-12-

                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB


[X]     ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934 for the fiscal year ended December 31, 2001

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 for the transition period from _______ to _______

COMMISSION FILE NUMBER: 001-14973
---------------------------------

                              NATIONAL BEAUTY CORP.
                              ---------------------
        (Exact name of small business issuer as specified in its charter)

                            BEAUTYMERCHANT.COM, INC.
                            ------------------------
                           (Former name of registrant)

          Nevada                              13-3422912
          ------                              ----------
(State or other jurisdiction of      (IRS Employer identification
incorporation or organization)                       No.)



            4818 West Commercial Blvd, Ft. Lauderdale, Florida 33319
            --------------------------------------------------------
                    (Address of principal executive offices)

                                 (954) 717-8680
                                 --------------
                           (Issuer's telephone number)

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

                                      None.

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

                          Common Stock, $.001 par value
                  Convertible Preferred Stock, $.001 par value

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

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained in this form, and no disclosure will 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 an
amendment  to  this  Form  10-KSB.  [x]

State issuer's revenues for its most recent fiscal year: $437,225.

As  of  March  27,  2002  there were 3,783,362 common shares outstanding and the
aggregate  market  value of the common shares (based upon the average of the bid
price  of  $.26  and  the  asked  price  of  $.28  reported  by brokers) held by
non-affiliates  was  approximately  $263,753.

Transitional  Small  Business  Disclosure  Format  (check  one):  Yes  [ ] No[X]

Number of shares of common stock outstanding as of March 27, 2002: 3,783,362
Number of shares of preferred stock outstanding as of March 27, 2002:   950,000


                                     PART I
                                     ------

ITEM 1.  DESCRIPTION OF BUSINESS

CORPORATE ORGANIZATIONCORPORATE ORGANIZATION

As  used  herein  the  term "Company" refers to National Beauty Corp., (a Nevada
Corporation),  formerly  known  as  BeautyMerchant.com,  Inc. since 1999 and its
subsidiaries  and  predecessors,  unless  the  context  indicates  otherwise.
Originally incorporated in 1987 as Tri-Capital Corporation, the name was changed
in  1988  to  Advanced Appearance of America, which operated beauty salons until
1995.  At  that  time, the Company discontinued its operations and went inactive
until  early  1998.  In  March  of  1998,  the  Company  changed its name to ATR
Industries,  Inc.  On June 1, 1998, the Company acquired ATR Industries, Inc. of
Florida  (AKA  Cleaning  Express  USA  and Cleaning Express of South Palm Beach,
Inc.),  a private Florida Corporation, for 3,000,000 restricted shares of Common
Stock.

Since  1998,  the  Company has concentrated its operations primarily on the home
cleaning services industry. In January 2000, the Company commenced operations of
a  new  division  of  operations  related  to  the  preparation, development and
marketing  of  cosmetics  and  beauty  products via an e-commerce Internet site.
These  operations  were  conducted through the Company's wholly owned subsidiary
Beautymerchant.com, Inc., a Florida corporation. In 2001, the Company has ceased
any  further  investment  into  Beautymerchant.com  Inc,  that  had  encountered
numerous  distribution and inventory problems, and after a developmental period,
it  was  deemed  not  prudent  to  make  any  further  investment.

DESCRIPTION OF BUSINESSCLEANING EXPRESS USA.CLEANING EXPRESS USA.  The Company's
-----------------------
operations  primarily  involve  home cleaning services.  Through its emphasis on
budget  pricing,  the  Company  has  developed  a  market  in  the home cleaning
industry.  The  Company  currently  operates  two  offices  and dispatches 40-50
workers in teams of two workers on a daily basis. The present geographic area in
which the Company operates includes Broward and South Palm Beach County areas of
South  Florida.

Marketing  for  the  home  cleaning  services is accomplished through print ads,
television  and radio commercials. Additionally, the Company utilizes a referral
program  that  rewards  customers  with future discounts for referring a client.
The home cleaning industry is highly competitive with respect to price, service,
quality  and  location. There are numerous, well-established, larger competitors
in  the  home  cleaning  industry  possessing  substantially  greater financial,
marketing,  personnel  and  other  resources  than  the Company. There can be no
assurance  that  the  Company  will  be  able  to respond to various competitive
factors  affecting  the  business.  The  Company  plans  to  gain  a competitive
advantage over its competitors in the home cleaning industry by offering quality
service  at  a low price. The Company has been successful in achieving this goal
since  1996  and  plans  to  further  expand  in South Florida by continuing its
current  marketing  strategy.

The  primary market for Cleaning Express USA is individual households. No single
customer  makes  up  more  than  ten  percent  of the total revenues of Cleaning
Express  USA.  The  Company does not expect that this will change in the future.

The  Company has three full time employees and contracts with 40-50 workers that
are  each  independently contracted with the Company to service and provide home
cleaning  services  to  existing  and  new  customers.

BEAUTYMERCHANT.COM,  INC.  During  January 2000, the Company, through its wholly
owned  subsidiary  Beautymerchant.com,  Inc., a Florida corporation, developed a
retail  cosmetic and beauty product e-commerce Internet site. Beautymerchant.com
was  developed  under  the  guidance of the CEO, Mr. Ed Roth. Beautymerchant.com
sold  and  distributed  popular  cosmetic,  fragrances  and  beauty  products.

In  2001,  the company has ceased any further investment into Beautymerchant.com
Inc, a prior startup e-commerce site, since it encountered numerous distribution
and  inventory problems. After a developmental period, it was deemed not prudent
to  make  any  further  investment.

BEAUTYWORKS  U.S.A., INC.  During December 2001, the Company, through its wholly
owned  subsidiary  Beautyworks  USA  of  Florida  Inc.,  Florida  corporation,
co-developed  a  retail  health  and  beauty  product  e-commerce Internet site.
Beautyworks  USA.com  was  developed under the guidance of the CEO, Mr. Ed Roth,
who  served  as a management consultant for beauty salons from 1978-1988. During
this  time,  he  became  familiar with retail cosmetics, hair, and skin products
through  attending  various  trade shows and studying consumer trends concerning
their  retailing.  The  site  is designed to create a marketing and distribution
area  for  cosmetic,  hair,  nails  and  skins care and general beauty lines on.
Beautyworks USA.com sells and distributes popular health and beauty products, to
the  public  via  the  Internet.



TOYWORKS  USA.COM. The company additional established a new shopping destination
toys,  for  children  of  all  ages.  Both  of  these  new  Internet  sites were
co-developed  with a strategic partner, that overall maintains the online stores
and  does  all  inventory  and  distribution, allowing the company to handle all
advertising  and  marketing.

The  Company  will  attempt  to  develop  the  Beautyworks  Usa and Toyworks USA
concepts,  and  will strive to cross market the catalogue format, offering brand
name  health  and  beauty  products on Beautyworks and popular toys on Toyworks.
Each  individual  e-commerce  site is independent of each other, but sharing the
USA  logo at the end, unifying the American symbolism in marketing. All customer
orders  are  implemented  by online credit card, with fraud risk to the company.
The  Company offers a secure shopping environment with state of the art security
on  all  transactions.

The  company  has  ceased  any further investment into Beautymerchant.com Inc, a
prior  startup  e-commerce  site, that had encountered numerous distribution and
inventory  problems, and after a developmental period, it was deemed not prudent
to  make  any  further  investment,  with  Beautyworks USA and Toyworks USA, the
company  has  no  capital  risk, other then the marketing expense, it chooses to
invest.  Both e-commerce sites are well maintained and the company is assured 2%
to  15%  of  gross  sales  generated.

The  Company  plans  to  cross  market  these e-commerce sites, as the brick and
mortar  salons  are  regionally  and  eventually  Nationwide.  Other  marketing
strategies  are  expected  to  be considered as our exposure is increased in the
beauty  services  industry.

In  addition,  the  Company  plans  to use in-house marketing and advertising to
promote  its  products.  Advertising  is expected to increase leading into 2002.

The  Company  is  actively seeking partners and compatible businesses to acquire
within  the  huge  beauty  services  industry.

DEVELOPMENT  OF  BEAUTYWORKS U.S.A., INC. During the second quarter of 2001, the
Company announced that it had expanded its business development into a prototype
store  offering  beauty  product  retailing  and  beauty  services hair styling,
coloring  and  chemical services affordable pricing. The prototype store in Boca
Raton,  Florida  has  meet  and  exceeds  initial  expectations, as evidenced by
revenue  increases. The company is expecting to continue to build and or acquire
retail  'brick  and mortar' salons. Management is presently discussing potential
acquisitions,  as  well  as  new  locations, in the event, existing beauty salon
stores  not available, or fail to meet the rigid due diligence, that is required
in  an acquisition. Development strategy is expected to be implemented in Nevada
and  Florida.

Beautyworks  will be designed to tap into the $7 billion beauty industry through
its  offering  of  personal  care  salons.  It is estimated that over 90% of all
personal  care  salons  are  closely  held, or 'mom and pop' owned and operated.
Currently, Regis Corp. (NASDAQ:RGIS) has over 6,000 salon stores and is the only
well-known  publicly traded company using this approach. Beautyworks will aim to
be  both a retailer and provider of such needed consumer services and provides a
one-stop  resource  for  professional  services on hair nails and skin care. The
Company  also  plans to offer such services as body and spa treatments, facials,
massages,  waxing,  and  tans.

The  Company  has  retained  the services of Neal Realty and Development of Fort
Lauderdale,  Florida  to  search  for  shopping  center  locations.  The Company
believes  the  beauty  services  business  industry,  is  well  established.

Initial  plans  are for a prototype store in Broward County, Florida, as soon as
appropriate  locations  are selected. Las Vegas, Nevada is also being considered
for  a  second  development  market  for  Beautyworks  U.S.A.,  Inc.

The  beauty  services  industry  is  highly  competitive  with respect to price,
service,  and  location. As a result, the potential for failure in this industry
is  significant. There are numerous, well-established, larger competitors in the
beauty  services  industry with considerable expertise, possessing substantially
greater  financial,  marketing,  personnel and other resources than the Company.
There  can  be  no assurance that the Company will be able to respond to various
competitive  factors  affecting  the  business.

YOURSALONAPPT.COM:  Plans  have  been  formulated  to  develop  and  market
www.yoursalonappt.com,  a  consumer  to  business  application  service provider
(ASP).  In  the  opinion  of  management,  this  developmental  information  and
interactive  consumer  to  business  portal,  when  fully  developed will assist
thousands  of  hair,  nail, and spa customers. By providing appointment services
that  have  traditionally  made by telephone, during normal business hours, this
application  service  provider (ASP) will allow customers access, 7 days a week,
24  hours  a  day,  regardless normal business hours. In addition consumers will
have  access to information that will provide them with a registry and directory
of National salons and beauty spas. Initial development is expected to begin 1st
quarter  2002,  with  projected  completion  later  in  the  year.  Risks  and
uncertainties  include,  but  are  not  limited  to,  consumer  spending habits,
availability  of  funds  for  project  completion, and general acceptance of new
technology  functions in the beauty service industry. The primary market will be
the  United  States,  but  could  be  extended  worldwide.

Business  Strategy

The  Company's  objective is to become a leading provider of beauty services and
brand  itself  as  a  leading  provider  in  the beauty industry. The company is
building  a  small  chain of retail product and services operations, and plans a
store  expansion  by  buying  or  acquiring "mom and pop" salons, offering owner
operators an exit strategy. In addition, by building or acquiring beauty service
operations,  the  company  plans  on  an  aggressive  marketing  program, as the
geographic  operational  areas  expand. The beauty services industry is vast and
growing.  Many  salon  services  such  as haircuts and hair color are considered
"recession  proof"  in  the  opinion  of  management.

The Company believes that the sale of beauty services, accessories and hair care
products  will  offer benefits to customers by providing convenient, competitive
pricing.  In  addition,  customers  entering  Beautyworks  USA may purchase gift
certificates,  browse  and  search for favorite beauty and cosmetic products and
participate  in special promotions. The Company expects to promote brand loyalty
and  repeat  purchases  by  providing  a  positive  experience  that  encourages
customers  to  return  frequently.

Products  and  Geographic  Expansion

The Company began retail brick and mortar operations in second quarter 2002, and
has shown significant increases in sales by concentrating on service operations.
Management  will  attempt  to  expand  to expand sales on a continual basis. The
Company  has  made  significant  gains  in curtailing losses by cost-cutting and
decreasing  expenses  in  the  year  2000.

Customer  Service

The  Company  believes its ability to establish long-term relationships with its
customers  will  encourage  repeat  sales. The Company provides customer service
with  on-premise  personnel and qualified management available at all locations.
In  addition  the company markets its services 7 days a week, to provide maximum
service.

Additional  Risk  Factor

Beautyworks  USA of Florida INC., a Florida corporation, has a limited operating
history.  Having  just  started  its  services  operation  in the year 2001, the
Company  has  a  short operating history upon which to evaluate its business and
prospects. As a new company, Beautyworks USA faces intense competitors, and must
manage  growth  effectively.  The  Company  may  not  succeed  in addressing all
challenges  and  risks,  including  unpredictability  of  future revenues. To be
successful,  Beautyworks  USA  plans  to  implement  the  following:

1.     Retain existing customers.
2.     Attract new customers.
3.     Meet customer demands.
4.     Fulfill all customer needs.
5.     Acquire additional sources for merchandise at discounted prices.
6.     Maintain sufficient website traffic.
7.     Increase our media exposure.
8.     Monitor the competition.
(Competition  in  the  beauty  services  industry will intensify. This increased
competition  may  reduce  our  profit  margins  or  market  share.)
9.     Ability to hire and retain qualified service personnel (hairstylists)

The  principal  suppliers  to Beautyworks USA are wholesale distributors, who do
not  sell  retail.

Beautyworks  USA is expecting to add 30 new employees for the first 12 months of
retail  service  operations.  In  addition to five managers, since the Company's
inception,  it  has  incurred  losses  from  operations. The Company anticipates
losses  to  increase  relating  to  the  following  factors:


*     The development of the Beauty Works USA brand, marketing and promotion.
*     Expanded offering of   service.
*     Continued store development costs.
*     Additional personnel to manage customer service and in-house marketing.
*     Increases in general and administrative costs to support the Company's
growing operations.

The  ability  to  become  profitable  depends  on the ability to generate higher
revenues  and  maintain  low  expense  levels.  The  Company's limited operating
history  makes  it  difficult  to  forecast  its  revenues.

Stock  Based  Compensation

A  few  key officers and management have elected to be compensated with stock by
S-8  registration.  This  has  provided  substantial  cash  savings.

Additional  Financing

The Company may need to raise additional funds to meet operating requirements in
the  future.  If  the Company raises additional funds through issuance of equity
related  or  debt  securities,  such securities may have rights to the Company's
common  stock,  such  as  warrants  or  options.  Shareholders  may  experience
additional  dilution  from  exercise  of  these  equity instruments. The Company
cannot  be  certain that additional financing will be available when required or
at  all.  (See  'Liquidity  and  Capital  Resources'  for  further  discussion.

ITEM  2.  PROPERTIES

The  Company  leases  its  executive  offices  with  1,650  square  feet  for
administration  at  4818  West  Commercial  Blvd,  Lauderhill, Florida 33319 for
$1,987  per  month.  The  Company also leases its beauty salon facility of 1,200
square  feet  at  the  Del  Mar  Shopping  Village, located at Powerline Road at
Palmetto  Park  Road,  Boca  Raton,  Florida,  for  $3,100 per month. Management
considers these facilities to be adequate for its requirements for the immediate
future. These noncancelable leases expire at varying dates through September 30,
2005.

ITEM  3.  LEGAL  PROCEEDINGS

The  Company  is  not  a party to any legal proceedings, nor, to the best of its
knowledge,  are  any  such  proceedings  threatened  or  contemplated.

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

No  matter  was  submitted  to  a  vote  during  the  fourth  quarter.





                                     PART II
                                     -------

ITEM  5.  MARKET  FOR  THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS

(a)     The  principal  market  in which the Company's common stock is traded is
the  Over-the-Counter  Bulletin Board. The table below presents the high and low
bid  price for the Company's common stock each quarter during the past two years
and  reflects  inter-dealer  prices,  without  retail  markup,  markdown,  or
commission,  and may not represent actual transactions. The Company obtained the
following  information  from  brokers  who  make  a  market  in  the  Company's
securities.


      Bid
      ---
Quarter Ended        Low        High
-------------        ---        ----

03/31/00           $ .94       $1.56
06/30/00             .38        1.25
09/30/00             .21         .43
12/31/00             .07         .36
03/31/01             .08         .44
06/30/01             .05         .16
09/30/01             .04        8.00
12/31/01             .36        1.36

(b) Holders. The approximate number of holders of record of the Registrant's
Common Stock as of March 27, 2002 was 35.

(c) The Registrant has not paid dividends from inception to date and does not
currently intend to do so.

ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS

Introduction

National  Beauty  Corp.,  formerly  known  as  Beautymerchant.com,  Inc.,  was
incorporated  in Nevada in 1987.  The company has primarily operated through its
wholly  owned  subsidiaries,  Cleaning  Express  USA, Beauty Works USA, Inc. and
Beauty  Merchant,  Inc.  Cleaning Express USA is a full service cleaning company
offering  daily residential cleaning services, carpet cleaning and other related
services  in  the  South  Florida  area.  During  April  2000, the company began
operations  as  an  E-commerce  distributor  of beauty products under its Beauty
Merchant,  Inc.  subsidiary and ceased these operations in 2001. National Beauty
currently  offers beauty services and products though its retail beauty salon in
the  South  Florida  area  through  its  Beauty  Works  USA,  Inc.  subsidiary.

Selected financial data
                              Year Ended December 31
                              ----------------------
                                 2000            2001
                                 ----            ----
Net Sales                      $376,450     $ 437,225

Net Loss                       (794,306)     (257,044)
Net Loss per
Common Share                     (12.34)         (.57)
Weighted Average
Common Shares Outstanding        64,379       448,016

    As of December 31,
    ------------------
                                 2000              2001
                                 ----              ----
Total Assets                   $137,330     $ 136,743
Working Capital                 133,228        89,140
Shareholders' Equity            142,536       120,536

No dividends have been declared or paid for any of the periods presented.

Results  of  Operations
-----------------------
Years Ended December 31, 2001 and 2000

Sales

Sales  for  the year ended December 31, 2001 increased to $437,225 from $376,450
for  the  year  ended  December  31,  2000,  an increase of 16%. The increase in
revenues  was  primarily  attributable  to  an  increase  in  the  revenues from
Beautyworks  U.S.A.,  Inc.,  the  Boca  Raton  beauty salon subsidiary, somewhat
offset  by  revenues  earned  by  the  Cleaning  Express  USA  subsidiary.

Net sales from the home cleaning segment have accounted for approximately 64% of
total  net  sales in 2001 and 90% of the net sales in 2000. The Company plans to
accelerate  growth  of  beauty salon sales in 2002 by increasing expenditures on
marketing  and  growing  public  awareness  of  services.

Income  /  Losses

Net  losses  for  the  year  ended  December 31, 2001 decreased to $257,044 from
$794,306  for  the  year  ended  December  31,  2000,  a  decrease  of  68%. The
substantial  decrease  in  losses  was  attributable  primarily to a decrease in
non-cash  expenses  relating  to payroll expenses and consulting services, which
were $387,346 and $96,097 for 2000, respectively, compared to $42,519 in payroll
expenses  for  2001.

The Company expects to continue to incur losses at least through fiscal 2002 and
may  not  be  able  to  achieve or maintain profitability or sustain its revenue
growth  in  the  future.

Expenses

Selling,  general  and  administrative  expenses for the year ended December 31,
2001,  decreased to $344,662 from $906,322 for the year ended December 31, 2000,
a  decrease of 62%. The decrease in selling, general and administrative expenses
was  the result of significant decreases in payroll expenses and consulting fees
that  were  $387,346  and  $96,097,  respectively.

Depreciation and amortization expenses for the years ended December 31, 2001 and
December  31, 2000 were $3,017 and $3,800, respectively. The decrease was due to
differences  in  accelerated  depreciation percentages between the year 2001 and
the  year  2000.

The  company  has  attempted  to  reduce rent expenses by closing one of the two
cleaning  offices  in  2001  and  consolidating  operations  in  the  other Fort
Lauderdale  office.  This  reduces  overhead expenses by a projected 10% for the
coming year. In addition, the company has taken steps to change daily operations
of  Cleaning  Express  USA,  projecting  a  savings  of 5-10% over the new year.
Specifically, the Company is anticipating a lower labor cost associated with its
cleaning  services  and  nominal  web  site  maintenance  leading  into  2002.

     The  Company  expects  increases  in  overall  expenses through 2002 as the
Company  moves  toward increasing development and marketing of its Beauty Works,
USA  subsidiary  and  related  acquisitions  of  beauty  salons.

Cost  of  Sales

The  cost of sales for the year ended December 31, 2001 was $282,123 compared to
$263,394 for the year ended December 31, 2000. The increase in the cost of sales
was  primarily  attributable  to an increase in cleaning and beauty salon sales.
Cost  of  sales  as a percentage of sales for December 31, 2001 and 2000 was 65%
and  69%,  respectively.

The  largest factor in the variation from year to year in the cost of sales as a
percentage  of  net  sales  was  the  cost  of  labor.

Impact  of  Inflation

The  Company  believes  that inflation has had a negligible effect on operations
over  the  past  two years. The Company believes that it can offset inflationary
increases  in  the  cost  of  labor  by increasing sales and improving operating
efficiencies.

Trends,  Events,  and  Uncertainties

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

Years  ended  December  31,  2001  and  December  31,  2000

Cash  flows  used  in  operations  were  a  negative  $23,482 for the year ended
December 31, 2001, and a negative $291,498 for the year ended December 31, 2000.
Negative  cash  flows from operating activities for the years ended December 31,
2001  and  2000  are primarily attributable to losses from operations, partially
offset  by  the common stock issued for services in both years and an unrealized
loss  on  trading  securities  in  2001.

Cash  flows  from investing activities were a negative $4,395 for the year ended
December  31,  2001  and  a  negative  $1,565  for  the same period in 2000. The
negative  cash  flows  were  primarily  attributable  to new equipment purchases
during  2001  and  2000.

Cash flows used in financing activities were $17,313 for the year ended December
31,  2001  and  cash flows generated from financing activities were $237,826 for
the  year  ended December 31, 2000. The negative cash flows in 2001 pertained to
repayments on a note payable and capitalized lease obligation. The positive cash
flows  in  2000 were primarily due to the private placement of common stock sold
during  2000  less  the effects of repayments on a capitalized lease obligation.

The  Company  has funded its cash needs from inception through December 31, 2001
with  a  series  of  debt and equity transactions, including private placements.

During  October  2000,  the  Company  signed an agreement with Standart Capital,
S.A., Inc. of West Palm Beach, Florida, an investment-banking firm, to assist in
a  private  placement  stock  offering  for  the Company. Under the terms of the
agreement,  Standart  Capital,  S.A.  agreed  to  use its best efforts to locate
funding  for  the  Company  between  $500,000  and $3 million within the next 24
months.  The  term  of the agreement lasts until October 2002. As of the date of
the  report,  no  funds  have  been  raised  for  the  Company.

During  the  year  ended  December  31,  2000,  the  Company collected aggregate
proceeds  from  unrelated  investors  of  $240,326  under a limited Regulation D
private  placement.

Web  site  development costs paid to the web designer for development, marketing
and  advertisements for Beautymerchant.com were approximately $27,000 during the
year  2000.  In  2001,  because of numerous distribution and inventory problems,
after  a  developmental  period,  the Company ceased any further investment into
Beautymerchant.com  Inc.


On  a  long-term  basis, liquidity is dependent on continuation and expansion of
operations,  receipt  of  revenues,  additional  infusions  of  capital and debt
financing.  The  Company  is  considering  launching  a wide scale marketing and
advertising  campaign.  The  current  Company's  capital  and  revenues  are not
sufficient  to  fund  such  a  campaign. If the Company chooses to launch such a
campaign  it  well require substantially more capital. If necessary, the Company
plans  to raise this capital through an additional follow-on stock offering. The
funds  raised  from  this  offering  will  be  used  to  develop and execute the
marketing  and  advertising  strategy  that  may  include the use of television,
radio,  print  and  Internet  advertising.  Funds  would also be used to acquire
beauty  salons. However, the Company may not be able to obtain additional equity
or  debt  financing  in the future, if at all. If the Company is unable to raise
additional  capital,  the  growth  potential  will  be  adversely  affected.
Additionally,  the  Company  will  have  to  significantly  modify  its  plans.

Financing activities for the years ended December 31, 2001 and 2000 consisted of
principal repayments under the company's capitalized lease obligation its office
equipment.  Principal  repayments under the capitalized lease obligation for the
years  ended  December  31,  2001 and 2000 were $2,313 and $2,500, respectively.
Principal  repayments  of  the  note  payable balance were made in the amount of
$15,000  in  2001.

ITEM  7.  FINANCIAL  STATEMENTS




                                    CONTENTS

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

INDEPENDENT  AUDITORS'  REPORT

CONSOLIDATED  BALANCE  SHEET

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

CONSOLIDATED  STATEMENT  OF  STOCKHOLDERS'  EQUITY

NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
====================================================================



<PAGE>
                                      -20-


                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Board of Directors and Stockholders:
NATIONAL BEAUTY CORP. (FKA Beautymerchant, Inc.)
4818 West Commercial Boulevard
Fort Lauderdale, Florida  33319

We  have  audited the accompanying consolidated balance sheet of National Beauty
Corp.  (FKA  Beautymerchant,  Inc.,  a  Nevada corporation) and its wholly owned
subsidiaries  as of December 31, 2001 and the related consolidated statements of
operations,  stockholders'  equity,  and cash flows for the years ended December
31,  2001  and  2000.  These  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

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

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the  consolidated  financial  position of
National  Beauty  Corp. (a Nevada corporation) and its wholly-owned subsidiaries
as  of December 31, 2001, and the consolidated results of its operations and its
cash  flows  for  the  years ended December 31, 2001 and 2000 in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.



Perrella & Associates, P.A.
Pompano Beach, FL
March 15, 2002










                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                December 31, 2001
                                =================


<TABLE>
<CAPTION>



                                   ASSETS
                                  ---------
<S>                               <C>
CURRENT ASSETS
--------------------------------
  Cash . . . . . . . . . . . . .  $ 11,001
  Accounts receivable. . . . . .       903
Marketable securities. . . . . .     1,743
Inventory. . . . . . . . . . . .     1,700
  Prepaid expenses . . . . . . .    90,000
                                  ---------
    TOTAL CURRENT ASSETS . . . .   105,347

PROPERTY AND EQUIPMENT
  Furniture. . . . . . . . . . .    21,616
  Leasehold improvements . . . .     3,500
  Equipment. . . . . . . . . . .    34,985
  Accumulated depreciation . . .   (35,361)
                                  ---------
      NET PROPERTY AND EQUIPMENT    24,740


OTHER ASSETS
--------------------------------
  Deposits . . . . . . . . . . .     6,656
                                  ---------
    TOTAL OTHER ASSETS . . . . .     6,656
                                  ---------

      TOTAL ASSETS . . . . . . .  $136,743
                                 ==========
</TABLE>













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


                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (CONTINUED)
                                December 31, 2001
                                =================

<TABLE>
<CAPTION>



LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------

<S>                                               <C>
CURRENT LIABILITIES
------------------------------------------------
  Accounts payable and accrued expenses. . . . .  $     2,230
  Outstanding checks in excess of bank balance .       11,664
  Current portion of capitalized
           lease obligation. . . . . . . . . . .        2,313
                                                  ------------
    TOTAL CURRENT LIABILITIES. . . . . . . . . .       16,207
                                                  ------------

COMMITMENTS - NOTE C
------------------------------------------------

STOCKHOLDERS' EQUITY
------------------------------------------------
  Convertible preferred stock ($.001 par value;
   50,000,000 shares authorized, 950,000
  shares issued and outstanding) . . . . . . . .          950
  Common stock ($.001 par value; 100,000,000
     shares authorized, 1,466,362 shares issued
     and outstanding). . . . . . . . . . . . . .        1,466
Additional paid-in-capital . . . . . . . . . . .    1,402,450
  Retained deficit . . . . . . . . . . . . . . .   (1,284,330)
                                                  ------------
                                                      120,536
                                                  ------------
TOTAL STOCKHOLDERS' EQUITY . . . . . . . . . . .  $  $136,743
                                                  ============

</TABLE>












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


                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                      ------------------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

<TABLE>
<CAPTION>



<S>                                                   <C>                   <C>
                                                                     2001        2000
                                                      --------------------  ----------
REVENUES:
----------------------------------------------------

  Sales. . . . . . . . . . . . . . . . . . . . . . .  $           431,810   $ 340,413
  Cost of Sales. . . . . . . . . . . . . . . . . . .             (275,974)   (221,268)
                                                      --------------------  ----------
  Gross profit . . . . . . . . . . . . . . . . . . .              155,836     119,145

EXPENSES:
----------------------------------------------------

  Selling, general and administrative. . . . . . . .              336,240     816,126
                                                      --------------------  ----------

  Total expenses . . . . . . . . . . . . . . . . . .              336,240     816,126
                                                      --------------------  ----------

  Loss from operations . . . . . . . . . . . . . . .             (180,404)   (696,981)
                                                      --------------------  ----------

OTHER EXPENSES:
----------------------------------------------------

  Unrealized Loss on Trading Securities. . . . . . .              (66,257)        -0-
   Interest Expense. . . . . . . . . . . . . . . . .               (1,227)    (1,040)
                                                      --------------------  ----------
  Total Other Expenses . . . . . . . . . . . . . . .              (67,484)    (1,040)
                                                      --------------------  ----------

  Loss from continuing operations. . . . . . . . . .             (247,888)  (698,021)

  Net loss from discontinued operations. . . . . . .               (9,156)   (96,285)
                                                      -------------------  ----------

    NET LOSS . . . . . . . . . . . . . . . . . . . .  $          (257,044) $(794,306)
                                                      ===================  ==========


Basic and fully diluted net loss per common share:
    Continuing operations. . . . . . . . . . . . . .  $             (.55)  $  (10.84)
    Discontinued operations. . . . . . . . . . . . .                (.02)      (1.50)
                                                      -------------------  ----------
   Basic and fully diluted net loss per common share  $             (.57)  $  (12.34)
                                                      ===================  ==========

Weighted average common shares . . . . . . . . . . .             448,016      64,379
                                                      ===================  ==========
</TABLE>





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


                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2001 and 2000

<TABLE>
<CAPTION>



<S>                                                   <C>         <C>
                                                           2001        2000
                                                      ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
----------------------------------------------------
  Net loss . . . . . . . . . . . . . . . . . . . . .  $(257,044)  $(794,306)
  Adjustments to reconcile net loss
  to net cash used in operating activities:
  Depreciation . . . . . . . . . . . . . . . . . . .      3,017       3,800
  Common stock issued in exchange for services . . .    235,044     103,908
  Unrealized loss on trading securities. . . . . . .     66,257         -0-
  (Increase) decrease in operating assets:
   Accounts receivable . . . . . . . . . . . . . . .        781       3,700
  Shareholder loan receivable. . . . . . . . . . . .      7,892         -0-
   Inventory . . . . . . . . . . . . . . . . . . . .      1,863         979
   Prepaid expenses. . . . . . . . . . . . . . . . .    (90,000)    393,121
   Deposits. . . . . . . . . . . . . . . . . . . . .     (2,956)        -0-
  (Decrease) in operating liabilities:
   Outstanding checks in excess of bank balance. . .     11,664         -0-
   Accounts payable & accrued expenses . . . . . . .        -0-      (4,700)
                                                      ----------  ----------

    NET CASH USED IN
    OPERATING ACTIVITIES . . . . . . . . . . . . . .    (23,482)   (293,498)
                                                      ----------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
----------------------------------------------------
  Purchases of property and equipment. . . . . . . .     (4,395)     (1,565)
                                                      ----------  ----------

    NET CASH USED IN
    INVESTING ACTIVITIES . . . . . . . . . . . . . .     (4,395)     (1,565)
                                                      ----------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
----------------------------------------------------
  Proceeds from common stock issuances/subscriptions        -0-     242,326
  Repayment of note payable. . . . . . . . . . . . .    (15,000)        -0-
  Principal repayments under capital lease . . . . .     (2,313)     (2,500)
                                                      ----------  ----------

  NET CASH PROVIDED BY (USED
    IN) FINANCING ACTIVITIES . . . . . . . . . . . .  $ (17,313)  $ 239,826
                                                      ----------  ----------
</TABLE>







    The accompanying notes are an integral part of these consolidated financial
                                   statements.
                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                  CONSOLIDATED STATEMENT OF CASH FLOWS (CONT.)
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

                                                      2001               2000
                                                     -----               ----
          NET (DECREASE) IN CASH
          AND CASH EQUIVALENTS                   $ (45,190)         $(55,237)

Cash and cash equivalents, beginning of year        56,191           111,428
                                                 --------------    ----------

     CASH AND CASH EQUIVALENTS,
     END OF YEAR                                 $  11,001      $     56,191
                                                 ==========     ============

SUPPLEMENTAL  CASH  FLOW  INFORMATION:
--------------------------------------

Supplemental disclosures of cash flow information for the year ended December
31, 2001 and 2000 is summarized as follows:

Cash paid during the year for:
                                                     2001               2000
                                                    -----               ----

     Income Taxes                           $         -0-       $        -0-
                                            =============       ============
     Interest                               $      1,227        $     1,040
                                            =============       ============

NON-CASH FINANCING ACTIVITES:
-----------------------------
Assumption of note payable with acquisition $    15,000         $       -0-
                                            ============        ============

Common stock issued to officers for services,
  charged to prepaid expenses               $    28,500         $       -0-
                                            ============        ============

Common stock issued to others for
  services, charged to prepaid expenses     $    61,500         $       -0-
                                            ============        ============

Common stock issued to officers for other services
                                            $    25,044         $  103,908

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

Common stock issued to others for other services
                                            $   120,000         $  103,908
                                            ============        ===========

Common stock issued in exchange for marketable securities
                                            $        -0-        $   68,000
                                            ============        ===========

     Retirement of common stock             $        -0-        $  359,667
                                            =============        ==========






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

<PAGE>
                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================
<TABLE>
<CAPTION>



<S>                                               <C>            <C>                <C>          <C>              <C>

                                                                                       Convertible
                                                  Common Stock   Common Stock         Preferred Stock             Common Stock
                                                  Shares         Amount             Shares            Amount       Subscribed
                                                  ----------------------------------------------------------------------------

Balances, January 1, 2000* . . . . . . . . . . .        58,843   $             59    1,000,000   $        1,000   $        17

Common stock issued for services . . . . . . . .           741                -0-          -0-              -0-       103,908


Proceeds from common stock subscriptions . . . .         5,508                  6          -0-              -0-            (6)


Common stock exchanged for marketable securities         1,545                  2          -0-              -0-            (2)

Retirement of shares during the year . . . . . .        (8,212)                (9)         -0-              -0-            (9)

Net loss for the year. . . . . . . . . . . . . .           -0-                -0-          -0-              -0-           -0-

Balances, December 31, 2000. . . . . . . . . . .        58,425   $             58    1,000,000   $        1,000           -0-
                                                  -------------  -----------------  -----------  ---------------  ------------

Common stock issued for services . . . . . . . .       907,937                908          -0-              -0-           -0-

Conversion of preferred shares into
common shares by officers. . . . . . . . . . . .       500,000                500      (50,000)             (50)          -0-

Net loss for the year. . . . . . . . . . . . . .           -0-                -0-          -0-              -0-           -0-
Balances, December 31, 2001. . . . . . . . . . .     1,466,362   $          1,466      950,000   $          950           -0-
                                                  -------------  -----------------  -----------  ---------------  ------------
*Includes retroactive adjustments
due to stock split.


<S>                                               <C>           <C>          <C>


                                                  Subscriptions Paid-in-     Retained
                                                  Receivable    Capital      Deficit
                                                  ---------------------------------------

Balances, January 1, 2000* . . . . . . . . . . .  $  (671,637)  $1,425,709   $  (232,980)

Common stock issued for services . . . . . . . .          -0-


Proceeds from common stock subscriptions . . . .      242,326          -0-           -0-


Common stock exchanged for marketable securities       68,000          -0-           -0-

Retirement of shares during the year . . . . . .      361,311     (361,303)          -0-

Net loss for the year. . . . . . . . . . . . . .          -0-          -0-      (794,306)

Balances, December 31, 2000. . . . . . . . . . .          -0-   $1,168,314   $(1,027,286)
                                                  ------------  -----------  ------------

Common stock issued for services . . . . . . . .          -0-      234,136           -0-

Conversion of preferred shares into
common shares by officers. . . . . . . . . . . .          -0-          -0-           -0-

Net loss for the year. . . . . . . . . . . . . .          -0-          -0-      (257,044)
Balances, December 31, 2001. . . . . . . . . . .          -0-   $1,402,450   $(1,284,330)
                                                  ------------  -----------  ------------
*Includes retroactive adjustments
due to stock split.
</TABLE>




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

<PAGE>
                                     ------
                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                      ------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

Business Activity - National Beauty Corp. (formerly known as Beautymerchant.com,
-----------------
Inc.)  (a Nevada corporation) legally changed its corporate name in 2001 and was
also  formerly  known  as  ATR Industries, Inc., a Nevada corporation, which was
incorporated  in  1987.

These  financial  statements  include  its  wholly  owned subsidiaries, Cleaning
Express  USA,  Beauty Works USA, Inc. and Beauty Merchant, Inc. The company is a
full  service  cleaning  company  offering  daily residential cleaning services,
carpet  cleaning  and other related services in the South Florida area under the
name of Cleaning Express USA. During April 2000, the Company began operations as
an  E-commerce  distributor  of  beauty products under its Beauty Merchant, Inc.
subsidiary  and  ceased  these  operations in 2001. The Company currently offers
beauty services and products though its retail beauty salon in the South Florida
area  under  its  Beauty  Works  USA,  Inc.  subsidiary.

During the year ended December 31, 2001, the Company enacted a 200 for 1 reverse
stock  split  on  its common stock. All common stock amounts in the accompanying
financial  statements  have  been  retroactively  restated  to  reflect  this
capitalization  change.

Accounts  Receivable  -  Accounts  receivable are charged to bad debt expense as
--------------------
they  are deemed uncollectible based upon a periodic review of the accounts. The
---
Company  performs  ongoing  credit  reviews  of  its  customer  accounts.

Property  and  Equipment  -  Property  and  Equipment  are  recorded  at  cost.
------------------------
Maintenance  and repair costs are expensed as incurred. Depreciation is provided
----------
using  the  straight-line  method  and  other  methods  that  approximate  the
straight-line  method.  It  is calculated over recovery periods as prescribed by
management  which  range  from  5  years for equipment to 7 years for furniture.
Leasehold  improvements  are  amortized  over  the terms of the office operating
leases.

When  an asset is disposed of, its cost and related accumulated depreciation are
removed  from  the  accounts.  The  difference  between  undepreciated  cost and
proceeds  from  disposition  is  recorded  as  gain  or  loss.

The  Company  makes ongoing evaluations of the values of its assets to determine
whether  an  impairment  write-down should be recognized in accordance with SFAS
No.  144.  To  date,  no  such  impairment write-down has been deemed necessary.




                       NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
-----------------------------------------------------------

Marketable  Securities  - Marketable securities include the Company's investment
----------------------
in  equity  securities  recorded at fair market value. The marketable securities
were  classified  as trading securities with holding gains and losses recognized
in  current  period  operations.

Cash  and  Cash  Equivalents  - For purposes of the Statement of Cash Flows, the
----------------------------
Company  considers  highly liquid investments with an original maturity of three
months  or  less  to  be  cash  equivalents.

Revenue  Recognition-  Revenue  for  the  residential  cleaning  operations  is
--------------------
recognized  when  cleaning  services  are  performed.

Revenues  for  beauty  services  are  recognized when the services are rendered.
Revenues  for  beauty  products  are  recognized  when  the products are shipped
provided  collection  of  the  resulting receivable is probable and the earnings
process  is  complete.  If  any  material  contingencies  are  present,  revenue
recognition is delayed until all material contingencies are eliminated. Material
contingencies  are  circumstances in which there are any potential uncertainties
as  to the completion of the revenue process being complete. Further, no revenue
is  recognized  unless  collection  of the applicable consideration is probable.
Probable  collection is determined at the time collection occurs or is more than
reasonably  possible  it  will  be  collected.

Income  Taxes  -  Income  taxes are provided for the tax effects of transactions
-------------
reported  in  the  financial  statements  and  consist of deferred taxes related
primarily to differences between the basis of certain assets and liabilities for
financial  and  tax  reporting.  Deferred  taxes represent the future tax return
consequences  of  those  differences, which will either be taxable or deductible
when  the  assets  and  liabilities  are  recovered  or  settled.

The  income  tax  benefit  consists  of  taxes  currently  refundable due to net
operating  loss carryback provisions for federal and state governments. Deferred
tax  assets  are  reduced  by  a  valuation  allowance  when,  in the opinion of
management,  it is more likely than not that some portion or the entire deferred
tax asset will not be realized. Deferred tax assets and liabilities are adjusted
for  the  effect  of  changes  in  tax  laws and rates on the date of enactment.







                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
-----------------------------------------------------------

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

Advertising  -  The  Company  charges  the  costs of advertising to expense when
-----------
incurred.

Earnings  Per  Share - The Company reports earnings per share in accordance with
----------------------
Statement  of  Financial  Accounting  Standard  (SFAS)  No.128.  This  statement
requires  dual  presentation  of  basic  and  diluted  earnings  (loss)  with  a
reconciliation  of  the  numerator  and  denominator  of  the  loss  per  share
computations. Basic earnings per share amounts are based on the weighted average
shares  of  common  outstanding. If applicable, diluted earnings per share would
assume  the  conversion,  exercise  or  issuance  of  all potential common stock
instruments  such  as  options,  warrants and convertible securities, unless the
effect  is  to  reduce  a loss or increase earnings per share. Accordingly, this
presentation  has  been  adopted  for  the  period  presented.  There  were  no
adjustments  required to net loss for the period presented in the computation of
diluted  earnings  per  share.

Comprehensive Income (Loss) - The Company adopted Financial Accounting Standards
---------------------------
Board  Statement  of  Financial  Accounting  Standards  No.  130,  "Reporting
Comprehensive Income", which establishes standards for the reporting and display
of  comprehensive  income (loss) and its components in the financial statements.
There  were  no  material items of comprehensive income (loss) applicable to the
Company  during  the  period  covered  in  the  financial  statements.

NOTE B - ACQUISITION
--------------------

During  2001,  the  Company acquired the fixed assets of a beauty salon in South
Florida.  The  Company  financed the acquisition with a short-term note with the
unrelated  seller  in  the amount of $15,000 at 8% interest per annum. This note
was paid in full with interest thereto during 2001. The Company also assumed the
lease  from  the seller. See footnote G for the minimum lease commitments. Since
the  acquisition  does not meet the conditions of a significant acquisition, pro
forma  information  has  not  been  provided.





                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTEC - DISCONTINUED OPERATIONS
-------------------------------

In  November 2001, the Board of Directors approved a plan for the disposal of it
e-commence  segment.  The  results  of  beautymerchant.com have been reported as
discontinued  operations  for  all  periods  presented.

NOTE D - STOCKHOLDERS' EQUITY
-----------------------------

During  the  year  ended December 31, 2000, the Company issued 741 shares of its
common  stock  for  services  to employees and consultants. The stock issued was
valued  at the market price at the time of issuance, yielding an aggregate value
of  $103,907.  The  total amount was expensed during the year ended December 31,
2000  and  is  included  in  the  accompanying  financial statements in selling,
general  and  administrative  expenses.

During the year ended December 31, 2000, the Company retired 8,212 of the common
shares  that  had  been  subscribed  at  $44  per  share  ($.22  pre-split).

Also  during  the year ended December 31, 2000, the Company received $242,326 in
proceeds  from  common stock subscribed during the year ended December 31, 1999.
The  Company  also  received  $68,000  in  marketable securities in exchange for
common  stock  subscribed  during  the  year  ended  December  31,2000.

The  Company  has  950,000 shares of preferred stock outstanding at December 31,
2001,  which  is  convertible  at  the  option of the shareholder into 9,500,000
shares  of  common  stock.

During  2001,  the  Company's  officers  converted  50,000 preferred shares into
500,000  common  shares.

During  the  year  ended December, 31 2001, the Company issued 607,937 shares of
its  common stock for services rendered by officers and outside consultants. The
shares were valued at the date of issuance yielding an aggregate market value of
$145,044,  which  was  expensed  during  the  year.

On December 27, 2001, the Company issued 95,000 and 205,000 common shares to its
officers and outside consultants, respectively. These common shares were paid in
advance  for services to be received by the Company in 2002 and are reflected as
Prepaid  Expenses  in  the accompanying balance sheet. The shares were priced at
the date of issuance yielding an aggregate market value of $90,000. In addition,
34,000  options  were  granted to an outside consultant as part of compensation.
The  options  are  exercisable at $.48 per share prior to December 31, 2005. The
options  did not yield a material expense using the Black-Scholes Option Pricing
Model.

                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE E - INCOME TAXES
---------------------

The Company has approximately $726,000 of federal and state net operating losses
that  expire  in  various  years  through  the  year  2015.

Due  to  operating  losses,  there  is no provision for current federal or state
income  taxes  for  the  years  ended  December  31,  2001  and  2000.

Deferred  income  taxes  reflect  the  net  tax effects of temporary differences
between  the  carrying amounts of assets and liabilities for financial reporting
purposes  and  the  amount  used  for  federal  and  state  income tax purposes.

The  Company's deferred tax asset at December 31, 2001 consists of net operating
loss  carryforwards  calculated  using  federal  and  state effective tax rates.
Because  of  the  Company's lack of earnings history, the deferred tax asset has
been fully offset by a valuation allowance. The valuation allowance increased by
approximately  $8,000  and  $141,000  for  the years ended December 31, 2001 and
2000,  respectively.

The Company's net deferred tax asset as of December 31, 2001 is as follows:

     Net operating loss carryforwards          $   276,000
     Valuation allowance                          (276,000)
                                              -------------

     Net deferred tax asset                    $       --
                                               ============

The reconciliation of income taxes computed at the federal statutory income tax
rate to total income taxes for the years ended December 31, 2001 and 2000 is as
follows:
                                                            2001         2000
                                                            ----         ----
     Income tax computed at the federal statutory rate       34%          34%
     State income taxes, net of federal tax benefit           4%           4%
                                                            ----         ----
Valuation allowance                                         (38%)        (38%)
                                                            -----         ----
Total deferred tax asset                                      0%           0%
                                                            =====         ====







                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE  F  -  OBLIGATION  UNDER  CAPITAL  LEASE
---------------------------------------------

The  Company  is  leasing  equipment  under  a  noncancelable capital lease that
expires  in  December,  2002.  The  obligation  under the capital lease has been
recorded  in  the  accompanying  Balance  Sheet  at the net present value of the
future  minimum  lease payments, discounted at an interest rate of 20%. The book
value  of  the  equipment  was  approximately  $1,500  at  December  31,  2001.

Minimum  future obligations under this capital lease at December 31, 2001 are as
follows:

Year                                         Amount
----                                         ------
2002                                       $  3,540
                                           --------
          Total minimum obligation            3,540

     Less amount representing interest        1,227
                                          ---------

          Present value of net
          minimum obligation                  2,313

          Less current portion                2,313
                                          ---------
                                         $      -0-
                                         ==========


NOTE G - COMMITMENTS
--------------------

The Company leases its offices in Fort Lauderdale, Florida and a beauty salon in
Boca  Raton,  Florida  under  non-cancelable  operating  leases that expire from
varying  dates  through September 30, 2005. Future minimum rental payments as of
December 31, 2001 in the aggregate and for each of the four succeeding years are
as  follows:

Year                                 Amount
----                                 ------

2002                               $ 61,050
2003                                 37,200
2004                                 37,200
2005                                 27,900
                                  ---------
                                   $163,350
                                   ========


Rent expense for 2001 and 2000 was $47,467 and $32,526, respectively.

                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE G - COMMITMENTS (CONT')
----------------------------

In  1999,  the  Company  committed  itself  to  compensate  each of its Board of
Directors  in the amount of 1,000 shares of its common stock annually and 10,000
common  stock purchase options over a thirty six-month period. As of the date of
this  report,  no option agreement has been officially adopted, there is no fair
market value for the options and none of the equity instruments have been issued
with  the  exception  of  1,000  restricted  common shares issued to each of its
directors  in  2001.

NOTE  H  -  SEGMENT  INFORMATION
--------------------------------

Based on the criteria established by SFAS 131, "Disclosures about Segments of an
Enterprise  and  Related  Information,"  the  Company  operates in two principal
business  segments  -  (1)  residential  cleaning  service and (2) retail beauty
salons.  In  accordance  with  SFAS 131, the Company is required to describe its
reportable  segments  and  provide  data  that  is consistent with the data made
available  to the Company's management to assess performance and make decisions.
Information  from  the  internal  management reports may differ from the amounts
reported  under accounting principles generally accepted in the United States of
America  due  to  certain corporate level adjustments related to vendor reserves
for  potential  under-delivery  of  minimum guaranteed orders. The assets of the
discontinued  subsidiary  are reflected as corporate assets. Summarized revenues
and  expense  information  by  segment  for 2001, as excerpted from the internal
management  reports,  is  as  follows:

                                        2001                 2000
                                        ----                 ----
Residential Cleaning:
---------------------
Residential cleaning sales          $281,124            $ 340,413
Cost of sales                       (182,731)            (221,268)
Corporate and other expenses        (220,436)            (819,626)
                                   ---------             ---------
     Segment loss                   (122,043)            (700,481)

Total assets                           9,550                9,550

Capital expenditures                      -0-                  -0-


Depreciation                              -0-                 200

Interest expense                         240                  208



                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE  H  -  SEGMENT  INFORMATION  (CONT')
-----------------------------------------

                                       2001                 2000
                                       ----                 ----
Retail beauty salon:
--------------------
Retail beauty salon sales          $150,686                  N/A
Cost of sales                      ( 93,243)                 -0-
Corporate and other expenses       (117,031)                 -0-
                                  ----------              ------
     Segment loss                   (59,588)                 -0-

Total assets                         13,500                  -0-

Capital expenditures                  1,538                  -0-

Depreciation                          1,056                  -0-

Interest expense                        429                  -0-

Corporate:
----------
Corporate  revenues               $    N/A               $   N/A
Cost of sales                           -0-                  -0-
Unallocated and other expenses     (66,257)                  -0-
                                  ----------             -------
     Segment loss                  (66,257)                  -0-

Total assets                       113,693              139,843

Capital expenditures                 2,857                1,565

Depreciation                         1,961                3,600

Interest expense                       558                  832


NOTE I - SUBSEQUENT EVENTS
--------------------------

Subsequent to December 31, 2001, one of the Company's officers converted 200,000
shares of the Company's preferred stock in to 2,000,000 shares of common stock.





                      NATIONAL BEAUTY CORP. & SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 For the Years Ended December 31, 2001 and 2000
                 ==============================================

NOTE J - RECENT ACCOUNTING PRONOUNCEMENTS
-----------------------------------------

In  July  2001,  the  Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards (SFAS) No.143, "Accounting for Asset Retirement
Obligations"  which  addresses  the  accounting  and  reporting  for obligations
associated  with the retirement of tangible long-lived assets and the associated
retirement  costs.  SFAS No. 143 requires that the fair value of a liability for
an  asset  retirement  obligation  be  recognized  in  the period in which it is
incurred  if a reasonable estimate of fair value cannot be made. SFAS No. 143 is
effective  for financial statements issued for fiscal years beginning after June
15,  2002. The Company does not expect SFAS No. 143 to have a material effect on
its  financial  condition  or  cash  flows.

In  August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of  Long-Lived  Assets". SFAS No. 144 generally establishes a standard
framework  which  to  measure  impairment  of  long-lived assets and expands the
Accounting  Principles  Board ("APB") 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary,
Unusual  and  Infrequently  Occurring  Events  and  Transactions"  to  include a
component of the entity (rather than a segment of the business). SFAF No. 144 is
effective  for  financial  statements  issued  for  fiscal years beginning after
December  15,  2001. The Company does not expect SFAS No. 144 to have a material
effect  on  its  financial  condition  and  cash  flows.









ITEM 8. CHANGES WITH AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
     None.

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a)     Identification of Directors

The following information, as of March 27, 2002 is furnished with respect to
each Director and Executive Officer:

               Date of
Name of Director          Age     Service       Position with Company
----------------          ---     -------       ---------------------

Edward A. Roth             44     1997          Chairman, President & CEO
Alisha Roth                36     1997          Secretary, Treasurer, Director
Barbara Patigalia          51     1997          Director
Michael J. Bongiovanni     39     2000          Chief Financial Officer

All Directors serve for one-year terms, which expire at the annual shareholders
meeting in 2002.

All officers serve at the pleasure of the Board.

There are no arrangements or understandings pursuant to which any of them were
elected as officers.

Edward  A.  Roth  has been President and Director of the Company since 1997. Mr.
Roth previously served as Vice-President and Director of Operations for Cleaning
Express  USA  since its inception in November 1994. During this period, Mr. Roth
developed  and  implemented  all  operations and developments creating a company
that started with less than 50 customers and today services over 8,000 customers
in  South  Florida.  Mr.  Roth  was President of Advanced Appearance, a chain of
Beauty  Salons, in Alabama and Florida form 1978 to 1988. Prior to this Mr. Roth
served  as  a management consultant working independently for 20 years. Mr. Roth
has attended Auburn University majoring in business and marketing, and is also a
veteran  of the United States Air Force.  Edward A. Roth is married to Alisha M.
Roth

Michael  J.  Bongiovanni  has  been Chief Financial Officer of the Company since
April  2000.  Mr.  Bongiovanni  is  responsible for SEC reporting compliance and
financial  analysis  of  new  operations  including  Beautyworks  USA,  Inc. Mr.
Bongiovanni  has  served  numerous  publicly  traded  companies  in  financial
consulting  and  business  management  since  1980. Mr. Bongiovanni received his
Masters  of  Accounting  degree  at  Florida  Atlantic  University.

Alisha  M.  Roth has served as Secretary and Director of the Company since 1997.
Mrs. Roth served previously as President of Cleaning Express USA, and during her
tenure she was in charge of staffing and customer relations.  Mrs. Roth has been
with  Cleaning  Express  USA  since  1994,  prior  to that she was a resident of
Trinidad, West Indies.  Mrs. Roth has owned and operated her own business in the
restaurant  and  pre-school  development  areas,  and  has 8 years of management
experience.  Alisha  M.  Roth  is  married  to  Edward  A.  Roth.

Barbara  Patigalia  is  a  language  pathologist  with the Head Start program in
Maryland,  and  serves  as  President  of the League of Women Voters in Potomac,
Maryland.  Ms.  Patigalia  had  no  business experience during the last 5 years,
except  other  than  through  her  role  as  a  director  of  the  Company.

There  have been no events under any bankruptcy act, no criminal proceedings and
no  judgments  or  injunctions  material  to  the  evaluation of the ability and
integrity  of  any  director  or  executive  officer  during  the  past 5 years.

Section 16(a) Beneficial Ownership Reporting Compliance

Based on information furnished to Registrant, no officer, director, or ten
percent shareholder failed to file on a timely basis reports on Forms 3, 4, or 5
during the most recent two fiscal years.

ITEM 10. EXECUTIVE COMPENSATION

         Summary Compensation Table

The following table sets forth in summary form the compensation received during
each of the Company's last three completed fiscal years by the Chief Executive
Officer and President of the Company. No executive officer of the Company,
including the Chief Executive Officer and President, received total salary and
bonus exceeding $100,000 during any of the last three fiscal years.

Summary Compensation Table
<TABLE>
<CAPTION>



<S>                    <C>      <C>           <C>          <C>      <C>      <C>      <C>
                       Other    Restricted                 Stock
Name and. . . . . . .  Fiscal   Annual        Restricted   Compen-  LTIP     Stock
 Position . . . . . .  Year     Salary        Bonuses      sation   Awards   Options  Bonuses
                           (1)           (2)      (3) (6)      (4)      (5)
                       -------  ------------  -----------  -------  -------
Edward A. . . . . . .    2001   $    65,000          -0-      -0-      -0-       -0-      -0-
 Roth, CEO. . . . . .    2000   $   233,121          -0-      -0-      -0-       -0-      -0-
and President . . . .    1999   $    43,215          -0-      -0-      -0-       -0-      -0-
---------------------  -------  ------------  -----------  -------  -------  -------  -------
Michael J.. . . . . .    2001   $    15,000          -0-      -0-      -0-       -0-      -0-
Bongiovanni,. . . . .    2000   $    46,800          -0-      -0-      -0-       -0-      -0-
 CFO. . . . . . . . .    1999   $       -0-          -0-      -0-      -0-       -0-      -0-
---------------------  -------  ------------  -----------  -------  -------  -------  -------
                         2001   $       -0-          -0-      -0-      -0-       -0-      -0-
Alisha Roth,. . . . .    2000   $    60,000          -0-      -0-      -0-       -0-      -0-
 Secretary, Treasurer    1999   $       -0-          -0-      -0-      -0-       -0-      -0-
---------------------  -------  ------------  -----------  -------  -------  -------  -------
</TABLE>




(1)     The  dollar  value  of  base  salary  (cash  and  non-cash)  received.
Information  on  the  stock-based  compensation can be found in the accompanying
audited  financial  statements.

(2)     The dollar value of bonus (cash and non-cash) received.

(3)     During  the  periods  covered  by  the  Summary  Compensation Table, the
Company  did  not  pay any other annual compensation not properly categorized as
salary  or  bonus, including perquisites and other personal benefits, securities
or  property.

(4)     During the periods covered by the Summary Compensation Table, the
Company did not make any award of restricted stock.

(5)     The Company currently has no Restricted Stock Bonus Plans.

(6)     No other compensation

Compensation of Directors

The  Company  pays  its  non-employee  directors'  1,000 shares of the Company's
restricted  common  stock  per  year  for  Directors'  Meetings  attended. It is
anticipated  that  no  more  than  twelve  meetings  will  occur  each  year.

Employment  Contracts  and  Termination  of  Employment  and  Change-In  Control
Arrangements

None

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)     Security Ownership of Certain Beneficial Owners

All persons known by the Registrant to own beneficially more than 5% of any
class of the Company's outstanding stock on March 27, 2002, are listed below:
<TABLE>
<CAPTION>



<S>                             <C>                       <C>         <C>         <C>
                                Nature of                 Current %
Title of Class . . . . . . . .  Name and Address           # Shares   Ownership   Owned (w)
------------------------------  ------------------------  ----------  ----------  ---------
                                Edward A. Roth
  4818 W. Commercial Blvd.
Common Stock, $.001 Par Value.  Lauderhill, FL 33319       2,806,500         (x)        74%
------------------------------  ------------------------  ----------  ----------  ---------
Preferred Stock, . . . . . . .  Edward A. Roth
 $.001 Par Value . . . . . . .  4818 W. Commercial Blvd.
(z). . . . . . . . . . . . . .  Lauderhill, FL 33319         950,000         (y)
------------------------------  ------------------------  ----------  ----------  ---------
</TABLE>



(w) On March 27, 2002, there were 3,783,362 shares of common stock issued and
outstanding.
     (x) Mr. & Mrs. Roth own the common shares as joint tenants.
(y) Mr. & Mrs. Roth own the preferred shares as joint tenants.
(z) Each share of preferred stock is convertible into ten shares of common
stock.


(b)     Security Ownership of Management

The  following table sets forth the number of shares owned beneficially on March
27,  2002,  by  each  Director  and  by  all  Officers and Directors as a group.
Information as to the beneficial ownership is based upon statements furnished to
the  Company  by  such  persons.
<TABLE>
<CAPTION>



<S>                         <C>                                            <C>         <C>         <C>
                            Nature of                                      Current %
Title of Class . . . . . .  Name and Address                                 # Shares  Ownership   Owned (w)
--------------------------  ---------------------------------------------  ----------  ----------  ---------
Common Stock,. . . . . . .  Edward A. Roth
 $.001 Par Value . . . . .  4818 W. Commercial Blvd.
                            Lauderhill, FL 33319                            2,806,500         (x)        74%
--------------------------  ---------------------------------------------  ----------  ----------  ---------
                            Michael J. Bongiovanni
Common Stock,. . . . . . .  19425-G Liverpool Pkwy.
..001 Par Value. . . . . .   Charlotte, NC 28031                                25,000  Direct            **
--------------------------  ---------------------------------------------  ----------  ----------  ---------
                            Barbara Patagalia
Common Stock,. . . . . . .  4818 W. Commercial Blvd.
..001 Par Value. . . . . .   Lauderhill, FL 33319                                2,065  Direct            **
--------------------------  ---------------------------------------------  ----------  ----------  ---------
Common Stock,. . . . . . .  All Officers and Directors
 $.001 Par Value . . . . .  as a Group                                      2,833,565  Direct            75%
--------------------------  ---------------------------------------------  ----------  ----------  ---------
                            Edward A. Roth
Preferred Stock, . . . . .  4818 W. Commercial Blvd
..001 Par Value(z). . . . .  Lauderhill, FL 33319                              950,000         (y)       100%
--------------------------  ---------------------------------------------  ----------  ----------  ---------
</TABLE>




** Less than .01%

(w) On March 27, 2002, there were 3,783,362 shares of common stock issued and
outstanding.
     (x) Mr. & Mrs. Roth own the common shares as joint tenants.
(y) Mr. & Mrs. Roth own the preferred shares as joint tenants.
     (z) Each share of preferred stock is convertible into ten shares of common
stock.

(c)     Changes in Control

The Company knows of no arrangements that may at a subsequent date result in a
change of control in the Company.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Financial Statements
1. The following financial statements of National Beauty Corp. & Subsidiaries
are included in Part II, Item 7:

Independent Auditors' Report                              13
Balance Sheet-December 31, 2001                        14-15
Statements of Operations - years ended
     December 31, 2001 and 2000                  .     16-17
Statements of Cash Flows - years ended
     December 31, 2001 and 2000       .                18-19
Statements of Stockholders Equity- years ended
     December 31, 2001 and 2000                           20
Notes to Financial Statements                          21-27

     2. Exhibits
3. Articles of incorporation and bylaws are incorporated by reference to Exhibit
No.  1  of  Form  10-SB  filed  November  1999.

(b)     Reports on Form 8-K
There were no reports on Form 8-K for the three months ended December 31, 2001.














                           --Signature Page Follows--

                                   SIGNATURES
                                   ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                  NATIONAL BEAUTY CORP.
                                  ---------------------
                                        (Registrant)


                                        /s/ Michael J. Bongiovanni
                                        --------------------------
Date:  March 27, 2002
                                            Michael J. Bongiovanni
                                            Chief Financial Officer
/s/ Edward A. Roth
------------------
Edward A. Roth
President & CEO

/s/ Alisha Roth
---------------
Alisha Roth
Secretary, Treasurer,
Director

/s/ Barbara Patagalia
---------------------
Barbara Patagalia
Director