FORM 10-KSB
              SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549
    [X] 15,ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
           THE SECURITIES EXCHANGE ACT OF 1934
        For the fiscal year ended: 3/31/01
                       OR
    [ ]15,TRANSITION REPORT PURSUANT TO SECTION 13 OR
       15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to

          Commission file number -  000-26361

               Creative Beauty Supply, Inc.
         Exact name of Registrant as specified in its charter)

NEW JERSEY                                            22-3392051
 (State or other   (Primary Standard Industrial    (I.R.S. Employer
jurisdictions       Classification Code Number)  Identification number)
of incorporation
or organization


        380 Totowa Road, Totowa, NJ                             07512
(Address of principal executive offices)                    (Zip Code)

                       Telephone:  973-904-0004
            (Registrant's telephone number, including area code)

Securities registered pursuant to
    Section 12(b) of the Act:                            None
Securities registered pursuant  to
     Section 12(g) of the Act:           Common  Stock, $.001 par value

Check whether the Company (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the
preceding 12 months (or such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for at least 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 Company'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]

The Company's revenues for its most recent fiscal year were $240,420. As
of March 31, 2001, the market value of the Company's voting $.00l par
value common stock held by non-affiliates of the Company was $0.00.

The number of shares outstanding of Company's class of common
stock, as of March 31, 2001 was 1,864,650 shares of its $.001 par
value common stock.

Check whether the Issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes  ____  No _____

No documents are incorporated into the text by reference.

Transitional Small Business Disclosure Format (check one)
 Yes                No     x
     --------          --------




<PAGE>2

                                    PART I
ITEM 1.    BUSINESS - General

A.   The Company was incorporated in New Jersey on August 28, 1995.
On March 15, 1996, the Company effectuated a 45,392 for 1 stock split.
There have been no other material events in the development of the
Company (including any material mergers or acquisitions) since
inception.   There are no pending or anticipated mergers, acquisitions,
spin-offs or recapitalizations.   On February 26, 1997, the Company's
officers surrendered 7,543,000 Common Shares.   The issued and
outstanding shares were reduced from 11,348,000 to 3,805,000.   On July
1, 1997, the Company effectuated a 1 for 2.5 reverse stock split
reducing the issued and outstanding shares from 4,600,000 to 1,840,000.

Corporate Operations.    The Company operates as a cosmetic and beauty
supply distributor at both the retail and wholesale levels. The
Company's various beauty and cosmetic products are purchased by it from
a number of unaffiliated suppliers and manufacturers and thereafter
sold on its premises to retail "walk-in" customers or directly to
beauty salons.

Products.   The Company's beauty and cosmetic products primarily
consist of the following items: Shampoos, conditioners, mousse,
setting/styling and spray gels, lotions, lipstick and nail products and
hair sprays as well as such beauty and cosmetic related appliances as
blow dryers, curling irons, mirrors, air diffusers and hair trimmers.
Many of the aforesaid products (at least 80%) may be considered to be
"national" brands bearing consumer recognition with respect to the
their respective names.   Such consumer recognition of such "brand"
names is considered by the Company to be of assistance to it with
respect to sale of such products since consumer recognition is advanced
by national brand media advertising (at no cost to the Company but to
the Company's benefit) when potential customers are already familiar
with the product as a result of media advertising.

Suppliers.   The above indicated products are purchased by the Company
from a number of unaffiliated suppliers and management of the Company
does not contemplate or anticipate any significant difficulties with
its ability to purchase such products from its current suppliers and/or
from replacement and/or additional suppliers if and when necessary or
advisable.   The Company does not have any written agreements with any
of its suppliers.   The Company currently purchases approximately 57%
of its products from one supplier.   Management believes that other
suppliers could provide similar products on comparable terms.  A
change in suppliers, however, could cause a delay in merchandise and
possible loss of sales which could reflect operating results.

Distribution.   The Company is currently distributing its products to
approximately 200 nail and beauty salons.   Its territory is
principally and almost exclusively located within the northern and
central portion of the State of New Jersey, in the counties of Essex,
Hudson, Bergen, Passaic, Morris and Union.

The Company sells cosmetic and beauty supplies, both on the retail and
wholesale levels to beauty salons and to the general public.

Wholesale sales consist of sales to beauty salons of merchandise for
resale.  Sales of merchandise to beauty salons for their own
consumption, not for resale, are considered retail sales.   All sales
to the general public are also considered retail sales.

Sales are summarized as follows:
                     2001            2000
                 -----------       ---------
Wholesale          $106,966        $103,470
Retail              133,501         141,839
                  ----------       --------
                  $240,467         $245,309
                  ==========      =========




<PAGE>3

Competition.   Competition is based on price.  The Company's price
ranges of its various products are within the manufacturer-suggested
prices, services and product lines.  The Company is competing with
established companies and other entities (many of which may possess
substantially greater resources than the Company).   Almost all of the
companies with which the Company competes are substantially larger,
have more substantial histories, backgrounds, experience and records of
successful operations, greater financial, technical, marketing and
other resources, more employees and more extensive facilities than the
Company now has, or will have in the foreseeable future.  It is also
likely that other competitors will emerge in the near future.  There is
no assurance that the Company's products will compete successfully with
other established and/or well-regarded products. Inability to compete
successfully might result in increased costs, reduced yields and
additional risks to the investors herein

Marketing.   The Company intends to purchase its products in larger
quantities, resulting in larger discounts on purchases, resulting in
more profit and better competition.   The Company's products will be
marketed through a combination of personal contact by sales
representatives, catalog advertising to the salon industry and special
promotion.     The salons order and receive their products weekly.
No customer accounts for more than 20% of sales and there are no
existing sales contracts.

Backlog.   The Company services its accounts on two days notice.  There
is no backlog.   If the Company does not have a specific item, it is
back ordered until the next delivery.

Employees.   The Company currently has one full-time employees and no
part-time employees.

The Company's operations do not depend nor are they expected to depend
upon patents, copyrights, trade secrets, know-how or other proprietary
information.   No amounts have been expended by the Company for
research and development of any products nor does the Company expect to
expend any amounts this year.

The Company's business, products and properties are not subject to
material regulation (including environmental regulation) by federal,
state, or local governmental agencies.

Seasonal Nature of Business Activities.   The Company's business
activities are not seasonal.


ITEM 2.  PROPERTIES.

The Company's executive offices and showroom are located at 380 Totowa
Road, Totowa, New Jersey 07512.  Telephone No. (973) 904-0004.   These
offices consist of 1,400 square feet on a lease term.   The Company has
a lease for a term of three (3) years commencing May 1, 1999 at a monthly
rental of $1,200 per month for the first twelve (12) months and $1,300
a month for each of the remaining twenty four (24) months.    The
Company needs additional warehouse space and will attempt to locate
adequate warehouse space on a lease basis in the near future.   The
Company owns its delivery vehicle and the computers used in the
operation of the business.

ITEM 3.    LEGAL PROCEEDINGS.

The Company is not involved in any legal proceedings at this date.

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

During the fourth quarter of the fiscal year ended March 31, 2001, no
matters were submitted to a vote of the Company's security holders,
through the solicitation of proxies.






<PAGE>4
                                   PART II

ITEM 5.    MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company has applied to have its common stock traded in the
over-the-counter market and listed on the NASDAQ Bulletin Board

The Company has never paid any cash dividends nor does it intend, at
this time, to make any cash distributions to its shareholders as
dividends in the near future.

As of March 31, 2001, the number of holders of Company's common
stock is 116.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

Trends and Uncertainties.  Demand for the Company's products will be
dependent on, among other things, market acceptance of the Company's
concept and general economic conditions, which are cyclical in nature.
Inasmuch as a major portion of the Company's activities is the receipt
of revenues from the sales of its products, the Company's business
operations may be adversely affected by the Company's competitors and
prolonged recessionary periods.

Hair styles in the industry change drastically from season to season.
The recent trend away from straight hair will have a favorable impact
on the sales of the Company's hair products such as perms, etc.
although the extent of this impact is indeterminable.

Capital and Source of Liquidity.   In April, 1999, the Company renewed
its lease for a term of three (3) years commencing May 1, 1999 at a
monthly rental of $1,200 per month for the first twelve (12) months and
$1,300 a month for each of the remaining twenty four (24) months.

For the year ended March 31, 2001, the Company pursued no financing
activities.

For the year ended March 31, 2000, the Company pursued no financing
activities.

For the year ended March 31, 2001, the Company made an investment in
marketable securities of $50,000 resulting in net cash used in
investing of $50,000.   Although the market value has increased
considerably, there is no guarantee that the marketable securities
will hold their value.  Management intends to sell the investment in
the near future.

For the year ended March 31, 2000, the Company pursued no investing
activities.

Results of Operations.

The Company sells approximately over 1,000 different products at
varying mark ups ranging from 20 to 35 percent.   The Company has two
types of customers, beauty salons and the general public.   The gross
profit margin on sales of merchandises to the general public ranges
from 20 to 35 percent depending on the product sold.   The gross margin
on sales of merchandise to beauty salons is somewhat less ranging from
15 to 25 percent depending on the product sold and the discount given.
Our profit margins were increased due to the across the board price
increase for our products.

March 31, 2001 compared to March 31, 2000

For the year ended March 31, 2001, the Company had a net income of
$100,899.  The Company had net sales of $240,420 with a cost of goods
sold of $188,736 resulting in gross profit of $51,684 for the year
ended March 31, 2001.

The Company had operating expenses of $134,029 for the year ended March
31, 2001.   These expenses primarily consisted of officer's salaries of
$56,936, auto and delivery of $8,360, professional fees of $27,812,
rent of $15,204, telephone of $2,466, utilities of $2,242, store
supplies of $1,587, insurance of $3,404, office expenses of $2,989
payroll and other taxes of $2,599 and other miscellaneous expenses
of $10,430.




<PAGE>5

For the year ended March 31, 2000, the Company had a net loss of
$(47,283).  The Company had net sales of $245,309 with a cost of goods
sold of $174,722 resulting in gross profit of $70,587 for the year
ended March 31, 2000

The Company had operating expenses of $134,792 for the year ended March
31, 2000.   These expenses primarily consisted of officer's salaries of
$61,189, auto and delivery of $12,339, professional fees of $25,530,
rent of $15,137, telephone of $2,012, utilities of $1,825, store
supplies of $1,716, insurance of $3,248, payroll and other taxes of
$2,561 and other miscellaneous expenses of $9,235.

The Company's product margin decreased from year ended March 31, 2000
to March 31, 2001 by approximately 7% (from 28.77% to 21.5%).   This
decrease represents an approximately 26.78% decrease in gross margin.
The decrease is a direct result from the sales mix and decreased
volume purchases.   The Company did not take advantage of purchase
discounts offered.   The Company raised its prices in 2000 which
resulted in lower sales in 2001.

Prices were increased in 2000 causing lower sales volume in 2001.   In
2000, the Company had 1,935 invoices to customers while in 2001, the
Company had only 1,852, a decrease of 4.8%

The Company changed its purchasing policy in 2001.   It purchased
smaller volumes at more frequent intervals.   The Company did not get
quantity discounts nor did they take advantage of cash discounts.

Auto and delivery expenses decreased approximately $3,979 as a direct
result of the Company's delivery van (a 1996 vehicle) repairs in 2000.
The van required a new transmission and motor repairs during the year
totaling approximately $3,400 in 2000.

Professional fees increased due to additional cost associated with new
auditing firm, higher fees charged by stock transfer agent and normal
fee increases by all professionals.

The major cause of the Company's losses from operations have been the
low sales volume.   Management is looking for new suppliers at more
favorable prices and to increase their customer base and sales volume.
Additionally, management has implemented inventory controls which has
resulted in additional profits by eliminating unproductive lines of
products.

Management believes that the implementation of its inventory controls
and obtaining supplies from new sources will have a favorable impact on
the Company's results of operations within the next 12 months.

Plan of Operation.  During the next twelve months, the Company may
obtain new product lines by negotiating with various manufacturers.
The Company does not intend to hire any additional employees .

If the Company does not achieve the milestones within the above time
schedule, their operating costs will be higher and the Company will
lose even more money.

The Company's liquidity will be decreased due to little or no increase
in revenue and higher operating costs.

The Company is not delinquent on any of its obligations even though the
Company has had limited operating revenues.   The Company intends to
market its products utilizing cash made available from the sale of its
products.   The Company is of the opinion that revenues from the sales
of its products and the proceeds from the sale of its securities will
be sufficient to pay its expenses.

The Company does not have nor does it intend to have pension and/or
other post-retirement benefits in the future.

The Company does not have any or intends to have any derivative
instruments or hedging activities.





<PAGE>6

ITEM 7.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements

The response to this item is being submitted as a separate section of
this report beginning on page 10.

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

There have not been any changes in or disagreements with accountants on
accounting and financial disclosure.




<PAGE>7
                                  PART III

ITEM 9.    DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY


Board of Directors.  The following persons listed below have been
retained to provide services as directors and executive officers until
the qualification and election of his successor.  All holders of Common
Stock will have the right to vote for Directors of the Company.  The
Board of Directors has primary responsibility for adopting and
reviewing implementation of the business plan of the Company,
supervising the development business plan, review of the officers'
performance of specific business functions.  The Board is responsible
for monitoring management, and from time to time, to revise the
strategic and operational plans of the Company.    Directors receive no
cash compensation or fees for their services rendered in such capacity.

Name                            Position Held        Term of Office

Carmine Catizone, age 54      President, Director      Inception
                                                       to present

Daniel Generelli, age 36      Secretary/Treasurer      Inception
                            Vice-President/Director    to present

Resumes:

Carmine Catizone.   Mr. Catizone has been President and a director of
the Company since its inception in August 1995.  From June 1988 to July
1994, Mr. Catizone was President and a Director of J&E Beauty Supply,
Inc., a retail and wholesale beauty supply distributor.   Mr. Catizone
served as President and a director of C&C Investments, Inc., a blank
check company (now known as T.O.P.S. Medical Corp., which provided
chemicals for transportation of organs) from July 1977 to December
1984.  Mr. Catizone is not currently involved with T.O.P.S. Medical
Corp.   From June 1980 to December 1985, Mr. Catizone had been district
sales manager (engaged in sales of cosmetics) for Chattem Labs.   Mr.
Catizone received his Bachelor of Science degree from Fairleigh
Dickerson University in 1972.

Daniel Generelli.   Mr. Generelli has been Secretary-Treasurer and a
director of the Company since inception in August 1995.   From December
1989 to July 1996, Mr. Generelli was Secretary/Treasurer and a director
of J&E Beauty Supply, Inc., a retail and wholesale beauty supply
distributor.   From December 1984 to December 1989, Mr. Generelli was
employed as a distribution supervisor with Tags Beauty Supply, a retail
and wholesale beauty supply distributor in Fairfield, NJ.   Mr.
Generelli graduated from Ramapo College of New Jersey with a Bachelor
of Science degree in June of 1984.

Remuneration.   To date, the Company has not entered into employment
agreements nor are any contemplated.   Mr. Generelli and Mr. Catizone
were paid approximately $30,000 per year.    Mr. Generelli is no
longer an employee of the Company as of February 2001.    Until March
2001, all of Mr. Catizone's $30,000 salary had been accrued.   Mr.
Catizone forgave all of the accrued salary owed to him from the
Company from January 1996 to February 2001 totaling $155,000.

Board of Directors Compensation.   Members of the Board of Directors
may receive an amount yet to be determined annually for their
participation and will be required to attend a minimum of four meetings
per fiscal year.   To date, the Company has paid $0.00 in directors'
expenses.


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
               AND MANAGEMENT


The following tabulates holdings of shares of the Company by each
person who, subject to the above, at the date of this registration
statement, holders of record or is known by Management to own
beneficially more than 5.0% of the Common Shares and, in addition, by
all directors and officers of the Company individually and as a group.
Each named beneficial owner has sole voting and investment power with
respect to the shares set forth opposite his name.



<PAGE>8

              Shareholdings at Date of
                   This Prospectus

                                                               Percentage of
                                Number & Class(1)              Outstanding
Name and Address                  of Shares                   Common Shares



Carmine Catizone              Common  808,000                     43.33%
10 1/2 Walker Avenue
Morristown, NJ 07960

Daniel T. Generelli           Common  80,000                       4.29%
24 Kansas Street
Hackensack, NJ 07601

Pat Catizone                  Common 160,000                       8.58%
                              Common 160,000(2)                    8.58%
266 Cedar Street
Cedar Grove, NJ 07009

Barbara Catizone              Common 160,000                       8.58%
                              Common 160,000(2)                    8.58%
266 Cedar Street
Cedar Grove, NJ 0709

Robyn Conforth                Common 140,000                       7.51%
266 Cedar Street
Cedar Grove, NJ 07009

David Wong                    Common 108,050                       5.79%
300 Rector Place #41
New York, NY 10280

All Directors & Officers             888,000                      47.62%
as a group (2 persons)



(1)Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, 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 above has sole power
to vote, or dispose or direct the disposition of all shares
beneficially owned, subject to applicable unity property laws.

(2)Pat Catizone and Barbara Catizone are husband and wife and are
deemed to be the beneficial owners of each other's shares.


ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None


ITEM 13.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K

     (A)    FINANCIAL STATEMENTS AND SCHEDULES

The following financial statements and schedules are filed as part of
this report:

Report of Independent Public Auditors................F-1
Balance Sheet........................................F-2
Statement of Operations..............................F-3
Statement of Stockholder's Equity....................F-4
Statement of Cash Flows..............................F-5
Notes to Financial Statements.....................F-6 - F-9

Schedules Omitted:  All schedules other than those shown have been
omitted because they are not applicable, not required, or the required
information is shown in the financial  statements  or  notes  thereto.




<PAGE>9



INDEPENDENT AUDITORS' REPORT



Board of Directors and Stockholders of
Creative Beauty Supply, Inc.
Totowa,  New Jersey


We have audited the accompanying balance sheet of Creative Beauty
Supply, Inc. as of March 31, 2001 and the related statements of
operations, stockholder's equity and cash flows for the year then
ended.  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 audit.  The financial
statements of Creative Beauty Supply, Inc. as of March 31, 2000, were
audited by other auditors whose report dated May 18, 2000 expressed an
unqualified opinion on those statements.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Creative
Beauty Supply, Inc. as of March 31, 2001 and the results of its
operations and cash flows for the year then ended in conformity with
generally accepted accounting principles.




Ehrenkrantz Sterling & Co., LLC
Certified Public Accountants
May 16, 2001






<PAGE>10

           INDEPENDENT AUDITORS' REPORT




Board of Directors and Stockholders of
Creative Beauty Supply, Inc.
Totowa, New Jersey


We have audited the accompanying balance sheets of Creative Beauty
Supply, Inc.  As of March 31, 2000 and 1999, and the related
statements of operations, stockholders' equity and cash flows for the
years then ended.  These financial statements are the responsibility
of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the
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 Creative
Beauty Supply, Inc. at March 31, 2000 and 1999 and the results of its
operations and its cash flows for the years then ended in conformity
with generally accepted accounting principles.


                 BEDERSON & COMPANY LLP






West Orange, New Jersey
May 18, 2000

                               F-1



<PAGE>11

CREATIVE BEAUTY SUPPLY, INC.

 BALANCE SHEETS

<TABLE>
<CAPTION>

March 31

2001                2000

-------------------------
<S>
<C>                <C>
ASSETS

CURRENT ASSETS
Cash and cash equivalents
$235,507          $321,509
Marketable equity securities, available for sale
178,125                --
Accounts receivable
2,406             3,634
Inventory
62,721            67,707
Prepaid expenses
3,637             2,248

--------          ---------
TOTAL CURRENT ASSETS
482,396           395,098

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

PROPERTY AND EQUIPMENT, at cost, less accumulated depreciation
375             2,052

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

$482,771          $397,150

========         =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable
$18,759           $16,217
Payroll taxes withheld and accrued
821                55
Accrued expenses, officer salaries
--           128,654
Accrued expenses
2,452            20,509
Deferred income taxes
55,093                --

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

TOTAL CURRENT LIABILITIES
77,125           165,435

------           -------
COMMITMENTS
--                 --

STOCKHOLDERS' EQUITY

Preferred stock, par value $.001, authorized 10,000,000
  shares, issued and outstanding -0-
--                --


Common stock, par value $.001, authorized 100,000,000
  shares, issued and outstanding 1,864,650 shares
1,865               1,865
Additional paid-in capital
472,541             472,541
Accumulated deficit
(141,792)           (242,691)
Accumulated other comprehensive income
73,032                  --

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

405,646             231,715

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

$482,771            $397,150

=========            ========
</TABLE>
See notes to financial statements.




<PAGE>12

CREATIVE BEAUTY SUPPLY, INC.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>

Years Ended March 31

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

2001                      2000
                                                                            ----
------                 --------
<S>
<C>                        <C>
NET SALES
$240,420                  $245,309
                                                                             ---
-----                  --------
COST OF GOODS SOLD
188,736                   174,722
                                                                             ---
-----                   -------
GROSS PROFIT
51,684                    70,587
                                                                             ---
-----                   -------
OTHER EXPENSES
Salaries, officers
56,936                    61,189
Payroll taxes
2,599                     2,561
Auto and delivery
8,360                    12,339
Employee welfare
7,644                     3,433
Insurance
3,404                     3,248
Office
2,989                     2,551
Professional fees
27,812                    25,530
Rent
15,204                    15,137
Store supplies
1,587                     1,716
Taxes
280                       200
Telephone
2,466                     2,012
Utilities
2,242                     1,825
Miscellaneous
829                       690
Depreciation and amortization
1,677                     2,361
                                                                              --
-----                   -------
TOTAL OPERATING EXPENSES
134,029                   134,792
                                                                              --
-----                   --------
LOSS FROM OPERATIONS BEFORE OTHER INCOME
(82,345)                  (64,205)
                                                                              --
------                  --------
OTHER INCOME (EXPENSE
Interest income
15,869                     16,922
Salary forgiveness
173,750                         --
Inventory write downs
(6,375)                        --
                                                                              --
-----                   --------

183,244                     16,922
                                                                              --
-----                   --------
NET INCOME (LOSS)
100,899                   (47,283)
                                                                              --
-----                   --------
OTHER COMPREHENSIVE INCOME, NET OF TAXES
Unrealized holding gains arising during the year,
  net of income taxes $55,093
73,032                         --
                                                                             ---
-----                  ---------
TOTAL COMPREHENSIVE INCOME
$173,931                  $(47,283)

========                  ==========

NET INCOME ( LOSS) PER COMMON SHARE, BASIC                          $
0.05               $       (0.03)
                                                                     -----------
----               -------------
WEIGHTED AVERAGE NUMBER OF COMMON SHARES outstanding
 OUTSTANDING
1,864,650                  1,864,650

=================             =============
</TABLE>
See notes to financial statements.



<PAGE>13

CREATIVE BEAUTY SUPPLY, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED MARCH 31, 2001 AND 2000
<TABLE>
<CAPTION>

Accumulated
                               Common Stock
Other
                         Number of                     Additional
Accumulated         Comprehensive
                          Shares      Amount          Paid-in Capital
Deficit                           Total
                      ----------------------------------------------------------
---------------------------------------
<S>                       <C>          <C>               <C>
<C>                <C>              <C>
Balance, April 1, 1999  1,864,650     $1,865            $472,541
$(195,408)         $     --    $278,998

Net loss                       --         --                  --
(47,283)               --     (47,283)
                        ---------     ------            --------               -
--------          --------    --------
Balance, March 31, 2000 1,864,650      1,865             472,541
(242,691)               --     231,715

Net income                    --          --                  --
100,899                --     100,899

Other comprehensive income,
   net of taxes $55,093       --          --                  --
--            73,032      73,032
                       ---------      ------            --------               -
--------           -------    --------
Balance, March
   31, 2001            1,864,650      $1,865            $472,541
$(141,792)          $73,032    $405,646
                       =========      ======            ========
=========           =======    ========
</TABLE>



<PAGE>14

Notes to Financial Statements.
CREATIVE BEAUTY SUPPLY, INC.

 STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                           Years
Ended March 31
                                                                           -----
------------------
                                                                          2001
2000
<S>                                                                        <C>
<C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                       $100,899
$(47,283)
Adjustments to reconcile net income to net cash
   used in operating activities
Depreciation and amortization                                              1,677
2,361
(Increase) decrease in operating assets
Accounts receivable                                                        1,228
(371)
Inventory                                                                  4,986
5,197
Prepaid expenses
(1,389)                   183
Increase (decrease) in operating liabilities
Accounts payable                                                           2,542
6,354
Payroll taxes withheld and accrued                                           766
(643)
Accrued expenses
(146,711)                31,028
                                                                       ---------
-             ---------
Net cash used in operating activities
(36,002)                (3,174)


CASH FLOWS FROM INVESTING ACTIVITIES
Investment in marketable securities
(50,000)                    --
                                                                       ---------
--------
NET DECREASE IN CASH AND CASH EQUIVALENTS
(86,002)                (3,174)

CASH AND CASH EQUIVALENTS, beginning of year                             321,509
324,683
                                                                      ----------
---------
CASH AND CASH EQUIVALENTS, end of year                                  $235,507
$321,509
                                                                      ==========
=========
</TABLE>

See notes to financial statements.




<PAGE>15

CREATIVE BEAUTY SUPPLY, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION
Creative Beauty Supply, Inc. was incorporated in the State of New
Jersey on August 28, 1995, and commenced operations on January 2,
1996.  The Company sells cosmetic and beauty supplies both on the
retail and wholesale levels to the general public and beauty salons in
Northern and Central New Jersey.

The Company is located in Totowa, New Jersey and had two employees
until February 2001, at which-time, one employee left leaving only one
employee at March 31, 2001.

ACCOUNTING 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.

BASIC OF ACCOUNTING
The Company maintains its records on the accrual basis of accounting.
Income is recognized when customers take title to the goods and
expenses are recorded when incurred.

CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

PROVISION FOR DOUBTFUL ACCOUNTS
Bad debts are provided on the allowance method based on historical
experience and management's evaluation of outstanding accounts
receivable.  Management considered accounts receivable at March 31,
2001 and 2000 to be fully collectible; accordingly, no allowance for
doubtful accounts was provided for at March 31, 2001 and 2000.

INVENTORY
Inventory, consisting of finished goods, is valued at cost, with cost
being determined on the first-in, first-out (FIFO) method.

PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost.  Depreciation of property
and equipment is provided for over the estimated useful lives of the
respective assets.  Depreciation is recorded based on the straight-
line method.
The major classes of assets and ranges of estimated useful lives are
as follows:
                                   Years
Delivery equipment                  5
Furniture and office equipment      7

Maintenance, repairs and minor renewals are charged to earnings when
they are incurred.  When assets are retired or otherwise disposed of,
the assets and related allowance for depreciation and amortization are
eliminated from the account and any resulting gain or loss is
reflected in income.

INCOME TAXES
Deferred income taxes are provided on the liability method whereby
deferred income tax assets are recognized for deductible temporary
differences and operating loss carryforwards and deferred income tax
liability are recognized for taxable temporary differences.  Temporary
differences are the differences between the reported amounts of assets
and liabilities and their tax bases.  Deferred income tax assets are
reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred
tax asset will not be realized.  Deferred income tax assets and
liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.



<PAGE>16

IMPAIRMENT OF LONG-LIVED ASSETS
The Company reviews long-lived assets for impairments whenever events
or changes in business circumstances occur that indicate that carrying
amount of the assets may not be recoverable.  The Company assesses the
recoverability of long lived assets held and to be used based on
undiscounted cash flows, and measures the impairment, if any, using
discounted cash flows.

EXPENSES RELATED TO SALE AND ISSUANCE OF SECURITIES
All costs incurred in connection with the sale and issuance of the
Company's common stock have been capitalized and charged to additional
paid-in capital.

NET LOSS PER COMMON SHARE
The Financial Accounting Standard Board issued "SFAS" No. 128, which
requires the presentation on the face of the income statement "basic"
earnings per share and "diluted" earnings per share.  Basic earnings
per share is computed by dividing the net income (loss) available to
common stockholders by the weighted average number of outstanding
common shares.  The calculation of diluted earnings per share is
similar to basic earnings per share except the denominator includes
dilative common stock equivalents such as stock options and
convertible debentures.  There were no dilative common stock
equivalents for all periods presented.

COMPREHENSIVE INCOME
Comprehensive income includes net earnings adjusted for certain
revenues, expenses, gains and losses that are excluded from net
earnings under generally accepted accounting principles.

Note 2: CONCENTRATION OF CREDIT RISK

The Company sells its products to various customers primarily in
Northern and Central New Jersey.  The Company performs ongoing credit
evaluations on its customers and generally does not require
collateral.

The Company maintans its cash balances with a major bank.  The
balances are insured by the Federal Deposit Insurance Corporation up
to $100,000 per depositor.  At March 31, 2001, the Company's
uninsurance cash balances approximated $140,000.

Note 3: ECONOMIC DEPENDENCY

The Company currently purchases approximately 57% of its products from
one supplier.  Managers believes that other suppliers could provide
similar products on comparable terms.  A change in suppliers, however,
could cause a delay in merchandise and possible loss of sales which
could reflect operating results.

Note 4: FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures its financial assets and liabilities in
accordance with generally accepted accounting principles.  For certain
of the Company's financial instruments, including cash and cash
equivalents, trade receivable accounts payable and accrued expenses,
the carrying amounts approximate fair value due to their short-term
maturities.

The investment in marketable equity securities is recorded at market
value which approximates fair value.

Note 5: MARKETABLE EQUITY SECURITIES

The cost and estimated fair value of marketable equity securities that
are available for sale are as follows:
                                             2001                2000
                                            -------            ------
Cost                                        $50,000          $     --
Gross unrealized gains                      128,125                --
                                            -------         ---------
Fair Market Value                          $178,125          $     --
                                           ========         =========



<PAGE>17

The unrealized appreciation of marketable equity securities that are
available for sale is as follows:

                                             2001                2000
                                          --------             ------
Net unrealized gains                     $128,125           $      --
Deferred income taxes                     (55,093)                 --
                                         --------           ---------
                                          $73,032           $      --
                                         ========           =========

There were no sales proceeds and realized gains or losses on
securities classified as available for sale in 2001 and 2000.

Note 6: PROPERTY AND EQUIPMENT

The components of property and equipment are as follows:

                                                 March 31
                                             2001                2000
                                           --------------------------
Delivery equipment                         $9,750              $9,750
Furniture and office equipment              1,500               1,500
                                           ------              ------
                                           11,250              11,250
Less: Accumulated depreciation             10,875               9,198
                                           ------              ------
                                           $  375              $2,052
                                           ======              ======

Depreciation expense for the years ended March 31, 2001 and 2000 was
$1,677 and $2,164, respectively.

Note 7: INCOME TAXES

The deferred income tax asset at March 31, 2001 and 2000 related to
Federal and state net operating losses and an accrued liability at
March 31, 2000.  The resulting deferred tax asset has been fully
offset by a valuation allowance.  The valuation allowance has been
established equal to the full amount of the deferred tax assets as the
Company is not assured at March 31, 2001 that is more likely than not
that these benefits will be realized.

The deferred income tax liability at March 31, 2001 relates to an
unrealized holding gain from an investment in marketable equity
securities held for sale.

Net operating loss carryforwards and temporary differences between the
financial statement carrying amounts and tax bases of assets and
liabilities that give rise to the net deferred tax liability relate to
the following:

                                                   March 31
                                               2001             2000
                                              -----------------------
Net operating loss carryforwards             $60,744         $ 41,313

Accrued liabilities, principally due to
  expenses not currently deductible for
  income tax purposes                             --           62,887

Unrealized holding gain                      (55,093)              --
                                             -------          -------
                                               5,651          104,200
Less valuation allowance for deferred
  tax assets                                 (60,774)         104,200
                                             -------          -------
Net deferred income tax assets
  and liabilities                          $ (55,093)        $     --
                                           =========         ========
The change in the valuation allowance for the year ended March 31,
2001 was a net decrease of $43,456 due to debt forgiveness for accrued
officer salaries and current year net operating loss.

A reconciliation between the statutory federal income tax rate (34%)
and the effective income tax rates based on continuing operation is as
follows:



<PAGE>18

                                               March 31
                                           2001                  2000
                                           --------------------------
Statutory federal income tax             $34,306           $ (16,076)
State income tax (benefit)                 9,081              (4,237)
Non deductible items                          69                  --
Valuation allowance                      (43,456)             20,313
                                         --------           --------
Net income tax expense                  $     --          $       --
                                        ========          ==========

Federal net operating loss carryforwards of $141,487 will expire in
the year 2016 and the state net operating loss carryforwards of
$140,437 will expire in the year 2006.

Note: 8 SALES

The Company sells cosmetic and beauty supplies both on the retail and
wholesale levels to beauty salons and to the general public.

Wholesale sales consist of sales to beauty salons of merchandise for
resale.  Sales of merchandise to beauty salons for their own
consumption, not for resale, are considered retail sales.  All sales
to the general public are also considered retail sales.

Sales are summarized as follows:

                                               March 31
                                         2001                   2000
                                         ---------------------------
Wholesale                             $106,966              $103,470
Retail                                 133,501               141,839
                                      -------               --------
                                      $240,467              $245,309
                                      ========              ========
Note: 9 SALARY FORGIVENESS

The President of the Company has forgiven all of the accrued salareis
owed to him from January 1996 to February 2001 totaling $155,000.
Commencing with March 1, 2001, his salary is and will be paid to him
on a monthly basis.

Accrued salaries due to the President's brother totaling $18,750
(accrued from January 1996 to March 1997) has been forgiven.

Note:10 COMMITMENTS

In April of 1999, the Company entered into a lease agreement with a
non-related party for a term of three (3) year commencing May 1, 1999
for the rental of its executive offices, retail, wholesale and
warehouse facilities in Totowa, New Jersey at a monthly rental of
$1,200 per month for the first twelve (12) months and $1,300 a month
for each of the remaining twenty four (24) months.  Total rent charged
to operations for the years ended March 31, 2001 and 2000 was $15,205
and $15,137 receptively.

The minimum annual future payments are as follows:

Years Ended
  March 31
  --------
     2002                          $15,600
     2003                            1,300
                                  --------
     Total                         $16,900
                                  ========
(b)    List of Exhibits

          The following exhibits are filed with this report:

(2.1) Articles of Incorporation incorporated by reference to Form 10SB
filed June 14, 1999, file #0-26361
(2.2) Bylaws incorporated by reference to Form 10SB filed June 14,
1999, file #0-26361
(3.1) Common Stock Certificate incorporated by reference to Form 10SB
filed June 14, 1999, file #0-26361

 (B)    REPORTS ON FORM 8-K
          None

<PAGE>19
                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company has duly caused this
Report to be signed on its behalf by the undersigned duly authorized
person.

Date:    June 12, 2001            Creative Beauty Supply, Inc.

                                 /s/ Carmine Catizone
                                 ------------------------------------
                                 By: Carmine Catizone, President

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


/s/Carmine Catizone                                6/12/2001
------------------------
Carmine Catizone
President and Director
(Principal Executive Officer)

/s/Daniel Generelli                                6/12/2001
------------------------
Daniel Generelli
Principal Financial Officer/Controller/Director