UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C 20549

                                   FORM 10-KSB
(Mark One)

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

For the Fiscal Year ended December 31, 2002

[Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the transition period of              to
                             ------------    --------------

Commission File No. 0-22809

                                   AZUREL LTD.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

             DELAWARE                                      13-3842844
   -------------------------------                     -------------------
   (State or other jurisdiction of                     (I.R.S Employer
    incorporation or organization)                     Identification No.)

                       23F Commerce Road
                        Fairfield N.J.                      07004
          ----------------------------------------        ----------
          (Address of principal executive offices)        (Zip Code)

Registrant's telephone number, including area code: (973) 575-9500

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

Title of Each Class              Name of Each Exchange on
                                 Which Registered None.

Not Applicable

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

<PAGE>


                          COMMON STOCK, $.001 PAR VALUE
                          -----------------------------
                                (Title of Class)

                    REDEEMABLE COMMON STOCK PURCHASE WARRANTS
                    -----------------------------------------
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter prior 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-KSB or any amendment to
this Form 10-KSB.
Yes   No X

The issuer's net sales for the most recent fiscal year were $206,702.


The aggregate market value of the voting stock held by non-affiliates based upon
the last sale price on May 16, 2003 was approximately $6,306,527.48.

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No

As of May 16, 2003 there were 28,666,034 shares of Common Stock, per value $.001
per share outstanding.

Other than historical information, statements in this report may be deemed to be
forward-looking statements within the meaning of the federal securities law.
Actual results and the timing of certain events could differ materially from
those projected in the forward looking statements due to a number of factors,
including those set forth in this report. See "Forward-Looking Statements" in
Part II of this report.

Explanatory Note

The financial statements included in this Form 10 KSB have not been audited by
the Company's independent auditors, nor any other independent accountants, using
professional standard and procedures for conducting such audits as established
by generally excepted auditing standards.


                                       1
<PAGE>


Accordingly, the Company's independent auditors have not expressed any opinion
or any other form of assurance on such financial statements, assume no
responsibility for, and disclaim any association with such financial statements.








                                       2
<PAGE>


                                     PART I
ITEM 1. BUSINESS

GENERAL

         The Company, through its wholly-owned subsidiary manufactures,
distributes, and assembles perfumes and color kit products under the Company's
own brand names. In order to take advantage of the Company's product development
expertise, the Company develops color cosmetic and fragrance lines, which it
markets under brand names created internally. These products are sometimes
referred to as "Branded Products". To date, the Company has developed two lines
of Branded Products internally.
         In March 2000, the Company met with the NASDAQ Listing Qualifications
Panel to respond to concerns raised by NASDAQ. On April 28, 2000, the Panel
delisted the Company's securities for public interest concerns. The Company
subsequently applied for and has been listed on the bulletin board.
         In May 2000, the Company sold its Private Label Group, which consisted
of subsidiaries acquired in August 1996 from Michael J. Assante.
         On February 2, 2001, the Company filed a voluntary petition of
bankruptcy under Chapter 11 in the United States Bankruptcy Court for the
District of New Jersey, Newark. All creditors were notified and all legal
proceedings were terminated; however, these claims were settled as part of the
First Modified Plan.
         On February 13, 2002, subsequent to the ratification of the First
Modified Plan, the Order of Confirmation was issued by the Bankruptcy Court, and
became effective February 27, 2002. The Plan provided two options to the
unsecured creditors: One is a combination of one share of stock for each dollar
of liability plus a 20% cash payout over 2 years. The other is a 45% cash payout
over 5 years. Each unsecured creditor that filed a claim was permitted to select
either of the two options.
         On March 27, 2002, the Company signed a letter of intent to merge with
Romantic Moments Inc. ("Romantic"), a distributor of high-end evening garments.
On July 1, 2002, the Company entered into a merger agreement to acquire all the
shares of Romantic Moments, Inc. (Romantic), a wholly owned subsidiary of RM
Enterprises International, Ltd., in exchange for 9,500,000 shares of the
Company's common stock. As part of the merger agreement, Romantic was dissolved
and FloWeinberg Inc. became a newly-formed, wholly-owned subsidiary of the
Company. The Company's shareholders approved the merger at the annual
shareholders' meeting held on October 17, 2002. The merger was consummated
effective November 1,2002.
         On July 26, 2002, the Company extended the expiration date on its pubic
warrants from July 29, 2002 to July 29, 2005.

PRODUCTS AND SERVICES
          In the United States, the Company sells its Branded Products directly
to two distributors, which purchase the Company's products for resale. One of
the distributors sells the Company's products through the internet, and the
other distributor sells to retail stores within its territory. The Company
established a sales and distribution facility in France in the first quarter of
1999. In November 2000, the Company decided not to sell in the international
market and closed its facility in France. The Company is currently seeking a
relationship that will allow for the Company's products to be sold
internationally.


                                       3
<PAGE>


         In October 1997, the Company acquired all of the outstanding capital
stock of Cambridge Business Services, Inc. (CBS). CBS provided outsourcing and
distribution services such as: accounting, sales, marketing, warehousing,
distribution, and other administrative and back offices services to cosmetic,
fragrance, and accessory companies. These functions were absorbed by Azurel
Sales and Distribution in the third quarter of 2000. The Company dissolved the
Corporation (CBS) during the fourth quarter 2000 and subsequently discontinued
the aforementioned service operations in February 2001.
         In October 1997, the Company began developing cosmetics, fragrances,
and related products for sale under the HANG TEN trade name pursuant to a
license agreement with the owner of the HANG TEN trade name (the "Licensor").
The HANG TEN trade name is a brand name used on men's outerwear, active wear,
and a wide variety of other merchandise which has been marketed in print media
in both the United States and internationally.
         The license agreement covered the period from January 1, 1999 until
December 31, 2003. In January 2001, the licensor cancelled the license agreement
due to the fact that the Company could not meet the minimum payments required in
the agreement.
         In July 1998, the Company purchased all of the assets of Ben Rickert
Inc. from Summit Bank. Ben Rickert Inc. was founded in 1970 by Ben Rickert and
throughout the years became a leading manufacturer, distributor, and assembler
of luxury bath and body products. With the purchase of Ben Rickert Inc. assets,
the Company created a wholly-owned subsidiary and named it Ben Rickert Corp.
(which was subsequently changed to Azurel Sales and Distribution), which
manufactured, distributed, and assembled bath and body products and perfumes,
sold mostly in gift sets. Azurel Sales and Distribution sells its products under
its own brand names including Benandre and Privilege, and intends to reintroduce
luxury bath and body products, which would be sold primarily to department
stores and mass merchandisers such as, J.C Penny, Federated Department Stores,
Marshall Field's, and AAFES (Military). The purchasers of Azurel Sales and
Distribution products are primarily women between the ages of 12 and 65 years of
age.
         Azurel Sales and Distribution believes that its products are
differentiated from its competitors' products by three distinct factors: (i)
aesthetics; (ii) price (value); and (iii) fragrance. Azurel Sales and
Distribution's products compete effectively with its competition by creating
handsomely designed quality products at reasonable prices, and its products have
established the concept of "high gift value" as its core selling strategy.
         On March 27, 2002, the Company signed a letter of intent to merge with
Romantic Moments Inc. ("Romantic"), a distributor of high-end evening garments.
On July 1, 2002, the Company entered into a merger agreement to acquire all the
shares of Romantic Moments, Inc. (Romantic), a wholly owned subsidiary of RM
Enterprises International, Ltd., in exchange for 9,500,000 shares of the
Company's common stock. As part of the merger agreement, Romantic was dissolved
and Flo Weinberg Inc. became a newly-formed, wholly-owned subsidiary of the
Company. The Company's shareholders approved the merger at the annual
shareholders' meeting held on October 17, 2002. The merger was consummated
effective November 1,2002.
         The Romantic product line of high-end ladies robes and better daywear
is carried by Bergdorf Goodman, Neiman Marcus, Jacobson's, Von Maur, Kassatly's,
Gattle's and Livingstones of Beverly Hills, and in more than 162 specialty
stores throughout the U.S.
         The Company also sells cosmetic kits, which are varieties of color
cosmetic items packaged in containers and manufactured in Asia, which are custom
made for retailers such as Marshall Field's and Bloomingdale's as well as
cosmetic companies. This sector of the overall cosmetic market is growing
rapidly and should continue to expand in the future.


                                       4
<PAGE>

Competition
         All aspects of the cosmetic and fragrance industry are subject to
intense competition throughout the world. In all aspects of its business the
Company will compete with numerous companies, many of which are better known in
the industry and have established channels of distribution and substantially all
of which have greater financial and other resource than the Company. These
competitors include Estee Lauder, Revlon, Avon, Maybelline, Coty, and Dial.
         The Company believes that the primary elements of competition in the
sale of Branded Fragrance Products are product awareness and consumer acceptance
of the competing brands. Achieving market acceptance may require substantial
marketing efforts and expenditure of significant funds. The Company markets its
Branded Products to niche markets such as chain drug stores, discount stores,
and mass merchandisers and develops Branded Products, which it believes will
appeal to the customers of these retailers.
         In the intimate apparel market, the Company experiences intense
competition from a large number of small and large fashion retailers. While the
women's intimate apparel industry is highly competitive, the company believes
that it has a unique opportunity to gain share and grow revenues in the luxury
segment of the market.. Traditionally, the company has distributed its product
through a limited number of high-end stores. In most cases, the company has
established long-term relationships with quality stores in each market and has
resisted the temptation to dilute the exclusivity it provides to its retail
outlets resulting in superior customer service and loyal retailers.
Government Regulation
         Various laws and regulations relating to safe working conditions, and
other employment matters, including the Occupational Safety and Health Act, are
also applicable to the Company. The Company believes it is in substantial
compliance with all material Federal, state and local laws and regulations
regarding safe working conditions, and other employment matters.

Trademarks
         The Company has sixteen United States registered trademarks, Flo
Weinberg (R), Scent Overnight (R), Scent 123(R) and Sports Extreme (R), U.S. -
Privilege (R), Benandre(R), Bene(R), PP Parfums Privilege & Design (R), American
Country Garden(R), Ben Rickert(R), Extreme Berry(R), Extreme Girl(R), Extreme
Vanilla(R), Private Part(R), France - Privilege(R) and Japan - Ben Rickert(R).
         The right to use trademarks and trade names in connection with the sale
of the Branded Products is material to the Company's business. In cases where
the Company is the licensee of the trademark or trade name, the ownership of the
trademark or trade name will be retained by the licensor. In such cases, the
Company may be subject to material claims of infringement by third-parties and
may or may not be indemnified by the licensor.
         The Company will be the owner of brand names developed by it and will
seek to establish protection of names. There can be no assurance, however, that
trademark rights would sufficiently protect the Company's right to use such
names or that, if and when the Company files trademark applications for such
names, such applications would be approved. Notwithstanding such ownership,
third-parties may claim that such names infringe such third party's rights. Such
claims may seek to require the Company to cease use of the names as well as pay
monetary damages. At the time any such claim is brought, the Company may not
have the financial resources to defend against such claim. The cessation of the
use of any brand name used by the Company might have a material adverse effect
on it.
There are no pending trademark applications at the current time.


                                       5
<PAGE>

Insurance
         In view of the activities conducted by the Company, there are inherent
risks of exposure to certain liabilities including product liability and
negligence claims resulting from the use of the Company's products. The Company
currently carries a general liability insurance policy (including products
liability) and property damage insurance, which provides for coverage of
$1,000,000 per occurrence and $2,000,000 in the aggregate. Although the Company
believes such insurance is sufficient, no assurance can be given that the amount
of the Company's present coverage will prove to be adequate.

Employees
         As of December 31, the Company employed 11 persons in the United
States. The Company utilizes temporary help and independent contractors in order
to perform its warehousing and administrative functions. The Company plans to
hire a sales rep force after the confirmation of its plan of reorganization.
This will increase the distribution of its Branded Products.

Seasonality and Backlog
         The cosmetic and fragrance business in general is subject to seasonal
fluctuations, with net sales in the second half of the year generally higher
than those in the first half as a result of increased demand by retailers in the
United States in anticipation of and during the back-to-school, Thanksgiving,
and Holiday seasons. The Company anticipates that the sales of Branded and
Azurel Sales and Distribution Products will follow the general industry trend.

Chapter 11 Filing
         On February 2, 2001, the Company filed a voluntary petition of
bankruptcy under Chapter 11 in the United States Bankruptcy Court for the
District of New Jersey, Newark. All creditors were notified and all legal
proceedings were terminated; however, these claims were settled as part of the
First Modified Plan.
         On February 13, 2002, subsequent to the ratification of the First
Modified Plan, the Order of Confirmation was issued by the Bankruptcy Court, and
became effective February 27, 2002. The Plan provided two options to the
unsecured creditors: One is a combination of one share of stock for each dollar
of liability plus a 20% cash payout over 2 years. The other is a 45% cash payout
over 5 years. Each unsecured creditor that filed a claim was permitted to select
either of the two options.


ITEM 2. PROPERTIES

         At December 31, 2000, the Company leased 2,400 square feet of space at
509 Madison Avenue, New York, New York, which was used as its executive office.
The lease, which was to expire in April, 2001, provided for an annual base rent
of $75,000, including utilities. In January 2001, the Company closed this office
as part of an overall consolidation plan.


                                       6
<PAGE>

         At December 31, 2000, the Company leased a 55,000 square foot building
in Fairfield, New Jersey, which was used as a packaging plant and as Azurel
Sales and Distribution's executive office. Approximately 10,000 square feet was
used for office space and 45,000 square feet housed its assembling, warehousing,
and shipping operations.
         The lease was to expire in July 2004 and provided for annual rent of
approximately $336,000. In January 2001, the Company defaulted on its rental
payments and made arrangements with the landlord, which enabled it to remain
until the middle of March 2001. At that time it moved to another facility in
Fairfield New Jersey of approximately 4,500 square feet, with rental payments of
approximately $18,000 annually.
         In March, 2002, after the confirmation of the Company's plan of
reorganization, the Company relocated its offices and warehouse to another
facility in Fairfield, New Jersey. The new facility is approximately 8,000 sq
ft. and will afford the Company the opportunity to expand its operations to
accommodate sales growth.
         FloWeinberg currently leases approximately 4,000 square feet of office
space located at Sunset Industrial Park, 50 20th Street, Brooklyn, NY, pursuant
to a lease beginning in 1999. The lease expires on June 30, 2004. The lease
provides for escalations based on the percentage increase in the consumer price
index. Rent is currently approximately $4,000 per month. FloWeinberg believes
that its facilities are adequate for its current and future operations.

ITEM 3.  LEGAL PROCEEDINGS

         A former employee has brought suit against Romantic, claiming damages
and unpaid wages of approximately $69,000. Management disagrees with this claim
and asserts that approximately $24,000 was advanced to this former employee as a
loan, which has not been repaid. Although a reserve for the entire amount has
been established, Management vigorously defended against this claim and did not
anticipate that the outcome of this matter would have a material adverse effect
on the Company's financial condition or results of operations. In November,
2002, a countersuit against the employee was won and the company is owed $83,000
by the employee. A receivable has not been recorded by the company due to the
fact that collectibility of this judgement cannot be reasonably assured.


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

         The following matters were submitted to a vote and approved at the
annual shareholders' meeting held on October 17, 2002:

(i) The Merger Agreement;
(ii) Amendment to the Certificate of Incorporation, increasing the number of
authorized common shares to 50,000,000;
(iii) Election of five (5) persons to the Board of Directors; and
(iv) The appointment of the Company's independent auditors for the ensuing
fiscal year.


                                       7
<PAGE>


                                     PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK

         As of the date hereof, the Company has outstanding 28,666,034 shares of
its Common Stock $.001 par value ("Common Stock"). The Company's Common Stock is
traded on the Nasdaq Bulletin Board ("OTCBB") under the symbol "AZUR". The
following table sets forth the high and low bid prices for the Common Stock as
reported by on the OTCBB. The high and low bid prices reflect inter-dealer
prices, without retail mark-up, mark-down, or commission, and may not present
actual transitions.

                                   COMMON STOCK
FISCAL 2001                    HIGH             LOW

First Quarter                $ 0.15         $  0.09
Second Quarter                 0.21            0.11
Third Quarter                  0.29            0.16
Fourth   Quarter               0.39            0.18

FISCAL 2002

First Quarter                 $ 0.40        $  0.25
Second Quarter                  0.50           0.30
Third Quarter                   0.52           0.21
Fourth   Quarter                0.40           0.15

         On March 31, 2003, there were approximately 83 holders of record of the
Company's 28,666,034 outstanding shares of Common Stock.

         On May 16, 2003, the last sale price of the Common Stock as reported on
the Nasdaq Bulletin Board was $.22.

                                 DIVIDEND POLICY

         The Company has never paid or declared dividends on its Common Stock.
The payment of cash dividends, if any, in the future is within the discretion of
the Board of Directors and will depend upon the Company's earnings, its capital
requirements, financial condition, and other relevant factors. The Company
intends, for the foreseeable future, to retain future earnings for use in the
Company's business.


                                       8
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

AZUREL LTD. AND SUBSIDIARIES
FORWARD-LOOKING STATEMENTS

         When used in this Form 10-KSB and in future filings by the Company with
the Securities and Exchange commission, the words or phrases "will likely
result" and "the company expects," "will continue," "is anticipated,"
"estimated," "project," or "outlook" or similar expressions are intended to
identify "forward-looking statements." The Company wishes to caution readers not
to place undue reliance on any such forward-looking statements, each of which
speak only as of the date made. Such statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected.
The Company has no obligation to publicly release the result of any revisions,
which may be made to any forward-looking statements to reflect anticipated or
unanticipated events or circumstances occurring after the date of such
statements.

GENERAL
         Azurel, through its wholly-owned Ben Rickert subsidiary, manufactures,
markets and sells private label cosmetics, fragrances and skincare products and
also provides warehousing and other administrative services. Its
wholly-subsidiary Flo Weinberg, manufactures, markets and sells high-end ladies
robes and better daywear is carried by Bergdorf Goodman, Neiman Marcus,
Jacobson's, Von Maur, Kassatly's Gattle's and Livingstones of Beverly Hills, and
in more than 162 specialty stores throughout the U.S.
         In August 1996, Azurel acquired the stock of the Private Label Group,
and in October 1996, Azurel acquired the assets of Scent Overnight. In October
1997, Azurel acquired the stock of Cambridge Business Services. In July 1998,
Azurel's wholly-owned subsidiary, Azurel Sales and Distribution, acquired the
assets of Ben Rickert Inc., a 28 year old cosmetic company, for $1.5 million.
         The Company established a sales and distribution facility in France in
the First Quarter of 1999. In November 2000, the Company decided not to sell in
the international market and closed its facility in France.
         During the second quarter of 2000, the Company sold the stock of the
Private Label Group and, in the fourth quarter of 2000, dissolved Cambridge
Business Services.
         On March 27, 2002, the Company signed a letter of intent to merge with
Romantic Moments Inc. ("Romantic"), a distributor of high-end evening garments.
On July 1, 2002, the Company entered into a merger agreement to acquire all the
shares of Romantic Moments, Inc. (Romantic), a wholly owned subsidiary of RM
Enterprises International, Ltd., in exchange for 9,500,000 shares of the
Company's common stock. As part of the merger agreement, Romantic would be
dissolved and Flo Weinberg Inc. would become a newly-formed, wholly-owned
subsidiary of the Company. The Company's shareholders approved the merger at the
annual shareholders' meeting held on October 17, 2002. The merger was
consummated effective November 1,2002.

         The following discussion and analysis should be read together with the
financial statements and notes for Azurel included herein.


                                       9
<PAGE>

RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the percentage of net
sales represented by certain items included in the statements of operation.


<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                                2002                               2001
                                                      -------------------------          ------------------------
                                                        Amount            %                Amount            %
                                                      ---------        --------          ---------       --------
<S>                                                   <C>                 <C>            <C>                <C>
Sales....................................             $ 206,702           100.0%         $ 463,173          100.0%
Cost of goods sold.......................               164,289            79.5%           192,435           41.6%
Gross profit.............................                42,413            20.5%           270,738           58.4%
Selling, general and
administrative expenses..................               692,508           335.0%         1,281,375          276.7%

Operating (loss).........................              (650,095)         (314.5%)       (1,010,637)        (163.4%)
Interest expense.........................                 8,712             4.2%           (42,837)          (9.3%)
Other income (expense):
Reorganization expense...................                12,315             6.0%                -               -
Gain on sale of fixed assets.............                    -               -              72,673            15.7%
Other income.............................                31,253            15.1%           391,658             8.9%

Net loss.................................              (639,869)         (309.6%)         (767,962)         (165.8%)

</TABLE>

YEAR ENDED DECEMBER 31, 2002 (THE "2002 PERIOD") AND YEAR ENDED
DECEMBER 31, 2001 (THE "2001 PERIOD").

         Net sales were $ 206,702 for the year ended December 31, 2002 and
declined $ 256,471 or 55.4% when compared to the $463,173 of net sales in the
2001 Period. The sales decrease in the 2002 Period was primarily due to the
downsizing of the Company subsequent to the Company's filing for protection
under the Chapter 11 Federal bankruptcy laws in February 2001.
         Cost of goods sold for the 2002 Period was $164,289 or 79.5% of net
sales, as compared to $192,435 or 41.6% of net sales for the 2001 Period. Cost
of goods sold for the 2002 Period reflects an inventory reserve reduction for
shortages of approximately $97,136 recorded at the time of the physical
inventory, taken in the first quarter of 2002. The gross profit as a percentage
of revenue was 20.5% for the 2002 period as compared to 58.5% for the 2001
Period. Excluding the aforementioned adjustment, the 2002 period gross profit
would have been approximately $139,549 or 67.5%. The lower margin in the 2001
period is the result of a higher percentage of closeout products.


                                       10
<PAGE>

            Selling, general and administrative expenses for the 2002 Period
were $692,508 or 335.0% of sales as compared to $1,281,375 or 276.7% of sales
for the 2001 Period. The $588,867 decrease (46.0%) in SG&A expenses is primarily
a reflection of lower payroll and rent costs. The Company significantly
downsized operations in February, 2001 upon filing for protection under Chapter
11. Thus, the 2001 Period contained one month of significantly higher payroll
costs. Furthermore, the Company moved into a lower cost facility toward the end
of the first quarter in 2001, resulting in substantial rent savings in the 2002
Period.
         Interest expense was $8,712 for the 2002 Period, compared to $42,837
for the 2001 Period. Subsequent to filing Chapter 11 in February 2001, the
Company was not required to record interest expense on its notes payable.
            In the 2002 Period, the Company realized a net extraordinary gain of
$4,235,687 compared to an extraordinary gain of $190,000 in 2001. In the 2002
Period, the extraordinary gain resulted from the extinguishment of debt relating
to the plan of reorganization, while the gain in the 2001 Period pertained to
the early extinguishments of a capitalized lease.

LIQUIDITY AND CAPITAL RESOURCES
         From inception to date, Azurel's operations have been funded by a
combination of debt and equity financings. Azurel completed its initial public
offering of its securities in August 1997, whereby the Company issued 1,200,000
shares of common stock and 1,200,000 common stock warrants. The Company received
approximately $5,538,000 from its initial public offering. In addition, prior to
the Company's initial public offering, it sold 750,000 shares of Common Stock at
$2.00 per share from February through July 1996 and in January and April of 1997
the Company secured additional debt financing in connection with the completion
of private placements of $200,000 and $350,000 respectively, which were repaid
upon the completion of the Company's initial public offering.
         On August 12, 1998 the Company solid shares of its Series A Convertible
Preferred Stock receiving net proceeds of approximately $1,237,587.
         In April 1999 and May 1999, the Company sold an aggregate of 716,667
shares of its Common Stock at a price of $1.50 per share, for an aggregate sale
price of $1,075,000, to several private investors, pursuant to an exemption from
the registration requirements of the Securities Act of 1933, as amended.
Additionally, an aggregate of 179,167 warrants (one warrant for every four
shares purchased) to purchase shares of the Company's Common Stock at an
exercise price of $2.00 per share were issued to these investors. In December
1999, the Company sold an additional 100,000 shares of its common stock at a
price of $1.00 per share in a private transaction pursuant to an exemption from
the registration requirements of the Securities Act of 1933, as amended.
        In May 1999, the Company obtained $1,528,1467, secured by an 8%, 2-year
promissory note and a majority of PLC common stock. In September 1999, the
Company sold $800,000 of its Series C Convertible Preferred Stock.
        In May 2000, the Company sold its interest in the Private Label Group
for an aggregate of $3,085,821 plus forgiveness of $600,000 of indebtedness to
Michael Assante.
         During the last 9 months of the year 2000, the Company raised
approximately $500,000 through the issuance of various unsecured notes at an
interest rate of 8% per annum.
         In March 2001, the Company converted $350,000 of notes payable into
700,000 shares of its common stock, valued at $0.50 per share, to a private
investor.
         In May 2002, Azurel issued 150,000 shares of its common stock for
non-cash compensation of approximately $68,000 to an entity that provided
management services

                                       11
<PAGE>


         In August 2002, Azurel converted all of its preferred stock to 1,500
shares of common stock as part of the Company's Plan of Reorganization (see Note
3 of the Notes to the consolidated financial statements).
         In November 2002, in conjunction with the merger agreement, Azurel
issued 9,500,000 common shares to RM enterprises (see Note 3 of the Notes to
consolidated audited financial statements). The acquired net assets are valued
at November 1, 2002 as follows:

Inventories on hand (lower cost or market)                    $276,464
Net Book Value of Machinery & Equipment                         52,041
Estimated value of intangible assets:
   Patterns for robes/apparel                                   10,453
   Trademarks/Brand names                                       14,024
   Customer list                                                28,731

         Total Value                                          $381,713

Concurrently, the Company also issued 200,000 shares of restricted stock to an
employee.
         In the 2002 Period, as part of the Company's Plan of Reorganization,
Azurel issued 6,980,337 shares of its common stock to creditors, reducing
short-term reorganization liabilities by approximately $800,000. Furthermore, as
part of the Company's Plan of Reorganization , Azurel is obligated to issue an
additional 456,444 shares, which is reflected as a further reduction of short
term reorganization debt of approximately $100,000, with a corresponding equity
entry to "Common shares to be issued for reorganization" (see Note 3 of the
Notes to consolidated financial statements).
        Azurel issued 4,992,500 common shares to investors in the 2002 Period,
receiving an aggregate of approximately $700,000.
        Cash used by operating activities for the 2002 Period was $21,414 as
compared to cash of $19,278 provided by operations for the 2001 Period. A
decrease in accounts payable and accrued liabilities of $527,561 and $47,236
respectively before non-cash reorganization income were the primary uses of cash
in the 2002 Period. The substantial decrease in accounts payable and accrued
liabilities was the result of the extinguishments of debt, which occurred upon
the ratification of the First Modified Plan.

ITEM 8. FINANCIAL STATEMENTS
        See pages F-1 to F-19.


                                       12
<PAGE>


                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSON

NAME                      AGE               POSITION

Norman Grief               71               Director
Brian Bookmeier            44               Director
Steven Moskowitz           38               Director and CEO
Frank Lazauskas            42               Director
Jerome Schlanger           46               Director

OTHER SIGNIFICANT EMPLOYEES

NAME                      AGE               POSITION

Robert O'Grady             55               President
Michael Metter                              COO
Edward Adamcik             60               Vice-President, Operations


         Directors are elected to serve until the next meeting of stockholders
and until their successors are duly elected and qualified. Meetings of
stockholders of the Company will be held on an annual basis. However, if at any
time an annual meeting is not held for the election of directors, then the
current directors will continue to serve until their successors are elected and
qualified. Vacancies and newly created directorships resulting from any increase
in the number of directors may be filled by a majority vote of Directors then in
office. Officers are appointed by, and serve at the discretion of, the Board of
Directors. Non-employee directors are eligible to receive options under the 1997
Stock Option Plan.
         The following is a brief summary of the background of each director,
executive officer, and significant employee of the Company:

NORMAN GRIEF was elected to the Company's Board of Directors on February 23,
1998. Mr. Grief is presently the Chief Executive Officer of The Jarrott Group,
Inc., a full service marketing agency with a specialty in developing cosmetic
brands, a position which he has served as since January 3, 1995. From March 1,
1981 to December 1, 1994 Mr. Grief was the President of Givandan. From March 9,
1970 to December 15, 1986 Mr. Grief served as the Vice President of Research and
Development at Revlon.


                                       13
<PAGE>


BRIAN BOOKMEIER was appointed as a director of the Company in Mach 2000. Since
August 1997, Mr. Bookmeier has been the Vice President of Seven Sons, Inc.,
d/b/a Las Vegas Golf & Tennis, a company in the business of franchised retailing
of golf and tennis equipment. From July 1995 to February 2000, Mr. Bookmeier
served as the President, Chief Executive Officer and a director of
TekInsight.com, Inc., a publicly-traded company. From 1989 Mr. Bookmeier served
as Executive Vice President and a director of Patient Care Services, a home
medical equipment supply company that specialized in diabetes management, and
the sale of related equipment and supplies, until its merger into
TekInsight.com. Mr. Bookmeier has been a director of the American Diabetes
Association since June 1995.

STEVEN MOSKOWITZ, appointed director and CEO in October 2002, has been a
successful leader in business and has helped major corporations in the
development of sales and marketing operations. Over the last five years, Mr.
Moskowitz has served as Vice President of Marketing and Licensing for H.W.
Carters & Sons, N.Y.C. Mr. Moskowitz obtained his degree in 1986 from Tuoro
College.

FRANK LAZAUSKAS was appointed director in October 2002. With over twenty years
experience as a Domino's franchisee, Mr. Lazauskas has won many national awards
and has been an advisor to the founder of Domino's, Mr. Frank Monahan. Currently
Mr. Lazauskas owns and operates eleven stores in the New
Jersey/Pennsylvania/Connecticut markets. Mr. Lazauskas holds a degree in math
and psychology from Central Connecticut State University, which he obtained in
1982.

JEROME SCHLANGER had been employed by Romantic Moments since 1999 as its Vice
President of Operations, where his focus has been on domestic manufacturing,
handling and costing, production and on time delivery. From 1995 to 1999, Mr.
Schlanger was Vice President of Business Development at Nema Consulting where he
was responsible for ascertaining the requirements of business operations and
ensuring that the proper systems were adopted. Mr. Schlanger graduated from
Villanova University in 1976.

ROBERT O'GRADY was appointed President of the Company in February 2003. Mr.
O'Grady has over thirty years of experience in consumer products manufacturing
and the health and beauty aid markets. In addition to positions with
International Paper Company and Nabisco Brands, Mr. O'Grady served as Vice
President - Finance/COO for Cosrich Group Inc. from 1998 to 2003. Mr. O'Grady is
a 1969 of St. Vincent College with a degree in Accounting/Finance.

MICHAEL METTER was appointed President of the Company in October 2002, a
position he held until the appointment of Mr. O'Grady in February 2003. Mr.
Metter is currently functioning as the COO for the Company.

EDWARD ADAMCIK joined the Company in September 1998. Mr. Adamcik worked as
Vice-President for various companies from 1992 to 1998. From 1987 to 1992, Mr.
Adamcik was Chief Financial Officer and Vice-President of Operations for Parlux
Fragrances Inc. Mr. Adamcik served as Controller of Onyx Chemical from 1976 to
1986 and for ten years prior, Mr. Adamcik was Controller of Faberge Inc.




                                       14
<PAGE>


MEETING OF THE BOARD OF DIRECTORS

The Company's Board of Directors met in August 2002.

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

The following table sets forth all cash compensation for services rendered in
all capacities to the Company, for the year ended December 31, 2002. There was
one person whose compensation in 2002 exceeded $100,000 per annum.

<TABLE>
<CAPTION>
NAME AND                                                 RESTRICTED
PRINCIPAL                                                STOCK      OPTIONS   ALL OTHER
POSITION                YEAR      SALARY       BONUS     AWARDS     SARS      COMPENSATION
--------                ----      ------       -----     ------     ----      ------------
<S>                     <C>      <C>                    <C>
Edward Adamcik          2002     $104,000               $64,000(1)
Vice-President,
Operations
</TABLE>

(1) Represents 200,000 shares issued on November 1, 2002, valued at the closing
market price of $0.32.

OPTIONS TO NAMED EXECUTIVE OFFICER

There were no options granted to any of the executive officers named in the
Summary Compensation Table above.

EMPLOYEE AGREEMENTS

As of December 31, 2002, there were no employment agreements.

STOCK OPTION PLAN

         In March 1997 the Board of Directors adopted, and the stockholders
subsequently approved the Company's 1997 Stock Option Plan (the "1997 Plan"). In
December 1998, the 1997 Plan was amended whereby the number of options to
acquire common stock, which may be granted was increased from 750,000 to
1,750,000. The 1997 Plan provides for grants to officers and other employees of
the Company, non-employee directors, consultants and advisors and other persons
who may perform significant services on behalf of the Company and will be
administers by the Board of Directors, or a committee (the "Committee") of two
or more directors, each of whom is a "Non-Employee Director: within the meaning
of Rule 16b-3 under the Exchange Act. Pursuant to the 1997 Plan, options to
acquire an aggregate of 1,750,000 shares of Common Stock may be granted subject
to adjustments as provided in the 1997 Plan.


                                       15
<PAGE>

         The 1997 Plan authorizes the issuance of incentive stock options
("ISOs"), as defined in Section 422A of the Internal Revenue Code of 1986 (the
"Code"), as amended, as well as non-qualified stock options ("NQSOs"). Only
"employees" (within the meaning of Section 3401c of the Code) of the Company
shall be eligible for the grant of Incentive Stock Options. The exercise price
of each ISO may not be less than 100% of the fair market value of the Common
Stock at the time of grant, except that in the case of a grant to an employee
who owns 10% or more of the then outstanding stock of the Company or a
subsidiary or parent of the Company (a "10% Stockholder"), the exercise price
shall be at least 110% of the fair market value of the Common Stock on the date
of grant. The exercise price of each NQSO is determined by the Committee, but
shall not be less than 85% of the fair market value of the Common Stock on the
date of grant. Notwithstanding the foregoing, the exercise price of any option
granted on or after the effective date of the registration of any class of
equity security of the Company pursuant to Section 12 of the Exchange Act, and
prior to size months after the termination of such registration, may be no less
than 100% of the fair option agreement, when the term of the option subject to
such agreement expires and the date when it becomes exercisable, but in no event
will an option granted under the 1997 Plan be exercisable after the expiration
of ten years from the date it is granted. Options may not be transferred during
the lifetime of an option holder and are exercisable during the optionee's
lifetime only by the optionee or by his or her guardian or legal representative.
The 1997 Plan shall terminate automatically as of the close of business on the
day preceding the 10th anniversary date of its adoption, unless subject to
earlier termination, as defined.
         To the extent fair market value of the Common Stock with respect to
which ISO's granted hereunder are exercisable for the first time by an optionee
in any calendar year exceeds $100,000, such options granted shall be treated as
NQSO's to the extent required by Section 422 of the Code.
         If the outstanding shares of Common Stock are changed by reason of an
adjustment to the capitalization of the Company or as a result of a merger or
consolidation, an appropriate adjustment shall be made by the Board or Committee
in the number, kind and price of shares, as to which options may be granted and
exercised.
         Subject to the provisions of the 1997 Plan, the Board of Directors or
the Committee has the authority to determine the individuals to whom stock
options are to be granted, the number of shares to be covered by each option,
the exercise price, the type of option, the option period, the restrictions, if
any, on the exercise of the option, the terms for payment of the option price
and all other terms and provisions of such options (which need not be
identical). Payments by holders of options, upon exercise of an option, may be
made (as determined by the Board or the Committee) in cash or such other form of
payment as may be permitted under the 1997 Plan, including without limitation,
by promissory note or by delivery of shares of Common Stock.

EMPLOYEE PENSION PLAN

The Company does not currently have an employee pension plan.


                                       16
<PAGE>


SECTION 16(A) REPORTING

         Under the securities laws of the United States, the Company's
directors, its executive (and certain other) officers, and any persons holding
ten percent or more of the Company's Common Stock must report on their ownership
of the Company's Common Stock and any changes in that ownership to the
Securities and Exchange Commission and to the National Association of Securities
Dealers, Inc.'s Automated Quotation System. Specific due dates for these reports
have been established. During the year ended December 31, 2001, the Company does
not believe that all reports required to be filed by Section 16(a) were filed on
a timely basis, if at all.




ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following tables set forth certain information as of December 31,
2001 with respect to each beneficial owner of five percent (5%) or more of the
outstanding shares of Common Stock of the Company, each officer and director of
the Company and all officers and directors as a group. The table does not
include options that have not yet vested or are not exercisable within 60 days
of the date hereof. Unless otherwise indicated, the address of each such person
or entity is 23F Commerce Road; Fairfield, New Jersey 07004.

NAME AND ADDRESS                    NUMBER OF SHARES               PERCENTAGE OF
OF BENEFICIAL OWNER                 BENEFICIALLY OWNED (1)         COMMON STOCK
-------------------                 ----------------------         ------------

Norman Grief                                     -0-                      0.0%
Brian Bookmeier                                  -0-                      0.0%
Steven Moskowitz (2)                      9,650,000                      36.6%
Frank Lazauskas                                  -0-                      0.0%
Jerome Schlanger                                 -0-                      0.0%
Damon Testaverde                          3,376,667                      12.9%
International Smart Source                1,682,844                       6.4%
H.T. Ardinger & Son(3)                    3,345,000                      12.4%
Fred Kassner Trust B                      1,114,000                       4.3%
RM Enterprises International              9,650,000                      36.6%
All officers and Directors
 as a group (5 persons)                   9,650,000                      36.6%


(1)  Pursuant to the rules and regulations of the Securities and Exchange
     Commission, shares of Common Stock that an individual or group has a right
     to acquire within 60 days pursuant to the exercise of options or warrants
     are deemed to be outstanding for the purposes of computing the percentage
     ownership of such individual or group, but are not deemed to be outstanding
     for the purposes of computing the percentage ownership of any other person
     shown in the table.
(2)  Includes 150,000 shares granted to RM Enterprises, representing non-cash
     compensation referenced in a management agreement that provided for
     management services in 2002. Mr. Moskowitz disclaims beneficial of all such
     shares of common stock.
(3)  Includes 800,000 shares of Series C Preferred Stock, which shares are
     convertible into shares of common stock within the next sixty (60) days.


                                       17
<PAGE>


             ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  In October 1997, the Company acquired all of the outstanding
capital stock of Cambridge Business Services, Inc., of which Frank DeSimone, the
Company's Executive Vice President, owned 50 percent, for a purchase price of
$212,000, of which $95,000 was paid in October 1997 and the balance was paid in
February 1998.
         On September 30, 1999, Mr. Semhon agreed to covert $100,000 of debt
owned to him by the Company into shares of the Company's Series C Convertible
Preferred Stock.
         In May 2000, the Company sold its interest in the Private Label Group,
Inc., a majority-owned subsidiary, to Michael J. Assante for an aggregate
purchase price of $3,085,821, plus forgiveness of $600,000 of indebtedness owned
to Mr. Assante in connection with the Company's purchase of the Private Label
Group from Mr. Assante in August 1996.
         Except as disclosed above and pursuant to certain loan transactions
with officers, all previous transactions between the Company and its officers,
directors or 5% stockholders, and their affiliates were made on terms no less
favorable to the Company than those available from unaffiliated parties. All
future transactions between the Company and its officers, directors of 5%
stockholders, and their affiliates, will be on terms no less favorable than
could be obtained from unaffiliated third parties.


ITEM 13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K

A) EXHIBITS (NUMBERED IN ACCORDANCE WITH ITEM 601 OF REGULATION S-B).

         Report on Form 8K was filed on July 31, 2002 Report on From 8K was
         filed on May 15, 2003




                                       18
<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15 (d) of the Securities Exchange Act
of 1934, the Registrant has duly caused this Annual Report on Form 10-KSB to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                                    AZUREL LTD.


Steven Moskowitz                                    BY:/S/ STEVEN MOSKOWITZ
                                                       ----------------------
                                                       Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons and in the capacities and on the date indicated.

SIGNATURE                             TITLE                        DATE

/S/ STEVEN MOSKOWITZ                Director and                 April 14, 2003
--------------------                Chief Executive Officer
Steven Moskowitz


/S/ NORMAN GRIEF                    Director
--------------------
Norman Grief


/S/ FRANK LAZAUSKAS                 Director
--------------------
Frank Lazauskas


/S/ JEROME SCHLANGER                Director
--------------------
Jerome Schlanger



                                       19
<PAGE>




                          AZUREL LTD. AND SUBSIDIARIES

                              FINANCIAL STATEMENTS

                                      INDEX

                                                                          Page
                                                                         Number
                                                                       ---------

INDEPENDENT AUDITOR'S REPORT                                               F - 1

CONSOLIDATED FINANCIAL STATEMENTS

      Consolidated Balance Sheet                                           F - 2

      Consolidated Statements of Operations                                F - 3

      Statement of Stockholders' Equity                                    F - 4

      Consolidated Statements of Cash Flows                            F - 5 - 6

      Notes to Financial Statements                                  F - 20 - 28






<PAGE>

<TABLE>
<CAPTION>




                          AZUREL LTD. AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31,2002


                                     ASSETS
CURRENT ASSETS:
<S>                                                                 <C>
   Cash                                                             $     23,849
   Accounts receivable, net of allowance for
       doubtful accounts                                                  25,111
   Inventories                                                           487,800
   Other receivable Spongetech                                            89,657
   Prepaid expenses and other current assets                              28,397
                                                                    ------------
       TOTAL CURRENT ASSETS                                              654,814

FIXED ASSETS:
   Equipment (net)                                                        48,588

OTHER ASSETS:
   Deposits                                                               19,430
   Intangibles                                                            82,438
                                                                    ------------
                                                                    $    101,868
INVESTMENT IN SUBSIDIARIES                                               381,713
                                                                    $  1,186,983
                                                                    ============

                        LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES SUBJECT TO COMPROMISE:
   Accounts payable                                                 $    476,530
   Notes payable                                                         153,736
   Capital leases                                                         28,755
    Accrued expenses                                                     111,671
   Reorganization Liabilities-ST                                         304,744
   Taxes payable                                                         520,888
                                                                    ------------
       TOTAL CURRENT LIABILITIES                                       1,596,324
                                                                    ------------

LIABILITIES NOT SUBJECT TO COMPROMISE                                          0
                                                                    ------------

REORGANIZATION LIABILITIES - LT                                          680,564

STOCKHOLDERS'  DEFICIT:
   Preferred stock, $.001 par value, authorized 4,000,000 shares;
       issued and outstanding 1,001,500 shares
   Common stock, $.001 par value, authorized 50,000,000 shares,
       issued and outstanding 28,666,034 shares                          278,666
   Additional paid-in-capital                                         13,980,353
   Accumulated deficit                                               (15,348,924)
                                                                    ------------
       TOTAL STOCKHOLDERS'  DEFICIT                                   (1,089,905)
                                                                    ------------

                                                                    $  1,186,983
                                                                    ============

                 See notes to consolidated financial statements.

                                      F - 2

</TABLE>

<PAGE>


<TABLE>
<CAPTION>





                          AZUREL LTD. AND SUBSIDIARIES


                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                   YEARS ENDED DECEMBER 31,
                                                            --------------------------------------
                                                                   2002                 2001
                                                            -----------------    -----------------

<S>                                                           <C>             <C>
NET SALES                                                     $    206,702    $    463,173

COST OF GOODS SOLD                                                 164,289         192,435
                                                              ------------    ------------

GROSS PROFIT (LOSS)                                                 42,413         270,738

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                       692,508       1,281,375
                                                              ------------    ------------

LOSS FROM OPERATIONS                                              (650,095)     (1,010,637)

INTEREST EXPENSE                                                    (8,712)        (42,837)

GAIN ON SALE OF FIXED ASSETS                                             0        8,256.00

OTHER INCOME (EXPENSE)                                              31,253         (41,202)

REORGANIZATION COSTS                                               (12,315)     (95,500.00)

                                                              ------------    ------------
NET LOSS BEFORE EXTRAORDINARY ITEM                                (639,869)     (1,181,920)

EXTRAORDINARY ITEM:
   Gain on early extinguishment of debt                          5,173,764         190,000
   Adjustment to settlement of debt relating plan of reorg        (445,454)
                                                              ------------    ------------
NET LOSS FROM CONTINUING OPERATIONS                              4,088,441        (991,920)

INCOME FROM DISCONTINUED OPERATIONS                                      0

                                                              ------------    ------------
NET( LOSS) / GAIN                                             $  4,088,441    $   (991,920)
                                                              ============    ============

BASIC (LOSS) EARNINGS PER COMMON SHARE:
   LOSS BEFORE EXTRAORDINARY ITEM                             $      (0.04)   $      (0.17)
   EXTRAORDINARY ITEM                                                 0.36            0.03
                                                              ------------    ------------
   CONTINUING OPERATIONS                                              0.28           (0.14)
   DISCONTINUED OPERATIONS                                            --              0.00
                                                              ------------    ------------
BASIC( LOSS) / GAIN PER COMMON SHARE                          $       0.28    $      (0.14)
                                                              ============    ============


WEIGHTED AVERAGE SHARES OUTSTANDING                             14,367,376       6,911,796
                                                              ============    ============










                 See notes to consolidated financial statements.


                                      F - 3

</TABLE>


<PAGE>


<TABLE>
<CAPTION>




                          AZUREL LTD. AND SUBSIDIARIES


                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
           FOR THE PERIODS ENDED DECEMBER 31,2002 AND DECEMBER 31,2001



                                       Preferred Stock                    Common Stock           Additional
                                 --------------------------      ---------------------------      Paid-in     Accumulated
                                    Shares        Amount            Shares           Amount       Capital       Deficit
                                    ------        ------            ------           ------       -------       -------


<S>                               <C>          <C>                <C>          <C>             <C>            <C>
Balance at January 1, 2002        1,001,500    $  2,237,587       6,911,796    $      6,912    $  8,998,983   $(18,117,717)
   Conversion of shares
       to common                 (1,001,500)     (2,237,587)          1,500               1       2,237,586
   Sale of common stock                --              --         4,767,302           4,768         622,772
   Net (loss) / gain                   --              --              --              --              --        4,088,441
   Bankruptacy creditors
      stock payments                   --              --         7,115,337           7,115         822,143            --
                                 ----------    ------------    ------------    ------------    ------------   ------------
   Purchase of Flo Weinberg                                       9,500,000           9,500         381,713
   Isue Restricted Stock                                            350,000             350          67,150
   Adjustments                                                           99            --              --
   Vendor Payments in Stock                                          20,000              20             (20)
   Flo Weinberg stock                                                               250,000         850,026      (1,319,648)


Balance at
  December 31, 2002                       0    $          0      28,666,034    $    278,666   $ 13,980,353     $(15,348,924)




   Net loss                            --              --              --              --              --             --
   Change in translation
     adjustment                        --              --              --              --              --             --
                                 ----------    ------------    ------------    ------------    ------------   ------------

Balance at December 31, 2002              0    $          0      28,666,034    $    278,666    $ 13,980,353   $(15,348,924)
                                 ==========    ============    ============    ============    ============   ============








                                    Other
                                Comprehensive                   Comprehensive
                                    Loss              Total        Loss


Balance at January 1, 2002       $        0    $ (6,874,235)
   Conversion of shares
       to common                                          0
   Sale of common stock                  --         627,540
   Net (loss) / gain                     --       4,088,441    $
   Bankruptacy creditors
      stock payments                      0         829,258
                                 ----------    ------------    -------------
   Purchase of Flo Weinberg                         391,213
   Isue Restricted Stock                             67,500
   Adjustments                                            0
   Vendor Payments in Stock                               0
   Flo Weinberg stock                              (219,622)


Balance at
  December 31, 2002              $         0   $ (1,089,905)   $       --
                                 ============  ============    =============




   Net loss                               0    $
   Change in translation
     adjustment
                               ------------    ------------    ------------

Balance at December 31, 2002     $      --     $ (1,089,905)   $          0
                               ============    ============    ============





                        See notes to financial statements



                                      F - 4


</TABLE>



<PAGE>
<TABLE>
<CAPTION>




                           AZUREL LTD. AND SUBSIDIARY


                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                               YEARS ENDED DECEMBER 31,
                                                                             ---------------------------
                                                                                   2002            2001
                                                                             -------------   -----------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>            <C>
    Net(loss) / GAIN                                                           $ 4,088,441    $  (991,920)
                                                                               -----------    -----------

    Adjustments to reconcile net loss to net cash provided by (used in)
    operating activities:
        Gain on extinguishment of debt                                          (5,173,764)
        Adjustment for settlement of debt relating to plan of reorganization       445,454
        Depreciation                                                                 3,452         22,054
        Amortization                                                                     0        118,439
        (Gain) loss on disposal of fixed assets                                          0         (8,256)
        Write-down of impaired asset                                                     0        125,583
        Gain on early extinguishment of debt                                             0       (190,000)
        Reduction of accrued expenses                                              (47,236)        21,500
        Reduction of non-cash interest expense                                        --           (7,000)
        Provision for discontinued operations                                         --             --
        Decrease in minority interest                                                 --             (357)
        Income from discontinued operations                                           --             --
        Non-cash compensation                                                       67,500
    Changes in assets and liabilities:
        Accounts receivable                                                         68,673        504,714
        Inventories                                                               (293,082)       490,801
        Prepaid expenses and other current assets                                   25,395         (3,002)
        Due from related parties                                                         0        150,000
        Other assets                                                               231,409         (8,703)
        Accounts payable other liabilities                                        (527,561)      (196,042)
        Net assets of discontinued operations                                            0         (8,533)
                                                                               -----------    -----------
        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                     (1,111,319)        19,278
                                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

        Purchase of property and equipment                                            --                0
        Disposal of property and equipment                                               0         37,896
                                                                               -----------    -----------
        NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                              0         37,896
                                                                               -----------    -----------

CASH FLOW FROM FINANCING ACTIVITIES:

        Decrease in revolving line of credit                                          --                0
        Proceeds from borrowings on notes                                             --                0
        Payment of long term debt                                                     --                0
        Proceeds from sale of  common stock per plan of reorganization           1,089,905              0
                                                                               -----------    -----------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                                1,089,905              0
                                                                               -----------    -----------

        Effect of exchange rate on cash                                               --                0

NET INCREASE IN CASH                                                               (21,414)        57,174

CASH, beginning of year                                                             71,085         13,911
                                                                               -----------    -----------

CASH, end of year                                                              $    23,849    $    71,085
                                                                               ===========    ===========

                 See notes to consolidated financial statements.


                                      F - 5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                           AZUREL LTD. AND SUBSIDIARY
                             (DEBTOR-IN-POSSESSION)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS






                                                                   YEARS ENDED DECEMBER 31,
                                                                 ---------------------------
                                                                      2001       2000
                                                                 ---------------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:

<S>                                                               <C>
           Cash paid for interest                                     $    --    $    --
                                                                      ========   ========

           Cash paid for income taxes                                 $   --     $      0
                                                                      ========   ========

           Notes received in connection with sale of subsidiary       $   --     $      0
                                                                      ========   ========

           Conversion of notes to common stock                        $   --     $      0
                                                                      ========   ========

SUPPLEMENTAL DISCLOSURE OF NON-CASH
FINANCING ACTIVITIES:

           Reduction in capital lease obligations                     $          $200,000
                                                                      ========   ========



                 See notes to consolidated financial statements.


                                      F - 6

</TABLE>


<PAGE>





                          AZUREL LTD. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2002 AND 2001

1.   ORGANIZATION AND SIGNIFICANT EVENTS

     Azurel Ltd. ("Azurel") was incorporated in Delaware on June 26, 1995. In
     July 1996, the Company formed a subsidiary, Scent 123, Inc. and
     subsequently acquired the assets of Scent Overnight, Inc., an overnight
     delivery service of men's cologne and women's fragrances. There was a
     significant operational addition as of November 1, 2002 with the
     acquisition of Flo Weinberg.

     In August 1996, Azurel purchased all of the outstanding common stock of
     Private Label Cosmetics, Inc. and affiliates ("Private Label Group" or
     "PLC") for cash, notes and common stock aggregating $2,782,500 plus
     acquisition costs of $285,000. The Private Label Group is located in New
     Jersey and manufactures cosmetics for sale to major cosmetic companies. In
     May 2000, the Company sold its remaining two-thirds ownership interest in
     PLC. The Company had transferred one third of the stock in PLC in December
     1999 pursuant to a notice of default of a loan to the former shareholder of
     PLC. Under the terms of the agreement, The Company returned all of PLC's
     outstanding common stock to PLC and in exchange, received $3,085,821, which
     consisted of (i) cash received aggregating $1,285,821 and (ii) a promissory
     note of $1,800,000 with interest accruing at 7.5% per annum, principal and
     interest due May 2002. The note receivable was subsequently assigned to
     another entity to secure an outstanding note payable to such entity.

     In October 1997, Azurel acquired all of the outstanding shares of Cambridge
     Business Services Corporation for $212,000. In 1998 Azurel opened a sales
     and distribution facility in France. Such entities were discontinued during
     the year ended December 31, 2001.

     On July 31, 1998, Azurel acquired from a bank the assets of Ben Rickert,
     Inc. a manufacturer and distributor of cosmetics, fragrances and gift
     items, for $1.5 million. The acquisition was financed by $150,000 in cash
     and a $1,350,000 note.

     On February 2, 2001, the Company filed a voluntary petition and order for
     relief under Chapter 11 of the US bankruptcy code. The court confirmed the
     Company's First Modified Plan of Reorganization (the "Plan") on February
     13, 2002. Accordingly, the Effective Date of the Plan was February 23,
     2002.

On February 13, 2002, subsequent to the ratification of the First Modified Plan,
the Order of Confirmation was issued by the Bankruptcy Court, and became
effective February 27, 2002. The Plan provided two options to the unsecured
creditors: One is a combination of one share of stock for each dollar of
liability plus a 20% cash payout over 2 years. The other is a 45% cash payout
over 5 years. Each unsecured creditor that filed a claim was permitted to select
either of the two options.

 On March 27, 2002, the Company signed a letter of intent to merge with Romantic
Moments Inc. ("Romantic"), a distributor of high-end evening garments. On July
1, 2002, the Company entered into a merger agreement to acquire all the shares
of Romantic Moments, Inc. (Romantic), a wholly owned subsidiary of RM
Enterprises International, Ltd., in exchange for 9,500,000 shares of the
Company's common stock. As part of the merger agreement, Romantic was dissolved
and FloWeinberg Inc. became a newly-formed, wholly-owned subsidiary of the
Company. The Company's shareholders approved the merger at the annual
shareholders' meeting held on October 17, 2002. The merger was consummated
effective November 1,2002.

On July 26, 2002, the Company extended the expiration date on its pubic warrants
from July 29, 2002 to July 29, 2005.

Hereinafter all of the above entities are collectively referred to as the
"Company".

2. SIGNIFICANT ACCOUNTING POLICIES

   a. GOING CONCERN - The accompanying financial statements have been prepared
      assuming that the Company will continue as a going concern. The Company
      incurred losses of approximately $992,000 and $5,564,000 for the years
      ended December 31, 2001 and 2000. On February 2, 2001, the Company filed a
      voluntary petition and order for relief under Chapter 11 of the US
      bankruptcy code. The Company emerged from Chapter 11 bankruptcy on
      February 23, 2002 and to date has received $266,000 from one of its
      secured creditors to fund the bankruptcy plan. Such creditor has agreed to
      fund up to $300,000. On March 27, 2002, the Company signed a letter of
      intent to merge with an entity that manufactures and distributes luxury
      evening apparel, although there is no assurance that such a merger will be
      consummated. The Company is also considering raising additional funds
      through the sale of additional shares of its common stock. The
      accompanying consolidated financial statements do not include any
      adjustments that might be necessary should the Company be unable to
      continue as a going concern.


                                       20
<PAGE>


   b. BASIS OF CONSOLIDATION - The consolidated financial statements include the
      accounts of the Company and its wholly owned subsidiaries. All
      intercompany profits, transactions, and balances have been eliminated.

   c. FINANCIAL REPORTING FOR BANKRUPTCY PROCEEDINGS - In connection with the
      bankruptcy proceedings, the Company is required to report in accordance
      with Statement of Position 90-7 Financial Reporting by Entities in
      Reorganization under the Bankruptcy Code ("SOP 90-7"). SOP 90-7 requires,
      among other things, (i) that pre-petition liabilities that are subject to
      compromise be segregated in the Company's consolidated balance sheet as
      liabilities subject to compromise and (ii) the identification of all
      transactions and events that are directly associated with the
      reorganization of the Company in the Consolidated Statement of Operations.


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

   e. ACCOUNTS RECEIVABLE - Accounts receivable is presented net of allowance
      for doubtful accounts. The company estimates the allowance for doubtful
      accounts based upon a review of outstanding receivables and historical
      collection information by customer. Normally accounts receivable are due
      within 30 days after the date of the invoice. Receivables more than 90
      days old are considered past due. Accounts receivable are written off when
      they are determined to be uncollectible.

   f. FACTOR - The Company has a factoring agreement with Westgate Financial
      whereby all accounts receivable are sold to the factor on a pre-approved
      non-recourse basis, except for chargebacks and customer claims. Factoring
      commissions are charged at 1.25% of factored sales with a minimum charge
      to the Company of $15,000 per annum.

   g. INVENTORIES - Inventories are recorded at the lower of cost or market.
      Cost is determined using the FIFO method.

   h. PROPERTY AND EQUIPMENT - Property and equipment are stated at cost.
      Depreciation is calculated on the straight-line method over the estimated
      useful lives of the assets. Amortization of leasehold improvements is
      calculated by the straight-line method ove the lesser of the term of the
      related lease or the useful lives of the improvements. Repairs and
      maintenance are charged to expenses when incurred and renewals and
      betterments are capitalized.

   i. STOCK BASED COMPENSATION - The Company follows the accounting treatment
      prescribed by Accounting Principles Board Opinion No.25 ("Accounting for
      Stock Issues to Employees") when accounting for stock-based compensation
      granted to employees and directors. It provides the required pro forma
      disclosures as if the fair value method under Statement of Financial
      Accounting Standards No. 123 ("SFAS No.123"), "Accounting for Stock Based
      Compensation" was adopted. Any stock-based compensation awards to
      non-employees are accounted for using the provisions of SFAS No. 123.


                                       21
<PAGE>


   j. NET INCOME (LOSS) PER SHARE - Net Income (Loss) Per Share is based on the
      weighted average number of common shares outstanding during each period.
      Potential common shares are included in the computation of diluted per
      share amounts during each period that income is reported. In periods that
      the Company reports a loss, potential common shares are not included in
      the diluted earnings per share calculation since the inclusion of those
      shares in the calculation would be anti-dilutive.

   k. INCOME TAXES - The Company accounts for income taxes under Statement of
      Financial Accounting Standards No.109, "Accounting for Income Taxes" (SFAS
      No.109). Pursuant to SFAS No.109, the Company accounts for income taxes
      under the liability method. Under the liability method, a deferred tax
      asset or liability is determined based upon the tax effect of the
      differences between the financial statement and tax basis of assets and
      liabilities as measured by the enacted rates that will be in effect when
      these differences reverse.

   l. USE OF ESTIMATES - The preparation of financial statements in conformity
      with accounting principals generally accepted in the United States of
      America 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.

   m. ACCOUNTING FOR LONG-LIVED ASSETS - Long-lived assets and intangibles are
      reviewed for impairment whenever events or changes in circumstances
      indicate that the carrying amount of an asset may not be recoverable.
      Recoverability of assets to be held and used is measured by a comparison
      of the carrying amount of the assets to the future 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. Accordingly, the Company wrote-off long-lived assets it believes
      were impaired at December 31, 2001 as disclosed below in Note 7 to the
      consolidated financial statements.

   n. REVENUE RECOGNITION - Income from sales of goods is recognized when the
      orders are completed and shipped, provided that the collection of the
      resulting receivable is reasonably assured. Substantially all of the
      Company's goods are shipped F.O.B. shipping point. Amounts billed to
      customers are recorded as sales while the shipping costs are included in
      cost of sales.



                                       22
<PAGE>

   o. NEW ACCOUNTING PRONOUNCEMENTS

  (i) In July 2001, the Financial Accounting Standards Board ("FASB") issued
      Statement of Financial Accounting Standards ("SFAS") No. 141 "Business
      Combinations" and SFAS No. 142 "Goodwill and Intangible Assets ("SFAS No.
      142"). SFAS No. 141 requires that all business combinations initiated
      after June 30, 2001 be accounted for using the purchase method of
      accounting and prohibits the use of the pooling-of-interests method for
      such transactions. SFAS No. 142 applies to all goodwill and intangible
      assets acquired in a business combination. Under the new standard, all
      goodwill, including goodwill acquired before initial application of the
      standard, should not be amortized but should be tested for impairment at
      least annually at the reporting level, as defined in the standard.
      Intangible assets other than goodwill should be amortized over their
      useful lives and reviewed for impairment whenever facts or circumstances
      change. The new standard is effective for fiscal years beginning after
      December 15, 2001. The Company has adopted these standard on July 1, 2001
      and January 1, 2002, respectively. There has been no material impact
      related to implementation of these statements on the Company's
      consolidated results of operations or financial position.

  (ii) In August 2001, the FASB issued SFAS No. 144, "Accounting for the
      Impairment or Disposal of Long Lived Assets." SFAS No. 144 supercedes SFAS
      No. 121, "Accounting for the Impairment of Long Lived Assets and Assets to
      be Disposed of" and the accounting and reporting provisions of Accounting
      Principles Board Opinion No. 30 "Reporting the Results of Operations -
      Reporting the Effects of Disposal of a Segment of Business, and
      Extraordinary, Unusual and Infrequently Occurring Events and
      Transactions." SFAS No. 144 also amends Accounting Research Bulletin No.
      51, "Consolidated Financial Statements," to eliminate the exception to
      consolidation for a subsidiary for which control is likely to be
      temporary. SFAS No.144 is effective for fiscal years beginning after
      December 15, 2001. The Company has not yet determined the effect SFAS
      No.144 will have on its financial position or results of operations in
      future periods. The Company has adopted this standard as of January 1,
      2002. There has been no material impact related to implementation of these
      statements on the Company's consolidated results of operations or
      financial position.

 (iii) In April 2002, the FASB issued SFAS No. 145, "Recission of FASB No.4,
      44, and 64, Amendment of FASB Statement No.13, and Technical Corrections".
      This statement eliminates the automatic classification of gain or loss on
      extinguishments of debt as an extraordinary item of income and requires
      that such gain or loss be evaluated for extraordinary classification under
      the criteria of Accounting Principal Board ("APB") No. 30 "Reporting
      Results of Operations". This statement also requires sales-leaseback
      accounting for certain modifications that have economic effects that are
      similar to sales-leaseback transactions, and makes various other technical
      corrections to existing pronouncements. This statement will be effective
      for the Company for the year ending December 31, 2003. The Company has not
      yet determined the effect SFAS No. 145 will have on its consolidated
      financial position or results of operations in future periods.

  (iv) In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
      Associated with Exit or Disposal Activities". SFAS No. 146 supersedes EITF
      Issue No. 94-3 "Liability Recognition for Certain Employee Termination
      Benefits and Other Costs to Exit an Activity (including Certain Costs
      Incurred in a Restructuring)". SFAS No. 146 requires that costs associated
      with an exit or disposal plan be recognized when incurred, rather than at
      the date of a commitment or disposal plan. SFAS No. 146 is to be applied
      prospectively to exit or disposal activities initiated after December 31,
      2002.


                                       23
<PAGE>


  (v) In December 2002, the FASB issued SFAS Statement No. 148, "Accounting for
      Stock-Based Compensation- Transition and Disclosure- an Amendment of FASB
      Statement No. 123". SFAS No. 148 amends SFAS No. 123, "Accounting for
      Stock-Based Compensation" to provide alternative methods of transition for
      a voluntary change to the fair value based disclosure method of accounting
      for stock-based employee compensation. In addition, this Statement amends
      the disclosure requirements of SFAS No. 123 to require prominent
      disclosure in both annual and interim financial statements about the
      method of accounting for stock-based employee compensation and the effect
      of the method used in reporting results. The Company currently believes
      there will be no material impact related to implementation of this
      statement on its consolidated results of operations or financial position.

3.  PLAN OF REORGANIZATION

     In accordance with the confirmed Plan of Reorganization of February 23,
     2002 (the "Effective Date"), the Company will settle its claims with its
     various creditors as follows:

     Priority tax claims for income, payroll and withholding taxes aggregating
     approximately $434,000 are payable in twenty equal quarterly installments
     of approximately $21,700, commencing February 27, 2002 through February 27,
     2007 and include interest at 8% per annum. Other payroll and withholding
     taxes of approximately $8,500 are payable in twelve equal quarterly
     installments of approximately $708, commencing February 23, 2002 through
     February 23, 2005 including interest at 8% per annum.

     No payments have been made in 2002 relative to this priority tax claim.

     Repayment of the Company's pre-petition debts are segregated into seven
     different classes of creditors as described below:

     a. Class 1 - A secured amount owed to an entity was $560,948. The Company
        will issue this entity three shares of its common stock for each dollar
        owed, which amounts to 1,682,844 shares.
     b. Class 2 - Class two consists of secured amounts owed to an individual
        investor for $1,010,000. This individual will receive three shares of
        the Company's stock for each dollar owed, which amounts to 3,030,000
        shares.
     c. Class 3 - Class three is a note payable including interest, to an entity
        in the amount of $1,823,833. Principal and interest were due in June
        2002. The Company has settled such amount with the entity with a note
        receivable of $1,650,000 relating to its sale of its PLC subsidiary,
        which been assigned to the entity and is due in May 2002. The Company
        has recorded a net amount due the entity of $173,833 as of December 31,
        2001.
     d. Class 4 - These are unsecured claims with trade creditors totaling
        approximately $2,964,000, which also includes notes payable of
        approximately $927,000. Each creditor has the option to receive company
        stock or cash as settlement for their claims.


                                       24
<PAGE>


     CREDITORS WHO ELECT TO RECEIVE STOCK -The Company will issue one share of
     its common stock for each dollar owed to these creditors plus a cash
     payment equal to 20% of such amount owed. The total outstanding balance to
     creditors who elected to receive stock was approximately $1,315,000.
     Accordingly, the Company will issue a total of approximately 1,315,000
     shares of common stock to these creditors and pay them $263,000 in cash,
     payable in three annual installments of $131,500, $65,750 and $65,750
     commencing May 2004 through May 2006.

     CREDITORS WHO ELECT TO RECEIVE CASH - For creditors, who elect to receive
     cash, the Company will pay 45% of the total dollar amount owed to them. The
     total outstanding balance to creditors, as of March 11, 2002, who have
     elected to receive cash was approximately $1,649,000. Therefore, the
     Company will pay such creditors approximately $742,000, payable in four
     installments of approximately $164,900, $164,900, $164,900 and $247,300
     commencing with in an initial payment April 2002 and subsequent payments in
     May 2004 through May 2006.

     Certain trademarks of the Company secure the claims.

     e. Class 5, 6 & 7 - These classes consist of equity interest holders. Class
        5 holders of common stock will retain their shares in accordance with
        the Plan agreement. Such shares amounted to 6,911,796 at December 31,
        2001. Class 6 holders of preferred stock will receive one share of
        common stock in exchange for each share of preferred stock, which
        amounted to 2,037,587 shares at December 31, 2001. For class 7 holders
        of stock warrants, such warrants will remain authorized and outstanding
        at the exercise price of $4.50 per share. Such warrants expire on July
        3, 2003.

        Administrative fees and expenses incurred amounted to $95,500,
which was paid in March 2002.

     The Plan will be funded by a certain secured creditor who will contribute
     $200,000 for the payment of administrative claims. The contribution will
     also be used to make the initial payment to unsecured claimants who elected
     to receive cash rather than shares of stock as settlement of their claims.
     The creditor will make additional contributions to fund the Plan when
     necessary, up to a maximum of $300,000. As of February 27, 2002, the
     creditor has contributed approximately $266,000. In return, the
     aforementioned creditor will receive ten shares of common stock for each
     dollar contributed to fund the Plan.

     Under the Bankruptcy Code, the Company elected to reject all unexpired
     leases and executory contracts. Amounts due through the filing date were
     reflected as pre-petition debt subject to compromise



                                       25
<PAGE>


     At December 31, 2001, pre-petition debt subject to compromise as per the
     confirmed plan related to the above classes of creditors is summarized as
     follows:

                                                            Amounts
                                                      --------------------
           Trade payables                                      $2,037,000
           Notes             payable             and            2,671,000
           interest
           Payroll taxes                                          443,000
                                                      --------------------
                                                               $5,151,000
                                                      ====================


     The Company has recorded liabilities in excess of such amounts. Included
     are approximately $588,000 of notes payable for which claims were not
     submitted and various other pre-petition expenses for which ultimately no
     claims were submitted or for which claims allowed by the bankruptcy court
     were less than the amounts per the Company's records. The reversal of such
     liabilities will be recorded in the year ended December 31, 2002, upon the
     finalization of the bankruptcy proceedings and reflected as an
     extraordinary item from extinguishment of debt.

     Of the $5,151,000 pre-petition debt referred to above, the Company will
     make cash payments of $1,448,000 and issue shares of its common stock for
     an additional $1,959,000. The remaining balance of $1,744,000 will be
     expunged in accordance with the Plan agreement.

3. INVENTORIES

         Inventories at December 31, 2002 consist of:

                                                                    AMOUNT
                                                                 ------------
                                Raw materials                    $    355,819
                                Work-in-process                        55,403
                                Finished goods                        173,715



                                Obsolescense reserve                 (97,137)
                                                                 ------------
                                                                 $    487,800
                                                                 ============

4. RELATED PARTY TRANSACTIONS

   None.


                                       26
<PAGE>

5. PROPERTY AND EQUIPMENT

     During 2001, the Company, in conjunction with the aforementioned bankruptcy
     proceedings, sold all of its property and equipment for a total amount of
     $37,896. For the year ended December 31, 2001, the Company recorded a net
     gain on sale of assets of $8,256 in the accompanying financial statements.

     In addition, the Company recognized an impairment on long lived assets of
     $125,583. The asset write-off relates to computer equipment and software
     under a capital lease obligation that the Company believed was in excess of
     its carrying value as compared to its fair value as determined in
     accordance with SFAS No. 144. Further, the Company under the bankruptcy
     plan of reorganization elected to reject this lease obligation which had a
     balance due of $200,000. The Company and the creditor then reached an
     agreement whereby the Company paid the creditor $10,000 in exchange for the
     forgiveness of the remaining balance due on the lease obligation. For the
     year ended December 31, 2001, the Company recognized a gain on
     extinguishment of debt in the amount of $190,000.

     For the years ended December 31, 2002 and 2001, the Company recorded
     depreciation expense of $3,452 and $22,054, respectively.

6. INCOME TAXES

     The Company accounts for income taxes under Statement of Financial
     Accounting Standards No. 109, Accounting for Income Taxes ("SFAS No. 109").
     SFAS No. 109 requires the recognition of deferred tax assets and
     liabilities for both the expected impact of differences between the
     financial statements and tax basis of assets and liabilities, and for the
     expected future tax benefit to be derived from tax loss and tax credit
     carry forwards. SFAS No. 109 additionally requires the establishment of a
     valuation allowance to reflect the likelihood of realization of deferred
     tax assets.

     The provision for income taxes for year ended December 31, 2002 and 2001
     differs from the amount computed by applying the statutory Federal income
     tax rate to income before income taxes as follows:
<TABLE>
<CAPTION>
                                                                             2002             2001
                                                                      ----------------------------------
<S>                                                                        <C>              <C>
             Income tax benefit computed at statutory rate                 1,385,981        $ (337,000)
             Income tax at statutory rate                                (1,138,981)                  -
             Tax benefit not recognized                                            -            337,000
                                                                      ----------------------------------
             Provision for income taxes                                            $           $      -
                                                                                   -
                                                                      ==================================
</TABLE>
     The Company has net operating loss carry forwards for tax purposes of
     approximately $15,348,924 at December 31, 2002 expiring in the years 2010
     to 2022. The resulting deferred tax asset of approximately $5,203,624 has
     been offset by a corresponding valuation allowance.


                                       27
<PAGE>

7. STOCK OPTIONS AND WARRANTS

     In March 1997, the Company adopted a stock option plan which provides for
     grants to officers and other employees, directors, consultants and other
     persons who perform significant services for the Company. The exercise
     price of each option may not be less than 100% of the fair market value of
     the common stock at the time of the grant, as defined. Options to acquire
     up to 1,750,000 shares may be granted under the plan.

     Prior to the Company's initial public offering, 980,500 warrants were
     issued at an exercise price of $4.50 per share. The Company issued
     1,200,000 warrants in connection with the initial public offering of its
     common stock. Each warrant entitles its holder to purchase one share of
     Common Stock at an exercise price of $4.50 per share. The warrants are
     exercisable commencing July 30, 1998 and expire in July 2005. The warrants
     are redeemable by the Company at a price of $.10 each subject to certain
     conditions commencing July 30, 1998 and thereafter up to their expiration.
     The Company additionally issued 120,000 redeemable warrants to the
     underwriter for $18,000. Such warrants are exercisable for four years
     commencing July 30, 1998 at a price equal to 150% of the initial public
     offering price of the Common Stock and Redeemable Warrants. Also, 180,000
     warrants were issued pursuant to the exercise of the underwriter's
     over-allotment option. During 1998, the Company issued 200,000 warrants at
     an exercise price of $2 per share. Each warrant entitles its holder to
     purchase one share of Common Stock at an exercise price of $2.00 per share.
     During 1999, the Company issued 1,355,168 warrants at an exercise prices
     ranging from $.90 to $2.00 per share. Each warrant entitles its holder to
     purchase one share of Common Stock. The Company has reserved 4,035,668
     shares of common stock for issuance upon exercise of the warrants.


                   ----------------------------     ----------------------------
                              Options                         Warrants
                   ----------------------------     ----------------------------
                                      Weighted                        Weighted
                      Number           Average        Number          Average
                        of            Exercise          of            Exercise
                      Shares            Price         SHARES           Price
                                                      ------

Outstanding   at
December 31, 2001        15,000         $1.06       4,035,668       $.90 - $6.75
Cancelled
Outstanding   at
December 31, 2002
                         15,000         $1.06       4,035,668       $.90 - $6.75

8. MAJOR CUSTOMERS

   The Company has two major customers, which represented approximately 15%
   and 35% of the Company's revenues for the years ended December 31, 2002 and
   2001, respectively.

9. SUBSEQUENT EVENTS

   In March 2003, the Company borrowed $80,000 from the Breckenridge Group to
   be used for the purchase of raw materials and the payment of current
   liabilities.

   On May 15, 2003, the Company filed a Report 8K to reflect a change of
   corporate auditors. Due to a personnel change within the firm of Grassi & Co.
   we have engaged Marcum and Kliegman LLP as our corporate auditor, effective
   immediately.



                                       28
<PAGE>

               CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
      AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Azurel Ltd. and Subsidiaries (the
"Company") on Form 10-KSB for the year ended December 31, 2002 filed with the
Securities and Exchange Commission (the "Report"), I, Steven Moskowitz, Chief
Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 certify that:

   (1) The Report fully complies with the requirements of Section 13 (a) of the
       Securities Exchange Act of 1934; and

   (2)The information contained in the Report fairly presents, in all materially
      respects, the consolidated financial condition of the Company as of the
      dates presented and consolidated result of operations of the Company for
      the period presented.

Dated:  May 16, 2003
                                      By:  /s/  Steven Moskowitz
                                      -----------------------------------------
                                      Steven Moskowitz, Chief Executive Officer

This certificate has been furnished solely pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.


                                       29
<PAGE>

      I, Steven Moskowitz, certify that:

1. I have reviewed this annual 10-K report on Form 10-KSB of Azurel Ltd. and
subsidiaries;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed
such disclosure controls and procedures to ensure that material information
relating to the registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during the period in
which this quarterly report is being prepared; b) evaluated the effectiveness of
the registrant's disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the "Evaluation Date"); and c)
presented in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing in that function) : a)
all significant deficiencies in the design or operation of the internal controls
which could effect the registrant's ability to record, process, summarize and
report financial data and have identified for the registran's auditors any
material weakness in internal controls; and b) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the registrant's internal controls; and

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


Date:  May 16, 2003

                                      By: /s/ Steven Moskowitz
                                      -----------------------------------------
                                      Steven Moskowitz, Chief Executive Officer

                                       30
<PAGE>