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                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K
                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED JANUARY 29, 2000

                        COMMISSION FILE NUMBER 001-15311

                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
                   FLORIDA                                 65-0981457
(State or other jurisdiction of incorporation    (I.R.S. Employer Identification
              or organization)                                No.)
</TABLE>

<TABLE>
<S>                                                 <C>
     4 MOUNT ROYAL AVENUE, MARLBORO, MA 01752                  (508)481-8303
     (Address of principal executive offices)         (Registrant's telephone number,
                                                           including area code)
</TABLE>

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<TABLE>
                                                    NAME OF EACH EXCHANGE ON
             TITLE OF EACH CLASS                        WHICH REGISTERED
---------------------------------------------  -----------------------------------
<S>                                            <C>
        COMMON STOCK, $0.01 PAR VALUE                AMERICAN STOCK EXCHANGE
</TABLE>

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such 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 [ ].

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

     The number of shares of Common Stock outstanding as of April 27, 2000 was
8,992,500. The aggregate market value of the voting stock held by non-affiliates
of the registrant based on the $64.75 closing price for the registrant's Common
Stock on the American Stock Exchange on April 27, 2000 was approximately
$242,354,912. Directors, executive officers and 10% or greater shareholders are
considered affiliates for purposes of this calculation but should not
necessarily be deemed affiliates for any other purpose.

                      DOCUMENTS INCORPORATED BY REFERENCE

     PART III OF THIS REPORT INCORPORATES BY REFERENCE CERTAIN PORTIONS OF THE
REGISTRANT'S PROXY STATEMENT FOR ITS 2000 ANNUAL MEETING OF SHAREHOLDERS TO BE
FILED WITH THE COMMISSION NO LATER THAN 120 DAYS AFTER THE END OF THE FISCAL
YEAR COVERED BY THIS REPORT.

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                           FORWARD LOOKING STATEMENTS

     Certain statements within this Form 10-K constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of Envision Development Corporation or its industry to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements are based on our current expectations and are subject to a number of
risks, uncertainties and assumptions relating to our operations, financial
condition and results of operations, including, among others, rapid
technological and regulatory changes in the industries we serve, the financial
resources of our customers, our numerous competitors and the few barriers to
entry for potential competitors, the short-term nature of many of our contracts,
the seasonality and quarterly variations we experience in our revenue, our
uncertain revenue growth, our ability to attract and retain qualified personnel,
our ability to expand our infrastructure and manage our growth, and our ability
to identify, finance and integrate acquisitions, among others. If any of these
risks or uncertainties materialize, or if any of the underlying assumptions
prove incorrect, actual results may differ significantly from results expressed
or implied in any forward-looking statements made by us. These and other risks
are detailed in this Annual Report on Form 10-K and in other documents filed by
us with the Securities and Exchange Commission. Envision undertakes no
obligation to update publicly any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.

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                                    BUSINESS

GENERAL

     Envision Development Corporation ("Envision" or the "Company") is the
successor to perfumania.com. Envision is attempting to position itself as a next
generation eBusiness professional services firm delivering innovative products
and services for a wide range of eCommerce applications. Envision was created on
February 10, 2000 through a plan of merger among perfumania.com, inc.
("perfumania.com"), the Company and EDC Sub Inc., a Florida corporation and
wholly owned subsidiary of the Company (see description of reorganization
below). The Company performed the reorganization to demonstrate its new mission
to provide breakthrough technologies through its delivery platform as an
eBusiness professional services firm.

     On January 7, 1999, perfumania.com was created as a wholly-owned subsidiary
of Perfumania, Inc. (former parent company of perfumania.com prior to the
reorganization). Perfumania, Inc. is a wholly-owned subsidiary of E Com
Ventures, Inc. Since its inception, perfumania.com has operated an online store
that specializes in the sale of fragrances, fragrance related products and bath
and body products on a retail and wholesale basis. perfumania.com offers retail
customers over 1,700 products at price discounts, including hard-to-find and
discontinued brands. The business-to-business component of the online store
offers products on a wholesale basis to the largely underserved market of
smaller specialty retailers. Users can easily browse and locate products using
perfumania.com's search engines. The online store offers personalized customer
service, secure ordering, numerous shipping options and fast delivery.

     On September 29, 1999, perfumania.com completed its initial public offering
and received proceeds of approximately $16,100,000, net of $1,400,000 in
underwriting discounts and commissions, from the sale of 2,500,000 shares of its
common stock. perfumania.com used approximately $3,344,000 of the proceeds to
repay advances from Perfumania, Inc. Additionally, perfumania.com incurred
approximately $496,000 in other costs in connection with the offering.

     On January 11, 2000, a change in control of perfumania.com (before the
reorganization described below) occurred when Alta Limited exercised an option
to purchase from Perfumania, Inc., 2,000,000 shares of common stock of
perfumania.com at a price of $6.00 per share pursuant to an Option Agreement,
dated December 10, 1999, among Perfumania, Inc., Alta Limited and the optionees
who are signatories thereto. In connection with such exercise, Alta nominated
two directors to the Board of Directors of perfumania.com (before the
reorganization) and an additional four directors were added by the Board of
Directors effective upon the expiration of the waiting requirements of Rule
14f-1 under the Securities Exchange Act of 1934, as amended. Under the Option
Agreement, Alta has a second option to purchase 500,000 shares of common stock
of Envision at a price of $8.00 per share on or prior to the earlier to occur of
December 31, 2000 or various other events, as defined in the Agreement.

     On February 10, 2000, perfumania.com, consummated a reorganization through
a plan of merger among the combination of perfumania.com, the Company and EDC
Sub, Inc., a Florida corporation and wholly-owned subsidiary of the Company. The
plan of merger provided for, among other things, the merger of EDC Sub, Inc.
with perfumania.com, with perfumania.com as the surviving corporation. As a
result, perfumania.com became a direct wholly-owned subsidiary of Envision.

     In addition, each share of common stock, par value $0.01 per share, of
perfumania.com issued and outstanding before the reorganization was converted
into and exchanged for one share of common stock, par value $0.01 per share, of
Envision. Consequently, shareholders of perfumania.com became shareholders of
Envision and ceased to be shareholders of perfumania.com. Pursuant to Florida
Statutes, shareholder approval of this reorganization was not required, and the
reorganization was tax free for federal income tax purposes to perfumania.com's
shareholders.

     In connection with the aforementioned reorganization of Envision on
February 14, 2000, perfumania.com common stock ceased to be publicly traded, and
instead, Envision common stock began trading on the American Stock Exchange,
Inc. under the new ticker symbol "EDV." In accordance with Florida law,

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certificates representing shares of Envision common stock were exchanged for
certificates of perfumania.com common stock soon thereafter.

     On March 10, 2000, Envision signed a First Amended and Restated Agreement
and Plan of Merger among Envision, Envision Acquisition Corporation, a
Massachusetts corporation that is a wholly-owned subsidiary of Envision,
perfumania.com, Envision Development Corporation, a Massachusetts corporation
("Envision Mass") and certain stockholders of Envision Mass to acquire all of
the outstanding stock of Envision Mass. This transaction is subject to approval
by shareholders of Envision.

     On April 7, 2000, Envision acquired approximately 80% of the voting stock
of Qui Vive, Inc. ("Qui Vive"), a Delaware corporation, pursuant to an Amended
and Restated Stock Acquisition Agreement (the "Stock Acquisition Agreement"),
dated March 31, 2000, among Envision, QV Acquisition Corporation, a Delaware
corporation that is a wholly-owned subsidiary of Envision, Sundog Technologies,
Inc., a Delaware corporation, and RockMountain Ventures Fund, LP, a Delaware
limited partnership. Pursuant to this Stock Acquisition Agreement, on April 7,
2000, Envision issued shares of its common stock in order to acquire shares of
Series A Preferred Stock and Series B Preferred Stock of Qui Vive. Envision will
issue additional shares of its common stock to complete the acquisition of the
80% of the voting stock of Qui Vive subject to Envision's shareholder approval.
Qui Vive, which does business as QVtech, has no significant operations except
for the development of its proprietary "Interosa" technology. This technology
provides security features to e-mail communications.

     On April 10, 2000, Envision entered into an Amended and Restated Stock
Purchase Agreement with VP IP, a Delaware corporation. Pursuant to the terms of
this agreement, Envision acquired the software and URL of VP IP. In exchange,
Envision issued 200,000 shares of its common stock to the owners of VP IP which
included William Patch, Chairman and Chief Executive Officer of Envision, and
his immediate family and Alex Adamopoulos, an officer of Envision.

     Envision does not presently have any significant operations itself or
through any other subsidiary, except for the operations of perfumania.com.

     The principal executive offices of Envision are 4 Mount Royal Avenue,
Malboro, Massachusetts 01752. The telephone number is (508) 481-8303.

BUSINESS OF ENVISION

     Envision was formed in February 2000 pursuant to the reorganization
previously described. Since its inception, Envision has sought to deliver
innovative, transactive eBusiness solutions so that customers can achieve
transformational breakthroughs into the Internet economy. Envision's customer
value proposition encompasses extending marketing reach, automating sales and
support functions, automating the supply chain, and enhancing overall business
activities. Envision seeks to deliver these benefits with a services/products
spectrum including eBusiness Consulting, eBusiness System Development,
eMarketing, Application Licensing and through its IsoStructuretm platform. In
conjunction with these services and products, Envision is currently seeking to
be a leader in transactive technologies that protect, secure and manage Internet
document exchange as a part of the eBusiness solution.

MARKET OPPORTUNITY

     Envision participates in one of the fastest growing categories of
eBusiness, the eBusiness Solution Provider sector. This sector is responding to
the growth in the Internet's Business-to-Business ("B2B") market, which is
expected to reach $2.7 trillion by 2004, according to a leading technology
industry research firm. The Internet presents opportunities to transform
businesses and entire industries and has allowed businesses to identify new
product and service offerings which extend and complement their core markets. As
a result, these opportunities are creating a significant and growing demand for
Internet services as organizations are investing in Internet solutions to
transform their core business and technology strategies. Envision believes that
as businesses race to achieve the transcendent opportunities and increased
operating efficiencies made possible by Internet technology, they will
increasingly seek to outsource their eBusiness

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activities to eBusiness solution providers that not only offer expertise, but
even more importantly, the speed to help them win in their industry.

     For this reason, Envision believes there is strong demand for professional
services to assist companies in developing eBusiness strategies and to design
and implement innovative eBusiness solutions that transform key business
processes and provide competitive advantages. The Company further believes that
few companies today have the combination of expertise in eBusiness strategy
development, market reach and automation of sales and support functions and the
supply chain required for the development and implementation of such solutions.

  Strategy

     Envision's strategy is formulated on the premise that organizations wishing
to participate in the Internet economy are increasingly turning to eBusiness
experts. These organizations wish not only to tap into the expertise and
innovative skills that are needed to create and deploy competitive and timely
eBusiness systems, but even more importantly, the eBusiness and eMarketing savvy
to make their companies successful in the Internet economy. Envision's strategy
in response to this need is to develop core competencies in eBusiness
Consulting/Development, Application Licensing and the IsoStructure(TM) platform.
Productization would simplify the delivery of eBusiness features while
increasing Envision's gross margin and erecting a competitive barrier to other
eBusiness competitors.

     The three core eBusiness competencies which Envision believes are critical
to becoming a leader in eBusiness are:

          eBusiness Consulting/Development -- Services include eBusiness
     Strategy Definition and Planning, Peer Web Audits, Internet Advisory
     Services. These services assist companies in understanding where eBusiness
     opportunities exist and helps them develop a roadmap for eBusiness
     implementation. The Development services include front-end website design
     for a high-performance website. While the website's front is visible to the
     user, the back-end services are what really powers a highly functional
     eBusiness website. Back-end services include database and transaction
     support.

          Application Service Provider (ASP) -- The Application Service Provider
     sector is an explosive marketplace enabling companies to leverage software
     applications rapidly and at a very competitive cost. Envision's approach to
     this segment is to provide both productized and customized applications to
     the client that meet their requirements, deliver value and allow for a
     competitive advantage.

          IsoStructure(TM) -- Envision's vision is to bring together
     breakthrough technologies it incubates and deliver them within a unified
     platform that can be entirely leveraged by its clients. IsoStructure(TM)
     would represent such a platform and transforms the manner in which
     customers interact with web applications today by providing a breakthrough
     combination of technologies within a single, secure and unified platform.

  Products

     If Envision succeeds in its acquisition of Envision Mass, it will acquire
the following trademarked terms which will be used to describe the various
modules of our web development strategy.

     InternetPowered(TM) products -- Specific productization opportunities
emerge in the designing and implementing of a variety of Internet business
solutions across diverse industries. Envision believes that a company's website
does not have to be a completely custom implementation. For example, many
companies want their website to include, among other things, press releases,
trade show calendars, news articles, job postings and fresh content on the home
page. Envision also believes that it is in the best interests of its customers
to be able to easily update website content so as to create reasons for visitors
to return to the website. With these goals in mind, Envision, if it is
successful in its acquisition of Envision Mass, plans to develop a series of
website plug-in modules, collectively known as InternetPowered(TM) products. The
use of the products and trademarks stated above is contingent upon the
acquisition of Envision Mass.

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     InternetPowered(TM) products would simplify the website sales-cycle by
providing predefined modules of website functionality at published prices. These
products include:

     - InternetPowered(TM) PressRoom

     - InternetPowered(TM) Events

     - InternetPowered(TM) Employment Recruitment

     - InternetPowered(TM) Collaborative Forum

     - InternetPowered(TM) Articles

     - InternetPowered(TM) HomePage

     - InternetPowered(TM) Content Administrator

     IsoStructure(TM) -- IsoStructure(TM) is an information exchange platform
that allows clients focused on business-to-business services to rapidly
implement a set of transactive technologies. IsoStructure(TM) leverages today's
approved industry standards and emerging ones, such as XML (Extensible Markup
Language), XFDL (Extensible Forms Data Language), HDML (Handheld Device Markup
Language) and WAP (Wireless Application Protocol).

     These platform capabilities represent a breakthrough in traditional
exchange applications through the incorporation of major industry advancements
in technology. These advancements represent the secure architectures represented
by legally binding documentation, policy-based email management, operating
system level security to strengthen the transaction layer and the extended
information platform to a wireless device utilizing SSL to secure the
transmission. Presently these technologies are all stand alone applications that
the market is demanding. Envision's IsoStructure(TM) is expected to bring these
advancements together with a competitive advantage to the market.

     Interosa technology -- Envision, through its subsidiary Qui Vive, developer
of the proprietary "Interosa" technology for secure e-mail communications, will
complement its product line by providing secure encrypted e-mails. Interosa
would assist senders in keeping e-mails in context by allowing senders to apply
policies which determine the behavior of a message. Policies can determine who
can open an e-mail, when they can open it, and what they can do with it.
Messages are encrypted at all times, and can only be decrypted when their
policies are satisfied. Unlike encrypted delivery systems, in which protection
ends when the document arrives, Interosa policies protect not only the transport
of the message, but also its use, for the entire life of the message. Senders
may choose policies when they compose a message. When the message is sent,
Interosa encrypts the policies together with the message and sends it as a
standard MIME e-mail. Interosa policies make e-mail safe for business
communication. Interosa assists any company in ensuring that internal corporate
dialogs remain internal. E-mail protection facilitates strategic partnerships in
which high value information must be exchanged between companies. Interosa also
promotes effective brainstorming, by assuring participants that off-the-cuff
ideas won't be archived. Interosa speeds the exchange of ideas because senders
do not have to compose messages that are understandable outside the intended
context. Policies in Interosa's first release will enable a sender to:

     - Password protect messages so they can only be opened with the required
       password,

     - Expire messages so they cannot be decrypted after a specified date and
       time,

     - Keep internal e-mail internal, by preventing decryption outside the
       sender's domain,

     - Prevent unencrypted forwarding outside the recipient's company for
       messages exchanged between Interosa-enabled businesses,

     - Prevent e-mail contents from being copied or pasted,

     - Prevent messages from being printed, and

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     - Ensure messages are stored encrypted at all times and that a decrypted
       view only occurs when the policies allow.

  Partnerships

     Envision's partnership strategy leverages its sales and marketing reach
through mutually beneficial partnerships with other companies. Partnerships
multiply our sales force reach through the efforts of partner sales personnel.
Simply stated, the goal is to funnel in highly qualified leads for Envision to
turn into revenue. A secondary benefit is increased market credibility for
Envision by virtue of the association with market leading companies.

  Competition

     Competitors are organized into five categories -- (1) eBusiness Solution
Providers, (2) web design shops, (3) system integrators, (4) major consulting
firms and (5) advertising firms.

  Risk Factors -- Related to Envision's Business

     Limited Operating History.  perfumania.com was founded in January 1999 to
sell fragrance and cosmetics online, and, in September 1999, had its initial
public offering. On February 10, 2000, perfumania.com reorganized into a holding
company structure whereby perfumania.com is now the wholly-owned subsidiary of
Envision. Envision currently has limited operations other than perfumania.com.
Accordingly, Envision has no operating history upon which to evaluate its
performance. Envision has not been in its currently contemplated business long
enough to enable a stockholder to make a reasonable judgment as to its future
performance. The likelihood of its success must be considered in light of the
problems, expenses, difficulties, complications and delays frequently
encountered in connection with a developing business and the competitive
environment in which Envision will operate. Many of these risks are described in
more detail in this section. Envision may not successfully address these risks.
If they do not successfully address these risks, the business will be seriously
harmed.

     Envision Business Model is Unproven.  Envision's strategy is based on an
unproven business model. Its business model depends on the acceptance of the
Internet for business-to-business transactions and the ability of Envision's
technology to continue evolving and gain wide spread acceptance.

     Expansion through Acquisitions of Other Businesses and Technologies.  The
acquisitions described in this Annual Report on Form 10-K involve a number of
special problems including: difficulty assessing technologies; operations and
personnel; diversion of management attention in connection with both the
negotiation of the investments and possible integration of the assets; strain on
the managerial and operational resources as management tries to oversee larger
operations; dilution of currently outstanding securities; and the amortization
of goodwill and other intangible assets. Envision's future operating results
will depend significantly on its ability to manage growth and integrate
acquisitions. Envision may not be able to address these problems successfully.

     Expenses may also increase due to the potential effect of goodwill
amortization and other charges resulting from acquisitions described herein and
in the future. If any of these and other expenses are not accompanied by
increased revenue, our losses will be greater than anticipated.

     No Assurance of Availability of Personnel.  Envision has not hired all of
the personnel necessary to implement our business plan. Envision is dependent
upon its ability to attract and retain qualified personnel. There is intense
competition for qualified personnel in its business. Although Envision believes
that such personnel will be available and attainable at reasonable compensation
levels, no assurance can be given that Envision will be able to attract and
retain the qualified personnel necessary for the development of our business.

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  Risk Factors-Related to the Internet Industry

     Business-to-Business E-commerce.  Envision relies on the Internet for the
success of its businesses. The development of the e-commerce market is in its
early stages. If widespread commercial use of the Internet does not develop, or
if the Internet does not develop as an effective medium for providing products
and services, Envision will not succeed.

     Competition.  Competition for Internet products and services is intense. As
the market for business-to-business e-commerce grows, Envision expects that
competition will intensify. Barriers to entry are minimal, and competitors can
offer products and services at a relatively low cost. Some companies may have
access to greater resources than Envision.

     Future Government Regulations Affecting the Internet.  With the exception
of regulations applicable to businesses generally, Envision is not currently
subject to direct regulation by any government agency. Due to increasing
popularity and use of the Internet, however, it is possible that a number of
laws may be adopted with respect to the Internet in the future, covering issues
such as user privacy, pricing of goods and services, and types of products and
services offered. An example of the kind of laws which may be adopted to cover
the use of the Internet is the Telecommunications Act of 1996. The
Telecommunications Act prohibited the transmission over the Internet of certain
types of information. Although certain provisions of the Telecommunications Act
were held unconstitutional, similar laws may be enacted in the future. Other
nations, including Germany, have taken similar actions to restrict the free flow
of information deemed to be objectionable on the Internet. Additionally, certain
telecommunications carriers continue to advocate that telecommunications over
the Internet should be regulated by the Federal Communications Commission in the
same manner as other telecommunications services. These telecommunications
carriers want to see the government eliminate the current exemption from payment
of telecommunications access charges for Internet service providers.

     If the government adopts any additional laws or regulations covering the
use of the Internet, such actions could decrease the growth of the Internet. Any
such reduction in the growth of the Internet may cause the value of our equity
holdings to decrease and may negatively affect the companies which use our
services. This could cause the demand for our services to be significantly
reduced and raise the cost to us in providing those services. The cost to us of
providing our services also may be increased if existing U.S. state and federal
laws and foreign laws governing issues such as commerce, taxation, property
ownership, defamation and personal privacy are increasingly applied to the
Internet.

     Rapid Change in Technology and Distribution Channels Related to the
Internet.  The market for Envision's Internet products and services are
characterized by rapidly changing technology, evolving industry standards,
frequent new product and service introductions, shifting distribution channels,
and changing customer demands. Envision's future success will depend on its
ability to adapt to this rapidly changing marketplace. Envision may not be able
to adequately adapt products and services or acquire new products and services
that can compete successfully. Envision may not be able to establish and
maintain effective distribution channels for its services. Failure to maintain
competitive product and service offerings or effective distribution channels
could have an adverse effect on Envision's business, results of operations and
financial condition. To respond to the rapid technological changes occurring in
Internet services, Envision may have to spend substantial amounts of money, and
there is no guarantee that such expenditures will yield a positive investment
return.

     Internet Security Risks.  The secure transmission of confidential
information over public telecommunications facilities is a significant barrier
to electronic commerce and communications on the Internet. Many factors may
cause compromises or breaches of security systems used by us and other Internet
sites to protect proprietary information. A compromise of security on the
Internet would materially negatively affect the use of the Internet for commerce
and communications. This in turn would negatively affect our business.
Circumvention of Envision's security measures could result in misappropriation
of our proprietary information or cause interruptions of Envision's operations.
Protecting against the threat of such security breaches may require us to expend
significant amounts of capital and other resources. There can be no assurance
that Envision's security measures will prevent security breaches.

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     Infrastructure of the Internet.  The success of commercial use of the
Internet depends in large part upon the development and maintenance of the
Internet's infrastructure, including the development of complementary products
such as various broadband technologies. The number of users of the Internet and
the amount of traffic on the Internet has grown significantly and is expected to
continue to grow. To the extent the number of users of the Internet and the
amount of traffic on the Internet continue to increase there will be greater
demands placed on the Internet's infrastructure. The Internet infrastructure may
not be able to support the demands placed on it by this continued growth without
the performance or reliability of the Internet being decreased. Any outages or
delays in services could lower the level of Internet usage. In addition, the
infrastructure and complementary products and services necessary to make the
Internet a viable commercial marketplace may not develop. If usage of the
Internet is curtailed due to infrastructure constraints or lack of complementary
products, Envision expects an adverse impact on our business and revenues. Even
if such infrastructure and complimentary products and services do develop, there
can be no guarantee that the Internet will become a viable commercial
marketplace for products and services such as those offered by Envision.

  Risk Factors -- Related to Control of Envision

     Stockholders of Envision.  Upon completion of the contemplated
acquisitions, the ownership interest of Envision's current shareholders will be
diluted. While certain shareholders will continue to beneficially own or control
a large amount of the outstanding shares of our common stock, one shareholder of
Envision Mass and a former shareholder of Qui Vive will become holders of more
than 5% of Envision common stock.

     Board of Directors of Envision.  ZERO.NET, Inc., ("ZERO.NET") a
busines-to-business internet holding company is the largest stockholder of the
Company with 35.9% of the Envision's shares of common stock.

BUSINESS OF perfumania.com

     As a subsidiary of Envision, perfumania.com operates an online store that
specializes in the sale of fragrances, fragrance related products and bath and
body products on a retail and wholesale basis. perfumania.com launched its
online store in February 1999 and offers retail customers over 1,700 products at
significant price discounts, including hard-to-find and discontinued brands. The
business-to-business component of the online store offers products on a
wholesale basis to the largely underserved market of smaller specialty
retailers. Users can easily browse and locate products using perfumania.com's
search engines. The online store offers personalized customer service, secure
ordering, numerous shipping options and fast delivery.

     One of Envision's shareholders is Perfumania, Inc., a leading discount
fragrance retailer that operates a chain of approximately 280 specialty
fragrance stores. Envision's relationship with Perfumania, Inc. provides
perfumania.com with the following advantages:

     - exclusive online use of the highly recognized Perfumania brand name,

     - cross marketing our online store with Perfumania, Inc.,

     - access to Perfumania, Inc.'s extensive supply relationships, and

     - Perfumania, Inc.'s considerable fragrance industry experience and
       expertise.

  Industry Background

     Growth of the Internet and E-Commerce.  The Internet has emerged as a
global medium, enabling millions of people to share information, communicate and
conduct business electronically. A leading technology research firm estimates
that the number of worldwide Web users will grow to approximately 320 million by
the end of 2002. This rapid growth represents a significant opportunity for
businesses to advertise and sell products online to both consumers and
businesses.

     Business-to-consumer online transactions were approximately $8.0 billion in
1998 and it is anticipated that online consumer transactions will increase to
approximately $60.2 billion by 2003. A leading technology

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research firm estimates that businesses bought and sold approximately $145.0
billion in goods over the Internet in 1999 and predicts that
business-to-business e-commerce will grow to approximately $3.95 trillion by
2003.

     The Fragrance Industry.  The traditional retail fragrance industry is
fragmented with different competitive strategies used throughout. The industry
includes upscale department stores which compete based on advertising and
promotions, not on price, specialty retailers which compete based on pricing,
and mass-market retailers and drug stores which emphasize convenience
purchasing.

     Management believes that traditional fragrance retailers face a number of
challenges in providing a satisfying shopping experience for consumers:

     - The number of SKUs and the amount of product inventory that a traditional
       retailer can carry in a store is constrained by the store's physical
       space, thereby limiting selection.

     - Limited shelf space and store layout constraints limit the merchandising
       flexibility of traditional retailers.

     - Due to the significant costs of carrying inventory in multiple store
       locations, traditional retailers focus their product selection on the
       most popular products that produce the highest inventory turns, thereby
       further limiting consumer selection.

     The unique characteristics of the Internet provide a number of advantages
for retail and wholesale fragrance sellers. Online sellers are able to display a
larger number of products than traditional store-based or catalog sellers at a
lower cost. In addition, online sellers are able to frequently adjust their
featured selections, editorial content and pricing, providing significant
merchandising flexibility. Online sellers also benefit from the minimal cost to
conduct business on the Internet, the ability to reach a large group of
customers from a central location, and the potential for low-cost customer
interaction. Unlike traditional channels, online sellers do not have the
burdensome costs of managing and maintaining a retail store infrastructure or
the significant printing and mailing costs of catalogs. Online sellers can also
easily obtain demographic and behavioral data about customers, increasing
opportunities for direct marketing and personalized services. Because brand
loyalty is a primary factor influencing a fragrance purchase, a customer's
presence at the point-of-sale and ability to physically sense the fragrance
product are not critical to the purchasing decision.

  Shopping at the Online Store

     perfumania.com's online store provides its retail and wholesale customers
with superior features, pricing and convenience.

     Browsing.  The online store offers visitors several special features
arranged in simple, easy-to-use formats intended to enhance product search,
selection and discovery. By clicking on the permanently displayed products and
product categories, users can move directly to the Web page that contains
details about the particular products. Users can quickly browse promotions, such
as perfumania.com's perfume of the month and other featured products. In
addition, customers can browse the online store by linking to specially designed
pages dedicated to products from well known national and specialty brands.
Customers can also link to pages based on product category, such as women's
brand name perfumes, men's brand name colognes, children's fragrances, gift set
specials and bath and body products.

     Large Product Offerings.  The online store offers customers a choice of
over 1,700 designer and private label fragrances, fragrance related products and
bath and body products for men and women at discounted prices. perfumania.com's
products are sold for between $5 and $100 and include designer fragrances,
fragrance related products, including moisturizers and powders, and bath and
body products, including aromatherapy products, scented soaps, scented candles,
body washes and massage products.

     Searching.  The most prominent feature of the online store is the
interactive, searchable catalog of our extensive line of products. The search
capabilities allow users to search for a product by name or category.
perfumania.com's "Perfumer Recommends" feature recommends fragrances for
different seasons, social occasions, moods, activities and customers'
preferences. In addition, for those customers who wish to try new
                                        9
<PAGE>   11

products, the online store offers several alternative fragrances similar to a
customer's favorite brand or to high demand brands.

     Selecting Products and Checking Out.  To purchase products, customers
simply click on a button to add products to their virtual shopping cart.
Customers can add and subtract products from their shopping cart as they browse
around our store prior to making a final purchase decision, just as in a
physical store. To execute orders, customers click on the checkout button and,
depending upon whether the customer has previously shopped with perfumania.com,
are prompted to supply shipping details online. perfumania.com also offers
customers a variety of gift wrapping and shipping options during the checkout
process. Prior to finalizing an order by clicking the submit order button,
customers are shown their total charges along with the various options chosen,
such as shipping method, at which point customers still have the ability to
change their order or cancel it entirely.

     Paying.  To pay for orders, a customer must use a credit card, which is
authorized during the checkout process, but which is charged when perfumania.com
ships the customer's items. The online store uses a security technology that
works with the most common Internet browsers and makes it virtually impossible
for unauthorized parties to read information sent by the customers.
perfumania.com's system automatically confirms receipt of each order via e-mail
within minutes and notifies the customer when perfumania.com ships the order,
which is typically within one to two business days for in-stock items.

     Customer Service Features.  perfumania.com believes that high levels of
customer service and support are critical to retain and expand our customer
base. perfumania.com monitors orders from the time they are placed through
delivery by providing numerous points of electronic, telephonic and personal
communication to customers. perfumania.com confirms all orders and shipments by
e-mail. Its customer service representatives are readily available during
regular business hours by telephone.

     Usage.  The average daily page views, which represent the number of times
per day our server delivers a page to a user, has grown consistently increasing
from 5,103 views per day during February 1999 to approximately 68,418 views per
day during February 2000. User sessions per day have grown from 769 shortly
after launch of our online store to approximately 9,685 for February 2000.

  Marketing and Advertising

     perfumania.com has established a variety of relationships with several
Internet sites to build traffic and attract customers, including Yahoo!.
perfumania.com has an agreement with Yahoo! to promote and advertise its online
store. perfumania.com has delivered to Yahoo! content about the online store
that Yahoo! has agreed to insert onto its banners and on its search results
page. perfumania.com gives Yahoo! discount coupons that can be used at the
online store by members of the Yahoo! Birthday Club.

     perfumania.com intends to expand its use of these kinds of alliances in the
future. perfumania.com strives to ensure that future alliances are
cost-effective in terms of the potential customers to be acquired, potential
revenue to be generated, level of exclusivity and brand exposure. perfumania.com
sends e-mails to its customers advising them of its promotions and other pricing
specials for their favorite fragrances. perfumania.com intends to continue to
advertise in whichever forms of media proves most effective.

  Fulfillment and Inventory Management

     perfumania.com offers over 1,700 fragrances and fragrance related products,
which it believes is a wider selection of products than offered by most
traditional fragrance sellers. perfumania.com obtains most of its inventory from
Perfumania, Inc., because they have offered the most favorable pricing and
services to date. perfumania.com's relationship with its former parent gives it
access to Perfumania, Inc.'s extensive network of suppliers, and perfumania.com
may obtain inventory directly from these and other suppliers depending on which
offers us the most favorable selection, pricing, quality and quantity terms.

     perfumania.com's inventory is stocked in its Miami, Florida facility.
Products are generally shipped within 24 hours unless they are out-of-stock, in
which case they are generally shipped within 48 to 96 hours.

                                       10
<PAGE>   12

Customers have numerous shipping options including overnight or international
shipping. Orders not filled through our online network are processed by a
telephone order group.

  Technology

     perfumania.com believes that it uses an advanced e-commerce platform.
perfumania.com believes that its platform will allow it to grow rapidly while
providing reliable, secure, and cost-effective e-commerce solutions. Its online
store is hosted by USinternetworking in Annapolis, Maryland.

     perfumania.com's web site uses a Microsoft NT Server platform which was
developed using the latest Microsoft technology to optimize the conducting of
business online.

     perfumania.com has taken steps to prevent the failure of its
mission-critical business applications. Routers, switches, firewalls, and
servers associated with its Web sites are all deployed with backup or stand-by
components so that it has at least six different paths to the Internet.
perfumania.com's Web site uses USinternetworking's total security architecture.
This architecture is specially designed and built to deliver Web-enabled
enterprise applications and ensures that customer information is protected and
that transactions are conducted securely over the Internet. USinternetworking
has taken significant measures to provide customers with secure application
hosting services. The security architecture is a layered approach that addresses
security at every layer from the application down to the physical wire and
ensures the primary aspects of security of confidentiality, integrity, and
availability are addressed and that customer information is secure.

     perfumania.com's technology allows it to avoid Internet congestion as it
has secured direct access to each of the six major Internet backbones in the
U.S. This enables its customers to achieve LAN-like speeds for over 80% of all
Internet connections, which makes roundtrip performance up to four times faster
than can be achieved using traditional Internet service provider network
architectures.

     The Web site's workload is distributed over a web server and a database
server, both high-end Compaq machines. With this solution, perfumania.com can
rapidly achieve its goal of implementing a fully scalable and a robust
e-commerce Web site without investing in hardware, software, servers, or
infrastructure. If, in the future, it becomes necessary to increase the capacity
of the Web site, USinternetworking can easily do this for perfumania.com by
adding new hardware. With a file replication system in place, identical Web
sites can easily be hosted on multiple Web servers. With the addition of a Cisco
Local Director switch, the workload can be dynamically balanced across the
different Web servers. The high-performance switch is equipped with a failure
mechanism that eliminates all points of failure for the Web server platform.

     Credit cards are authorized and processed securely using Cybercash, which
handles the authorization in real time, while the shopper is online. If the
authorization is successful, the user is presented with an order confirmation
message and number, and the order information is written to a database at
USinternetworking.

     Using perfumania.com's software package's accounting, merchandising and
warehousing modules, fulfilling orders and running other aspects of the business
is an efficient process. RF scanning technology is used when receiving goods
from vendors, fulfilling orders and conducting inventory counts, making these
processes more accurate and efficient. Its system prints packing slips and
shipping labels and directs the fulfillment team to conduct efficient product
picking and packing using the RF scanners' LED readout. Once the order is
fulfilled and shipped, the customer is e-mailed a confirmation. perfumania.com's
software package is capable of scaling very high, often running businesses much
larger than itself.

  Competition

     perfumania.com's competition includes:

        - nationally known discount fragrance retailers such as Perfumania,
          Inc.;

        - competition from other retailers who seek to purchase high demand or
          limited supply products;

                                       11
<PAGE>   13

        - web sites maintained by online retailers of fragrances and fragrance
          related products including fragrancecounter.com and fragrancenet.com;
          and

        - catalog retailers of fragrances and fragrance related products.

     perfumania.com believes that its ability to compete depends upon many
factors, including:

        - the market acceptance of its online store and services;

        - the success of sales and marketing efforts;

        - the performance and reliability of its services;

        - the price of its products; and

        - the effectiveness of our customer service and support efforts.

     perfumania.com's competitors may be larger than itself and may have
substantially greater financial, distribution and marketing resources. In
addition, its competitors may be able to secure products from vendors on more
favorable terms, fulfill customer orders more efficiently and adopt more
aggressive pricing or inventory availability policies than perfumania.com can.
Traditional retailers also enable customers to see, feel, and smell products in
a manner that is not possible over the Internet. Some online competitors,
including fragrancenet.com and fragrancecounter.com, may be able to use the
Internet as a marketing medium to reach significant numbers of potential
customers more effectively that perfumania.com can.

     perfumania.com's wholesale competitors may have more established
distribution channels than perfumania.com and may have entered into exclusive
supply arrangements with retailers who constitute part of perfumania.com's
potential wholesale market. These factors may preclude perfumania.com from
competing effectively in the wholesale fragrance distribution market.

EMPLOYEES

     As of April 27, 2000, Envision employed 53 full-time employees. The loss of
services of one or more of its key employees could damage the business of
Envision. None of Envision's employees are represented by unions and Envision
considers its relationship with its employees to be excellent. Envision believes
that success is dependent on its ability to attract and retain qualified
personnel in numerous areas, including software development.

                      EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
NAME                                     AGE                       POSITION HELD
----                                     ---                       -------------
<S>                                      <C>   <C>
William J. Patch.......................  53    Chief Executive Officer
Michael E. Amideo......................  30    Chief Financial Officer
Alex Adamopoulos.......................  33    Executive Vice President, Technology and Development
Tom Nolan..............................  52    Vice President of Operations
</TABLE>

     William J. Patch.  Mr. Patch is the Company's Chief Executive Officer. From
January 2000 until April 2000, Mr. Patch was the President and Chief Operating
Officer of the Company. Mr. Patch founded and has served as President of VP
Incorporated since 1989. At VP, his responsibilities included developing and
managing global enterprise network programs, professional services, logistics,
acquisitions, sales, and strategic planning for clients including Compaq, Dell,
IBM, Kodak, SonicAir/UPS, and dozens of smaller entrepreneurial companies. From
1976 to 1980, Mr. Patch was employed in a number of executive positions with
Bell Atlantic Business Systems Services and its predecessor Sorbus Inc.,
including Vice President, marketing and sales. From 1972 to 1976, Mr. Patch was
manager of equal employment opportunity for NCR Corporation.

     Michael E. Amideo.  Mr. Amideo has served as the Chief Financial Officer
and a director of the Company since June 1999 and as Secretary of the Company
since January 2000. From July 1999 until

                                       12
<PAGE>   14

January 2000, he also served as the Company's Chief Operating Officer. From
April 1999 to June 1999, Mr. Amideo served as controller of perfumania.com. From
1995 to 1999, Mr. Amideo was employed by PricewaterhouseCoopers LLP as a
certified public accountant. From 1994 to 1995, Mr. Amideo was employed by
Arthur Andersen LLP, as a certified public accountant.

     Alex Adamopoulos.  Mr. Adamopoulos has served as Executive Vice President,
Technology and Development at Envision since February 2000. From March 1999 to
February 2000, Mr. Adamopoulos served as Chief Technology Officer for Biz2Net,
Inc. From August 1998 to February 1999, he served as Chief Technology Officer of
MicroAge. From February 1997 to August 1998, he served as Chief Technology
Officer CIC Systems. Mr. Adamopoulos' responsibilities at Biz2Net, Inc.,
MicroAge and CIC Systems included overall management and responsibility for the
technological direction of the companies, including strategic relationships,
mergers and acquisitions, service delivery and solution selling methodology.
From 1993 to 1997, Mr. Adamopoulos served in various capacities in Workgroup
Solutions, Inc. and Omni Multimedia Group, Inc.

     Tom Nolan.  Mr. Nolan has served as Vice President of Operations of the
Company since February 2000. From 1995 to 2000, Mr. Nolan served as Vice
President, Computer Services at Halifax Corporation. At Halifax, his
responsibilities have included the developing and management of operations
through a combination of key account initiatives, productivity enhancements, and
expense control programs. Previously, Mr. Nolan served in various capacities for
a number of companies, including Bell Atlantic.

                                   PROPERTIES

     Envision's administrative and warehouse facilities related to
perfumania.com business are located in Miami, Florida and total approximately
20,000 square feet. The space is shared with Perfumania, Inc. pursuant to an
intercompany services agreement between perfumania.com and Perfumania, Inc.

     Envision relocated a portion of its operations from Miami and is currently
located in Marlboro, Massachusetts and has plans to relocate its corporate
headquarters to Bridgewater, Massachusetts in 2000. The Company has executed a
lease and development agreement with a developer for new corporate facilities in
Bridgewater, Massachusetts.

                               LEGAL PROCEEDINGS

     Envision is not presently involved in any material legal proceedings.

              SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Envision did not submit any matter for the vote of security holders in the
fourth quarter of the last fiscal year.

                                       13
<PAGE>   15

               MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                              STOCKHOLDER MATTERS

     Market Information.  Our common stock currently is listed on the American
Stock Exchange under the symbol "EDV". The following table sets forth, for the
quarters indicated, the high and low sale prices of the common stock, as
reported by the American Stock Exchange. For periods ended prior to February 14,
2000, the date on which Envision common stock began to be publicly traded in
lieu of perfumania.com common stock, the high and low sales prices presented are
the high and low sales prices for perfumania.com common stock were quoted on the
American Stock Exchange under the symbol "PF."

<TABLE>
<CAPTION>
                                                              HIGH      LOW
                                                              ----      ---
<S>                                                           <C>       <C>
FISCAL YEAR ENDED JANUARY 29, 2000
Third quarter (beginning September 29, 1999)................  $ 8 1/2   $ 5 3/4
Fourth quarter..............................................  $52       $ 6 3/4

FISCAL YEAR ENDING JANUARY 27, 2001
First quarter (through April 26, 2000)......................  $74 1/8   $37
</TABLE>

     Holders.  As of April 26, 2000, there were 362 shareholders of record of
the common stock.

     Dividends.  Envision has not declared cash dividends since our inception
and management does not anticipate paying any cash dividends in the foreseeable
future, but intends instead to retain any future earnings for reinvestment in
our business.

     Any future determination as to the payment of dividends will be made at the
discretion of our Board of Directors and will depend upon our operating results,
financial condition, capital requirements, general business conditions and such
other factors as the Board of Directors deem relevant.

                                       14
<PAGE>   16

                            SELECTED FINANCIAL DATA

     The selected financial data set forth below should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and notes thereto appearing herein. The
selected statement of operations data for the period from January 7, 1999
through January 30, 1999 (the "Inception Period") and the fiscal year ended
January 29, 2000 have been derived from our financial statements.

STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
                                                                              FOR THE PERIOD
                                                                             FROM JANUARY 7,
                                                                              1999 (DATE OF
                                                                 FISCAL         INCEPTION)
                                                               YEAR ENDED        THROUGH
                                                              JANUARY 29,      JANUARY 30,
                                                                  2000             1999
                                                              ------------   ----------------
<S>                                                           <C>            <C>
Net sales...................................................  $  2,290,149      $       --
Cost of goods sold..........................................     1,832,094              --
                                                              ------------      ----------
Gross profit................................................       458,055              --
                                                              ------------      ----------
Operating expenses:
  General and administrative expenses.......................     3,234,910          60,245
  Sales and marketing expenses..............................     1,548,742          32,852
  Web site development expenses.............................       196,673          18,146
  Consulting fees...........................................       277,190          15,019
  Management fees to affiliate..............................       433,655          29,644
  Consulting fees to related party..........................            --         115,000
                                                              ------------      ----------
          Total operating expenses..........................     5,691,170         270,906
                                                              ------------      ----------
Loss from operations........................................    (5,233,115)       (270,906)
Interest income.............................................       180,886              --
Interest expense to affiliate...............................      (176,238)         (2,599)
                                                              ------------      ----------
Net loss....................................................  $ (5,228,467)     $ (273,505)
                                                              ============      ==========
Basic and diluted loss per common share.....................  $      (0.89)     $    (0.05)
Basic and diluted weighted average common shares
  outstanding...............................................     5,844,780       5,000,000
</TABLE>

BALANCE SHEET DATA:

<TABLE>
<CAPTION>
                                                              JANUARY 29,      JANUARY 30,
                                                                  2000             1999
                                                              ------------     -----------
<S>                                                           <C>            <C>
Cash and cash equivalents...................................  $  9,208,501     $   100,000
Working capital (deficit)...................................     9,481,434        (287,708)
Total assets................................................    11,237,497         323,868
Due to affiliate............................................       255,201         531,326
Shareholders' equity (deficit)..............................     9,717,809        (273,495)
</TABLE>

                                       15
<PAGE>   17

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

     The following discussion may contain forward-looking statements. The
Company's actual results could differ materially from those discussed in such
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below and elsewhere in this Annual Report on
Form 10-K. The following discussion and analysis should be read in conjunction
with the Financial Statements and the Notes thereto which appear elsewhere in
this Annual Report Form 10-K.

GENERAL

     perfumania.com was incorporated in January 1999 and launched its online
store in February 1999. Operations during the period from January 7, 1999
through January 30, 1999 (the "Inception Period") resulted in net sales of $0
and a net loss of $274,000. For the fiscal year ended January 29, 2000, net
sales and net loss totaled $2.3 million and $5.2 million, respectively. The loss
during the inception period was attributable to the developmental nature of the
business during the start-up phase. Perfumania, Inc. financed our operations
from our inception on January 7, 1999 through the initial public offering in
September 1999. These results are not indicative of the results that would have
resulted had perfumania.com been operating as a separate stand-alone company
during the periods presented. Since our inception, perfumania.com has incurred
significant losses.

     Management believes that our operating expenses will significantly increase
as a result of the financial commitments related to the development of marketing
channels, future strategic relationships and other capital expenditures
projected in developing the professional service. Management expects to incur
losses and generate negative cash flow from operations for the foreseeable
future. Our profitability primarily depends upon our ability to substantially
increase revenues from professional consulting services. In view of the rapidly
changing nature of our business and our limited operating history, management
believes that our historical operating results are not necessarily meaningful
and should not be relied upon as an indication of future performance.

                                       16
<PAGE>   18

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, our results of
operations in dollar and percentage of sales terms.

OPERATIONS STATEMENT DATA:

<TABLE>
<CAPTION>
                                                                                   FOR THE PERIOD FROM
                                                          FISCAL                     JANUARY 7, 1999
                                                        YEAR ENDED             (DATE OF INCEPTION) THROUGH
                                                     JANUARY 29, 2000               JANUARY 30, 1999
                                               ----------------------------    ---------------------------
<S>                                            <C>                   <C>       <C>                 <C>
Net sales....................................      $ 2,290,149        100.0%      $        --           *
Cost of goods sold...........................        1,832,094         80.0%               --           *
                                                   -----------       ------       -----------      ------
Gross profit.................................          458,055         20.0%               --           *
                                                   -----------       ------       -----------      ------
Operating expenses:
  General and administrative expenses........        3,234,910        141.3%           60,245           *
  Sales and marketing expenses...............        1,548,742         67.6%           32,852           *
  Web site development expenses..............          196,673          8.6%           18,146           *
  Consulting fees............................          277,190         12.1%           15,019           *
  Management fees to affiliate...............          433,655         18.9%           29,644           *
  Consulting fees to related party...........               --                        115,000           *
                                                   -----------       ------       -----------      ------
          Total operating expenses...........        5,691,170        248.5%          270,906           *
                                                   -----------       ------       -----------      ------
Loss from operations.........................       (5,233,115)      (228.5)%        (270,906)          *
Interest income..............................          180,886          7.9%               --           *
Interest expense to affiliate................         (176,238)        (7.7)%          (2,599)          *
                                                   -----------       ------       -----------      ------
Net loss.....................................      $(5,228,467)      (228.3)%     $  (273,505)          *
                                                   ===========       ======       ===========      ======
Basic and diluted loss per common share......      $     (0.89)                   $     (0.05)
Basic and diluted weighted average common
  shares outstanding.........................        5,844,780                      5,000,000
</TABLE>

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

* Percentage of net sales is not meaningful due to $0 revenue for the inception
  period.

                                       17
<PAGE>   19

        RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JANUARY 29, 2000
                        COMPARED TO THE INCEPTION PERIOD

     Net sales.  Net sales includes the sale of our fragrances and fragrance
related products, net of discounts and returns. Net sales for the fiscal year
ended January 29, 2000 were $2,290,100. There were no sales during the inception
period. During the fiscal year ended January 29, 2000, net sales included
$378,000 of wholesale sales. The resulting net sales for the fiscal year ended
January 29, 2000 were attributable to the launch of the online store subsequent
to the inception period.

     Cost of goods sold.  Cost of goods sold consists primarily of the cost of
merchandise sold plus shipping costs. Cost of goods sold for the fiscal year
ended January 29, 2000 was $1,832,100. There was no cost of goods sold during
the inception period. During the fiscal year ended January 29, 2000, cost of
goods sold included $215,000 of wholesale sales. The resulting cost of good sold
for the fiscal year ended January 29, 2000 was attributable to the launch of the
online store subsequent to the inception period.

     Gross profit.  For the fiscal year ended January 29, 2000, gross profit was
$458,100 or 20.0% of net sales compared to $0 during the inception period. Gross
profit for the fiscal year ended January 29, 2000, included $163,000 of gross
profit from perfumania.com's wholesale division, representing 7.1% of net sales.

     General and administrative expenses.  General and administrative expenses
consist of payroll and related expenses for executive, accounting and
administrative personnel, recruiting, professional fees and other general
corporate expenses. General and administrative expenses for the fiscal year
ended January 29, 2000 increased to $3,234,900 from $60,200 for the inception
period. The increase was attributable to the hiring of additional personnel to
support the growth of Envision, the payment of approximately $600,000 in
compensation following the termination of employment of the previous chief
executive officer, sign-on bonuses of $322,900 for three of its executive
officers and increased professional fees, as well as the length of the inception
period compared to the full year of results being reported in 2000. General and
administrative expenses will continue to increase as our staff expands and
incurs additional costs to support the growth of the business.

     Sales and marketing expenses.  Sales and marketing expenses consist of
expenditures related to advertising and promotion. Marketing and advertising
expenses for the fiscal year ended January 29, 2000 increased to $1,548,700 from
$32,900 for the inception period. During February 1999, perfumania.com began a
cross-marketing campaign with Perfumania, Inc. that it intends to continue.
perfumania.com expects to expand its marketing efforts and, as a result, it is
expected that marketing expenses will continue to increase.

     Web site development expenses.  Web site development expenses consist
principally of expenses for development of our Web site, network operations and
systems and telecommunications infrastructure. Web site development expenses for
the fiscal year ended January 29, 2000 increased to $196,700 from $18,100 for
the inception period. This amount reflects the staffing and associated costs
related to building and enhancing our online store and transaction-processing
systems, as well as our investment in systems and telecommunications
infrastructure. Web site development expenses are expected to increase as
perfumania.com continues to enhance its online store and expand our staff.

     Consulting fees.  Consulting fees consist primarily of amounts paid to
various technical and managerial consultants for services provided in the
development of perfumania.com. For the period from January 7, 1999 to January
30, 1999, consulting fees were $130,000. Consulting fees for the year ended
January 29, 2000, amounted to $277,200.

     Management fees to affiliate.  Management fees consist primarily of
expenses, which have been allocated to perfumania.com by Perfumania, Inc., for
costs associated with resources it shares. These fees consist primarily of the
pro-rata cost of rent, utilities and facilities maintenance. Management fees for
the fiscal year ended January 29, 2000 increased to $433,700 from $29,600 for
the inception period. The increase was attributable to the increase in resources
necessary to support the growth of the perfumania.com. Effective May 1, 1999,
perfumania.com and Perfumania, Inc. entered into an intercompany services
agreement covering these services.

                                       18
<PAGE>   20

     Net loss.  As a result of the factors discussed above, primarily relating
to the significant initial investments made in establishing and developing our
web site, which included among others, the marketing and advertising of our site
and attracting competitive personnel, the net loss for the fiscal year ended
January 29, 2000 increased to $5,228,500 from $273,500 for the inception period.
Management anticipates to continue to incur losses in the foreseeable future.

LIQUIDITY AND CAPITAL RESOURCES

     On September 29, 1999, perfumania.com completed its initial public offering
and received net proceeds of approximately $16,100,000, net of underwriting
discounts and commission expenses. Prior to its initial public offering,
perfumnia.com's primary source of liquidity had been advances from Perfumania,
Inc. perfumania.com used approximately $3,300,000 of the public offering net
proceeds to repay the advances from Perfumania, Inc.

     At January 29, 2000, Envision had a working capital of $9,481,400, compared
to a deficit of $287,700 at January 30, 1999. The increase in working capital
was due to the completion of perfumania.com's initial public offering offset by
results of operations.

     Net cash used in operating activities was $5,408,700 for the fiscal year
ended January 29, 2000, compared to cash used in operating activties of $196,300
during the inception period. The difference between Envision's net loss of
$5,228,500 for the fiscal year ended January 29, 2000, and its operating cash
flow was due primarily to a $1,466,100 increase in inventory, an increase of
$141,300 in accounts receivable and prepaid expenses, offset by non-cash items
such as depreciation and amortization and impairment of long-term assets and an
increase in accounts payable and accrued expenses of $1,198,500.

     Net cash used in investing activities for the fiscal year ended January 29,
2000 was $360,300. These expenditures are primarily related to the purchase of
computer equipment and $50,000 for the acquisition of PostAcard.com from
Perfumania, Inc.

     Net cash provided by financing activities was $14,877,500 for the fiscal
year ended January 29, 2000, compared to $310,600 during the inception period.
In September 1999, the perfumnia.com completed its initial public offering and
received proceeds of $16,100,000, net of $1,400,000 in underwriting discounts
and commissions, from the sale of 2,500,000 shares of its common stock.
perfumania.com used approximately $3,344,000 of the proceeds to repay advances
from Perfumania, Inc. Additionally, perfumania.com incurred approximately
$496,000 in other costs in connection with the offering. Also, during 1999,
Envision acquired certain assets of PostAcard.com, primarily an e-commerce
greeting card website, from Perfumania, Inc. for $500,000 in cash, of which
$450,000 was recorded as a reduction to additional paid in capital and
considered as a dividend to Perfumania, Inc.

     Management of Envision expects to use the remaining proceeds for working
capital, general corporate purposes, and expansion of the Company's operations,
including potential acquisitions. Pending completion of such uses, Envision has
invested the net proceeds of the offering in high-quality short-term, interest
bearing investment-grade debt securities, certificates of deposit or direct or
guaranteed obligations of the United States.

     perfumania.com's principal capital requirements are to acquire merchandise,
maintain and improve our online store and engage in advertising and promotional
activities. perfumania.com's long-term capital requirements beyond this period
will depend on numerous factors, including, but not limited to, the following:

     - The rate of market acceptance of the online store;

     - The ability to expand our customer base;

     - The cost of upgrades to our online store; and

     - The level of expenditures for sales and marketing and other factors.

                                       19
<PAGE>   21

     Envision's principal capital requirements are to:

     - Build-out our technical infrastructure so that we can rapidly fulfill
       future engagements and increase our development efficiency;

     - Continue and expand development of new technologies so that we can
       increase our competitiveness and gross margins;

     - Extend and intensify our marketing efforts so that we can achieve a
       leading position in the ebusiness Solution Provider category and achieve
       our revenue growth objectives;

     - Fund future strategic acquisitions; and

     - Provide working capital in order to achieve our business objectives.

     The Company has a history of significant operating losses and its future
capital needs may exceed its current financial resources. The Company also
anticipates continuing operating losses in the future and presently is unable to
predict when it may become profitable, if at all. As a result of the foregoing,
a significant shareholder of the Company has committed to fund the Company's
operations and cash requirements through May 31, 2001.

NEW ACCOUNTING PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). Among other provisions, SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities. It also requires that an entity recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those instruments at fair value. SFAS No. 133 is effective for financial
statements for fiscal years beginning after June 15, 2000. Management has not
determined the effect, if any, of adopting SFAS No. 133.

YEAR 2000

     Envision has had no disruption to its operations to date as a result of the
Year 2000 issue. The Year 2000 issue results from computer systems using two
digits rather than four to represent the year so that a date using "00" is
recognized as the year 1900 rather than the year 2000. This situation may
disrupt the smooth operation of both our and third party computer systems.

     Envision has assessed the Year 2000 exposure and completed a program to
ascertain our systems were Year 2000 compliant during 1999. A plan of
communication with significant business partners was developed to obtain
appropriate assurances that their Year 2000 issues are resolved in a timely
manner. The remediation costs to date have not been material and it is not
anticipated that any future remediation costs will have a material effect on the
Company's financial position or results of operations. However, the Company may
be exposed to incur significant costs if unanticipated internal or external Year
2000 compliance issues arise.

     Despite assurances from outside parties, there is no assurance that
vendors, suppliers and customers have resolved all Year 2000 issues. Given the
responses from our internal vendor compliance effort and our experience thus far
in 2000, the Company believes it will be highly unlikely that a large number of
outside parties will experience any significant problems due to unresolved Year
2000 issues. Envision has contingency plans to address situations that may
result if a Year 2000 issue is encountered in a critical application system.
Those contingency plans cover the disruption of Perfumania, Inc.'s internal
inventory management system, the inability of vendors, principal suppliers and
other third party providers to achieve Year 2000 compliance and the disruption
of the Web pages and communications links affecting the online store. If both
our solutions and contingency plans fail for a critical system for a prolonged
period, the impact on our business, financial condition, results of operations
and prospects for growth would be material.

                                       20
<PAGE>   22

SEASONALITY

     perfumania.com operations are expected to fluctuate according to the retail
industry seasonalities.

IMPACT OF INFLATION

     The primary inflationary factor affecting our operations is increased labor
costs. Competition for qualified personnel could increase labor costs for us in
the future.

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     None.

                                       21
<PAGE>   23

                              FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Certified Public Accountants..........   23
Balance Sheets as of January 29, 2000 and January 30,
  1999......................................................   24
Statements of Operations for the Year Ended January 29, 2000
  and for the Period from January 7, 1999 (date of
  inception) through January 30, 1999.......................   25
Statements of Changes in Shareholders' Equity (Deficit) for
  the Year Ended January 29, 2000 and for the Period from
  January 7, 1999 (date of inception) through January 30,
  1999......................................................   26
Statements of Cash Flows for the Year Ended January 29, 2000
  and for the Period from January 7, 1999 (date of
  inception) through January 30, 1999.......................   27
Notes to Financial Statements...............................   28
</TABLE>

                                       22
<PAGE>   24

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and
Shareholders of Envision Development Corporation:

     In our opinion, the accompanying balance sheets and the related statements
of operations, shareholders' equity (deficit) and cash flows present fairly, in
all material respects, the financial position of Envision Development
Corporation (successor to perfumania.com, inc.) (the "Company") at January 29,
2000 and January 30, 1999 and the results of its operations and its cash flows
for the year ended January 29, 2000 and for the period from January 7, 1999
(date of inception) through January 30, 1999 in conformity with accounting
principles generally accepted in the United States. 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 of the financial statements in accordance with auditing
standards generally accepted in the United States, which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

PricewaterhouseCoopers LLP
Miami, Florida

April 28, 2000

                                       23
<PAGE>   25

                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                              JANUARY 29,   JANUARY 30,
                                                                 2000          1999
                                                              -----------   -----------
<S>                                                           <C>           <C>
                                        ASSETS
Current assets:
  Cash and cash equivalents.................................  $ 9,208,501    $ 100,000
  Accounts receivable.......................................       38,937           --
  Inventories...............................................    1,651,327      209,655
  Prepaid expenses and other current assets.................      102,357           --
                                                              -----------    ---------
          Total current assets..............................   11,001,122      309,655
Property and equipment, net.................................      236,375       14,213
                                                              -----------    ---------
          Total assets......................................  $11,237,497    $ 323,868
                                                              ===========    =========
                    LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Amounts due to affiliate..................................  $   255,201    $ 531,326
  Accounts payable and accrued expenses.....................    1,264,487       66,037
                                                              -----------    ---------
          Total current liabilities.........................    1,519,688      597,363
                                                              -----------    ---------
Commitments and contingencies
Shareholders' equity (deficit):
  Preferred stock, $0.01 par value, 5,000,000 shares
     authorized,
     0 shares issued and outstanding........................           --           --
  Common stock, $0.01 par value, 20,000,000 shares
     authorized,
     7,500,000 and 5,000,000 shares issued and outstanding,
     respectively...........................................       75,000       50,000
  Additional paid in capital................................   15,194,771           --
  Accumulated deficit.......................................   (5,551,962)    (323,495)
                                                              -----------    ---------
          Total shareholders' equity (deficit)..............    9,717,809     (273,495)
                                                              -----------    ---------
          Total liabilities and shareholders' equity
            (deficit).......................................  $11,237,497    $ 323,868
                                                              ===========    =========
</TABLE>

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

                                       24
<PAGE>   26

                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                             FOR THE PERIOD
                                                                            FROM JANUARY 7,
                                                                FOR THE      1999 (DATE OF
                                                              YEAR ENDED       INCEPTION)
                                                              JANUARY 29,       THROUGH
                                                                 2000       JANUARY 30, 1999
                                                              -----------   ----------------
<S>                                                           <C>           <C>
Net sales...................................................  $ 2,290,149      $       --
Cost of goods sold..........................................    1,832,094              --
                                                              -----------      ----------
Gross profit................................................      458,055              --
                                                              -----------      ----------
Operating expenses:
  General and administrative expenses.......................    3,234,910          60,245
  Sales and marketing expenses..............................    1,548,742          32,852
  Web site development expenses.............................      196,673          18,146
  Consulting fees...........................................      277,190          15,019
  Management fees to affiliate..............................      433,655          29,644
  Consulting fees to related party..........................           --         115,000
                                                              -----------      ----------
          Total operating expenses..........................    5,691,170         270,906
                                                              -----------      ----------
Loss from operations........................................   (5,233,115)       (270,906)
Interest income.............................................      180,886              --
Interest expense to affiliate...............................     (176,238)         (2,599)
                                                              -----------      ----------
Net loss....................................................  $(5,228,467)     $ (273,505)
                                                              ===========      ==========
Basic and diluted loss per common share.....................  $     (0.89)     $    (0.05)
Basic and diluted weighted average common shares
  outstanding...............................................    5,844,780       5,000,000
</TABLE>

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

                                       25
<PAGE>   27

                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

            STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                COMMON STOCK        ADDITIONAL
                                                            ---------------------     PAID IN     ACCUMULATED
                                                              SHARES      AMOUNT      CAPITAL       DEFICIT        TOTAL
                                                            ----------   --------   -----------   -----------   -----------
<S>                                                         <C>          <C>        <C>           <C>           <C>
Balance at January 7, 1999 (date of inception)............       1,000   $     10   $        --   $        --   $        10
Net loss from the period from January 7, 1999 (date of
  inception) through January 30, 1999.....................          --         --            --      (273,505)     (273,505)
5,000-for-1 stock split...................................   4,999,000     49,990            --       (49,990)           --
                                                            ----------   --------   -----------   -----------   -----------
Balance at January 30, 1999...............................   5,000,000     50,000            --      (323,495)     (273,495)
Net loss..................................................          --         --            --    (5,228,467)   (5,228,467)
Issuance of common stock warrants in exchange for
  services................................................          --         --        66,150            --        66,150
Issuance of common stock through an initial public
  offering, net of expenses of $1,896,379.................   2,500,000     25,000    15,578,621            --    15,603,621
Dividend to affiliate.....................................          --         --      (450,000)           --      (450,000)
                                                            ----------   --------   -----------   -----------   -----------
Balance at January 29, 2000...............................   7,500,000   $ 75,000   $15,194,771   $(5,551,962)  $ 9,717,809
                                                            ==========   ========   ===========   ===========   ===========
</TABLE>

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

                                       26
<PAGE>   28

                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                  FOR THE PERIOD
                                                                                  FROM JANUARY 7,
                                                                                   1999 (DATE OF
                                                                  FOR THE           INCEPTION)
                                                                 YEAR ENDED           THROUGH
                                                              JANUARY 29, 2000   JANUARY 30, 1999
                                                              ----------------   -----------------
<S>                                                           <C>                <C>
Cash flows from operating activities:
  Net loss..................................................    $(5,228,467)         $(273,505)
  Adjustments to reconcile net loss to net cash used in
     operating activities:
     Depreciation and amortization..........................         17,673                 95
     Impairment of long-term assets.........................        120,452                 --
     Other..................................................         24,414             11,035
     Charge for warrants issued in exchange for services....         66,150                 --
     Changes in operating assets and liabilities, net of
       acquisitions:
       Accounts receivable..................................        (38,937)                --
       Inventories..........................................     (1,466,086)                --
       Prepaid expenses and other current assets............       (102,357)                --
       Accounts payable and accrued expenses................      1,198,450             66,037
                                                                -----------          ---------
Net cash used in operating activities.......................     (5,408,708)          (196,338)
                                                                -----------          ---------
Cash flows from investing activities:
  Capital expenditures......................................       (310,287)           (14,308)
  Acquisition from affiliate................................        (50,000)                --
                                                                -----------          ---------
Net cash used in investing activities.......................       (360,287)           (14,308)
                                                                -----------          ---------
Cash flows from financing activities:
  Issuance of common stock, net of transaction costs of
     $1,896,379.............................................     15,603,621                 --
  Dividend to affiliate.....................................       (450,000)                --
  (Payments to) borrowings from affiliate, net..............       (276,125)           310,646
                                                                -----------          ---------
Net cash provided by financing activities...................     14,877,496            310,646
                                                                -----------          ---------
Net increase in cash and cash equivalents...................      9,108,501            100,000
Cash and cash equivalents, beginning of period..............        100,000                 --
                                                                -----------          ---------
Cash and cash equivalents, end of period....................    $ 9,208,501          $ 100,000
                                                                ===========          =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest to affiliate.....................................    $   176,238          $      --
                                                                ===========          =========
</TABLE>

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

                                       27
<PAGE>   29

                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                         NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     On January 7, 1999, perfumania.com, inc. ("perfumania.com") was created as
a wholly-owned subsidiary of Perfumania, Inc. (the "Affiliate"). The Affiliate
is a wholly-owned subsidiary of E Com Ventures, Inc. perfumania.com operates an
online store that specializes in the sale of fragrances, fragrance related
products and bath and body products on a retail and wholesale basis.
perfumania.com launched its online store in February 1999. On September 29,
1999, perfumania.com completed its initial public offering (see Note 2).

     On January 11, 2000, a change in control of perfumania.com occurred when
Alta Limited ("Alta") exercised an option to purchase from the Affiliate
2,000,000 shares of common stock of perfumania.com at a price of $6.00 per share
pursuant to an Option Agreement, dated December 10, 1999, among the Affiliate,
Alta and the optionees who are signatories thereto. In connection with such
exercise, Alta nominated two directors to the Board of Directors of
perfumania.com and an additional four directors were added by the Board of
Directors effective upon the expiration of the waiting requirements of Rule
14f-1 under the Securities Exchange Act of 1934, as amended. Under the Option
Agreement, Alta has a second option to purchase 500,000 shares of common stock
of Envision at a price of $8.00 per share on or prior to the earlier to occur of
December 31, 2000 or various other events, as defined in the Option Agreement.

     On February 10, 2000, Envision Development Corporation (the "Company") was
formed in the State of Florida. The Company entered into a plan of merger with
perfumania.com and EDC Sub, Inc., a Florida corporation and wholly-owned
subsidiary of the Company on February 10, 2000. The plan of merger provided for,
among other things, the merger of EDC Sub, Inc. with perfumania.com, with
perfumania.com as the surviving corporation. As a result, perfumania.com became
a direct wholly-owned subsidiary of the Company. The Company does not have any
present significant operations itself or through any other subsidiary, except
for the operations of perfumania.com.

     In addition, each share of common stock, par value $0.01 per share, of
perfumania.com issued and outstanding before the reorganization was converted
into and exchanged for one share of common stock, par value $0.01 per share, of
the Company. Consequently, shareholders of perfumania.com became shareholders of
the Company and ceased to be shareholders of perfumania.com. Pursuant to Florida
Statutes, shareholder approval of this reorganization was not required, and the
reorganization was tax-free for Federal income tax purposes to perfumania.com's
shareholders.

     A summary of the significant accounting policies followed in the
preparation of the accompanying financial statements is presented below:

     Fiscal year-end.  The Company's fiscal year ends the Saturday closest to
January 31 to enable the Company's operations to be reported in a manner which
more closely coincides with general retail reporting practices and the financial
reporting needs of the Company.

     Management's 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.

     Management fees.  Management fees reflected in the statements of operations
represent shared expenses which have been allocated to the Company by the
Affiliate for costs associated with resources it shares with the Affiliate using
the proportional cost allocation method. Such allocations include the prorata
share of the rent, utilities, facilities, maintenance, and administrative
services provided by the Affiliate. Prorata amounts of rent, utilities and
facilities expense were determined based on the square footage utilized by the
Company

                                       28
<PAGE>   30
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

while administrative services charges by the Affiliate were determined based on
the prorata share of time spent by the Affiliate's administrative personnel.
Although no formal agreement existed through May 1, 1999, management believes
these allocations are reasonable. The financial statements of the Company do not
necessarily reflect the results of operations or financial position that would
have existed had the Company been independent of the Affiliate, however,
management believes that these fees are representative of the fair value of the
services provided.

     Effective May 1, 1999, the Company entered into an intercompany services
agreement (the "Agreement") with its Affiliate. Under the terms of the
Agreement, the Company will pay various management fees to the Affiliate as
follows: for corporate services, the monthly fee is fixed at $10,000 unless
monthly gross sales exceed $50,000, at which time, the monthly fee will amount
to $10,000 plus two percent of the Company's monthly gross sales; for
fulfillment services, the fee is equal to three percent of the costs of goods
sold by the Company and serviced by the Affiliate; for advertising services, the
fee ranges between 20% to 50% of the cost of the advertisement incurred by the
Affiliate; for shared facilities, the fee is equal to a proportionate share of
the facility costs incurred by the Affiliate, initially 15%; and for inventory
purchases, the purchase price is equal to 105% of the Affiliate's cost of such
inventory. Management fees for the year ended January 29, 2000, amounted to
$433,655.

     Sales and marketing expense.  Sales and marketing expenses, which consist
primarily of advertising and promotional costs, are charged to operations as
incurred.

     Web site development expenses.  Web development expenses consist
principally of expenses incurred for the development of the Company's web site
and are expensed as incurred. These costs are primarily covered under a service
agreement with a software and network developer providing web hosting services.

     Revenue recognition.  The Company's revenues are derived principally from
the sale of products over the internet. Revenue and related costs are recognized
upon delivery of goods, net of discounts and returns. Sales from electronic
commerce transactions accounts for 84% of net sales for the year ended January
29, 2000. No one customer accounted for 10% or more of net revenues during the
year ended January 29, 2000.

     Loss per share.  Basic loss per common share is computed by dividing income
available to common shareholders by the weighted average number of common shares
outstanding. Diluted earnings per common share include the dilutive effect of
stock options using the treasury stock method. The difference between the
weighted average common shares outstanding used to calculate basic and diluted
earnings per share relates to stock options assumed exercised under the treasury
method of accounting. Potentially dilutive shares as of January 29, 2000 not
included in the diluted per share calculation include 224,244 shares because
their effects would be anti-dilutive due to the loss incurred by us.
Accordingly, for the year ended January 29, 2000 and the period from January 7,
1999 through January 30, 1999, diluted net loss per common share is the same as
basic net loss per common share.

     Cash and cash equivalents.  Short-term investments with maturities of three
months or less are considered to be cash equivalents.

     Inventories.  Inventories, consisting of finished goods, are carried at the
lower cost or market, cost being determined on a moving average cost basis.
Inventories include product costs, freight and insurance charges.

     Property and equipment.  Property and equipment are recorded at cost.
Depreciation and amortization are computed using the straight-line method over
the estimated useful lives of the respective assets. Expenditures for repairs
and maintenance are charged to expense as incurred.

     Intangibles and other long lived assets.  Assets and liabilities acquired
in connection with business combinations accounted for under the purchase method
are recorded at their respective estimated fair values. Goodwill represents the
excess of the purchase price over the estimated fair value of net assets
acquired,
                                       29
<PAGE>   31
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

including the recognition of applicable deferred taxes. At January 29, 2000, the
Company had no recorded goodwill.

     The Company reviews long-lived assets, identifiable intangibles and
goodwill and record an impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully recoverable.

     Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of the assets to future discounted net cash flows expected
to be generated by the assets. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets or expected future
cash flows on an undiscounted basis. The Company determined that the carrying
amount of the Company's goodwill and other long-term assets was not recoverable;
therefore, an impairment of approximately $120,000 was recorded as general and
administrative expenses in the accompanying statement of operations for the year
ending January 29, 2000.

     Income taxes.  The Company records income taxes using the liability method
of accounting for deferred income taxes. Under this method, deferred tax assets
and liabilities are recognized for the expected future tax consequence of
temporary differences between the financial statement and income tax bases of
assets and liabilities. A valuation allowance is established when it is more
likely than not that any or all of the deferred tax assets will not be realized.
Prior to the change in control that occurred in January 2000, the Company filed
a consolidated U.S. Federal income tax return with its Affiliate.

     Fair value of financial instruments.  The Company's short-term financial
instruments, including cash and cash equivalents, accounts receivable, accounts
payable and accrued expenses, consist primarily of instruments without extended
maturities, the fair value of which, based on management's estimates, equaled
their carrying values.

     Due to Affiliate.  Amounts due to Affiliate include accounts payable
primarily for inventory and management fees. Such amounts have similar terms as
with other suppliers which are due in 30 days. Interest is charged at 12.5% per
annum. Total interest expense approximated $176,200 for the year ended January
29, 2000 and $2,600 during the period from January 7, 1999 through January 30,
1999.

     Concentration of risk.  The Company operates an online store that
specializes in the sale of fragrances, fragrance-related products and bath and
body products. The Company has relied upon its Affiliate to provide corporate,
fulfillment, inventory supply, advertising space-sharing and other
administrative services through an intercompany agreement. Accordingly, a
significant portion of the inventory sold since inception is purchased from the
Affiliate at an amount equal to the Affiliate's cost plus five percent. The
inability of the Affiliate to adequately provide these services or the failure
of the Company to develop management and financial systems and alternative
sources of inventory supply could adversely impact the Company's financial
position or results of operations.

     The Company's principal competitors include department stores, discount
perfume retailers, on-line retailers, catalog retailers and other retailers.
Many of the Company's competitors are larger in scope and have greater financial
and marketing resources.

     Recent accounting pronouncements.  In June 1998, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No. 133").
Among other provisions, SFAS No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities. It also
requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. SFAS No. 133 is effective for financial statements for fiscal
years beginning after June 15, 2000. Management has not determined the effect,
if any, of adopting SFAS No. 133.

                                       30
<PAGE>   32
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 2 -- INITIAL PUBLIC OFFERING

     In September 1999, perfumania.com completed its initial public offering of
its common stock (the "Offering"), in which perfumania.com and its Affiliate
sold 3,500,000 shares of common stock at an offering price of $7.00 per share.
Of the 3,500,000 shares of common stock, 2,500,000 shares of common stock were
sold by perfumania.com. perfumania.com received proceeds of approximately
$16,100,000, net of $1,400,000 underwriting discounts and commissions.
perfumania.com used approximately $3,344,000 of the proceeds to repay advances
from the Affiliate. Additionally, perfumania.com incurred approximately $496,000
in other costs in connection with the Offering. In connection with the Offering,
perfumania.com granted common stocks warrant to the underwriters to purchase
350,000 shares of common stock at an exercise price of $9.80 per share. The
common stock warrants can be exercised at any time for a period of five years.

NOTE 3 -- ACQUISITION

     On October 31, 1999, perfumania.com acquired certain assets of
PostAcard.com, primarily an e-commerce greeting card website, from the Affiliate
for $500,000 in cash. The acquisition has been recorded at the Affiliate's
historical cost of $50,000 and the excess was treated as a dividend to the
Affiliate. The acquisition was accounted for using the purchase method of
accounting and since PostAcard.com had no tangible assets the Affiliate's
historical cost was recorded as goodwill. Subsequent to its acquisition,
perfumania.com determined that the carrying amount recorded was not recoverable;
therefore, an impairment charge was recorded in the accompanying statement of
operations. PostAcard.com had no significant operations for the year ended
January 29, 2000.

NOTE 4 -- PROPERTY AND EQUIPMENT, NET

     Property and equipment, net is comprised of the following as of January 29,
2000 and January 30, 1999:

<TABLE>
<CAPTION>
                                                                                     ESTIMATED
                                                                                      USEFUL
                                                       JANUARY 29,   JANUARY 30,     LIVES (IN
                                                          2000          1999          YEARS)
                                                       -----------   -----------   -------------
<S>                                                    <C>           <C>           <C>
Furniture, fixtures and equipment....................     54,119            --            5
Computer equipment and software......................    200,024        14,308            3
                                                        --------      --------
                                                         254,143        14,308
Accumulated depreciation.............................    (17,768)          (95)
                                                        --------      --------
                                                        $236,375      $ 14,213
                                                        ========      ========
</TABLE>

     Depreciation expense for the year ended January 29, 2000 and the period
from January 7, 1999 (date of inception) through January 30, 1999 approximated
$18,000 and $95, respectively.

NOTE 5 -- COMMITMENTS

     Effective April 15, 1999, perfumania.com entered into a 36 month service
agreement with a software and network developer providing web hosting services.
Pursuant to the agreement, perfumania.com must remit 36 equal monthly
installments of $14,200. Under the term of the service agreement, in return for
displaying the network developer's corporate logo on perfumania.com's web page,
perfumania.com shall receive a marketing credit of $1,700 per month, resulting
in a net monthly web hosting service fee of $12,500 per month. perfumania.com is
subject to an early termination fee of $201,165 if cancelled within the first 12
months and $100,583 if cancelled after 24 months of service. The net monthly web
hosting service fee is expensed as incurred and is reflected in web site
development expenses in the accompanying financial statements.

                                       31
<PAGE>   33
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     In May 1999, perfumania.com entered into an employment agreement with its
then chief executive officer and president for a five year initial term. Total
annual base salary is $200,000. A total of 225,000 common stock options were
granted at an exercise price equal to the initial public offering price of $7.00
per share. These options vested immediately at the date of grant. Upon change of
control of perfumania.com, the president is entitled to a lump sum payment equal
to three times the annual base salary. Due to the change in control that took
effect on January 11, 2000, the then president received a lump sum payment of
$600,000. Such amount has been recorded as general and administrative expenses
in the accompanying statement of operations for the year ended January 29, 2000.

     Four of the Company's officers have employment agreements which provide for
aggregate base salaries of $715,000. The agreements expire at various dates from
January 2003 through February 2004. The officers are eligible for an annual
bonus, payable in the Company's stock or cash, based upon such criteria as may
be established in advance by the Board of Directors.

NOTE 6 -- RELATED PARTY TRANSACTIONS

     perfumania.com has purchased a majority of the inventory sold since
inception from the Affiliate at an amount equal to the Affiliate's cost plus
five percent. For the year ended January 29, 2000 and the period from January 7,
1999 (date of inception) through January 30, 1999, such purchases totaled
approximately $1,748,000 and $220,000, respectively.

     perfumania.com is charged for various services provided by the Affiliate
including administrative, distribution and other services. Such charges were
approximately $434,000 and $30,000 for the year ended January 29, 2000 and for
the period from January 7, 1999 (date of inception) to January 30, 1999,
respectively, and are classified as management fees in the accompanying
statements of operations. Purchases of inventory and expenses charged by the
Affiliate are not necessarily indicative of costs and expenses which might have
been incurred had perfumania.com been operating as a separate, or stand-alone
company. Management believes that all operating costs incurred by the Affiliate
on behalf of perfumania.com are reflected in the accompanying financial
statements.

     perfumania.com's former Chief Executive Officer (the "former CEO") provided
consulting services to perfumania.com amounting to $50,000 during the period
from January 7, 1999 (date of inception) through January 30, 1999. In addition,
a party related to the former CEO provided consulting services to perfumania.com
amounting to $65,000 during the period from January 7, 1999 (date of inception)
through January 30, 1999. These consulting services were not subject to a
written consulting agreement. Management believes that these amounts are
representative of the time both parties spent in providing these consulting
services to perfumania.com during the respective period. Both of these amounts
are included in consulting fees in the accompanying statement of operation
during the period from January 7, 1999 (data of inception) through January 30,
1999.

NOTE 7 -- STOCK OPTION PLAN

     Effective May 1, 1999, the Company adopted the 1999 Incentive Stock Option
Plan (the "Plan"). Officers, key employees and nonemployee consultants may be
granted stock options, stock appreciation rights, stock awards, performance
shares and performance units under the Plan. The Company has reserved 1,000,000
shares of common stock for issuance under the Plan.

     Prior to establishment of a Compensation Committee (the "Committee") of the
Board of Directors, the Plan was administered by the Board of Directors of the
Company. The Board of Directors or the Committee was authorized to determine,
among other things, the key employees to whom, and the time at which, options
and other benefits were granted, the number of shares subject to each option,
the applicable vesting schedule

                                       32
<PAGE>   34
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

and the exercise price. The Board of Directors or the Committee will determine
the treatment to be afforded to a participant in the Plan in the event of
termination of employment for any reason, including death, disability or
retirement. Under the Plan the maximum term of an incentive stock option is 10
years and the maximum term of a nonqualified stock option is 10 years.

     The Board of Directors has the power to amend the Plan from time to time.
Shareholder approval of an amendment is only required to the extent that it is
necessary to maintain the Plan's status as a protected plan under applicable
securities laws or the Plan's status as a qualified plan under applicable tax
laws.

     Options to purchase an aggregate of 740,000 have been granted under the
Plan to employees and non-employee director nominees of the Company before
January 11, 2000, the change in control date. These options have a total term of
ten years. Of the total options to purchase shares granted under the Plan before
the change in control date, 460,000 options vested immediately on the date of
grant, and options to purchase 280,000 shares had vesting as follows: 16.67%,
33.33% and 50.0% of the total number of shares granted on the first, second and
third anniversary of the date of grant, respectively. Given the change in
control that occurred in January 2000, the 280,000 options became 100% vested in
accordance with the Plan provisions of change in control. After the change in
control date, the Company has granted 1,496,547 options to purchase shares of
the Company common stock, exceeding the current Plan limits by 1,236,547
options. These options in excess of the current Plan limits are subject to
shareholders' approval of an increase of the reserve shares of common stock
under the Plan. The vesting period of these 1,496,547 options to purchase shares
of the Company's common stock extends from three to four years.

     SFAS No. 123 encourages, but does not require, companies to record
compensation cost for stock-based employee compensation plans at fair value. The
Company measures compensation expense for the stock Plan using the intrinsic
value method prescribed by Accounting Principal Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB No. 25"). Accordingly,
compensation expense for qualified and non-qualified employee stock options
granted under the Plan is equal to the difference between the fair market value
of the stock at the date of grant and the amount an employee must pay to acquire
the stock. For options granted to employees which were outstanding prior to the
Offering, the compensation expense is equal to the difference between the fair
market value of the stock at the offering price and the amount an employee must
pay to acquire the stock. For options granted to non-employee directors or other
employees in exchange for goods and services, compensation cost is measured in
accordance with SFAS No. 123.

     The following is a summary of all stock option transactions:

<TABLE>
<CAPTION>
                                                                                           WEIGHTED
                                                                        WEIGHTED         AVERAGE FAIR
                                                          STOCK     AVERAGE EXERCISE   VALUE OF OPTIONS
                                                         OPTIONS         PRICE             GRANTED
                                                        ---------   ----------------   ----------------
<S>                                                     <C>         <C>                <C>
Granted...............................................  2,236,547        $18.25             $16.72
Exercised.............................................         --            --
Canceled..............................................         --            --
                                                        ---------        ------
Outstanding at January 29, 2000.......................  2,236,547        $18.25
                                                        =========        ======
</TABLE>

                                       33
<PAGE>   35
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information about stock options outstanding
at January 29, 2000:

<TABLE>
<CAPTION>
                             STOCK OPTIONS OUTSTANDING              OPTIONS EXERCISABLE
                    -------------------------------------------   ------------------------
                                        WEIGHTED       WEIGHTED                   WEIGHTED
                                        AVERAGE        AVERAGE                    AVERAGE
RANGE OF EXERCISE     NUMBER OF        REMAINING       EXERCISE     NUMBER OF     EXERCISE
     PRICES         STOCK OPTIONS   CONTRACTUAL LIFE    PRICE     STOCK OPTIONS    PRICE
-----------------   -------------   ----------------   --------   -------------   --------
<S>                 <C>             <C>                <C>        <C>             <C>
$ 6.75 - $ 7.50         720,000           9.40          $ 7.03        720,000      $ 7.03
$ 7.51 - $10.50          20,000           9.80           10.50         20,000       10.50
$10.51 - $22.00         775,556          10.00           22.00         55,556       22.00
$22.01 - $26.13         720,991          10.00           25.63        110,991       26.13
                      ---------          -----          ------      ---------      ------
$ 6.75 - $26.13       2,236,547           9.80          $18.25        906,547      $10.36
                      =========          =====          ======      =========      ======
</TABLE>

     Reflected below are losses as of January 29, 2000 and January 30, 1999, as
if compensation expense relative to the fair value of the options granted had
been recorded under the provisions of SFAS No. 123. The fair value of each
option grant was estimated using the Black-Scholes option-pricing model with the
following assumptions used for grants: 10 years expected life with expected
turnover of 10%; volatility factor of 100%; risk-free interest rates of 5.9%;
and no dividend payments.

<TABLE>
<CAPTION>
                                                              JANUARY 29,   JANUARY 30,
                                                                 2000          1999
                                                              -----------   -----------
<S>                                                           <C>           <C>
NET LOSS:
  As reported...............................................  $(5,228,467)   $(273,505)
                                                              ===========    =========
  Pro forma.................................................  $(9,569,865)   $(273,505)
                                                              ===========    =========
BASIC LOSS PER SHARE:
  As reported...............................................  $     (0.89)   $   (0.05)
  Pro forma.................................................  $     (1.64)   $   (0.05)

DILUTED LOSS PER SHARE:
  As reported...............................................  $     (0.89)   $   (0.05)
  Pro forma.................................................  $     (1.64)   $   (0.05)
</TABLE>

                                       34
<PAGE>   36
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8  -- INCOME TAXES

     Prior to the change in control that occurred in January 2000, the Company
filed a consolidated U.S. Federal income tax return with its Affiliate. The
provision for income taxes is computed as if the Company filed a separate tax
return, on a stand-alone basis.

     The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
                                                          JANUARY 29, 2000   JANUARY 30, 1999
                                                          ----------------   ----------------
<S>                                                       <C>                <C>
Current:
  Federal...............................................    $        --         $      --
  State and local.......................................             --                --
                                                            -----------         ---------
                                                                     --                --
                                                            -----------         ---------
Deferred:
  Federal...............................................     (1,865,636)          (95,723)
  State and local.......................................       (251,373)           (7,193)
                                                            -----------         ---------
                                                             (2,117,009)         (102,916)
Valuation allowance.....................................      2,117,009           102,916
                                                            -----------         ---------
Provision for income taxes..............................    $        --         $      --
                                                            ===========         =========
</TABLE>

     The significant components of the net deferred tax asset (liability) as of
January 29, 2000 and January 30, 1999 are as follows:

<TABLE>
<CAPTION>
                                                          JANUARY 29, 2000   JANUARY 30, 1999
                                                          ----------------   ----------------
<S>                                                       <C>                <C>
Deferred tax assets:
  Net operating loss carryforward.......................    $ 2,138,802         $  98,763
  Reserves and allowances...............................         69,874             4,153
                                                            -----------         ---------
                                                              2,208,676           102,916
  Valuation allowance...................................     (2,117,009)         (102,916)
                                                            -----------         ---------
          Total deferred tax asset......................         91,667                --
                                                            -----------         ---------
Deferred tax liability:
  Property and equipment................................         (6,200)               --
  State taxes...........................................        (85,467)               --
                                                            -----------         ---------
          Total deferred tax liabilities................        (91,667)               --
                                                            -----------         ---------
Net deferred tax asset (liability)......................    $        --         $      --
                                                            ===========         =========
</TABLE>

     The Company provides a valuation allowance against deferred tax assets if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized. The Company has
established a valuation allowance against deferred tax assets of $2,117,009 and
$102,916 at January 29, 2000 and January 30, 1999, respectively.

     The Company has Federal and State net operating loss carryforwards of
approximately $5,400,000 as of January 29, 2000, both of which will begin to
expire in the year 2018.

     During 1999, the Company was involved in certain transactions that included
changes in the ownership of the Company's stock. In connection with the
ownership charge, the Internal Revenue Code may restrict the amount of losses
and credit that may be used to offset future income.

                                       35
<PAGE>   37
                        ENVISION DEVELOPMENT CORPORATION
                      (SUCCESSOR TO PERFUMANIA.COM, INC.)

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

     A reconciliation of U.S. statutory federal income tax expense on the
earnings from continuing operations is as follows:

<TABLE>
<CAPTION>
                                                        JANUARY 29, 2000    JANUARY 30, 1999
                                                        ----------------    ----------------
<S>                                                     <C>                 <C>
U.S. statutory federal rate applied to pretax
  income..............................................        34.0%               34.0%
  State income taxes..................................         3.6%                3.6%
  Valuation allowance.................................       (37.6)%             (37.6)%
                                                             -----               -----
Provision for income taxes............................          --                  --
                                                             =====               =====
</TABLE>

NOTE 9 -- SUBSEQUENT EVENTS

     On March 10, 2000, the Company signed an Amended and Restated Agreement and
Plan of Merger to acquire all of the outstanding stock of Envision Development
Corporation, a Massachusetts corporation. The closing of this transaction is
subject to Shareholder approval.

     On April 7, 2000, Envision acquired approximately 80% of the voting stock
of Qui Vive, Inc. ("Qui Vive"), a Delaware corporation pursuant to an Amended
and Restated Stock Acquisition Agreement (the "Stock Acquisition Agreement"),
dated March 31, 2000, among Envision, QV Acquisition Corporation, a Delaware
corporation that is a wholly-owned subsidiary of Envision and created solely for
the purpose of the acquisition, Sundog Technologies, Inc., a Delaware
corporation, and RockMountain Ventures Fund, LP, a Delaware limited partnership.
Pursuant to this Stock Acquisition Agreement, Envision issued shares of its
common stock in order to acquire shares of Series A Preferred Stock and Series B
Preferred Stock of Qui Vive on April 7, 2000. Envision issued 1,492,500 shares
of its common stock to acquire the 80% interest. Envision will issue additional
shares of its common stock to complete the acquisition of 80% of the voting
stock of Qui Vive subject to Envision's shareholder approval. Qui Vive, which
does business as "QV Tech", has no significant operations except for the
development of its proprietary "Interosa" technology.

     On April 10, 2000, the Company entered into an Amended and Restated Stock
Purchase Agreement with VP IP, a Delaware corporation. Pursuant to the terms of
this agreement, the Company acquired the software and URL of VP IP. In exchange,
the Company issued 200,000 shares of its common stock to the owners of VP IP
which were William Patch, Chairman and Chief Executive Officer of the Company,
and his immediate family and Alex Adamopoulos, an officer of the Company.

     On April 20, the Board of Directors approved a lease for the new corporate
headquarters in Bridgewater, Massachusetts. The lease commences on August 1,
2000 for a term of seven years. The minimum lease payments are approximately
$529,000 annually for years one to five and approximately $568,000 annually for
years six and seven.

     The Company has a history of significant operating losses and its future
capital needs may exceed its current financial resources. The Company also
anticipates continuing operating losses in the future and presently is unable to
predict when it may become profitable, if at all. As a result of the foregoing,
a significant shareholder of the Company has committed to fund the Company's
operations and cash requirements through May 31, 2001.

                                       36
<PAGE>   38

          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                           AND FINANCIAL DISCLOSURES

     On April 4, 2000, the Company dismissed its independent certified public
accountants, PricewaterhouseCoopers LLP, effective upon the completion of the
audit of the financial statements as of January 29, 2000. The decision to
dismiss the accountants was approved by the Board of Directors, as the Company
did not have an audit or similar committee.

     PricewaterhouseCoopers LLP audited the Company's financial statements for
the period from January 7, 1999 (date of inception) through January 30, 1999,
the three-month period ended May 1, 1999 and the fiscal year ended January 29,
2000. Their reports on such financial statements contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principle, except that their reports for each of the
periods referred to above, with the exception of the fiscal year ended January
29, 2000, contained a modification to their opinion relating to the Company's
ability to continue as a "going concern".

     In connection with its audits noted in the preceding paragraph, and through
April 28, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles and practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their reports on the financial statements for the periods
noted in the preceding paragraph.

     During the audit periods noted above and through April 28, 2000, there have
been no reportable events.

               DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information regarding our executive officers is included in this Annual
Report under the caption "Executive Officers of the Registrant." Information
regarding our directors and nominees for directors will be contained in our
Proxy Statement relating to the 2000 Annual Meeting of Shareholders to be filed
with the Securities and Exchange Commission on or before April 30, 2000 (the
"Proxy Statement"), and is incorporated in this Annual Report by reference.

                             EXECUTIVE COMPENSATION

     Information regarding compensation of our executive officers will be
contained in the Proxy Statement and is incorporated in this Annual Report by
reference.

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information regarding the ownership of our common stock will be contained
in the Proxy Statement and is incorporated in this Annual Report by reference.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information regarding certain relationships and related transactions will
be contained in the Proxy Statement and is incorporated in this Annual Report by
reference.

                                       37
<PAGE>   39

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

     (a) 1. Financial Statements -- The financial statements and the reports of
our Certified Public Accountants are listed on pages 22 through 36.

          2. Financial Statements Schedules -- Not Applicable.

          3. Exhibits including those incorporated by reference:

<TABLE>
<CAPTION>
EXHIBIT                                DESCRIPTION
-------                                -----------
<S>       <C>  <C>
2.1       --   Agreement and Plan of Merger dated February 8, 2000, among
               the Registrant, perfumania.com, inc. and EDC Sub, Inc.(2)
2.2       --   Amended and Restated Stock Purchase Agreement dated April
               10, 2000, between Envision Development Corporation and
               William J. Patch, III, Elisabeth M. Patch, Lisabeth Patch,
               William Patch, IV and Alex Adamopoulos
3.1       --   Articles of Incorporation
3.2       --   Bylaws
10.1      --   1999 Incentive Stock Option Plan (1)
10.2      --   Intercompany Services Agreement dated as of May 1, 1999 by
               and between perfumania.com, inc. and Perfumania, Inc. (1)
10.3      --   Technology Transfer and License Agreement dated as of May 1,
               1999 by and between perfumania.com, inc. and Perfumania,
               Inc. (1)
10.4      --   Employment agreement, dated as of January 11, 2000, between
               Envision and William J. Patch.
10.5      --   Employment agreement, dated as of January 11, 2000, between
               Envision and Michael E. Amideo.
10.6      --   Employment agreement, dated as of January 14, 2000, between
               Envision and Thomas Nolan.
10.7      --   Employment agreement, dated as of February 22, 2000, between
               Envision and Alex Adamopoulos.
10.8      --   Employment agreement of Ilia Lekach (1)
10.9      --   Employment agreement of Rachmil Lekach (1)
10.10     --   Employment agreement of Richard Veliz (1)
10.11     --   Lease Agreement dated as of April 6, 2000, between Envision
               Development Corporation (Tenant) and Claremont Bridgewater
               I, LLC
16.1      --   Letter re change in certifying accountant (3)
21.1      --   Subsidiaries of Envision
23.1      --   Consent of PricewaterhouseCoopers LLP
24.1      --   Power of attorney (included on the signature page to this
               Annual Report on Form 10-K)
27.1      --   Financial Data Schedule
</TABLE>

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

(1) Incorporated by reference to the exhibit of the same description filed with
    the Registrant's Registration Statement on Form S-1 (No. 33-80059).
(2) Incorporated by reference to the exhibit of the same description filed with
    the Registrant's Current Report on Form 8-K dated February 8, 2000.
(3) Incorporated by reference to the exhibit of the same description filed with
    the Registrant's Current Report on Form 8-K dated April 4, 2000.

     (b) Reports on Form 8-K

     A Current Report on Form 8-K dated January 11, 2000 was filed on January
24, 2000 containing information on Item 1. Change in Control of Registrant.

                                       38
<PAGE>   40

                                   SIGNATURES

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

April 28, 2000

                                          ENVISION DEVELOPMENT CORPORATION

                                          By:     /s/ WILLIAM J. PATCH
                                            ------------------------------------
                                            William J. Patch
                                            Chairman and Chief Executive Officer

                               POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints William J. Patch and Michael E. Amideo
and each of them, his true and lawful attorneys-in-fact and agents with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Annual Report on Form 10-K and to file the
same with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
This power of attorney may be executed in counterparts.

     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 registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                     DATE
                      ---------                                     -----                     ----
<C>                                                    <S>                               <C>

                /s/ WILLIAM J. PATCH                   Chairman and Chief Executive      April 28, 2000
-----------------------------------------------------  Officer
                  William J. Patch

                /s/ MICHAEL E. AMIDEO                  Secretary, Chief Financial        April 28, 2000
-----------------------------------------------------  Officer and Director
                  Michael E. Amideo

               /s/ SUNNY C. VANDERBECK                 Director                          April 28, 2000
-----------------------------------------------------
                 Sunny C. Vanderbeck

                 /s/ DEAN M. WILLARD                   Director                          April 28, 2000
-----------------------------------------------------
                   Dean M. Willard

                /s/ THOMAS H. CARMODY                  Director                          April 28, 2000
-----------------------------------------------------
                  Thomas H. Carmody

               /s/ JAMES B. WEINSTOCK                  Director                          April 28, 2000
-----------------------------------------------------
                 James B. Weinstock

                  /s/ ALAN E. RUDD                     Director                          April 28, 2000
-----------------------------------------------------
                    Alan E. Rudd
</TABLE>

                                       39
<PAGE>   41

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT                                DESCRIPTION
-------                                -----------
<S>       <C>  <C>
2.1       --   Agreement and Plan of Merger dated February 8, 2000, among
               the Registrant, perfumania.com, inc. and EDC Sub, Inc.(2)
2.2       --   Amended and Restated Stock Purchase Agreement dated April
               10, 2000, between Envision Development Corporation and
               William J. Patch, III, Elisabeth M. Patch, Lisabeth Patch,
               William Patch, IV and Alex Adamopoulos
3.1       --   Articles of Incorporation
3.2       --   Bylaws
10.1      --   1999 Incentive Stock Option Plan (1)
10.2      --   Intercompany Services Agreement dated as of May 1, 1999 by
               and between perfumania.com, inc. and Perfumania, Inc. (1)
10.3      --   Technology Transfer and License Agreement dated as of May 1,
               1999 by and between perfumania.com, inc. and Perfumania,
               Inc. (1)
10.4      --   Employment agreement, dated as of January 11, 2000, between
               Envision and William J. Patch.
10.5      --   Employment agreement, dated as of January 11, 2000, between
               Envision and Michael E. Amideo.
10.6      --   Employment agreement, dated as of January 14, 2000, between
               Envision and Thomas Nolan.
10.7      --   Employment agreement, dated as of February 22, 2000, between
               Envision and Alex Adamopoulos.
10.8      --   Employment agreement of Ilia Lekach (1)
10.9      --   Employment agreement of Rachmil Lekach (1)
10.10     --   Employment agreement of Richard Veliz (1)
10.11     --   Lease Agreement dated as of April 6, 2000, between Envision
               Development Corporation (Tenant) and Claremont Bridgewater
               I, LLC
16.1      --   Letter re change in certifying accountant (3)
21.1      --   Subsidiaries of Envision
23.1      --   Consent of PricewaterhouseCoopers LLP
24.1      --   Power of attorney (included on the signature page to this
               Annual Report on Form 10-K)
27.1      --   Financial Data Schedule
</TABLE>

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

(1) Incorporated by reference to the exhibit of the same description filed with
    the Registrant's Registration Statement on Form S-1 (No. 33-80059).
(2) Incorporated by reference to the exhibit of the same description filed with
    the Registrant's Current Report on Form 8-K dated February 8, 2000.
(3) Incorporated by reference to the exhibit of the same description filed with
    the Registrant's Current Report on Form 8-K dated April 4, 2000.

                                       40