U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-KSB
(Mark One)

[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934


[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

         Commission file number 0-27833

                      International Cosmetics Marketing Co.
       -------------------------------------------------------------------
                 (Name of small business issuer in its charter)

                                     Florida
  ----------------------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   65-0598868
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                      (I.R.S. Employer Identification No.)

           6501 Congress Avenue, Suite 100, Boca Raton, Florida 33487
           ----------------------------------------------------------
               (Address of principal executive offices)(Zip Code)

                     Issuer's telephone number 561-999-8878
                                               -------------

         Securities registered under Section 12(b) of the Exchange Act:

                                      None
                                      ----
                              (Title of each class)

                    Name of each exchange on which registered

                                 Not applicable
                                 --------------

         Securities registered under Section 12(g) of the Exchange Act:

                                  Common Stock
                                  ------------

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [x] No [ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [x]

         State issuer's revenues for its most recent fiscal year. Issuer had
revenues of $698,763 for the year ended June 30, 2002.

<PAGE>

         State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. The aggregate market value of the voting stock held by
non-affiliates as of September 30, 2002 was approximately $2,809,882.

         State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date. As of September 30, 2002,
8,491,579 shares of Common Stock are issued and outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB into which the document
is incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) of
the Securities Act of 1933 ("Securities Act"). Not Applicable.

         Transitional Small Business Disclosure Form (check one):

         Yes      No   X
             ----    -----

<PAGE>

                      INTERNATIONAL COSMETICS MARKETING CO.
                  Form 10-KSB for the year ended June 30, 2002

                                Table of Contents

                                     Part I

Item 1                   Description of Business
Item 2                   Description of Property
Item 3                   Legal Proceedings
Item 4                   Submission of Matters to a
                         Vote of Security Holders

                                     Part II

Item 5                   Market for Common Equity and
                         Related Stockholder Matters
Item 6                   Management's Discussion and
                         Analysis
Item 7                   Financial Statements
Item 8                   Changes in and Disagreements
                         With Accountants on Accounting
                         And Financial Disclosure

                                    Part III

Item 9                   Directors, Executive Officers, Promoters
                         And Control Persons; Compliance with
                         Section 16(a) of the Exchange Act
Item 10                  Executive Compensation
Item 11                  Security Ownership of Certain Beneficial
                         Owners and Management
Item 12                  Certain Relationships and Related
                         Transactions
Item 13                  Exhibits and Reports on Form 8-K



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                                     PART I

The discussion in this Annual Report on Form 10-KSB regarding the Company and
its business and operations includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1996. Such statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward-looking terminology such as "may," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. The reader is cautioned that all
forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements. The
Company does not have a policy of updating or revising forward-looking
statements and thus it should not be assumed that silence by management of the
Company over time means that actual events are bearing out as estimated in such
forward looking statements.

ITEM 1.  BUSINESS

General

         The Company was incorporated in Florida on July 14, 1995 under the name
CindyCo, Inc. In August 1999, the Company changed its name to International
Cosmetics Marketing Co. (the "Company") and concurrently entered into an
agreement for the exclusive worldwide rights to use the names and likenesses of
Beverly Sassoon and Elan Sassoon.

         The Company commenced operations in late 1999 to develop and distribute
a variety of skin care and nutritional products branded with the Beverly Sassoon
and Elan Sassoon names. Following the initial test phase from December 1999
through February 2001 using a network marketing distribution model, the Company
developed products for retail distribution. In the fourth quarter of fiscal
2001, the Company received orders from a large retail outlet for skin care
products and subsequently sun care products. In December 2001, the Company's
relationship with a large retail outlet was terminated and redirected its
marketing strategy to a direct-to-consumer approach. The Company began selling
its products on Shop NBC in September 2002.

         The Company's objective is to develop a unique line of skin care
products with a quality and selection traditionally distributed through a
direct-to-consumer approach. The Company believes that a unique niche exists for
their products in the upper end of the mass market. As the awareness of the
product line becomes more established, the Company anticipates that some line
extension can be developed, as well as additional licensing opportunities. The
Company is currently developing public relations and marketing campaigns to
support the debut of the new line extensions.

         The Company's fiscal year end is June 30 and its executive offices are
located at 6501 Congress Avenue, Suite 100, Boca Raton, Florida 33487. The
Company's telephone number is 561-999-8878.

Products

         Beverly Sassoon's skin care and sun care products contain various
vitamins. The Company's skin care products, except for the Age-Defying
Moisturizer contain only organic ingredients. The Company's products are as
follows:

         Beverly Sassoon Skin Care Products.

                  Vita Organics Ultra-Gentle Cleanser. Ultra-Gentle Cleanser is
a water soluble creamy cleanser that removes all traces of surface residue. It
is recommended for even the most sensitive skins.


                                       1
<PAGE>

                  Vita Organics Detoxifying Toner. Detoxifying Toner gently
removes excess oil without stripping or over-drying the skin. It refines the
appearance of pores while leaving skin feeling cool and refreshed. It is
recommended for all skin types.

                  VitaOrganics Ultra-Lite Moisturizer. Ultra-Lite Moisturizer
helps prevent the visible signs of aging by restoring skin's natural moisture
balance.

                  VitaOrganics Skin Support Serum. Skin Support Serum is
enriched with essential oils and Vitamins A, B and E with Rose Hips (a natural
source of Vitamin C) to help hydrate and restore radiance to the skin. It is
beneficial for all skin types and can be used alone or under moisturizers.

                  VitaOrganics Night Cream. Night Cream is a lightweight
PM-hydration formula to help the skin retain an optimum moisture level while a
person sleeps.

                  VitaOrganics Eye Cream. Eye Cream is rich in rejuvenating
botanicals and skin friendly vitamins. It soothes and helps reduce puffiness and
signs of fatigue around the eyes.

                  Age-Defying Moisturizer. Age-Defying Moisturizer is a
non-greasy formula that goes beyond moisturizing by combining Beta Hydroxy and
Vitamin E with SPF 15 sunscreen to help exfoliate, moisturize and protect. It is
recommended to be used as a daily protectant to help reduce signs of premature
aging caused by the sun.

         Beverly Sassoon Sun Care Products.

                  SPF 15 VitaSun Sunscreen. SPF 15 VitaSun Sunscreen is a
lightweight, oil-free sunscreen lotion formulated with "Parsol 1789" to protect
against the sun's aging UVA rays. It also provides protection against the sun's
burning UVB rays.

                  SPF 30 VitaSunscreen. SPF 30 VitaSunscreen is a lightweight,
oil-free sunscreen lotion formulated with "Parsol 1789" to protect against the
suns's aging UVA rays. It also provides protection against the sun's burning UVB
rays.

                  SPF 15 VitaSun. SPF 15 VitaSun is an age-defying sunscreen
with oat extract and vitamins A and E.

                  SPF 30 VitaSun. SPF 30 VitaSun is an age-defying sunscreen
with oat extract and vitamins A and E.

                  SPF4 VitaGold Sunscreen Spray. SPF 4 VitaGold Sunscreen Spray
is a light shimmering sunscreen spray with Aloe and Vitamin E that helps to
moisturize skin while tanning.

                  SPF 30 VitaSPORT. SPF 30 VitaSPORT helps protect the skin from
the sun's burning UVA and UVB rays while providing 30 times a person's natural
protection. It is formulated with vitamin E and selected moisturizers to help
hydrate the skin during strenuous activity.

                  Cloudy Days Sunless Tanning Cream. Cloudy Days Sunless Tanning
cream provides a non-streak uniform tan anytime without the sun. It is
formulated with Aloe, vitamin E and selected moisturizers to help keep skin soft
and supple.

Licensing Agreement

         Exclusive License Agreement. On August 19, 1999, the Company entered
into an exclusive worldwide license agreement with Beverly Sassoon
International, LLC (a Florida limited liability company), Beverly Sassoon, and
Elan Sassoon. The agreement was modified in October 2000 and amended in March
2001 and February 2002. The agreement grants the Company the rights to utilize
Ms Sassoon's and Mr. Sassoon's names and likenesses with the manufacturing and
promotion of products, except for hair care products (as defined). The term of
this Exclusive License Agreement is 99 years, with a 99-year renewal at the
Company's option.

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<PAGE>

         Under the Exclusive License Agreement, as amended, the Company pays
Beverly Sassoon International, LLC a royalty which is the greater of (i) $68,250
for each fiscal quarter in six equal installments on the 1st and 15th of each
month or (ii) a payment within 5 days after the Company files its quarterly and
annual financial statements with the U. S. Securities and Exchange Commission
equal to (A) 2% of estimated annual gross revenue (as defined) up to
$22,500,000, plus (B) 1.25% of estimated annual gross revenues from $22,500,000
up to $45,000,000, plus (C) .75% of estimated annual gross revenues exceeding
$45,000,000. Notwithstanding the foregoing the minimum payment shall be
automatically increased to $75,000 for each fiscal quarter in which the Company
reports net income before depreciation and income taxes. The period of the
royalty payments is the period of the Exclusive License Agreement.

Product Development

         The Company is committed to building its brand name and customer
loyalty by selling premium quality, innovative personal care products that
appeal to broad markets. The Company's philosophy is to combine the best of
science and nature and to include in each of its products the highest quality
ingredients with the greatest amount of benefit to the consumer. The Company is
committed to developing and providing quality products that can be sold at
attractive retail prices and allow the Company to maintain reasonable profit
margins.

Suppliers and Key Vendors

         Six of the Company's skin care products are produced by a supplier in
South Carolina. One of the Company's skin care products and its sun care
products are produced by a supplier in Florida. Containers and cartons are
purchased from suppliers in New York and in Florida, respectively. Finally, the
development of additional new products in the future will likewise depend in
part on the services of suitable outside manufacturers. The Company believes
that, in the event it is unable to source any products or ingredients from its
current supply sources, the Company could produce such products or replace such
products or substitute ingredients without great difficulty or prohibitive
increases in the cost of goods sold. However, there can be no assurance that the
loss of a primary supplier or its suppliers would not have a material adverse
effect on the Company's business and results of operations.

         The Company has purchase volume commitments for bottles and caps with a
supplier through 2005 to cover the $77,113 cost of molds used to manufacture the
bottles and caps. After purchases in the year ended June 30, 2002, $67,532
remains payable for the molds. Title to the molds passes to the Company upon
payment of the molds. See "Risk Factors - Reliance on Limited Suppliers."

Competition

         The markets for skin care and sun care products are large and intensely
competitive. The Company competes directly with companies that manufacture and
market skin care and sun care products in each of the Company's product
categories and product lines. The Company competes with other companies in the
skin care and sun care products industry by emphasizing the uniqueness, value
and premium quality of the Company's products. Many of the Company's competitors
have much greater name recognition and financial resources than the Company. In
addition, skin care and sun care products can be purchased in a wide variety of
channels of distribution. There can be no assurance that the Company's business
and results of operations will not be affected materially by market conditions
and competition in the future. See "Risk Factors - Competition."

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<PAGE>


Intellectual Property

         Under the terms of the Exclusive License Agreement, the Company has the
rights to all trademarks, copyrights, trade names and other intellectual
property related to the use of the names and likeness of Beverly Sassoon or Elan
Sassoon for products marketed and distributed under the terms of that agreement.
The Company has registered certain fictitious name applications with the state
of Florida in order to conduct business under the names "Beverly Sassoon &
Company", "Beverly Sassoon & Co." and "Beverly Sassoon." Ms. Sassoon and Mr.
Sassoon have agreed to execute such additional documents, as the Company deems
reasonably necessary to register and protect these intellectual property rights.
As the Company develops other trademarks, trade names, copyrights or other
intellectual property rights, the Company may seek to protect these, as well as
those related to Ms. Sassoon and Mr. Sassoon, by registration in the United
States and other countries where these products may be marketed. Depending upon
the development of the Company's business, the Company may also wish to develop
and market products that incorporate patented or patent-pending formulations, as
well as products covered by design patents or other patent applications. While
the Company may seek to protect its intellectual property, in general, there can
be no assurance that its efforts to protect its intellectual property rights
through copyright, trademark and trade secret laws will be effective to prevent
misappropriation of its products. The Company's failure or inability to protect
its proprietary rights could materially adversely affect its business, financial
condition and results of operations.

Government Regulation

         The Company's skin care and sun care products and related marketing and
advertising are subject to extensive governmental regulation by numerous
governmental agencies and authorities, including the Food and Drug
Administration, the Federal Trade Commission, the Consumer Product Safety
Commission, and U. S. Department of Agriculture.

         The Company's existing markets also regulate product claims and
advertising. These laws regulate the types of claims and representations that
can be made regarding the efficacy of products. The Company and its vendors are
also subject to laws and regulations governing the manufacturing of its products
See "Risk Factors - Government Regulation of Products and Marketing."

Employees

         As of June 30, 2002, the Company had three full time employees. As the
Company implements its business plan, it anticipates hiring additional full-time
employees. Union or other collective bargaining groups represent none of the
employees. The Company believes its relationship with its employees is good, and
does not currently foresee a shortage of qualified personnel needed to operate
its business.

Risk Factors

         There are certain significant risks facing the Company, many of which
are substantial in nature. The following risks and information should be
considered in connection with the other information contained in this filing.

         Reliance on a limited number of customers. Currently the Company has
one customer. The Company believes that it can attract additional customers. See
"General."

         Acceptability of new products. The Company's current products are new
and their acceptability by consumers has not yet been experienced. Limited
acceptability of the Company's products by consumers would have a material
adverse effect upon the Company's business. See "General."

         Dependency on License Agreement. The ability of the Company to market
its products is dependent upon the continuation of its Exclusive Licensing
Agreement with Beverly Sassoon, Elan Sassoon and Beverly Sassoon International
LLC, and the sale of such products under the Beverly Sassoon trade name and Elan
Sassoon trade name. The Company's Exclusive Licensing Agreement with the


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<PAGE>

Sassoons is for a term of 99 years renewable for an additional term of 99 years
at the Company's option. The Company is required to pay certain royalty payments
as a condition to sustaining its License Agreement with the Sassoons during this
time. Although the Company believes that it will be in a position to pay such
royalty payments, there can be no assurances that it will be able to provide
timely payments under the Exclusive Licensing Agreement. If for any reason the
Company were not able to sell its products under the Beverly Sassoon trade name
or Elan Sassoon trade name, a substantial portion of its competitive advantage
would be lost, and it is unlikely the Company would be able to market an
alternative product which would have market identity and acceptance by
consumers. Furthermore, the loss of this License would have a material adverse
effect upon the Company's business.

         The value of the Company's Exclusive License Agreement is also
dependent upon the public perception, image, and reputation of Beverly Sassoon,
Elan Sassoon, and Beverly Sassoon International, LLC. Litigation against the
licensors, improper or illegal conduct, negative publicity, etc., of the
licensors may have a material adverse effect upon the Company's business. See
"Exclusive License Agreement."

         Government Regulation of Products and Marketing. The Company is subject
to or affected by extensive governmental regulations. Such regulations govern,
among other things: (i) the Company's skin care and sun care products, (ii)
product formulation, manufacturing, labeling, and packaging, (iii) product
claims and advertising, and (iv) fair trade practices.

         The Company's skin care and sun care products and related marketing and
advertising also are subject to extensive governmental regulation. The Company
may also be prohibited from making therapeutic claims regarding such products
even if the Company may have research and independent studies supporting such
claims. Present or future health and safety or food and drug regulations, or
judicial interpretations thereof, could delay or prevent the introduction of new
products or suspend the sale of existing products. See "Government Regulation -
Regulation of Skin Care and Sun Care Products."

         Reliance on Suppliers and Key Vendors. The Company currently acquires
its skin care and sun products and related containers and cartons from a limited
number of suppliers. The loss of any of these suppliers could have a material
adverse effect on the Company's business and results of operations. The Company
has no contracts with its suppliers. See "Suppliers and Key Vendors."

         Competition. The markets for the Company's skin care and sun care
products are intensely competitive. Many of the Company's competitors have much
greater name recognition and financial resources than the Company, which may
give them a competitive advantage. There can be no assurance that the Company's
business and results of operations will not be affected materially by market
conditions and competition in the future. Although the Company distributes
certain products it considers proprietary, it does not currently have patent
protection for its products. In addition, competitors may also introduce
products utilizing the same ingredients as the Company's products. See
"Competition."

         Potential Effects of Adverse Publicity. The Company's operations can be
particularly impacted by adverse publicity regarding the Company, the quality of
the Company's products and product ingredients or those of its competitors,
regulatory investigations of the Company or the Company's competitors and their
products.

         Controls by Preferred Stockholder. On September 27, 2000, the Company
entered into a stock purchase agreement with related parties to issue 221,458
shares of Series A Convertible Preferred Stock at a stated value of $2.50 per
share, currently convertible into common shares at $1.50. Nico P. Pronk, a
Director of the Company, received 200,000 of these shares. The preferred stock
carries voting rights equal to 75 votes per one (1) share of preferred stock.
The stock purchase agreement also requires the Company to obtain the written
approval of the holders of at least a majority of the voting power of the
outstanding shares of preferred stock for the following: 1) sell, convey, or
otherwise dispose of or encumber all or substantially all of its property or
business or merge into or consolidate with any other corporation or effect any


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<PAGE>

transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is transferred or disposed of, 2) alter
or change the rights, preferences or privileges of the preferred stock, 3)
increase or decrease the total number of authorized shares of the preferred
stock, 4) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security having rights, preferences or privileges over, or being on a
parity with or similar to, the preferred stock, 5) redeem, purchase or otherwise
acquire (or pay into or set aside for a sinking fund for such purpose) any
security of the Company, 6) amend the Company's Articles of Incorporation or
bylaws, 7) change the authorized number of directors of the Company's board of
directors, 8) declare, order or pay any dividends on any class of securities, 9)
adjust the salary of executive officers, directors, executive level independent
contractors and key employees of the Company, 10) make any capital expenditures
in excess of $15,000, 11) issue new shares of capital, 12) enter into or approve
any agreement or contract for the purchase of goods, services or other items
between the Company, a shareholder or a member of shareholder's immediate
family, or 13) make any commission payment in excess of $15,000.

         Product Liability. The Company may be subject, under applicable laws
and regulations, to liability for loss or injury caused by its products.
Accordingly, the Company maintains a policy covering product liability claims
with a $1,000,000 per claim and $1,000,000 annual aggregate limit and an excess
liability policy with a $1,000,000 per claim and $1,000,000 annual aggregate
limit. Although the Company has not been the subject of product liability
claims, and, if any such claims were to be filed and were to be successful,
there can be no assurance that the Company will be adequately covered by
insurance or have sufficient resources to pay such claims.

         Qualified Report of Independent Auditors. Our independent auditors'
report on our financial statements includes an explanatory paragraph stating
that the accompanying financial statemetns have been prepared assuming that we
will continue as a going concern. Our operations have generated losses and cash
flow deficiences, which raises substantial doubt about our ability to continue
as a going concern. We may be unable to continue as a going concern.

ITEM 2. DESCRIPTION OF PROPERTY

         On September 23, 2002, the Company relocated its principal offices to
6501 Congress Avenue, Suite 100, Boca Raton, Florida 33487. The Company has an
existing lease agreement with an unrelated third party for its previous location
of approximately 4,251 square feet of commercial office space. The lease is for
a term of five (5) years, commencing on November 1, 1999 and expiring on October
31, 2004. The base rent, ranges from $5,314 per month to $5,977 per month over
the term of the lease, along with its pro rata share of certain common area
maintenance, operating expenses, taxes and insurance. The Company intends to
negotiate a settlement with the landlord regarding the remaining balance of this
lease.

ITEM 3.  LEGAL PROCEEDINGS

         On November 7, 2000, a complaint was filed against the company and
other defendants in the Superior Court of the State of California for the County
of Santa Barbara (Case No. 01037203 - Ann Pennock Marshall v. Beverly Sassoon
International, LLC; Beverly Sassoon & Company; Beverly Sassoon, individually;
Paul Lambert; and Michelle Spitz). The complaint alleges that Beverly Sassoon
International, LLC ("BSI") and other defendants involved with BSI fraudulently
induced an elderly investor to loan $150,000 to BSI when BSI never intended to
pay the loan. The complaint alleges, among other things that the Company is the
successor in interest to BSI and is therefore liable to the Plaintiff. In the
third quarter of this fiscal year the lawsuit was settled with a full, complete,
mutual and general release of all claims at no cost to the company. The
settlement stated that certain shares of common stock held by the Plaintiff be
included in a Form SB-2 to be filed with the SEC. As of June 30, 2002, the Form
SB-2 has not been declared effective with the SEC.

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

         None


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<PAGE>

                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The common stock began trading on March 28, 2000 on the OTC bulletin
board market under the symbol "ICMK." On October 15, 2001, the stock symbol was
changed to "SASN." The following table sets forth the range of high and low
closing sale price as reported by the OTC bulletin board for the common stock
for the quarters indicated. The OTC bulletin board market quotations represent
quotations between dealers without adjustment for retail mark-up, markdowns or
commissions and may not represent actual transactions.

                                                               Low         High
                                                               ---         ----
         First Quarter - ended September 30, 2000            $2.625       $4.125
         Second Quarter - ended December 31, 2000            $3.00        $5.00
         Third Quarter - ended March 31, 2001                $1.250       $3.750
         Fourth Quarter - ended June 30, 2001                $1.60        $2.60
         First Quarter - ended September 30, 2001            $1.50        $2.45
         Second Quarter - ended December 31, 2001            $1.10        $1.85
         Third Quarter - ended March 31, 2002                $0.90        $1.80
         Fourth Quarter - ended June 30, 2002                $0.55        $1.70

         As of September 30, 2002, the Company believes that it has
approximately 200 record holders of its common stock.

         The Company has never declared or paid any cash dividends on the
Company's common stock. The Company currently expects to retain future earnings,
if any, to finance the growth and development of the Company's business.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

         The following discussion and analysis should be read in conjunction
with our financial statements and notes related thereto. The discussion of
results, causes and trends should not be constructed to infer conclusions that
such results, causes or trends necessarily will continue in the future.

                          CRITICAL ACCOUNTING POLICIES

         The preparation of our consolidated financial statements requires us to
make estimates and assumptions that affect the reported amounts. The estimates
and assumptions are evaluated on an on-going basis and are based on historical
experience and on various other factors that are believed to be reasonable.
Estimates and assumptions include, but are not limited to fixed asset lives,
intangible assets, income taxes and contingencies. We base our estimates on
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under difference assumptions or conditions. The Company believes the
following critical accounting policies affect its more significant judgments and
estimates used in the preparation of the consolidated financial statements.


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<PAGE>

REVENUE RECOGNITION:

         The Company recognizes revenue at the time it ships products to
customers.

SALES RETURNS AND ALLOWANCES

         Accruals for sales returns and allowances are based on industry
experience and the Company's limited experience to date.

INVENTORIES

         Inventories are recorded at the lower of cost or market. Cost is
determined by the average method while market is determined by replacement cost
for raw materials and net realizable value for finished goods. Appropriate
consideration is given to deterioration, obsolescence and other factors in
evaluating net realizable value.

INTANGIBLE ASSETS

         Intangible assets include a license agreement that was acquired with
cash and common stock. The license agreement was being amortized on the
straight-line basis over 16 years. During the year ended June 30, 2002, the
Company determined that the license agreement was impaired and was completely
written off.

STOCK BASED COMPENSATION

         In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting of
Stock Based Compensation," which is effective for the accompanying financial
statements of the Company. SFAS 123 requires extended disclosures of stock based
compensation arrangements with employees and encourages (but does not require)
compensation cost to be measured based on the fair value of the equity
instrument awarded. Companies are permitted, however, to apply Accounting
Principles Board Opinion No. 25 (APB 25), which recognizes compensation cost
based on the intrinsic value of the equity instrument awarded. The Company
accounts for its stock based compensation awards to employees under the
provisions of APB 25, and will disclose the required pro forma effect on net
income and earnings per share at such time as options are granted.

         Options and warrants issued to non-employees have been valued under
SFAS 123 using the Black-Scholes option-pricing model.


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<PAGE>

RESULTS OF OPERATIONS
Year ended June 30, 2002 compared to year ended June 30, 2001:

         Company sales for the years ended June 30, 2002 and 2001 were $698,763
and $1,206,369, respectively. The decrease in sales resulted from the Company
terminating its relationship with a large retail outlet in the second quarter of
this fiscal year and by redirecting its marketing strategy to a
direct-to-consumer approach.

         Gross profit as a percentage of net sales was 2% and 34% for the years
ended June 30, 2002 and 2001, respectively. The decrease in gross profit
resulted primarily from the write downs taken on Company inventory in 2002.

         Commissions earned by distributors of the Company's products as a
percentage of net sales was 5% and 41% for the years ended June 30, 2002 and
2001, respectively. The decrease in commissions as a percentage of net sales is
attributable to the change from a network marketing distribution model to
selling to the retail market, as well as decreased sales.

         Royalty expense was $276,500 and $289,208 for the years ended June 30,
2002 and 2001, respectively. The increase is attributable to changes in the
underlying license agreement.

         Selling, general and administrative expenses were $1,360,837 and
$1,494,438 in the years ended June 30, 2002 and 2001, respectively. Selling and
general administrative expenses were 195% and 124% of net sales for the years
ended June 30, 2002 and 2001, respectively. Included in 2002 was $183,099 of
impairment losses because the Company determined that the Sassoon license
agreement was impaired and should be completely written off. The decrease from
2002 to 2001 is primarily attributable to the reduction in employees and their
related cost which is attributable to the change in the Company's marketing
approach.

         Expense for stock, stock options and warrants issued for services
$28,959 and $1,812,988 in the years ended June 30, 2002 and 2001, respectively.
The decrease is primarily attributable for warrants issued for investment
banking services and options issued for public relations, consulting, and
referral services in 2001.

         Losses on disposal of fixed assets were $39,464 and $184,878 for the
years ended June 30, 2002 and 2001, respectively. For the year ended June 30,
2002, $35,199 of the losses was due to writing down certain fixed assets and
leasehold improvements to zero, when the Company relocated to new office space.
The decrease from 2002 to 2001 is due to the discontinuance of the Company's
network marketing business, which occurred in 2001.

         Interest expense was $37,375 and $23,400 for the years ended June 30,
2002 and 2001, respectively. The increase results principally from interest on
notes payable and interest on certain accounts payable.

         Net loss decreased by approximately $2,248,034 for the year ended June
30, 2002 compared to a net loss of $3,988,088 in the year ended June 30, 2001.
Net loss as a percentage of net sales was 249% for the year ended June 30, 2002
as compared to 330% for June 30, 2001. The decrease is principally the result of
the reduction of the cost associated with stock options and warrants issued for
services (principally investment banking services) in 2002.

Liquidity and Capital Resources

         The Company's principal needs for funds have been for working capital
(principally inventory purchases), commissions, royalty expense, operating
expenses, capital expenditures, and the development of operations for the U.S.
market. The Company has generally relied on cash flow from sales, issuance of
convertible debentures, preferred stock, common stock, and notes payable of
approximately $7,200,000 since August 1999, including approximately $6,700,000
and $500,000 from the issuance of stock and secured notes, respectively, through
June 30, 2002. It is anticipated current funding will come from sales through an
arrangement with Valuevision d/b/a Shop NBC as well as an investment agreement
which will invest $280,000 into the Company during the first half of fiscal
2003.

                                       9
<PAGE>

         For the year ended June 30, 2002, the Company had negative cash flow
from operations of $1,364,243. This negative cash flow from operations primarily
related to the Company's net loss, and a reduction in accounts payable and
accrued liabilities.

         As of June 30, 2002 and 2001, working capital deficits were $803,321
and $827,970, respectively. Cash at June 30, 2002 and 2001 was $56,635 and
$89,586, respectively.

         Capital expenditures, primarily for office furniture, equipment and
software were $8,680 for the year ended June 30, 2002. In addition, the Company
anticipates additional similar capital expenditures for the next fiscal year.
The Company plans to finance these expenditures from operations.

         The Company leases office space under a non-cancelable operating lease
expiring October 31, 2004. Minimum future operating lease obligations at June
30, 2002 were $178,081, including $74,589 for fiscal 2003. On September 23,
2002, the Company relocated its Corporate Headquarters to 6501 Congress Avenue,
Boca Raton, Florida 33487. The Company will be negotiating a settlement with its
previous landlord regarding the outstanding commitment under the lease
agreement.

Seasonality and Cyclicality

         In addition to general economic factors, the Company's sun care
products are affected by climate and vacation patterns.

Note Regarding Forward-Looking Statements

         Certain statements made above, including those in the Liquidity and
Capital Resources section, herein are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
consist of any statement other than a recitation of historical fact and be
identified by the use of forward-looking terminology such as "may," "expect,"
"anticipate," "estimate," or "continue" or the negative thereof or other
variations thereon or comparable terminology. The reader is cautioned that all
forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward looking statements. The
Company does not have a policy of updating or revising forward-looking
statements and thus it should not be assumed that silence by its management over
time means that actual events are bearing out as estimated in such forward
looking statements.

ITEM 7.  FINANCIAL STATEMENTS

         The Company's financial statements are contained in pages F-1 THROUGH
F-21 as follows.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.


                                       10
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

         The following table sets forth information concerning the Company's
executive officers and directors. Members of the Company's Board of Directors
are elected at the annual meeting of shareholders, and serve for one year or
until their successors are elected and qualify. The Company's debenture holder
and convertible preferred stock holders have the right to approve any change of
the number of directors of the Company. The Board of Directors elects the
Company's officers, and their terms of office are at the discretion of the Board
of Directors.

    Name              Age               Position
    ----              ---               --------

Mark A. Pinvidic      46      President and Chief Financial Officer and Director

Nico P. Pronk         37      Director


         Under the Stock Purchase Agreement of September 7, 2001, Stanford
Venture Capital Holdings, Inc. has the right to have a representative appointed
to the Company's Board of Directors. Stanford Venture Capital Holdings, Inc has
appointed no representative to date.

         Mr. Pinvidic has been President and Acting Chief Financial Officer
since March 16, 2002. Mr. Pinvidic has more than 25 years experience in retail,
manufacturing, and consumer product development. As a business owner, Mr.
Pinvidic has marketed personal care products throughout Canada and the United
States and parts of Europe and Asia for more then the past 5 years.

         Mr. Pronk became a Director on December 18, 2000. Mr. Pronk is
President, a director and shareholder of Noble International Investments, Inc.,
an NASD broker/dealer. Mr. Pronk is a native of Amsterdam, The Netherlands. Mr.
Pronk is a graduate of the Dutch Institute for Banking and Finance. Mr. Pronk is
a member of, and serves on the board of directors of, the National Investment
Bankers Association and is a member of the Securities Traders Association of
Florida.

         There are no family relationship between any of the executive officers
and directors. Each director is elected at the Company's annual meeting of
shareholders and holds office until the next annual meeting of shareholders, or
until his successor is elected and qualified.

Compliance with Section 16(a) of the Exchange Act

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
(10%) percent of the outstanding Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership on Form 3 and
reports of changes in ownership of Common Stock on Forms 4 or 5. Such persons
are required by SEC regulation to furnish the Company with copies of all such
reports they file.

         Based solely on its review of the copies of such reports furnished to
the Company or written representations that no other reports were required, the
Company believes that all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten (10%) percent beneficial owners were
compiled with during the year ended June 30, 2002.

ITEM 10. EXECUTIVE COMPENSATION

Cash Compensation

         The following table summarizes all compensation recorded by the Company
in each of the last two fiscal years for the Company's Chief Executive Officer
and each other executive officers serving as such whose annual compensation
exceeded $100,000.

                                       11
<PAGE>
<TABLE>
<CAPTION>


-----------------------------------------------------------------------------------------------------------------------
                           SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------------------------------------------------
                                                                      Long Term Compensation
------------------ ------- --------- --------- -------------- --------------------------------------- -----------------
                                  Annual Compensation                   Awards              Payouts
------------------ ------- ---------------------------------- ---------------------------- ---------- -----------------
Name and            Year   Salary    Bonus     Other Annual   Restricted     Securities    LTIP          All Other
                                                                 Stock       Underlying
Principle                                      Compensation    Award(s)     Options/SARs
Position                     ($)       ($)          ($)           ($)           (#)         Payouts     Compensation
------------------ ------- --------- --------- -------------- ------------ --------------- ---------- -----------------
<S>                 <C>       <C>       <C>          <C>           <C>           <C>           <C>           <C>
Stephanie McAnly
(1)                 2001    68,000      0            0             0             0             0             0
------------------ ------- --------- --------- -------------- ------------ --------------- ---------- -----------------
Menderes Akdag
(2)                 2001    44,318      0            0             0             0             0             0
------------------ ------- --------- --------- -------------- ------------ --------------- ---------- -----------------
Sam A. Lazar (3)    2001    30,000      0            0             0          150,000          0             0
------------------ ------- --------- --------- -------------- ------------ --------------- ---------- -----------------
Sam A. Lazar (3)    2002    85,268      0            0             0             0             0             0
------------------ ------- --------- --------- -------------- ------------ --------------- ---------- -----------------
Mark A. Pinvidic    2002    47,914      0            0             0          450,000          0             0
(4)
------------------ ------- --------- --------- -------------- ------------ --------------- ---------- -----------------
</TABLE>

(1)      Ms. McAnly served as the Company's President from August 19, 1999 to
         February 28,2001

(2)      Mr.Akdag served as the Company's Chief Executive Officer from November
         15, 2000 to March 31, 2001 and a director of the Company from December
         18, 2000 to March 31, 2001.

(3)      Mr. Lazar served as the Company's President and Chief Operating Officer
         from April 2, 2001 to January 4, 2002.

(4)      Mr Pinvidic began serving as the Company's President and Chief
         Financial Officer on March 16, 2002.

                                       12
<PAGE>


<TABLE>
<CAPTION>
--------------------------------------------------------------------------- ------------------------------------------
                  OPTION/SAR GRANTS IN LAST FISCAL YEAR
--------------------------------------------------------------------------- ------------------------------------------
                            Individual Grants
--------------------------------------------------------------------------- ------------------------------------------
Name                         Number of          % of Total       Exercise or       Market         Expiration Date
                            Securities         Options/SARs
                            Underlying          Granted to
                           Options/SARs        Employees in       Base Price     Price Date
                            Granted (#)        Fiscal Year          ($/Sh)        of Grant
--------------- -------- ------------------ ------------------- --------------- ------------- ------------------------
<S>                           <C>                  <C>               <C>            <C>           <C>
Mark A.
Pinvidic (1)                  225,000              100%              1.50           1.20          March 16, 2012
--------------- -------- ------------------ ------------------- --------------- ------------- ------------------------
Mark A.
Pinvidic (1)                  225,000              100%              1.10            1.20         March 16, 2012
--------------- -------- ------------------ ------------------- --------------- ------------- ------------------------
Sam A. Lazar
(2)                           150,000              81%               1.50           2.00           April 2, 2011
--------------- -------- ------------------ ------------------- --------------- ------------- ------------------------
</TABLE>

(1)      Mr. Pinvidic began serving as the Company's President and Chief
         Financial Officer on March 16, 2002. His options are exercisable per
         the following: 150,000 on January 15, 2003, 150,000 on January 15,
         2004, and the final 150,000 on January 15, 2005.

(2)      Mr. Lazar served as the Company's President and Chief Operating office
         from April 2, 2001 to January 4, 2002. His 150,000 options were
         forfeited in January 2002.

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------
            AGGREGATE OPTION/SAR EXERCISES IN FISCAL YEAR 2002 AND FY-END OPTION/SAR VALUES
--------------------------------------------------------------------------------------------------------
                                           Number of Securities              Value of Unexercised
                                          Underlying Unexercised       In-the-Money Options/SARs at FY
                                          Options/SARs at FY-End                     End
                                                    (#)                               ($)
------------------------------------- -------------------------------- ---------------------------------
    Name      Shares      Value        Exercisable    Unexercisable     Exercisable     Unexercisable
              Acquired
              on
              Exercise    Realized
                 (#)         ($)
------------- ----------- ----------- -------------- ----------------- --------------- -----------------
<S>               <C>         <C>           <C>          <C>                 <C>              <C>
Mark A.           0           0             0            450,000             0                0
Pinvidic (1)
------------- ----------- ----------- -------------- ----------------- --------------- -----------------
Sam A. Lazar      0           0             0               0                0                0
------------- ----------- ----------- -------------- ----------------- --------------- -----------------
</TABLE>

(1)      Mr. Pinvidic began serving as the Company's President and Chief
         Financial Officer on March 16, 2002. His options are exercisable per
         the following: 150,000 on January 15, 2003, 150,000 on January 15,
         2004, and the final 150,000 on January 15, 2005.

(2)      Mr. Lazar served as the Company's President and Chief Operating office
         from April 2, 2001 to January 4, 2002. His 150,000 options were
         forfeited in January 2002.

1997 STOCK OPTION PLAN

         The Company's 1997 Stock Option Plan ("Plan") was adopted by the
Company's Board of Directors and the holders of a majority of issued and
outstanding capital stock on October 1, 1997, effective as of that date. Under
the Plan, the Company has reserved an aggregate of 1,000,000 shares of Common
Stock for issuance pursuant to options granted under the Plan ("Plan Options"),
of which options to acquire an aggregate of 450,000 shares have been granted to
Mr. Pinvidic. The purpose of the Plan is to encourage stock ownership by the
Company's officers, directors and key employees, and to give such persons a
greater personal interest in the Company's success and an added incentive. The
Board of Directors will administer the Plan including, without limitation, the
selection of the persons who will be granted Plan Options under the Plan, the
type of Plan Options to be granted, the number of shares subject to each Plan
Option and the Plan Option price.


                                       13
<PAGE>

         Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of Common Stock owned
by the eligible person, and receive a new Plan Option to purchase shares of
Common Stock equal in number to the tendered shares. Any Incentive Option
granted under the Plan must provide for an exercise price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the exercise price of any Incentive Option granted to an eligible employee
owning more than 10% of the outstanding Common Stock must not be less than 110%
of such fair market value as determined on the date of the grant. The term of
each Plan Option and the manner in which it may be exercised is determined by
the Board of Directors. Provided that no Plan Option may be exercisable more
than 10 years after the date of its grant and, in the case of an Incentive
Option granted to an eligible employee owning more than 10% of the Common Stock,
no more than five years after the date of the grant.

         The Plan provides that, if the Company's outstanding shares are
increased, decreased, exchanged or otherwise adjusted due to a share dividend,
forward or reverse share split, recapitalization, reorganization, merger,
consolidation, combination or exchange of shares, an appropriate and
proportionate adjustment shall be made in the number or kind of shares subject
to the Plan or subject to unexercised Plan Options and in the purchase price per
share under such Plan Options. Any adjustment, however, does not change the
total purchase price payable for the shares subject to outstanding Plan Options.
In the event of the Company's proposed dissolution or liquidation, a proposed
sale of all or substantially all of the Company's assets, a merger or tender
offer for the Company's shares of Common Stock, the Board of Directors may
declare that each Option granted under this Plan shall terminate as of a date to
be fixed by the Board of Directors; provided that not less than 30 days written
notice of the date so fixed shall be given to each Eligible Person holding an
Option, and each such Eligible Person shall have the right, during the period of
30 days proceeding such termination, to exercise his Option as to all or any
part of the shares, including shares of stock as to which such Option would not
otherwise be exercisable.

         The Plan provides that the Plan Options granted there under shall be
exercisable from time to time in whole or in part, unless otherwise specified in
the agreement representing the Plan Options or by the Board of Directors. Each
Plan Option may be exercised in whole or in part at any time during the period
from the date of the grant until the end of the period covered by the Plan
Option period. The Plan provides that, with respect to Incentive Stock Options,
the aggregate fair market value (determined as of the time the option is
granted) of the shares of Common Stock, with respect to which Incentive Stock
Options are first exercisable by any option holder during any calendar year
(including all of the Company's incentive stock option plans or any parent or
any subsidiary which are qualified under Section 422 of the Internal Revenue
Code of 1986) shall not exceed $100,000.

         All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not the Company's employee but is a member of the
Board of Directors and his service as a director is terminated for any reason,
other than death or disability, the Plan Option granted to him shall lapse to
the extent unexercised on the earlier of the expiration date or 30 days
following the date of termination, except options of William Wirch expire the
earlier of the expiration date or one year following the date of termination. If
the optionee dies during the term of his employment, the Plan Option granted to
him shall lapse to the extent unexercised on the earlier of the expiration date
of the Plan Option or the date one year following the date of the optionee's
death. If the optionee is permanently and totally disabled within the meaning of
Section 22(c)(3) of the Internal Revenue Code of 1986, the Plan Option granted
to him lapses to the extent unexercised on the earlier of the expiration date of
the option or one year following the date of such disability.

                                       14
<PAGE>

         The Board of Directors may amend, suspend or terminate the Plan at any
time. However, no such action may prejudice the rights of any optionee who has
prior thereto been granted options under this Plan. Further, no amendment to
this Plan which has the effect of (a) increasing the aggregate number of shares
subject to the Plan (except for adjustments due to changes in the Company's
capitalization), or (b) changing the definition of "Eligible Person" under this
Plan, may be effective unless and until approved by the Company's stockholders
in the same manner as approval of the Plan was required. Any such termination of
the Plan shall not affect the validity of any Plan Options previously granted
thereunder. Unless the Plan shall theretofore have been suspended or terminated
by the Board of Directors, the Plan shall terminate on October 1, 2007.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         (a) Security ownership of certain beneficial owners and management. As
of September 12, 2002, there were 8,491,579 shares of the Company's Common Stock
issued and outstanding and there were 221,458 shares of Series A Convertible
Preferred Stock issued and outstanding. The following table sets forth, as of
the close of business on September 12, 2002, (a) the name, address and number of
shares of each person known by us to be the beneficial owner of more than five
percent of the Company's Common Stock; and (b) the number of shares of the
Company's Common Stock owned by each officer and director, and all officers and
directors as a group, together with their respective percentage holdings of such
shares. Unless otherwise indicated, the address for each person is 6501 N.W.
Park of Commerce Boulevard, Suite 205, Boca Raton, Florida 33487.

Name and                                          Amount of           Percentage
Address of                                        Beneficial             of
Beneficial Owner (1)                          Ownership of Stock        Class
--------------------                          ------------------        -----
Common Stock
------------

Mark Pinvidic(2)                                    450,000             5.3%
820 Hibiscus St, Boca Raton, FL. 33486
Nico Pronk, Sr.                                     449,000             5.3%
c/o 6501 Congress Ave, Boca Raton, FL. 33487
Nico P. Pronk(3)                                    775,092             9.1%
c/o 6501 Congress Ave, Boca Raton, FL. 33487
Stanford Venture Capital Holdings, Inc.(4)        1,643,748            19.4%
5050 Westheimer Rd., Houston, TX. 77056
Beverly Sassoon (5)                                 779,133             9.2%
P.O. Box 267145, Weston, FL. 33326
Elan Sassoon (6)                                    779,133             9.2%
P.O. Box 267145, Weston, FL. 33326

All Executive Officers
and Directors as a Group
(two people)(2)(3)                                1,225,092            14.4%

Preferred Stock
---------------

Nico P. Pronk                                       200,000            90.0%
c/o 6501 Congress Ave, Boca Raton, FL. 33487


(1)      Pursuant to Rule 13-d-3 under the Exchange Act, beneficial ownership of
         a security consists of sole or shared voting power (including the power
         to vote or direct the voting) and/or sole or shared investment power
         (including the power to dispose or direct the disposition) with respect
         to a security whether through a contract, arrangement, understanding,
         relationship or otherwise. Unless otherwise indicated, each person
         indicated has sole power to vote, or dispose or direct the disposition
         of all shares beneficially owned, subject to applicable unity property
         laws.

(2)      Includes 450,000 options which vest at a rate of 150,000 options on
         January 15, 2003, 150,000 options on January 15, 2004, and 150,000
         options on January 15, 2005 under the Company's 1997 Stock Option Plan
         which options will be exercisable for ten (10) years from the date of
         grant at an exercise price of $1.10 per share for 225,000 and $1.50 per
         share for the remaining $225,000.

(3)      Includes 333,333 shares issuable upon conversion of 200,000 shares of
         Series A Convertible Preferred Stock and 199,884 shares issuable upon
         exercise of warrants.

(4)      Includes 375,000 shares issuable upon exercise of warrants. Also
         includes 43,748 shares held by Stanford Group Company, a wholly owned
         subsidiary of Stanford Venture Capital Holdings, Inc.

(5)      Beverly Sassoon is a managing member of Beverly Sassoon International,
         LLC and is a control person of Capital Distributors, LLC.

(6)      Elan Sassoon is a managing member of Beverly Sassoon International, LLC
         and is a control person of Capital Distributors, LLC.

         (b) Change in control. The Series A Convertible Preferred Stock issued
September 27, 2000 entitles each such stockholder to seventy-five (75) votes for
each one vote of Common Stock, and with respect to such vote, shall be entitled,
notwithstanding any provision hereof, to notice of any shareholders' meeting in
accordance with the bylaws of the Company, and shall be entitled to vote
together as a single class with holders of Common Stock, with respect to any
question or matter upon which holders of Common Stock have the right to vote.
The Series A Convertible Preferred Stock also entitles the holders thereof to
vote as a separate class. The issuance of the Series A Convertible Preferred
Stock resulted in a change in control of the Company to Nico P. Pronk.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Exclusive License Agreement - On October 13, 2000, an Exclusive License
Agreement with Beverly Sassoon, Elan Sassoon and Beverly Sassoon International,
LLC, was modified to have the royalty terminate August 19, 2001. The royalty
payment was also modified to equaling the greater of 2% of gross revenues as
defined in the Exclusive License Agreement or $22,750 per month starting October
2000 until such time as the Company reports positive net cash flow from
operating activities for three consecutive months. Subsequent to June 30, 2000,
the options were modified to be cashless exercisable options and to be
exercisable in whole or in part through August 19, 2019. On March 28, 2001, this
Exclusive License Agreement was amended including modifying the royalty payment
the greater of (i) $68,250 for each fiscal quarter in six equal installments on
the 1st and 15th of each month or (ii) a payment within 5 days after the Company
files its quarterly and annual financial statements with the U. S. Securities
and Exchange Commission equal to (A) 2% of estimated annual gross revenue (as
defined) up to $22,500,000, plus (B) 1.25% of estimated annual gross revenues
from $22,500,000 up to $45,000,000, plus (C) .75% of estimated annual gross
revenues exceeding $45,000,000. Notwithstanding the foregoing the minimum
payment shall be automatically increased to $75,000 for each fiscal quarter in
which the Company reports net income before depreciation and income taxes. The
period of the royalty payments was also extended to the period of the Exclusive
License Agreement. On February 4, 2002, this Exclusive License Agreement was
amended to among other things, cancel the Indemnification Agreement which was in
place as well as to cancel 3,000,000 stock options of the Company which were
being held by the Sassoon's and/or Capital Distribution, LLC.


                                       15
<PAGE>


Financial advisory and investment banking services - On October 13 2000, the
Company entered into a consulting agreement for financial advisory and
investment banking services with an NASD broker dealer, Noble International
Investments, Inc. Certain principals of the broker dealer are stockholders of
the Company, including the primary convertible preferred shareholder (see Note
13 in the accompany financial statement). The agreement provides a monthly
consulting fee of $10,000 plus five-year "cashless exercise" warrants to
purchase 250,000 shares of the Company's common stock at an exercise price of
$2.50 (subject to adjustment in certain events) for which the broker dealer will
have registration rights with respect to the common stock underlying the
warrants. Additionally, the agreement provides for payment of a transaction fee
equal to 1) 5% of the consideration up to $3,000,000, plus 2) 3% of the
consideration from and including $3,000,000 up to $5,000,000, plus 3) 1% of the
consideration including and in excess of $5,000,000 for any merger, acquisition,
strategic partner relationship, etc. In addition to the consulting fee and
transaction fee, the agreement provides for payment of an alternate transaction
fee, subject to a minimum of $25,000, for any joint venture, marketing
agreement, licensing agreement, strategic partner agreement, etc., and 1) in
connection with any equity securities financing in a public offering, a fee to
be agreed upon by the Company and the broker dealer; 2) in connection with any
equity securities financing in a private placement, a) a cash fee equal to 10%
of the gross proceeds raised, plus b) a non-accountable expense fee equal to 3%
of the offering price of the securities sold, plus c) the broker dealer shall
have the right to purchase, for $.01 each, "cashless exercise" warrants to
purchase common stock equal to 10% of the number of shares of common stock sold
in equity securities financing. The warrants will have a term of five years and
have an exercise price of 100% of the per share price (or conversion price of
the securities, if applicable) at which the investors invested in connection
with the equity securities financing and will be transferable to broker dealers'
employees and affiliates. The broker dealer shall also be granted registration
rights with respect to the common stock underlying such warrants which will
include at least one demand registration right at the Company's cost and an
unlimited number of piggyback registration rights; 3) in connection with any
debt securities financing, such amount as shall be agreed upon by the Company
and the broker dealer; 4) in connection with any bank financing that is
consummated prior to termination of this agreement in which the broker dealer
acts as arranger, the Company shall pay the broker dealer aggregate arrangement
fees in an amount to be agreed upon, payable on the date of execution of
definitive documentation with respect thereto, which fee shall be in addition to
any fee payable to any affiliate of the broker dealer that may act as agent or a
member of a lending syndicate or otherwise as a participant in any such bank
financing.

         The term of this agreement is for the three years ending October 12,
2003 and is renewable by mutual consent. The agreement provides that the Company
agrees to retain the broker dealer on an exclusive basis in connection with a
possible transaction, alternate transaction or financing for the term of the
agreement.

         Stock Purchase Agreement. On September 7, 2001, the Company entered
into a Stock Purchase Agreement pursuant to which the Company sold an aggregate
of 1,000,000 shares of its Common Stock (the "Shares") and Common Stock Purchase
Warrants to purchase 750,000 shares of its Common Stock, (the "Warrant") for an
aggregate purchase price of $1,500,000 in a private transaction exempt from
registration under the Securities Act of 1933, as amended (the "Act"), in
reliance on Section 4(2) of said Act. Acting as placement agent in this
transaction, Noble International Investments, Inc. received $97,500.00 for fees
and expenses. Nico P. Pronk, President of Noble International Investments, Inc.
and a stockholder and director of the Company received warrants to purchase the
18,750 and 25,000 shares of the Company's Common Stock at $2.125 per share and
$1.50 per share, respectively.


                                       16
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         The following documents are filed as a part of this report or are
incorporated by reference to previous filings, if so indicated:

         (a)      Exhibits
                  --------
<TABLE>
<CAPTION>

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

<S>                        <C>
3(i)                       Articles of Incorporation, as amended**

3(ii)                      By-Laws**

4(i)                       Option to Purchase Common Stock held by Beverly Sassoon**

4(ii)                      Option to Purchase Common Stock held by Elan Sassoon**

4(iii)                     Option to Purchase Common Stock held by Capital Distributors, LLC.**

4(iv)                      Form of Convertible Debenture**

4(v)                       Form of Common Stock Warrant**

10(i)                      Exclusive  License  Agreement  dated  as of  August  19,  1999  by and  between  Beverly
                           Sassoon, Elan Sassoon,  Beverly Sassoon International,  LLC and International  Cosmetics
                           Marketing Co.**

10(iv)                     1997 Stock Option Plan**

10(x)                      Consulting  Agreement  dated  as of  October  13,  2000  by  and  between  International
                           Cosmetics Marketing Co. and Noble International Investments, Inc.**

10(xi)                     Security  Agreement  dated  February  6,  2001 by and  between  International  Cosmetics
                           Marketing Co. and Nico P. Pronk**

10(xi)(1)                  Secure   Promissory   Note  for  $200,000   dated   February  6,  2001  by  and  between
                           International Cosmetics Marketing Co. and Nico P. Pronk**

10(xi)(2)                  Secured  Promisory Note for $25,000 dated February 28, 2001 by and between  Internationa
                           Cosmetics Marketing Co. and Nico P. Pronk**

10(xi)(3)                  Secured  Promissory Note for $100,000 dated March 12, 2001 by and between  International
                           Cosmetics Marketing Co. and Nico P. Pronk**

10(xi)(4)                  Secured  Promissory Note for $100,000 dated March 28, 2001 by and between  International
                           Cosmetics Marketing Co. and Nico P. Pronk**

10(xi)(5)                  Secured  Promissory  Note for $25,000 dated April 12, 2001 by and between  International
                           Cosmetics Marketing Co. and Nico P. Pronk**

10(xi)(6)                  Secured  Promissory  Note for $80,000  dated July 16, 2001 by and between  International
                           Cosmetics Marketing Co. and Nico P. Pronk**

                                      F-17
<PAGE>

10(xi)(7)                  Secured  Promissory  Note for $150,000 dated July 27, 2001 by and between  International
                           Cosmetics Marketing Co. and Nico P. Pronk**

10(xii)                    Amendment  to  Exclusive   License  Agreement  dated  March  28,  2001  by  and  between
                           International  Cosmetics  Marketing Co. and Beverly Sassoon,  Elan Sassoon,  and Beverly
                           Sassoon International, LLC.**

10(xiii)                   Employment  Agreement  dated  March 21,  2001,  effective  as of April 2,  2001,  by and
                           between International Cosmetics Marketing Co. and Sam A. Lazar**

10(xiiii)                  Stock Purchase  Agreement dated September 7, 2001 by and between  International
                           Cosmetics Marketing Co. and Stanford Venture Capital Holdings, Inc.**

10(xv)                     Registration Rights Agreement dated September 7 by and between  International  Cosmetics
                           Marketing Co. and Stanford  Venture  Capital  Holdings,  Inc.,  Stanford  Group Company,
                           Nico P. Pronk, and Wayne Horne.**

10(xvi)                    Amendment  to  Exclusive  License  Agreement  dated  February  4,  2002  by and  between
                           International  Cosmetics  Marketing Co. and Beverly Sassoon,  Elan Sassoon,  and Beverly
                           Sassoon International, LLC.*

10(xvii)                   Investment Agreement dated July 19, 2002 by and between International
                           Cosmetics Marketing Co. and Stanford Venture Capital Holdings, Inc and Nico P.Pronk.*
</TABLE>

**Previously filed
* Filed here within


         (b)      Reports on Form 8-K
                  -------------------

         Current Report on Form 8-K. A current report on Form 8-K was filed on
October 5, 2001, regarding the Company's entering into a Stock Purchase
Agreement pursuant to which the Company sold an aggregate of 1,000,000 shares of
its common stock and common stock purchase warrants to purchase 750,000 shares
of its common stock for an aggregate purchase price of $1,500,000 in a private
transaction exempt from registration under the Securities Act of 1933, as
amended.


                                       18
<PAGE>

         Current Report on Form 8-K. A current report on Form 8-K was filed on
December 12, 2001, regarding the termination of Sam A. Lazar as President and
Chief Operating Officer as of December 4, 2001.

         Current Report on Form 8-K. A current report on Form 8-K was filed on
April 18, 2002, regarding the termination of Sonny Spoden as Chief Financial
Officer and Director as of February 28, 2002. In addition, Mark A. Pinvidic was
appointed President and acting Chief Financial Officer as of March 16, 2002.


                                       19
<PAGE>

                                   SIGNATURES

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

                                         International Cosmetics Marketing Co.


                                         By:  /s/ Mark A. Pinvidic
                                              ----------------------------------
                                              Mark A. Pinvidic, President and
                                              Chief Financial Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>


   Signature                          Title                                             Date
   ---------                          -----                                             ----

<S>                                 <C>                                                <C>
/s/  Nico P. Pronk                  Director                                           October 16, 2002
---------------------------
Nico P. Pronk


/s/ Mark A. Pinvidic                President and Chief Financial Officer              October 16, 2002
---------------------------
Mark A. Pinvidic
</TABLE>


                                       20
<PAGE>


                                 CERTIFICATIONS

I, Nico P. Pronk certify that:

1. I have reviewed this annual report on Form 10-KSB of International Cosmetics
Marketing Co.

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

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

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

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

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

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

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors ( or persons performing the equivalent
functions):

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

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

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: October 16, 2002

/s/ Nico P. Pronk
---------------------------------------
Nico P. Pronk, Director




                                       21
<PAGE>



I, Mark A. Pinvidic certify that:

1. I have reviewed this annual report on Form 10-KSB of International Cosmetics
Marketing Co.

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

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

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

         d)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

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

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

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

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

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

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: October 16, 2002

/s/ Mark A. Pinvidic
---------------------------------------
Mark A. Pinvidic, President and Acting CFO




                                       22
<PAGE>
                       [letterhead of Daszkal Bolton LLP]

                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders
International Cosmetics Marketing Co.

We have audited the accompanying balance sheets of International Cosmetics
Marketing Co. as of June 30, 2002 and 2001, and the related statements of
operations, changes in stockholders' deficiency and cash flows for the year
ended June 30, 2002 and 2001. 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 auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 International Cosmetics
Marketing Co. as of June 30, 2002 and 2001, and the results of its operations
and its cash flows for the year ended June 30, 2002 and 2001 in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 15 to the
financial statements, the Company has suffered recurring losses from operations
and had negative cash flows from operations which raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also described in the Note 15. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


                                              /s/ Daszkal Bolton LLP


Boca Raton, Florida
September 10, 2002

                                      F-1
<PAGE>


                     INTERNATIONAL COSMETICS MARKETING CO.

                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                              June 30,        June 30,
                                                                                2002           2001
                                                                            -----------     -----------
                                     ASSETS
<S>                                                                         <C>             <C>
Current Assets:
    Cash                                                                    $    56,635     $    89,586
    Receivables                                                                   1,326          14,000
    Inventory, net                                                              114,296         222,590
    Deposits for inventory purchases                                                 --          80,135
    Prepaid expenses and other current assets                                    15,542          29,322
                                                                            -----------     -----------

                    Total current assets                                        187,799         435,633

Office furniture and equipment, net                                              77,113          69,793
License agreement, net                                                               --         197,005
Deposits                                                                         17,915          57,915
                                                                            -----------     -----------
                    Total assets                                            $   282,827     $   760,346
                                                                            ===========     ===========


        LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
    Demand notes payable to stockholder                                     $   500,000     $   500,000
    Accounts payable                                                            351,340         513,987
    Payables to related parties                                                  78,243         222,618
    Accrued liabilities                                                          61,537          26,998
                                                                            -----------     -----------
                    Total current liabilities                                   991,120       1,263,603

Long Term liabilities:
   Payable to supplier                                                           67,532

Convertible debentures - stockholder                                                 --         105,000

Stockholders' deficiency:
    Preferred stock, $.001 par value, $2.50 liquidation value, 5,000,000
     shares authorized; 221,458 shares issued and outstanding                       221             221
    Common stock, $.001 par value, 25,000,000
     shares authorized; 8,491,579 and 5,488,963 shares issued
      and outstanding                                                             8,491           5,489
    Additional paid-in capital                                                6,590,816       5,021,332
    Accumulated deficit                                                      (7,375,353)     (5,635,299)
                                                                            -----------     -----------
                    Total stockholders' deficiency                             (775,825)       (608,257)
                                                                            -----------     -----------
                    Total liabilities and stockholders' deficiency          $   282,827     $   760,346
                                                                            ===========     ===========
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                      F-2
<PAGE>
                     INTERNATIONAL COSMETICS M6ARKETING CO.

                             STATEMENT OF OPERATIONS

                                                       Year            Year
                                                       Ended           Ended
                                                      June 30,        June 30,
                                                        2002            2001
                                                    -----------     -----------

Net sales                                           $   698,763     $ 1,206,369

Cost of sales                                           683,945         796,802
                                                    -----------     -----------

Gross profit                                             14,818         409,567

Operating expenses:
    Commissions                                          33,723         488,948
    Royalty and other - licensors                       276,500         289,208
    Selling, general and administrative               1,360,837       1,494,438
    Stock, stock options and warrants issued to
    licensors and others for services                    28,959       1,812,988
                                                    -----------     -----------

Total operating expenses                              1,700,019       4,085,582
                                                    -----------     -----------

Operating loss                                       (1,685,201)     (3,676,015)
                                                    -----------     -----------

Other income (expense):
     Forgiveness of debt                                  6,690          51,225
     Interest income                                      9,774              --
     Interest expense                                   (37,375)        (23,400)
     Loss on disposal of fixed assets                   (39,464)       (184,878)
     Other                                                5,522              --
                                                    -----------     -----------

                                                        (54,853)       (157,053)
                                                    -----------     -----------

Loss before income taxes                             (1,740,054)     (3,833,068)

Provision for income taxes                                   --              --
                                                    -----------     -----------

Net loss                                             (1,740,054)     (3,833,068)

Discount attributable to beneficial conversion
     privilege of preferred stock                            --        (155,020)
                                                    -----------     -----------

Net loss applicable to common stock                 $(1,740,054)    $(3,988,088)
                                                    ===========     ===========


Net loss per share:
    Basic                                           $     (0.25)    $     (0.79)
    Diluted                                         $     (0.25)    $     (0.79)
Weighted average common shares outstanding:
    Basic                                             6,843,807       5,043,032
    Diluted                                           6,843,807       5,043,032

   The accompanying notes are an integral part of these financial statements.


                                      F-3
<PAGE>

                     INTERNATIONAL COSMETICS MARKETING CO.

                STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
                                                      Preferred                    Common
                                                        Stock       Preferred      Stock         Common
                                                       Shares         Stock        Shares         Stock
                                                     ----------    ----------    ----------     ----------


<S>                                                     <C>               <C>     <C>                <C>
Balances at June 30, 2000                                    --            --     5,145,730          5,145

Options issued to certain licensors                          --            --            --             --
Conversion of accounts payable                               --            --        21,900             22
Conversion of advances payable                           16,000            16        18,000             18
Cancellation of shares at par value                          --            --      (400,000)          (400)
Issuance of preferred stock                             200,000           200       499,800             --
Conversion of legal fees payable                          5,458             5            --             --
Issuance of common stock at $3.00
per share, net of issuing costs                              --            --       110,000            110
Change in issuance of common stock
from $3.00 to $1.50 per share                                --            --       110,000            110
Stock options - certain licensors                            --            --            --             --
Stock options - employee                                     --            --            --             --
Issuance of common stock for
public relations services                                    --            --       190,000            190
Stock options for consulting services                        --            --            --             --
Transfer of 30,000 shares of
common stock by stockholders for
public relations services                                    --            --            --             --
Issuance of common stock at $1.50
per share, net of issuance costs                             --            --       293,333            294
Warrants issued for investment
banking services                                             --            --            --             --
Embedded dividends on convertible preferred stock            --            --            --             --
Net loss                                                     --            --            --             --

                                                     ----------    ----------    ----------     ----------

Balances at June 30, 2001                               221,458           221     5,488,963          5,489

Issuance of common stock at $1.50 (net)                      --            --       109,350            109
Issuance of common stock at $1.50 (net)                      --            --     1,000,000          1,000
Stock options - licensors                                    --            --            --             --
Stock options - employee                                     --            --            --             --
Exercise of options                                          --            --       250,000            250
Conversion of debenture                                      --            --        70,000             70
Issuance of common stock for legal services                  --            --        15,000             15
Exercise of options                                          --            --     1,558,266          1,558
Net loss                                                     --            --            --             --

                                                     ----------    ----------    ----------     ----------

Balances at June 30, 2002                               221,458           221     8,491,579          8,491
                                                     ==========    ==========    ==========     ==========
[RESTUBBED]
<CAPTION>
                                                         Additional                       Total
                                                           Paid-in      Accumulated    Stockholders'
                                                           Capital        Deficit        Equity
                                                          ----------     ----------     ----------
                                                                                       (Deficiency)
                                                                                       ------------
<S>                                                        <C>           <C>              <C>
Balances at June 30, 2000                                  2,046,258     (1,957,251)        94,152
                                                                                        ----------
Options issued to certain licensors                           12,126             --         12,126
Conversion of accounts payable                                54,727             --         54,749
Conversion of advances payable                                84,966             --         85,000
Cancellation of shares at par value                              400             --             --
Issuance of preferred stock                                  500,000
Conversion of legal fees payable                              13,640             --         13,645
Issuance of common stock at $3.00
per share, net of issuing costs                              284,200             --        284,310
Change in issuance of common stock
from $3.00 to $1.50 per share                                   (110)            --             --
Stock options - certain licensors                             36,378             --         36,378
Stock options - employee                                     150,000             --        150,000
Issuance of common stock for
public relations services                                    379,810             --        380,000
Stock options for consulting services                        267,400             --        267,400
Transfer of 30,000 shares of
common stock by stockholders for
public relations services                                     60,000             --         60,000
Issuance of common stock at $1.50
per share, net of issuance costs                             381,757             --        382,051
Warrants issued for investment
banking services                                             905,000             --        905,000
Embedded dividends on convertible preferred stock           (155,020)       155,020             --
Net loss                                                          --     (3,833,068)    (3,833,068)

                                                          ----------     ----------     ----------

Balances at June 30, 2001                                  5,021,332     (5,635,299)      (608,257)

Issuance of common stock at $1.50 (net)                      138,356             --        138,465
Issuance of common stock at $1.50 (net)                    1,270,661             --      1,271,661
Stock options - licensors                                      6,459             --          6,459
Stock options - employee                                      22,500             --         22,500
Exercise of options                                               --             --            250
Conversion of debenture                                      104,930             --        105,000
Issuance of common stock for legal services                   28,136             --         28,151
Exercise of options                                           (1,558)            --             --
Net loss                                                          --     (1,740,054)    (1,740,054)

                                                          ----------     ----------     ----------

Balances at June 30, 2002                                  6,590,816     (7,375,353)      (775,825)
                                                          ==========     ==========     ==========
</TABLE>


   The accompanying notes are an integral part of these financial statements.



                                      F-4
<PAGE>

                      INTERNATIONAL COSMETICS MARKETING CO.

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                             Year          Year
                                                                                            Ended          Ended
                                                                                           June 30,       June 30,
                                                                                            2002            2001
                                                                                         -----------     -----------
<S>                                                                                      <C>             <C>
Cash Flows From Operating Activities:
    Net loss                                                                             $(1,740,054)    $(3,988,088)
    Adjustments to reconcile net loss to net cash used
      in operations:
        Loss on disposal of fixed assets                                                      39,464         184,878
        Depreciation expense                                                                  32,299          30,822
        License impairment loss                                                              183,099              --
        License amortization expense                                                          13,906          13,906
        Provision for inventory obsolescence                                                 393,952         355,955
        Stock, stock options and warrants issued to licensors and others for services         28,959       1,812,988
        Discount attributable to beneficial conversion privilege of preferred stock               --         155,020
        Changes in operating assets and liabilities:
            Receivables                                                                       12,674          44,351
            Inventory                                                                       (285,658)        (78,928)
            Deposits for inventory purchases                                                  80,135         (54,890)
            Deposits for services                                                             40,000          58,342
            Prepaid expenses and other current assets                                         13,780          25,087
            Accounts payable                                                                (162,646)        (34,735)
            Payable to related parties                                                      (116,224)        165,201
            Payable to supplier                                                               67,532              --
            Accrued liabilities                                                               34,539         (68,129)
                                                                                         -----------     -----------

                    Net cash used in operating activities                                 (1,364,243)     (1,378,220)

Cash Flows From Investing Activities:
    Purchase of office furniture and equipment                                               (79,084)       (203,293)
                                                                                         -----------     -----------

                    Net cash used in investing activities                                    (79,084)       (203,293)

Cash Flows from Financing Activities:
     Proceeds from issuance of notes payable to stockholder                                       --         500,000
     Proceeds from issuance of common stock, net of issuance costs                         1,410,376         666,360
    Proceeds from issuance of preferred stock                                                     --         500,000
                                                                                         -----------     -----------


                    Net cash provided by financing activities                              1,410,376       1,666,360

                    Net increase in cash                                                     (32,951)         84,847

Cash, beginning of period                                                                     89,586           4,739
                                                                                         -----------     -----------

Cash, end of period                                                                      $    56,635     $    89,586
                                                                                         ===========     ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                      F-5
<PAGE>

                     INTERNATIONAL COSMETICS MARKETING CO.

                            STATEMENTS OF CASH FLOWS

                                                               Year      Year
                                                               Ended     Ended
                                                              June 30,  June 30,
                                                               2002       2001
                                                             --------   --------

Supplemental disclosure of cash flow information:
    Interest paid                                           $ 32,875     $ 2,759


Supplemental Disclosure of Noncash Investing and Financing
Activities for the year ended June 30, 2002:
   Options of certain licensors valued $6,459
   15,000 shares of common stock issued for legal services valued at $28,151
   70,000 shares of common stock issued for conversion of debenture at
       $1.50 per share.
   Options issued to employee valued at $22,500


Supplemental Disclosure of Noncash Investing and Financing Activities for the
year ended June 30, 2001:
    Warrants issued for investment banking services valued at $905,000 Stock
    options issued for consulting services valued at $267,400 190,000 shares of
    common stock issued for public relations services valued at $2.00 per share
    30,000 shares of common stock of certain shareholders transferred for public
    relations services valued at $2.00 per share Options of certain licensors
    valued at $48,504 Call options granted on previously issued options to
    employee
        valued at $150,000
    21,900 shares of common stock issued for accounts payable at
        $2.50 per share
    18,000 shares of common stock issued for advance payable to related
        parties at $2.50 per share
    400,000 shares of common stock previously issued conditionally
        cancelled at par value
    5,458 shares of preferred stock issued for legal fees payable at
        $2.50 per share
    16,000 shares of preferred stock issued for conversion of advance
        payable to related parties at $2.50 per share
    Beneficial conversion privilege of preferred stock valued at $155,020



   The accompanying notes are an integral part of these financial statements.


                                      F-6
<PAGE>
                      INTERNATIONAL COSMETICS MARKETING CO.
                          NOTES TO FINANCIAL STATEMENTS


1. - THE COMPANY
----------------

International Cosmetics Marketing Co. (the "Company"), d/b/a Beverly Sassoon &
Co. commenced operations in late 1999 to develop and distribute a variety of
skin care and nutritional products branded with the Beverly Sassoon and Elan
Sassoon names. The Company temporarily discontinued sales in December 2001 in
order to determine an appropriate sales strategy. Beginning in September 2002
the Company entered into an arrangement with Valuevision d/b/a Shop NBC, to
market its skin care products on their twenty-four hour shopping network.

2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------

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 disclosure 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. Estimates that are
particularly susceptible to change in the near term include reserves for excess
and obsolete inventory and sales returns and allowances.

Revenue Recognition
-------------------

The Company recognizes revenue at the time it ships products to customers.

Sales Returns and Allowances
----------------------------

Accruals for sales returns and allowances are based on industry experience and
the Company's limited experience to date.

Cash and Cash Equivalents
-------------------------

Cash consists of demand deposits and cash equivalents, which are short-term
investments with original maturities of 90 days or less. At June 30, 2002 and
2001, the Company had no cash equivalents.

Accounts Receivable
-------------------

The Company uses the allowance method to account for un-collectible accounts
receivable. Accounts receivable are presented net of an allowance for doubtful
accounts of $39,216 and $0 at June 30, 2002 and 2001, respectively. Bad debt
expense was $39,312 and $30,516 for the years ended June 30, 2002 and 2001,
respectively.


                                      F-7
<PAGE>

Inventories
-----------

Inventories are recorded at the lower of cost or market. Cost is determined by
the average method while market is determined by replacement cost for raw
materials and net realizable value for finished goods. Appropriate consideration
is given to deterioration, obsolescence and other factors in evaluating net
realizable value.

Property and Equipment
----------------------

Property and equipment are recorded on the basis of historical cost.
Depreciation of equipment is computed using the straight-line method over the
assets' estimated useful lives, ranging from 3 years to 5 years. Gain or loss on
disposition of assets is recognized currently. Repairs and maintenance are
charged to expense as incurred. Major replacements and betterments are
capitalized and depreciated over the remaining useful lives of the assets.

Intangible Assets
-----------------

Intangible assets include a license agreement that was acquired with cash and
common stock. The license agreement was being amortized on the straight-line
basis over 16 years. During the year ended June 30, 2002, the Company determined
that the license agreement was impaired and was completely written off.
+
Advertising Expense
-------------------

Advertising expense is recognized as incurred. The Company had $8,500 and $0
advertising expense in the years ended June 30, 2002 and 2001 respectively.

Stock Based Compensation
------------------------

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123 (SFAS 123), "Accounting of Stock Based
Compensation," which is effective for the accompanying financial statements of
the Company. SFAS 123 requires extended disclosures of stock based compensation
arrangements with employees and encourages (but does not require) compensation
cost to be measured based on the fair value of the equity instrument awarded.
Companies are permitted, however, to apply Accounting Principles Board Opinion
No. 25 (APB 25), which recognizes compensation cost based on the intrinsic value
of the equity instrument awarded. The Company accounts for its stock based
compensation awards to employees under the provisions of APB 25, and will
disclose the required pro form effect on net income and earnings per share at
such time as options are granted.

Options and warrants issued to non-employees have been valued under SFAS 123
using the Black-Scholes option-pricing model.

Reclassifications
-----------------

Certain reclassifications have been made to the financial statements for the
prior year to conform to the presentation of the current year.


                                      F-8
<PAGE>

3. - CONCENTRATIONS
-------------------

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash and inventory on hand and on order.

The Company maintains its cash in demand deposit accounts that, at times may
exceed the Federal Deposit Insurance Corporation limits. These balances are
maintained with a high quality institution and the Company has not experienced
any losses in such accounts.

In the fiscal year ended June 30, 2002, sales to a large retail outlet of
$633,058 represented 91% of gross sales.

As of June 30, 2002, inventory on hand will be used primarily to fulfill the
orders of Shop NBC. The Company currently has one primary supplier for inventory
containers, packing and shipping material, and product fulfillment.


4. - INVENTORIES
----------------

Inventories consist of the following:                   2002             2001
                                                      ---------       ---------

Finished goods at June 30                             $ 112,187       $ 176,365
Raw materials at June 30                                160,318         278,565
Less: Reserve for excess and obsolescence              (158,210)       (232,340)
                                                      ---------       ---------
                                                      $ 114,296       $ 222,590
                                                      ---------       ---------
5. - PROPERTY AND EQUIPMENT
---------------------------

Property and equipment consist of the following at June 30, 2002 and 2001:

                                            Estimated
                                            Useful Life
                                            -----------

Office equipment                                  3     $      --     $  63,582
Office furniture                                  5            --        43,103
Leasehold improvement                             4            --        10,400
Production molds                                 10        77,113            --
                                                        ---------     ---------
  Total property and equipment                             77,113       117,085
  Less: accumulated depreciation                               --       (47,292)
                                                        ---------     ---------
  Property and equipment net                            $  77,113     $  69,793
                                                        =========     =========

Loss on disposal of fixed assets aggregated $39,464 and $184,878 in the years
ended June 30, 2002 and 2001, respectively. For the year ended June 30, 2002,
$35,199 of the losses was due to writing down certain fixed assets and leasehold
improvements to zero, when the Company relocated to new office space. The loss
in the year ended June 30, 2001 resulted principally from the Company's changing
from distributing its products using network marketing to retail distribution.
Depreciation and Amortization expense was $32,299 and $30,822 in the year ended
June 30, 2002 and 2001, respectively.


                                      F-9
<PAGE>

6. ISSUANCE OF COMMON STOCK
---------------------------

In the year ended June 30, 2002, the Company issued 109,350 shares of common
stock for $164,025 ($1.50 per share). In connection with the sale of common
stock the Company incurred placement agent fees and expenses of $25,560 and the
placement agent has earned five year warrants, exercisable at $1.50 per share,
to purchase 10,935 shares of the Company's common stock with registration rights
with respect to the common stock underlying the warrants. The Company has
granted certain registration rights to the holders of these shares of common
stock.

In September 2001, the Company entered into a Stock Purchase Agreement with a
venture capital firm for the sale of 1,000,000 shares of the Company's common
stock for $1,500,000 ($1.50 per share) and warrants to purchase 750,000 shares
of the Company's common stock. The warrants are exercisable for five years at an
exercise price of $2.125 per share. Net proceeds to the Company after placement
agent fees and expenses of $195,000 and legal expenses were $1,271,661. The
placement agent also earned five year warrants, exercisable at $1.50 per share,
to purchase 100,000 shares of the Company's common stock and exercisable at
$2.125 to purchase 75,000 shares of the Company's common stock with registration
rights with respect to the common stock underlying the warrants. The placement
agent fees and expenses and warrants were allocated equally between the
placement agent and a selling group member.
Contemporaneously with the closing of the Stock Purchase Agreement, the venture
capital firm purchased 250,000 options of the Company from a non-affiliate
option holder. The Company did not receive any proceeds from the sale of these
options by the selling option holder. On October 22, 2001, these options for
250,000 shares of the Company's common stock were exercised at a price of $.001
per share. These options had been purchased from a former member of Beverly
Sassoon International, LLC

7. - COMMITMENTS AND CONTINGENCIES
----------------------------------

Exclusive License Agreement
---------------------------

On August 19, 1999, the Company entered into an exclusive worldwide license
agreement with Beverly Sassoon International, LLC (a Florida limited liability
company), Beverly Sassoon and Elan Sassoon. The agreement was modified in
October 2000 and amended in March 2001. The agreement grants the Company the
rights to utilize Ms Sassoon's and Mr. Sassoon's names and likenesses with the
manufacturing and promotion of products, except for hair care products (as
defined). The term of this Exclusive License Agreement is 99 years, with a
99-year renewal at the Company's option.

The Company retains full control over the manufacturing, development and
marketing of the Company's products. Ms. Sassoon and Mr. Sassoon, through
Beverly Sassoon International, LLC will consult with the Company in connection
with product development and marketing.

                                      F-10
<PAGE>

Under the amended agreement, the Company pays Beverly Sassoon International, LLC
a royalty which is the greater of (i) $68,250 for each fiscal quarter in six
equal installments on the 1st and 15th of each month or (ii) a payment within 5
days after the Company files its quarterly and annual financial statements with
the U. S. Securities and Exchange Commission equal to (A) 2% of estimated annual
gross revenue (as defined) up to $22,500,000, plus (B) 1.25% of estimated annual
gross revenues from $22,500,000 up to $45,000,000, plus (C) .75% of estimated
annual gross revenues exceeding $45,000,000. Notwithstanding the foregoing the
minimum payment shall be automatically increased to $75,000 for each fiscal
quarter in which the Company reports net income before depreciation and income
taxes. Under the amended agreement, the royalty payment termination date of
August 19, 2001 was changed to the period of the Exclusive License Agreement.

Pursuant to SFAS No. 121 "Accounting for the impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed of," the Company evaluated the
recoverability of the long-lived assets, primarily the license agreement.
Consequently, the Company recorded a non-cash charge of $183,099 adjusting the
carrying value of the license agreement to its estimated fair value of $0.
Amortization expense on the license agreement was $13,906 for the years ended
June 30, 2002 and 2001.

Leases
------

The Company has certain non-cancelable operating leases for office space and
office equipment. Rent expense was $84,090 and $95,948 for the years ending June
30, 2002 and 2001, respectively. Future minimum lease commitments under these
leases at June 30, 2002 are as follows: (see Note 16)

Fiscal years ending June 30,
         2003                            $  74,589
         2004                               75,391
         2005                               28,101
                                         ---------
Total minimum lease payments             $ 178,081

On September 23, 2002, the Company relocated its Corporate Headquarters to 6501
Congress Avenue, Boca Raton, Florida 33487. The Company's current business model
of a more direct-to-customer approach has different facility requirements than
the previous model. The Company will be negotiating a settlement with its
previous landlord regarding the outstanding commitment under the lease
agreement. The outcome of this matter may materially, adversely affect the
Company's operating results in future periods.

Employment Contracts
--------------------

On March 16, 2002, the Company entered into an employment contract with Mark A.
Pinvidic to be the Company's President and acting Chief Financial Officer. The
contract provides for annual base compensation of $100,000 and stock options
vesting over three years to purchase 225,000 shares at $1.50 per share and
225,000 shares at $1.10 per share. The contract also provides for severance pay
equal to base compensation for up to six months.


                                      F-11
<PAGE>

Purchase Commitment
-------------------

The Company has purchase volume commitments for bottles and caps with a supplier
through 2005 to cover the $77,113 cost of molds used to manufacture the bottles
and caps. After purchases in the year ended June 30, 2002, $67,532 remains
payable for the molds. The Company has recorded the cost of the molds as a fixed
asset and the remaining payable as a long-term payable to supplier in the
accompanying condensed financial statements. Title to the molds passes to the
Company upon payment of the molds.

Legal Proceedings
-----------------

On November 7, 2000, a complaint was filed against the company and other
defendants in the Superior Court of the State of California for the County of
Santa Barbara (Case No. 01037203 - Ann Pennock Marshall v. Beverly Sassoon
International, LLC; Beverly Sassoon & Company; Beverly Sassoon, individually;
Paul Lambert; and Michelle Spitz). The complaint alleges that Beverly Sassoon
International, LLC ("BSI") and other defendants involved with BSI fraudulently
induced an elderly investor to loan $150,000 to BSI when BSI never intended to
pay the loan. The complaint alleges, among other things that the Company is the
successor in interest to BSI and is therefore liable to the Plaintiff. In the
third quarter of this fiscal year the lawsuit was settled with a full, complete,
mutual and general release of all claims at no cost to the company. The
settlement stated that certain shares of common stock held by the Plaintiff be
included in a Form SB-2 to be filed with the SEC. As of June 30, 2002, the Form
SB-2 has not been declared effective by with the SEC.

8. - RELATED PARTIES
--------------------

During the year ended June 30, 2002, the Company borrowed $230,000 from the
Company's controlling preferred stockholder pursuant to a series of 6% demand
notes under a security agreement and repaid the $230,000, leaving $500,000
payable at June 30, 2002. The Company incurred interest expense of $33,287 and
$10,500 and paid accrued interest of $28,787 and $0 on these notes in the years
ended June 30, 2002 and 2001, respectively. At June 30, 2002, interest of
$15,000 is payable and is included in payables to related parties.

Royalty and other expenses of $276,500 and $289,208 were incurred for the years
ended June 30, 2002 and 2001, respectively to Beverly Sassoon International,
LLC, a stockholder of the Company and an entity controlled by Beverly Sassoon
and Elan Sassoon. At June 30, 2002, no royalties are payable.

In October 2000, the Company entered into a consulting agreement for financial
advisory and investment banking services with an NASD broker dealer as
summarized in Note 14. The Company's secured note holder (see above) and primary
convertible preferred shareholder (see Note 13) is a stockholder of the Company
and president of the broker dealer. Under this agreement, consulting expense of
$60,000 and $90,000 was incurred during the years ended June 30, 2002 and 2001,
respectively, and $45,000 remains payable at June 30, 2002. In September 2001,
the Company entered into a Placement Agent Agreement with the broker dealer in
connection with sale of stock. Under the agreement, the Company pays a fee equal
to ten percent of the price of each share sold by or through the placement agent
and an expense allowance equal to three percent of the gross proceeds of stock
sold. In connection with shares of common stock sold for $1,109,360, the Company
incurred fees and expenses to the placement agent of $216,323, which have been
charged against additional paid-in capital.

Legal fees of $48,499 and $81,909 in the years ended June 30, 2002 and 2001,
respectively, were incurred with a law firm, in which the firm and certain of
its principals are stockholders of the Company. During 2002, $28,151 of legal
fees was converted to 15,000 shares of common stock.

During the year ended June 30, 2002, the Company paid $15,417 to a stockholder
to retire an advance payable.


                                      F-12
<PAGE>

Public relations expense and related expenses of $39,358 and $10,020 were
incurred with a public relations firm that is a stockholder of the Company in
the years ended June 30, 2002 and 2001, respectively.

During the year ended June 30, 2001, liabilities aggregating $54,749 under a
verbal consulting agreement with a stockholder and a related distributor were
converted to 39,900 shares of the Company's common stock at $2.50 per share.

During the year ended June 30, 2001, two consulting agreements with companies
affiliated with a stockholder were terminated. The 400,000 shares of the
Company's common stock conditionally issued to these entities in the year ending
June 30, 2000 were returned to the Company at no cost to the Company and
cancelled.

9. - INCOME TAXES

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting For Income Taxes."
SFAS No. 109 requires the recognition of deferred tax liabilities and assets for
temporary differences, operating loss carry-forwards, and tax credit
carry-forwards.

A temporary difference is a difference between the tax basis of an asset or
liability and its reported amount in the financial statements that will result
in taxable or deductible amounts in future years when the asset is recovered or
the liability is settled. Deferred taxes represent the future tax return
consequences of these differences.

The Company has not recognized any benefit of such net operating loss
carry-forwards in the accompanying financial statements in accordance with the
provisions of SFAS No. 109 as the realization of this deferred tax benefit is
not more likely than not. A 100% valuation allowance has been recognized to
offset the entire effect of the Company's net deferred tax assets.

The Company's evaluation of the tax benefit of its net operating loss carry
forward is presented in the following table. The tax amounts have been
calculated using the 34% federal and 5.5% state income tax rates.

                                                       2002             2001
                                                       ----             ----

Taxes currently payable                            $     --           $     --
Deferred income tax benefit                              --                 --
                                                   --------           --------

Provision (benefit) for income taxes               $     --           $     --
                                                   --------           --------



                                      F-13
<PAGE>

Reconciliation of the Federal statutory income tax rate to the Company's
effective income tax rate is as follows:

                                                      2002            2001
                                                   -----------     -----------

Benefit computed at the statutory rate (34%)       $  (591,618)    $(1,303,243)
Increase (decrease) resulting from
Non-deductible expenses                                 14,166          21,991
Stock options exercised                               (477,360)             --
State income taxes, net of federal income
  tax benefit                                         (112,585)       (139,141)
Valuation allowance                                  1,167,397       1,420,393
                                                   -----------     -----------
Tax provision (benefit)                            $        --     $        --
                                                   -----------     -----------

The components of the deferred tax asset were as follows at June 30:

                                                       2002            2001
                                                   -----------      -----------

Deferred tax assets:
    Net operating loss carry forward               $ 2,390,652      $ 1,255,146
    Stock warrants issued                              340,552          340,552
    Stock options granted                              338,822          330,355
    Other                                              200,435          177,800
                                                   -----------      -----------
            Total deferred tax asset                 3,270,461        2,103,853
                                                   -----------      -----------

Deferred tax liabilities:
    Other                                                   --             (789)
            Total deferred tax liabilities                  --             (789)
                                                   -----------      -----------

         Net deferred tax asset                      3,270,461        2,103,064
                                                   -----------      -----------
Valuation allowance:
    Beginning of year                               (2,103,064)        (682,672)
    Decrease (increase) during year                 (1,167,397)      (1,420,392)
                                                   -----------      -----------
         Ending balance                             (3,270,461)      (2,103,064)
                                                   -----------      -----------
         Net deferred taxes                        $        --      $        --
                                                   -----------      -----------

As of June 30, 2002 and 2001, the Company's has net operating loss
carry-forwards approximating $6,353,049 and $3,335,493, which expire in 2020
through 2022.

10. - STOCK OPTIONS AND WARRANTS
--------------------------------

Stock Options
-------------

The Company has a stock option plan entitled the 1997 Stock Option Plan under
which 1,000,000 shares of common stock have been reserved for issuance pursuant
to options granted under the plan. The Plan provides for the award of options,
which may be either incentive stock options (ISO's) within the meaning of the
Internal Revenue Code or non-qualified options (NQO's), which are not subject to
special tax treatment. The Plan is administered by the board of directors.
Subject to certain restrictions, the board of directors is authorized to
designate the number of shares to be covered by each award, the terms of the
award, the dates on which and the rates at which options or other awards may be
exercised, the method of payment and other terms.

Options issued under the Plan for the years ended June 30, 2002 and 2001 are
exercisable at between $2.50 per share and $1.10 per share. Options under the
Plan generally vest over 3 years and are generally exercisable over 5 years
while the individual is an employee, or ordinarily expire within one month
following termination of employment.

                                      F-14
<PAGE>

In addition to options issued under the 1997 Stock Option Plan, the Company has
issued additional options as follows:

         In an agreement of August 19, 1999, as modified in October 2000 and as
         amended in March 2001 and again in February 2002 , Beverly Sassoon,
         Elan Sassoon and/or Capital Distributors, LLC, a Florida limited
         liability company controlled by Beverly Sassoon and Elan Sassoon, were
         granted options to purchase 4,850,000 shares of the Company's common
         stock. The options are cashless exercisable at $.001 for the period
         August 19, 2001 through August 19, 2019 in the following quantities: 1)
         2,250,000 shares for Beverly Sassoon, 2) 2,000,000 shares for Elan
         Sassoon, and 3) 600,000 shares for Capital Distributors, LLC. The
         Company recognized expense of $6,459 and $48,504 relating to these
         options in the years ending June 30, 2002 and 2001, respectively. The
         Company granted registration rights with respect to the common stock
         underlying the options.

         In February 2002, as per the amended agreement, Beverly Sassoon, Elan
         Sassoon and Capital Distributors, LLC, each retired 1,470,000,
         1,220,000 and 310,000 of their common stock options, respectively. In
         April 2002, Beverly and Elan Sassoon each exercised 780,000 (an
         aggregate of 1,560,000) options at a price of $.001 per share and were
         issued 1,558,000 shares of the Company's common stock.

         In February 2001, Capital Distributors, LLC assigned options
         exercisable at $.01 per share for 250,000 shares of the Company's
         common stock to a former member of Beverly Sassoon International, LLC.
         In September 2001, these 250,000 options were sold to a venture capital
         firm that invested in the Company. On October 22, 2001, these options
         for 250,000 shares of the Company's common stock were exercised at a
         price of $.001 per share.

         In March 2001, Capital Distributors, LLC assigned options exercisable
         at $1.50 per share for 40,000 shares of the Company's common stock for
         the period through March 14, 2004 to a former executive of the Company.

In March 2002, the Company granted options to purchase 450,000 shares of common
stock, 225,000 shares at $1.50 per share and 225,000 shares at $1.10 per share,
to one of its employees as part of their employment agreement. Compensation
expense of $22,500 was recorded for these options and added to additional
paid-in capital.

In April 2001, the Company granted options to two individuals for referral and
consulting services to purchase 140,000 shares of the Company's common stock at
$1.50 per share for the period through March 31, 2004 with registration rights
with respect to the common stock underlying the options. Consulting expense of
$267,400 was recorded for these options and added to additional paid-in capital.

In the fiscal year ended June 30, 2002, former employees forfeited 225,000
options.


                                      F-15
<PAGE>

A summary of the Company's stock options activity is as follows:

                                                Number of       Weighted Average
                                                  Shares          Exercise Price
                                                ----------      ----------------

Options outstanding at June 30, 2000:            5,220,334             $  .18
         Options granted                           325,000               1.50
         Options exercised                              --             ------
         Options forfeited                        (276,167)              2.59
                                                ----------             ------


Options outstanding at June 30, 2001:            5,269,167                .14
         Options granted                           450,000               1.30
        Options exercised                       (1,810,000)              .001
         Options forfeited                      (3,225,000)               .13



Options outstanding at June 30, 2002               684,167             $1.31
                                                ----------             ------

Options outstanding at June 30, 2002:

                                         Weighted-Average
                       Number               Remaining           Weighted-Average
Exercise Price     Outstanding           Contractual Life        Exercise Price

$.001                   40,000               17.13                  $ .001
$1.10                  225,000                9.71                  $1.100
$1.50                  400,000                6.23                  $1.500
$2.50                   19,167                1.75                  $2.500

Options exercisable at June 30, 2002:

                           Number                          Weighted-Average
                        Outstanding                         Exercise Price

                           234,167                             $1.33
                           -------                             -----


SFAS 123 requires "as adjusted" information regarding net income (loss) and net
income (loss) per share to be disclosed. The fair value of these options was
determined at the date of grant using the Black-Scholes option-pricing model
with the following weighted average assumptions for the years ended June 30,
2002 and 2001.
                                                       2002             2001
                                                       ----             ----

         Expected dividend yield                       0.00%            0.00%
         Calculated volatility                         2.82             1.31
         Risk-free interest rate                       6.50%            5.85%
         Expected life of the options in years         5.00             6.88

The estimated fair value of the options is amortized to expense over the
options' vesting period for "as adjusted" disclosure. The net income (loss) per
share "as adjusted" for the effects of SFAS 123 is not indicative of the effects



                                      F-16
<PAGE>

on reported net income (loss) for future years. The Company's reported "as
adjusted" information for the years ended June 30, 2002 and 2001 are as follows:

                                                    2002               2001
                                                    ----               ----

         Net loss                                $(1,740.054)      $(3,988,088)
         As adjusted                             $(1,749,054)      $(4,050,287)
         Net loss per share as reported - basic  $      (.25)      $      (.79)
         Net loss per share as adjusted - basic  $      (.26)      $      (.80)

Warrants
--------

During the year ended June 30, 2002, the Company issued warrants which remain
outstanding at June 30, 2002 as follows:

                      Warrants expiring September 7, 2006, to purchase 825,000
         shares of the Company's common stock, at $2.125 per share with
         registration rights with respect to the common stock underlying the
         warrants. The related expense has been recorded as the cost of capital
         in additional paid-in capital.


                       Warrants expiring September 7, 2006, to purchase 110,935
         shares of the Company's common stock, at $1.50 per share with
         registration rights with respect to the common stock underlying the
         warrants. The related expense has been recorded as the cost of capital
         in additional paid-in capital.


                       Warrants expiring June 30, 2006, to purchase 29,333
         shares of the Company's common stock, at $1.50 per share with
         registration rights with respect to the common stock underlying the
         warrants. The related expense has been recorded as the cost of capital
         in additional paid-in capital.


During the year ended June 30, 2001, the Company issued warrants which remain
outstanding at June 30, 2002 as follows:

         Cashless exercise warrants expiring October 12, 2005 to purchase
         250,000 shares of the Company's common stock at $1.50 per share (as
         adjusted) with registration rights with respect to the common stock
         underlying the warrants. The Company recognized expense of $905,000
         relating to these options in the year ending June 30, 2001.

         Warrants expiring January 30, 2006 to purchase 22,000 shares of the
         Company's common stock at $1.50 per share with registration rights with
         respect to the common stock underlying the warrants. The related
         expense has been recorded as the cost of capital in additional-in
         capital.


11. - FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------------

The respective carrying value of certain on-balance sheet financial instruments
(cash, accounts receivable, 6% demand notes payable, accounts payable, and
accrued expenses) approximated their fair values. Fair values were assumed to
approximate carrying values for these financial instruments since they are short
term in nature and their carrying amounts approximate fair values or they are
receivable or payable on demand.

                                      F-17
<PAGE>


12. - CONVERTIBLE DEBENTURES
----------------------------

In December 2001, the outstanding debentures of $105,000 were converted into
70,000 shares of the Company's common stock at $1.50 per share.

13. - ISSUANCE OF CONVERTIBLE PREFERRED STOCK AND CHANGE IN CONTROL OF
----------------------------------------------------------------------
THE COMPANY
-----------

On September 27, 2000, the Company entered into a stock purchase agreement with
related parties to issue 221,458 shares of Series A Convertible Preferred Stock
at a stated value of $2.50 per share. The preferred stock has a liquidation
preference of $2.50 per share. This preferred stock is convertible into the
Company's common stock at $1.50 per share (as adjusted). The stock purchase
agreement provides for adjustment of the conversion price for any stock splits,
stock dividends, corporate reorganizations and certain other corporate
transactions and issuance of securities. The stock purchase agreement provides
the purchasers of the preferred stock certain registration rights. The preferred
stock is redeemable solely at the option of the Company.

The Company recognized the discount attributable to the beneficial conversion
feature of $138,190 by accreting the amount from the issued date through the
last date that shareholders could convert (September 27, 2000) as an adjustment
to net loss attributable to common stockholders. Additionally, the Company
recognized additional discount attributable to the beneficial conversion feature
of $16,830 by accreting the amount from the date (April 20, 2001) when the
Company adjusted the conversion rate to $1.50 per share. The adjustment resulted
in a charge to net loss applicable to common stock and an accompanying increase
to additional paid-in capital. The financial amounts of the prior periods were
restated for the year ended June 30, 2001 to reflect these adjustments.

The preferred stock entitles each such stockholder to seventy-five (75) votes
for each one (1) vote of common stock, and shall be entitled to vote together as
a single class with holders of common stock, with respect to any question or
matter, which holders of common stock have the right to vote. The preferred
stock also entitles the holders thereof to vote as a separate class.

The stock purchase agreement also requires the Company to obtain the written
approval of the holders of at least a majority of the voting power of the
outstanding shares of preferred stock for the following: 1) sell, convey, or
otherwise dispose of or encumber all or substantially all of its property or
business or merge into or consolidate with any other corporation or effect any
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is transferred or disposed of, 2) alter
or change the rights, preferences or privileges of the preferred stock, 3)
increase or decrease the total number of authorized shares of the preferred
stock, 4) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security having rights, preferences or privileges over, or being on a
parity with or similar to, the preferred stock, 5) redeem, purchase or otherwise



                                      F-18
<PAGE>

acquire (or pay into or set aside for a sinking fund for such purpose) any
security of the Company, 6) amend the Company's Articles of Incorporation or
bylaws, 7) change the authorized number of directors of the Company's board of
directors, 8) declare, order or pay any dividends on any class of securities, 9)
adjust the salary of executive officers, directors, executive level independent
contractors and key employees of the Company, 10) make any capital expenditures
in excess of $15,000, 11) issue new shares of capital, 12) enter into or approve
any agreement or contract for the purchase of goods, services or other items
between the Company, a shareholder or a member of shareholder's immediate
family, or 13) make certain commission payments in excess of $15,000.

The preferred stock is not redeemable without the prior express written consent
of the holders of a majority of the voting power of all then outstanding shares
of the preferred stock. Notwithstanding the foregoing, in the event the holders
of the preferred stock have not converted with preferred stock into common stock
of the Company by December 31, 2005, the Company shall have the option to redeem
the preferred stock at a price of $7.50 per share. The preferred stock is not
redeemable at the options of the holders.

14. - FINANCIAL ADVISORY AND INVESTMENT BANKING SERVICES CONSULTING CONTRACT
----------------------------------------------------------------------------

On October 13, 2000, the Company entered into a consulting agreement for
financial advisory and investment banking services with an NASD broker dealer.
Certain principals of the broker dealer are stockholders of the Company,
including the primary convertible preferred shareholder (see Note 12). The
agreement provides a monthly consulting fee of $10,000 (amended to $5,000 per
month effective October 2001) plus five-year "cashless exercise" warrants to
purchase 250,000 shares of the Company's common stock at an exercise price of
$1.50 (as adjusted) for which the broker dealer will have registration rights
with respect to the common stock underlying the warrants.

Additionally, the agreement provides for payment of a transaction fee equal to
1) 5% of the consideration up to $3,000,000, plus 2) 3% of the consideration
from and including $3,000,000 up to $5,000,000, plus 3) 1% of the consideration
including and in excess of $5,000,000. In addition to the consulting fee and
transaction fee, the agreement provides for payment of an alternate transaction
fee subject to a minimum of $25,000 and 1) in connection with any equity
securities financing in a public offering, a fee to be agreed upon by the
Company and the broker dealer; 2) in connection with any equity securities
financing in a private placement, a) a cash fee equal to 10% of the gross
proceeds raised, plus b) a non-accountable expense fee equal to 3% of the
offering price of the securities sold, plus c) the broker dealer shall have the
right to purchase, for $.01 each, "cashless exercise" warrants to purchase
common stock equal to 10% of the number of shares of common stock sold in equity
securities financing. The warrants will have a term of five years and have an
exercise price of 100% of the per share price (or conversion price of the
securities, if applicable) at which the investors invested in connection with
the equity securities financing and will be transferable to the broker dealer's
employees and affiliates. The broker dealer shall also be granted registration
rights with respect to the common stock underlying such warrants which will
include at least one demand registration right at the Company's cost and an
unlimited number of piggyback registration rights; 3) in connection with any
debt securities financing, such amount as shall be agreed upon by the Company


                                      F-19
<PAGE>

and the broker dealer; 4) in connection with any bank financing that is
consummated prior to termination of this agreement in which the broker dealer
acts as arranger, the Company shall pay the broker dealer aggregate arrangement
fees in an amount to be agreed upon, payable on the date of execution of
definitive documentation with respect thereto, which fee shall be in addition to
any fee payable to any affiliate of the broker dealer that may act as agent or a
member of a lending syndicate or otherwise as a participant in any such bank
financing.

The term of this agreement is for the three years ending October 12, 2003 and is
renewable by mutual consent. The agreement provides that the Company agrees to
retain the broker dealer on an exclusive basis in connection with a possible
transaction, alternate transaction or financing for the term of the agreement.

15.  GOING CONCERN
------------------

In December 2001, the Company's relationship with a large retail outlet was
terminated. This retail outlet accounted for 91% of gross sales for the year
ended June 30, 2002. The Company incurred net losses of $1,740,054 and
$3,988,088 for the years ended June 30, 2002 and 2001, respectively, and net
cash used in operations was $1,364,243 for the year ended June 30, 2002. The
Company had net sales of $698,763 and $1,206,369 for the years ended June 30,
2002 and 2001 respectively. Due to recurring net losses, negative cash flows
from operations and termination of the relationship with the large retail
outlet, there is substantial doubt about the Company's ability to continue as a
going concern.

Management's plan with regard to this matter encompasses redirecting its
marketing strategy to a direct-to-consumer approach and minimizing operating
expenses. The Company will be required to raise additional funding of
approximately $280,000 to fund operations for the first six months of the year
ending June 30, 2003. The expected capital needs assume that the Company's
demand note holder, who is the Company's controlling shareholder, will not
demand payment of the $500,000 demand notes payable or any significant part
thereof.

The eventual outcome of the success of management's plans cannot be ascertained
with any degree of certainty. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

16 -  SUBSEQUENT EVENTS
-----------------------

The Company has entered into an arrangement with Valuevision d/b/a Shop NBC, to
market its skin care products on their twenty-four hour shopping network. The
initial order from Shop NBC was for approximately $160,000.

In July of 2002, the Companies Board of Directors adopted a resolution to enter
into an investment agreement with two existing material shareholders of the
Company. In stages, but no later than November 5, 2002, the investors will
invest into the Company $280,000, in exchange for a Promissory Note for $280,000
(Coupon of 10%, Maturity date of April 30, 2003) and 840,000 Warrants to
purchase common stock (expiration date of July 19, 2007, exercise price of
$0.01). As of September 30, 2002, $130,000 has been invested into the Company.


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