provides for options for 2,500,000  shares that may be
granted to any  employee,  officer  and  director of the  Company.  The Board of
Directors or its  committee  selects the optionees  and  determines  the type of
option (incentive or non-statutory) and number of shares subject to each option.

A summary of changes in outstanding  options under the Plan and warrants  issued
outside of the plan follows:
<TABLE>
<CAPTION>
                                              Weighted                Weighted
                                   Stock      Average                 Average
                                  Options     Exercise     Other      Exercise
                                 Outstanding   Price      Warrants     Price
                                 -----------  ----------  ----------  ----------
<S>                              <C>          <C>         <C>         <C>
Balance at December 31, 1996        204,000    $  4.96     2,202,000    $  6.07
    Granted                         733,454    $ 16.29       528,616    $ 11.58
    Exercised                       (29,000)   $  5.15    (2,128,184)   $  6.28
    Canceled                         (6,000)   $  9.50          (916)   $ (6.50)
                                 -----------  ----------  ----------  ----------
Balance at December 31, 1997        902,454    $ 14.10       601,516    $ 10.16
    Granted                         840,000    $  8.92       100,733    $ 13.47
    Exercised                       (94,000)   $  6.03       (26,400)   $  6.00
    Canceled                       (181,000)   $ 15.70             -          -
                                 -----------  ----------  ----------  ----------
Balance at December 31, 1998      1,467,454    $ 11.47       675,849    $ 10.99
    Granted                         725,000    $  8.90     1,941,120    $ 12.62
    Exercised                       (44,500)   $  9.50      (251,000)   $  5.00
    Canceled                       (181,500)   $  9.47        (4,000)   $  9.50
                                 -----------  ----------  ----------  ----------
Balance at December 31, 1999      1,966,454    $ 10.95     2,361,969    $ 12.94
                                 ===========  ==========  ==========  ==========

Exercisable at December 31, 1999    946,286    $ 11.11     2,225,969    $ 13.00
                                 ===========  ==========  ==========  ==========
Shares available for future grant   366,046
                                 ===========
</TABLE>
                                       33
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements

6. Stock Option Plan (continued)

The weighted-average  remaining contractual lives of the options are 7.6 and 9.2
years  at  December  31,  1999  and  1998,  respectively.  The  weighted-average
remaining  contractual  lives of the  warrants are 3.8 and 3.3 years at December
31, 1999 and 1998, respectively.

SFAS No. 123 requires  disclosure  of pro forma net loss and pro forma basic and
diluted  loss per share  based upon the fair value of the  options  issued.  The
Company  calculated the fair value of each option grant on the date of the grant
using an option  pricing model as prescribed by SFAS No. 123 using the following
assumptions:
<TABLE>
<CAPTION>

                                        1999            1998             1997
                                        ----            ----             ----
   <S>                                  <C>             <C>              <C>
   Risk-free interest rate.......       5.6%            4.8%             5.7%
   Expected life (in years)......         5             4.7              4.1
   Dividend yield................         0%              0%               0%
   Volatility....................        70%             80%              65%
</TABLE>

This option valuation model requires the input of highly subjective  assumptions
including the expected stock price  volatility.  Because the Company's  employee
stock options have characteristics  significantly different from those of traded
options and because changes in the subjective  input  assumptions can materially
affect the fair value estimate, in management's opinion, the existing model does
not  necessarily  provide a  reliable  single  measure  of the fair value of its
employee stock options.

During  the  year  ended  December 31,  1998,  outstanding  options  granted  to
employees  in 1997 were  repriced in  December  1998.  The Company has  included
additional  compensation  cost for the excess of the fair value of the  modified
options  issued  over  the  value  of the  original  options  at the date of the
exchange in its pro forma  disclosure  and  recognized the total amount over the
remaining  life of the  options.  For  purposes  of pro forma  disclosures,  the
estimated  fair value of the options is  amortized  to expense over the options'
vesting period. The Company's pro forma information follows:
<TABLE>
<CAPTION>
                                             Years ended December 31,
                                    1999             1998              1997

<S>                           <C>              <C>               <C>
Pro forma net loss            $(19,779,296)    $(15,251,331)     $ (1,365,274)

 Pro forma loss per share
   Basic and diluted              $(2.79)          $(2.51)            $(0.28)
</TABLE>

                                       34
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements


6. Stock Option Plan (continued)

These pro forma amounts may not be  representative  of future  disclosures since
the  estimated  fair value of stock  options is  amortized  to expense  over the
vesting period, and additional options may be granted in future years.

7. Sales

Major Customers

During 1999,  the Company  conducted  business  with two  customers  whose sales
comprised approximately 56% and 13% of net sales.

During 1998,  the Company  conducted  business  with two  customers  whose sales
comprised approximately 30% and 24% of net sales.

During  1997,  the Company  conducted  business  with one  customer  whose sales
comprised approximately 34% of net sales.

Export Sales

For  the  year  ended  December 31,   1999,  the  Company's  export  sales  were
approximately $507,740, principally comprised of $464,396 in Asia and $43,344 in
other geographic regions.

For  the  year  ended  December 31,   1998,  the  Company's  export  sales  were
approximately $627,422,  principally comprised of $586,725 in Europe and $40,697
in other geographic regions.

For  the  year  ended  December 31,   1997,  the  Company's  export  sales  were
approximately $957,000,  principally comprised of $761,000 in Europe, $91,000 in
Asia, and $105,000 in other geographic regions.

8. Deferred Contribution Plan

In 1996, the Company adopted the Styleclick  401(k) Plan,  formerly known as the
Modacad  401(k)  Plan,  (the  "401(k)  Plan").  The 401(k) Plan is  available to
substantially   all   employees   who  meet  service  and  years  of  employment
requirements.  Employees  who  participate  in the  401(k)  Plan  may  elect  to
contribute  from 3% to 15% of their annual  compensation.  The 401(k) Plan has a
Company discretionary contribution provision in which the Company may contribute
up to 5% of income before taxes.  The amount of the  contribution  is determined
each year by the Company. For the years ended December 31,  1999, 1998 and 1997,
employer  contributions  under the  401(k)  Plan were  approximately  $0, $0 and
$22,000, respectively.

                                       35
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements


9. Income Taxes

The following is a  reconciliation  of the statutory  federal income tax rate to
the Company's effective income tax rate.
<TABLE>
<CAPTION>
                                              1999         1998         1997
                                         ---------------------------------------
<S>                                      <C>             <C>          <C>
Income tax computed at federal
   statutory tax rate                         34 %         34 %         34 %
State taxes (net of federal benefit)           3            6            6
Valuation allowance                          (37)         (40)         (40)
                                         ---------------------------------------
Total                                          - %          - %          - %
                                         =======================================
</TABLE>
As  of   December 31,   1999,   the  Company  has  federal  net  operating  loss
carryforwards of approximately $29,900,000 which expire through 2019.

Significant  components  of the  Company's  deferred tax assets and  liabilities
consist of the following:
<TABLE>
<CAPTION>
                                                    1999              1998
                                               ---------------------------------
<S>                                            <C>                <C>
Deferred tax assets:
   Net operating loss carryforwards            $  11,314,485      $  4,740,810
   Warrants issued for services                      589,350           253,600
   Computer software development costs               211,171           133,861
   Research credits                                1,023,565           798,565
   Other                                             238,789            96,037
                                               ---------------------------------
                                                  13,377,360         6,022,873
Valuation allowance for deferred tax assets      (12,724,477)       (5,748,785)
                                               ---------------------------------
                                                     652,883           274,088
Deferred tax liabilities:
   Furniture and equipment                          (156,697)         (109,942)
   Deferred state taxes                             (496,186)         (164,146)
                                               ---------------------------------
Net deferred tax asset                         $           -      $          -
                                               =================================
</TABLE>

Due to the uncertainty  surrounding the timing of realizing the net deferred tax
assets in future tax returns, the Company has placed a valuation allowance equal
to its net deferred tax assets.

The net change in the valuation  allowance for the year ended December 31,  1999
and 1998 was an increase of $6,975,692 and $3,920,450, respectively. $887,200 of
the  valuation  allowance  relates to warrants  issued for  services  which,  if
realized, will not reduce tax expense.

                                       36
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements


10. Earnings Per Share

Earnings per share for the years ended December 31, 1999, 1998, and 1997 were as
follows:
<TABLE>
<CAPTION>
                                                 Year ended December 31,
                                         --------------------------------------
                                             1999         1998         1997
                                         ------------ ------------ ------------
<S>                                      <C>            <C>          <C>
Net income (loss)                        $(15,879,341)  (9,687,639)  $  354,275
Weighted average shares                     7,092,374    6,088,247    4,800,918
                                         ------------ ------------ ------------
Basic income (loss) per share            $      (2.24)  $    (1.59)  $     0.07

                                         ============ ============ ============
Weighted average shares including the
   dilutive effect of stock options and
   other equity securities                  7,092,374    6,088,247    5,507,582
Diluted income (loss) per share          $      (2.24)  $    (1.59)  $     0.06
                                         ============ ============ ============
</TABLE>
414,918 and 490,616 weighted average shares that could potentially  dilute basic
income per share in the future were excluded in the  computation of diluted loss
per share for the years ended December 31, 1999 and 1998, respectively.

11. Subsequent Event

Merger of Styleclick.com and Internet Shopping Network

On January 25, 2000, the Company and USA Network, Inc. announced an agreement to
form a new  company by merging the Company and  Internet  Shopping  Network,  an
indirect wholly owned  subsidiary of USAi. The new company,  which will be named
Styleclick Inc., will own and operate the combined properties of the Company and
Internet  Shopping  Network.  Under the terms of the  agreement,  USAi will also
invest $40 million in cash,  contribute $10 million in dedicated  media and will
receive warrants to purchase additional shares of the new company. Upon both the
closing  of  the  transaction  and on a  fully  diluted  basis,  USAi  will  own
approximately  75% of the new company and the  Company's  stockholders  will own
approximately 25%. In the interim,  USAi has agreed to extend a $10 million line
of credit to the  Company.  The  transaction  is expected to close in the second
quarter of 2000.


                                       37
<PAGE>
                               Styleclick.com Inc.

                          Notes to Financial Statements


Item 9.  Changes  in  and  Disagreements  With  Accountants  on  Accounting  and
         Financial Disclosure

On April 19,  1999,  Styleclick.com  Inc.  dismissed  Singer  Lewak  Greenbaum &
Goldstein LLP ("SLGG") as its independent  accountants and engaged Ernst & Young
LLP as its new independent accountants. Stylelick's Audit Committee participated
in and approved the decision to change  independent  accountants.  In connection
with its audits for the two most recent fiscal years and through April 19, 1999,
there  have  been  no  disagreements  with  SLGG  on any  matter  of  accounting
principles or practices,  financial statement  disclosure,  or auditing scope or
procedure, which disagreements if not resolved to the satisfaction of SLGG would
have  caused  it to  make  reference  thereto  in its  report  on the  financial
statements for such years.


                                       38
<PAGE>
                                    SIGNATURE

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                           Styleclick.com Inc.


Date:  June 22, 2000                   By: /s/  JOYCE FREEDMAN
                                          -----------------------------
                                           Joyce Freedman
                                           Chairman of the Board and
                                           Co-Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.


/s/ JOYCE FREEDMAN          Chairman of the Board and            June 22, 2000
------------------------    Co-Chief Executive Officer        ------------------
    Joyce Freedman                                                   Date


/s/ MAURIZIO VECCHIONE      President,                           June 22, 2000
------------------------    Co-Chief Executive Officer        ------------------
    Maurizio Vecchione      Director                                 Date


/s/ BARRY HALL             Executive Vice President, Finance     June 22, 2000
------------------------   and Chief Financial Officer        ------------------
    Barry Hall                                                       Date


/s/ LEE FREEDMAN           Executive Vice President and          June 22, 2000
------------------------   Director                           ------------------
    Lee Freedman                                                     Date


/s/ STEPHEN WYLE           Director                              June 22, 2000
------------------------                                      ------------------
    Stephen Wyle                                                     Date


/s/ PETER FRANK            Director                              June 22, 2000
------------------------                                      ------------------
    Peter Frank                                                      Date


/s/ LESLIE SALESON         Director                              June 22, 2000
------------------------                                      ------------------
    Leslie Saleson                                                   Date