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

                                   FORM 10-QSB
(Mark One)

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

             For the Quarterly Period Ended June 30, 2000

                                  OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)  OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from               to
                                     -------------    ---------------

      Commission file number:    0-22809
                                --------

                                   AZUREL LTD.
                                   -----------
        (Exact Name of Small Business Issuer as Specified in its Charter)

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

                     509 MADISON AVENUE, NEW YORK, NY 10022
                     ---------------------------------------
               (Address of principal executive office) (Zip Code)

                                 (212) 317- 0712
                                ----------------
                 (Issuer's telephone number including area code)

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

The number of shares of registrant's Common Stock, $.001 par value, outstanding
as of August 14, 2000 was 6,911,797 shares.
Transitional Small Business Disclosure Format (check one)

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




<PAGE>





                          AZUREL LTD. AND SUBSIDIARIES
                          ----------------------------

                                      INDEX
                                      -----


                                                                    Page
                                                                   Number
                                                                 -----------

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

      Consolidated Balance Sheet                                     1
      Consolidated Statements of Operations                          2
      Consolidated Statements of Cash Flows                         3-4
      Notes to Financial Statements                                 5-6

Item 2 - Management's Discussion and Analysis or
      Plan of Operation                                            7-10

PART II - OTHER INFORMATION

Item 5 - Other Information                                          11


SIGNATURE                                                           12









<PAGE>





                                     PART I

                              FINANCIAL INFORMATION

                           ITEM 1 FINANCIAL STATEMENTS
                           ---------------------------


<TABLE>
<CAPTION>

                          AZUREL LTD. AND SUBSIDIARIES
                          ----------------------------

                           CONSOLIDATED BALANCE SHEET
                           --------------------------

                                    June 30,
                                      2000
                                 ---------------
                                   (Unaudited)
                                     ASSETS
                                     ------
CURRENT ASSETS:
<S>                                                                <C>
    Cash                                                             $     58,170
    Accounts receivable, net of allowance for
       doubtful accounts of $25,000                                       375,738
    Short-term note receivable                                            224,403
    Inventory                                                           2,449,806
    Due from related parties                                               31,284
    Prepaid expenses and other current assets                             142,752
                                                                     ------------
       TOTAL CURRENT ASSETS                                             3,282,153

FURNITURE AND EQUIPMENT                                                   205,217

GOODWILL                                                                  139,175

LONG-TERM NOTE RECEIVABLE                                               1,800,000

OTHER ASSETS                                                              110,451
                                                                     ------------


                                                                     $  5,536,996
                                                                     ============

         LIABILITIES AND STOCKHOLDERS' DEFICIT
         -------------------------------------


CURRENT LIABILITIES:
    Bank Loans                                                       $     24,312
    Accounts payable                                                    1,986,979
    Notes payable                                                       2,657,000
    Accrued expenses and other liabilities                              1,212,681
    Current portion of long-term debt                                      49,574
    Capital lease obligation - current portion                            160,000
                                                                     ------------
       TOTAL CURRENT LIABILITIES                                        6,090,546

LONG TERM DEBT                                                          1,528,167

OBLIGATIONS UNDER CAPITAL LEASE                                            40,000

MINORITY INTEREST                                                             357

STOCKHOLDERS'  DEFICIT:
    Preferred stock, $.001 par value, authorized 4,000,000 shares;
       issued and outstanding 1,001,500 shares                          2,237,587
    Common stock, $.001 par value, authorized 24,000,000 shares,
       issued and outstanding 6,911,797 shares                              6,912
    Additional paid-in-capital                                          8,998,983
    Accumulated deficit                                               (13,353,101)
    Translation loss                                                      (12,455)
                                                                     ------------
       TOTAL STOCKHOLDERS'  DEFICIT                                    (2,122,074)
                                                                     ------------

                                                                     $  5,536,996
                                                                     ============


</TABLE>

                 See notes to consolidated financial statements.



                                       -1-




<PAGE>






<TABLE>
<CAPTION>


                          AZUREL LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)



                                                             Three Months ended June 30,             Six Months ended June 30,
                                                        -------------------------------------   ----------------------------------
                                                             2000               1999                 2000              1999
                                                        ---------------    ---------------      ---------------   ----------------

<S>                                                 <C>                <C>                  <C>               <C>
     NET SALES                                        $        492,849   $      1,010,010     $        874,880  $       1,801,795
     COST OF GOODS SOLD                                        276,774          1,767,354              456,105          3,106,128
                                                        ---------------    ---------------      ---------------   ----------------
     GROSS PROFIT (LOSS)                                       216,075           (757,344)             418,774         (1,304,333)
     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES            1,161,314          1,213,896            2,298,783          2,312,032
                                                        ---------------    ---------------      ---------------   ----------------
     LOSS FROM OPERATIONS                                     (945,239)        (1,971,239)          (1,880,009)        (3,616,365)
     INTEREST EXPENSE                                         (242,997)          (202,309)            (372,302)          (313,361)
     OTHER INCOME (EXPENSE)                                    271,414            736,000              263,306            736,000
                                                        ---------------    ---------------      ---------------   ----------------
     NET LOSS FROM CONTINUING OPERATIONS              $       (916,822)  $     (1,437,548)    $     (1,989,004) $      (3,193,726)
     DISCONTINUED OPERATIONS:
        INCOME FROM OPERATIONS OF PLC                          180,896             70,253              197,260            105,366
                                                        ---------------    ---------------      ---------------   ----------------
     NET INCOME FROM DISCONTINUED OPERATIONS                   180,896             70,253              197,260            105,366
                                                        ---------------    ---------------      ---------------   ----------------

     NET LOSS                                         $       (735,926)  $     (1,367,295)    $     (1,791,744) $      (3,088,360)
                                                        ===============    ===============      ===============   ================

     BASIC (LOSS) EARNINGS PER COMMON SHARE:
        CONTINUING OPERATIONS                         $          (0.15)  $          (0.26)    $          (0.31) $           (0.58)
        DISCONTINUED OPERATIONS                                   0.03           --                       0.03          --
                                                        ---------------    ---------------      ---------------   ----------------
     BASIC LOSS PER COMMON SHARE                      $          (0.12)  $          (0.26)    $          (0.28) $           (0.58)
                                                        ===============    ===============      ===============   ================


     WEIGHTED AVERAGE COMMON SHARES OUTSTANDING              6,328,464          6,053,845            6,445,130          5,686,345
                                                        ===============    ===============      ===============   ================






</TABLE>





                 See notes to consolidated financial statements.


                                       -2-





<PAGE>


<TABLE>
<CAPTION>

                          AZUREL LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)



                                                                                    Six months ended June 30,
                                                                              ---------------------------------
                                                                                    2000             1999
                                                                               ----------------   ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                                      $(1,791,744)   $(3,088,360)
                                                                                  -----------    -----------

    Adjustments to reconcile net loss to net cash used in operating activities:
<S>                                                                              <C>             <C>
        Depreciation                                                                   27,115          6,361
        Amortization                                                                    3,978              4
        Loss (gain) on disposal of fixed assets                                         3,305       (237,924)
        Provision for discontinued operations                                         132,000           --
        Increase in minority interest                                                   --               357

    Changes in assets and liabilities:
        Decrease in accounts receivable                                             1,458,886      1,111,673
        Decrease in inventories                                                       274,991        852,642
        Increase in prepaid expenses and other current assets                          (5,278)      (212,554)
        Decrease (increase) in other assets                                                70        (80,832)
        Decrease in accounts payable and accrued expenses                            (218,997)      (225,008)
        (Increase) decrease in net assets of discontinued operations                  (73,024)        29,629
                                                                                  -----------    -----------
        NET CASH USED IN OPERATING ACTIVITIES                                        (188,698)    (1,844,013)
                                                                                  -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

        Purchase of property and equipment                                             (5,951)       (26,259)
        Disposal of property and equipment                                                879        237,924
                                                                                  -----------    -----------
        NET CASH USED IN (PROVIDED BY) INVESTING ACTIVITIES                            (5,072)       211,665
                                                                                  -----------    -----------

CASH FLOW FROM FINANCING ACTIVITIES:

        Decrease in revolving line of credit                                       (1,168,950)    (1,832,087)
        Increase in bank loans                                                         24,312           --
        Proceeds from borrowings on notes                                             350,000        845,000
        Borrowings from long term debt                                                   --        1,910,294
        Principal payments of capital lease obligations                                  --           (1,795)
        Payment of long term debt                                                     (27,538)      (303,870)
        Proceeds from exercise of stock options                                          --              100
        Proceeds from issuance of common stock                                           --      1,075,000
        Proceeds from sale of PLC                                                   1,061,418           --
                                                                                  -----------    -----------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                                     239,242      1,692,642
                                                                                  -----------    -----------

        Effect of exchange rate                                                        (2,539)           767

NET INCREASE IN CASH                                                                   42,933         61,060

CASH, beginning of period                                                              15,237         14,624
                                                                                  -----------    -----------

CASH, end of period                                                               $    58,170    $    75,684
                                                                                  ===========    ===========


</TABLE>

                 See notes to consolidated financial statements.


                                       -3-




<PAGE>

<TABLE>
<CAPTION>
                          AZUREL LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                                  Six months ended June 30,
                                                                             ------------------------------------
                                                                                    2000                1999
                                                                             ----------------    ----------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:

<S>                                                                             <C>            <C>
           Cash paid for interest                                                 $   130,866    $   162,132
                                                                                  ===========    ===========

           Cash paid for income taxes                                             $    10,431    $      --
                                                                                  ===========    ===========

           Notes received in connection with sale of subsidiary                   $ 2,024,403    $      --
                                                                                  ===========    ===========
           Conversion of notes to common stock                                    $   350,000    $      --
                                                                                  ===========    ===========

</TABLE>









                        See notes to financial statements

                                       -4-





<PAGE>






















                          AZUREL LTD. AND SUBSIDIARIES
                          ----------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                         SIX MONTHS ENDED JUNE 30, 2000
                         ------------------------------

                                   (UNAUDITED)
                                   -----------


1.         BASIS OF PRESENTATION
           ---------------------

           The accompanying consolidated financial statements as of June 30,
           2000 have not been audited by independent auditors, but in the
           opinion of management, such unaudited statements include all
           adjustments consisting of normal recurring accruals necessary for a
           fair presentation of the financial position, the results of
           operations and cash flows for the six months ended June 30, 2000.

           On May 26, 2000, the Company consummated an agreement to sell its
           ownership in its Private Label Group subsidiary, pursuant to an
           agreement signed in March 2000.

           On July 18, 2000, the Company's Board of Directors held a special
           meeting, at which time the Board voted unanimously to relieve Gerard
           Semhon of his duties as Chairman and Chief Executive Officer for
           cause and appointed Norman Grief as its new Chairman of the Board. It
           furthermore resolved to run the Company by Management Committee and
           seek an Executive with a marketing background to assist in moving the
           Company in a new direction.

           The consolidated financial statements should be read in conjunction
           with the financial statements and related notes concerning the
           Company's accounting policies and other matters contained in the
           Company's annual report on Form 10-KSB. The results for the six
           months ended June 30, 2000 are not necessarily indicative of the
           results expected for the full year ending December 31, 2000. Certain
           prior year amounts have been reclassified to conform with the current
           year's presentation.

2.         GOING CONCERN
           -------------

           The accompanying financial statements have been prepared assuming
           that the Company will continue as a going concern. The Company
           sustained losses of approximately $1,791,000 for the six months ended
           June 30, 2000 and had a working capital deficiency of approximately
           $2,808,000 as of that date. Although the Company is current with
           respect to payments of year 2000 payroll tax obligations, it has not
           remitted 1999 third and fourth quarter federal and state payroll
           taxes of approximately $325,000. These conditions raise substantial
           doubt about the Company's ability to continue as a going concern.
           Management's plans with respect to these matters include
           restructuring its existing debt, raising additional capital through
           issuance of stock and debentures, and ultimately developing a viable
           business through new leadership. The accompanying financial
           statements do not include any adjustments that might be necessary
           should the Company be unable to continue as a going concern.




                                        5


<PAGE>


3.         MEETING WITH NASDAQ
           -------------------

           On March 23, 2000, the Company met with the Nasdaq Listing
           Qualifications Panel ("The Panel") to respond to concerns raised by
           Nasdaq. Although the Company believed it was in compliance with
           corporate governance requirements, on April 28, 2000, the Panel
           determined to delist the Company's securities for public interest
           concerns. The Panel also cited the Company's December 31, 2000
           reported net tangible assets of $(820,944) -net tangible assets as of
           March 31, 2000 are reported as $(1,792,607)- and that, as of the
           close of business on April 27, 2000, the Company failed to evidence a
           minimum bid price of $1.00 per share, as required by Nasdaq
           Marketplace Rule 430(c)(4), for 27 consecutive trading days. The
           Company subsequently applied and has been listed on the Bulletin
           Board.

4.         NOTES PAYABLE
           -------------

           During the first quarter of 2000, the Company borrowed an aggregate
           of $350,000 in unsecured short term notes at an interest rate of 8%.
           These notes were converted to 700,000 shares of the Company's common
           stock at a price of $.50 per share in June 2000. The Company has
           extended a $500,000 note to a lender which came due during the first
           quarter of 2000 to the first quarter of 2001, in return for a
           security interest in the Company's inventory. Another lender notified
           the Company that it was in default of payment of a $300,000 note due
           on July 19, 2000, along with accrued interest of $27,000. A third
           lender notified the Company on August 2, 2000, that it is in default
           of its obligations to repay a $550,000 note along with approximately
           $50,000 of interest on June 30, 2000, . The same lender also notified
           the Company, on the same day, that it is in default of making
           interest payments on a long term note of approximately $130,000 as of
           June 30, 2000.


5.         NOTE RECEIVABLE
           ---------------

           The long-term note receivable from Private Label Cosmetics, Inc., in
           the amount $1,800,000, is collateralized against the $1,528,167
           long-term debt. Furthermore, the note is in the hand of the lender's
           attorney, who also issued a default letter to the Company relative to
           non-payment of interest as explained in the previous paragraph.

6.         LEGAL
           -----

           The Company has received legal notification of claims from certain
           vendors and former employees and is in the process of negotiating
           settlements to most of these claims. In certain instances, the
           Company intends to challenge the validity of these claims.

7.         REVOLVING LINE OF CREDIT
           ------------------------

           On May 26, 2000, on the same day that the Company consummated the
           sale of its Private Label subsidiary, the Company used the proceeds
           obtained at the closing, to pay off the remaining balance on its
           revolving line of credit.

8.         PURCHASE ORDER FINANCING AND FACTORING AGREEMENT
           ------------------------------------------------

           In July 2000, the Company signed a purchase order financing and
           factoring agreement, whereby 100 percent of its overseas purchases
           can be funded by letters of credit, and the receivables generated by
           the sale of this merchandise will be factored. The aforementioned
           inventory and receivables will be secured by the financing company
           and factoring company, respectively.


                                        6



<PAGE>


           ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

           FORWARD LOOKING STATEMENTS AND ASSOCIATED RISKS
           -----------------------------------------------

           This Quarterly Report on Form 10-QSB contains forward-looking
           statements within the meaning of Section 27A of the Securities Act of
           1933 and Section 21E of the Securities Exchange Act of 1934. The
           Company's actual results could differ materially from those set forth
           in the forward-looking statements.

           The following discussion should be read in conjunction with the
           attached consolidated financial statements and notes thereto and with
           the Company's audited financial statements and notes thereto for the
           fiscal year ended December 31, 1999.


           FOR THE SIX AND THREE MONTHS ENDED JUNE 30, 2000 AND 1999
           ---------------------------------------------------------

           Azurel, Ltd., hereinafter "Azurel" or "the Company", through its
           wholly-owned subsidiaries, markets, and sells private label
           cosmetics, fragrances and skincare products, in addition to providing
           warehousing, assembly and distribution services for other companies
           in related businesses. Prior to the sale of its Private Label
           Cosmetics subsidiary on May 26, 2000, the Company was also engaged in
           the manufacture of many of those same products.

           In August 1996, Azurel acquired the stock of Private Label Group.
           March 2000, Azurel entered into an agreement to sell PLC and
           completed this sale in May 2000. In October 1996, Azurel acquired the
           stock of Scent Overnight. In October 1997, Azurel acquired the stock
           of Cambridge Business Services Corporation.

           In July 1998, Azurel's wholly owned subsidiary, Azurel Sales &
           Distribution, acquired the assets of Ben Rickert, Inc.














                                        7

<PAGE>

           RESULTS OF OPERATIONS
           ---------------------

           Total revenues for the six and three months ended June 30, 2000 were
           $874,880 and $492,849, respectively, compared to $1,801,795 and
           $1,010,010 for the six and three months ended June 30, 1999. This
           decrease is largely attributable to a significantly higher volume of
           closeout sales in the first half of 1999.

           Cost of goods sold were $456,105 and $276,774 for the six and three
           months ended June 30, 2000 and $3,106,128 and $1,767,354 for the
           respective periods ended June 30, 1999. The significant decrease is
           attributable to two factors. The first factor relates to the
           capturing of overhead costs at the Azurel Sales and Distribution
           facility. In the 1999 period, when this subsidiary was manufacturing
           soap, overhead was allocated to cost of goods sold. The Company,
           however, sold its soap machines in June, 1999, and is now recording
           all overhead costs in "Selling, general and administrative expenses"
           in 2000. Secondly, the Company sold off significant quantities of
           slow moving inventory and disposed of obsolete inventory during the
           first half of 1999. The gross profit as a percentage of revenue was
           47.9% and 43.8% for the six and three months ended June 30, 2000 as
           compared to (72.4)% and (75.0) for the corresponding periods ended
           June 30, 1999.

           Selling, general and administrative (S,G&A) expenses for the six and
           three months ended June 30, 2000 were $2,298,783 and $1,161,314 and
           $2,312,032 and $1,213,895 for the six and three months ended June 30,
           1999. As mentioned in the last paragraph, overhead expenses in the
           first half of 1999 were captured in cost of goods sold, but are
           treated as selling, general and administrative expenses in 2000.
           Current year expenses were adversely impacted approximately $100,000
           by increased computer training and programming costs associated with
           the implementation of a new computer system and increased legal
           expenses resulting from the sale of the Company's Private Label
           Cosmetics subsidiary. These factors were more than offset by current
           year expense reductions in wages and associated costs of
           approximately $200,000 and lower rent resulting from the move to a
           smaller facility, $125,000. Additionally, amortization expense was
           approximately $100,000 lower in 2000 due to the write-off of formulae
           and customer lists attributable to the discontinued operation, in
           December 1999.

           Interest expense was $372,302 for the six months ended June 30, 2000
           and $242,997 for the three months ended June 30, 2000 compared to
           $313,361 for the three months ended June 30, 1999 and $202,309 for
           the three months ended June 30, 1999. The increase is a reflection of
           increased debt financing levels in 2000, partially offset by a
           reduction in the revolving line of credit.

           LIQUIDITY AND CAPITAL RESOURCES
           -------------------------------

           The Company's primary source of liquidity is accounts receivable of
           $375,738.

           The Company has funded its operations to date primarily through a
           combination of debt and equity financing. In August 1997, Azurel
           completed its initial public offering of 1,200,000 shares of common
           stock and 1,200,000 common stock purchase warrants, which resulted in
           approximately $4,800,000 to the Company.




                                        8



<PAGE>


           In December 1997, the Company secured a 4 year term loan of $800,000
           at 11.3% from GE Capital. Such loan is secured by the company's
           existing machinery and equipment. In February 1998, the Company
           secured a revolving line of credit in the amount of $3,500,000 with
           Finova Capital Corporation, which will be transferred to Private
           Label Group upon completion of the sale. This line of credit bears an
           interest rate of 2.5% above the prime rate and is secured by the
           Company's receivables, inventory and a second lien on machinery and
           equipment. An additional line of credit of $4,000,000 was secured for
           the Company's wholly owned subsidiary, Azurel Sales & Distribution,
           in September 1998 with Finova Capital Corp. Upon the completion of
           the sale of PLC, the Company paid off the outstanding balance owed to
           Finova, by the Company, from the sale proceeds.

           In August, 1998 the Company sold 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 investors, pursuant to
           an exemption from the registration requirements.

           In May 1999, the Company obtained approximately $1,000,000 and
           converted a $500,000 short-term note. The $1,500,000 is secured by a
           majority of PLC common stock. On April 10, 2000, it was agreed to
           exchange this security for the $1,800,000 promissory note that would
           be issued in connection with the sale of PLC, conditional on the
           successful completion of such sale.

           In June 1999, the Company entered into a web-site design and
           consulting agreement with Tadeo E-Commerce Corp. In connection with
           the agreement, Tadeo paid the Company a $500,000 non-refundable fee
           for the right to develop the website and for the Company's consulting
           services pertaining to the cosmetic industry. The Company believes it
           had substantially fulfilled all of its requirements under the
           contract prior to June 30, 1999. In connection with the agreement,
           Tadeo is entitled to receive a 5% royalty on gross revenues generated
           from the website until it receives an aggregate of $500,000 in
           royalties, at which time its royalty shall be reduced to 3% of gross
           revenues generated from the website.

           In September 1999, the Company sold $800,000 of its Series C
           Convertible Preferred Stock.

           During the first quarter of 2000, Azurel borrowed an aggregate of
           $350,000 in unsecured notes, at an interest rate of 8%. These notes
           were converted to 700,000 shares of common stock at a price of $.50
           per share in June 2000.

           In July, 2000, the Company signed a purchase order financing and
           factoring agreement, whereby 100 per cent of its overseas purchases
           can be funded by letters of credit, and the receivables generated by
           the sale of this merchandise will be factored. The aforementioned
           inventory and receivables will be secured by the financing company
           and factoring company, respectively.

           Cash used in operating activities for the six months ended June 30,


                                        9


<PAGE>

           2000 was $13,101 as compared to $1,844,013 for the corresponding 1999
           period. This decrease is primarily attributable to a decrease in net
           loss of approximately $1,300,000. Net losses of $1,314,414 before
           non-cash expenses were funded essentially by a $1,458,886 decrease in
           accounts receivable.

           Cash used in investing activities amounted to $5,072 for the six
           months ended June 30, 2000 compared to $211,665 provided by investing
           activities for the six months ended June 30, 1999. The 1999 figure is
           primarily a reflection of the sale of the soap machines at the Azurel
           Sales & Distribution facility in June 1999. The proceeds from the
           sale of PLC, $1,061,418 and proceeds from the issuance of debt and
           converted to common stock, $350,000 were more than sufficient to pay
           down loan balances with Finova, $1,168,950.



           DISCONTINUED OPERATIONS
           -----------------------

           In March 2000, the Company entered into an agreement to sell its
           two-thirds interest in Private Label Cosmetics, Inc. and Fashion
           Laboratories, Inc. (collectively known as the "Private Label Group")
           to Michael J. Assante, President of Private Label Cosmetics. Mr.
           Assante currently owns one-third of the Private Label Group. The
           Company completed the sale on May 26, 2000, receiving an aggregate of
           $1,061,418 in cash, a one-year $224,403 promissory note and a
           two-year $1,800,000 promissory note. In addition, Mr. Assante has
           agreed to forgive $600,000 owed to him by the Company in connection
           with the Company's acquisition of the Private Label Group in August
           1996.

           The Company had established a provision for an estimated loss of
           approximately $1,156,000. The results of operations for the
           discontinued operations have been reclassified for all periods in the
           accompanying financial statements.

           GOING CONCERN
           -------------

           The Company received a going concern opinion from its auditors for
           the year ended December 31, 1999. The Company sustained losses of
           approximately $1,791,000 for the six months ended June 30, 2000 and
           had a working capital deficiency of approximately $2,808,000 as of
           that date. Although the Company is current with respect to payment of
           its year 2000 payroll tax obligations, it has not remitted 1999 third
           and fourth quarter federal and state payroll taxes of approximately
           $325,000. These conditions raise substantial doubt about the
           Company's ability to continue as a going concern. Management's plans
           with respect to these matters include restructuring its existing
           debt, raising additional capital through issuance of stock and
           debentures, and ultimately developing a viable business through new
           leadership.




                                       10




<PAGE>



           PART II - OTHER INFORMATION
           ---------------------------



           Item 5.  OTHER INFORMATION
                    -----------------

           Meeting with Nasdaq - On March 23, 2000, the Company met with the
           Nasdaq Listing Qualifications Panel ("The Panel") to respond to
           concerns raised by Nasdaq. Although the Company believed it was in
           compliance with corporate governance requirements, on April 28, 2000,
           the Panel determined to delist the Company's securities for public
           interest concerns. The Panel also cited the Company's December 31,
           2000 reported net tangible assets of $(820,944) -net tangible assets
           as of March 31, 2000 are reported as $(1,792,607)- and that, as of
           the close of business on April 27, 2000, the Company failed to
           evidence a minimum bid price of $1.00 per share, as required by
           Nasdaq Marketplace Rule 430(c)(4), for 27 consecutive trading days.



           Item 3.            Item 6.  EXHIBITS AND REPORTS ON FORM 8-K
                                       --------------------------------
           (a.)               (a.)       EXHIBIT            DESCRIPTION
                                         -------            -----------
                                            27        Financial Data Schedule

           (b.)       Reports on Form 8-K


           No reports on Form 8-K were filed during the quarter ended June 30,
2000; however, one was filed on July 26, 2000.



















                                       11




<PAGE>








                                   SIGNATURES
                                   ----------



           In accordance with the requirements of the Exchange Act, the
           registrant caused this report to be signed on its behalf by the
           undersigned, thereunto duly authorized.


                                             AZUREL LTD.




                                    /S/ EDWARD ADAMCIK
                                    ------------------------------
                                    Edward Adamcik
                                    Chief Financial Officer



                                    /S/ STEVEN M. BARRY
                                    -----------------------------
                                    Steven M. Barry
                                    Corporate Controller and Secretary



Dated : August 14, 2000














                                       12