FASHIONMALL.COM INC



                 Filing Type: 10KSB
                 Description: Annual Report
                 Filing Date: April 16, 2002
                 Period End: December 31, 2001


            Primary Exchange: NASDAQ - National Market System
                      Ticker: FASH
















































(1)

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                       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

                                       or

[_]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)  For the transition period
from ___________ to ___________

                         Commission file number: 0-26151

                              fashionmall.com, Inc.
                Delaware                              06-1544139
-------------------------------------  ------------------------------------
     (State or other jurisdiction        (I.R.S. Employer Identification No.)
   of incorporation or organization)

                               774 Mays Blvd #10-259
                               Incline Village, NV 89451
                               (775) 833-3233
---------------------------------------------------------------------------
(Address, zip code and telephone number of issuer's principal executive
 offices)

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

					Name of Each Exchange
	Title of Each Class		on Which Registered
---------------------------------------  ------------------------------------
                  NONE				NONE

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.01 par value
-----------------------------------------------------------------------------
                                (Title of Class)

Check whether the issuer: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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 pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [ ].

The issuer's revenues for its most recent fiscal year ended
December 31, 2001 was $2,687,000.

The aggregate market value of the voting and non-voting
common stock held by non-affiliates at April 8, 2002 was $7,396,000.

The number of shares of common stock outstanding as of April 8, 2002
was 6,466,797.

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                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      NONE
=============================================================================
(2)

                      		Table of Contents

                       		  10KSB OTHERDOC

Part 1................................................................ 4
Item 1................................................................ 4
Item 2................................................................ 7
Item 3................................................................ 7
Item 4................................................................ 7
Part II............................................................... 8
Item 5................................................................ 8
Table 1............................................................... 8
Item 6................................................................ 8
Item 7............................................................... 23
Item 8............................................................... 23
Part III............................................................. 23
Item 9............................................................... 23
Item 10.............................................................. 24
Item 11.............................................................. 27
Table 2.............................................................. 28
Item 12.............................................................. 28
Item 13.............................................................. 30
Table 3.............................................................. 30
Balance Sheet........................................................ 33
Income Statement..................................................... 34
Table 4.............................................................. 35
Table 5.............................................................. 36
Cash Flow Statement.................................................. 37
Table 6.............................................................. 42
Table 7.............................................................. 44
Table 8.............................................................. 45
Table 9.............................................................. 47
Table 10............................................................. 47
Table 11............................................................. 47


                      		  EX-21.1 OTHERDOC

EX-21.1 OTHERDOC..................................................... 55


                      		  EX-23.1 OTHERDOC

EX-23.1 OTHERDOC..................................................... 56




















(3)


                                     Part I

     This Annual Report on Form 10-KSB contains statements which constitute
forward-looking statements. These statements appear in a number of places in
this Form 10-KSB and include statements regarding the intent, belief or current
expectations of fashionmall.com, Inc. (together with its subsidiaries, the
"Company"). Investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and uncertainties,
and that the actual results may differ materially from those in the forward-
looking statements as a result of various factors. The information contained
in this Form 10-KSB, including, without limitation, the information under
"Management's Discussion and Analysis of Financial Condition and Results
from Operations" and "Description of Business" identify important factors that
could cause or contribute to such differences. See
"Description of Business -- Cautionary Statements Regarding Forward-Looking
Statement" continued in Item 6 of this Report.

Item 1.  Description of Business.

Overview
          fashionmall.com,Inc. has historically operated
multiple Internet properties within the fashion lifestyle
segment and generated revenues from these properties by
charging fees for the placement of either store links,
advertising, content or other materials on the sites.

     Our properties include www.fashionmall.com, our
original property, which is a general online fashion mall,
www.outletmall.com, our online outlet mall, and www.boo.com,
a global style guide for the web.  Our clients have included
traditional and online retailers and catalogs as well as
manufacturers, magazines, and advertisers who desire to tap
into our consumer traffic.  To reduce operating costs and to
maximize traffic available to affiliate links, we have
consolidated our properties into one central location at
www.fashionmall.com with multiple "floors" to represent the
individual brands.

     While clients historically paid a fixed or variable fee
for site placements tied to the location and or amount of
traffic they are exposed to, we have shifted our Internet
properties to a primarily affiliate based operating model
whereby we receive commissions for sales made to visitors
from our sites.  The affiliate operating model allows our
existing Internet properties to continue to generate some,
though minimal, revenue from tenants and protecting some of
the value in the sites themselves, their traffic and their
database of customers.

     We have more cash than is needed to fund our current
operations and we are exploring how best to use such cash,
including, possibly, by making acquisitions, issuing special
dividends or finding other options to provide opportunities
for liquidity and/or new operating or investment
opportunities for our shareholders at some time in the
future. We are exploring other opportunities for our
corporation, which may include, without limitation, entering
into a new line of business or engaging in a merger
transaction or a sale of some or all of our assets.

     Notwithstanding the foregoing, future profitability
remains uncertain. If our new affiliate operating model
proves to be unsustainable, or the value of our assets
proves to be difficult to monetize, we may choose to
entirely discontinue the current operating business.

(4)



Our History

     In connection with our initial public offering
("IPO") completed on May 21, 1999, Internet Fashion Mall,
LLC ("IFM"), a limited liability corporation, changed its
name to fashionmall.com, Inc. ("fashionmall.com" or the
"Company"). In connection with the IPO and immediately prior
thereto, the existing members of IFM contributed all of
their membership interests in IFM in exchange for 4.5
million shares of common stock. On May 21, 1999, we
completed our IPO of 3.0 million shares of our common stock.
The IPO resulted in net proceeds, after related expenses, of
approximately $35 million.

      The mailing address for our principal executive
offices is 774 Mays Blvd Bldg 10 Unit 259, Incline Village,
NV 89451, and the telephone number is (775) 833-3233.

Business objectives and strategies

      Our current objective is to provide opportunities
for liquidity and/or new operating opportunities or
investment for our shareholders at some time in the future.
We are exploring other opportunities for our corporation,
which may include, without limitation, entering into a new
line of business or engaging in a merger transaction or a
sale of some or all of our assets.  In the meantime, we
intend to continue to generate revenues based on an
affiliate model whereby we earn commissions for sales made
from visitors to various merchants supplied by our sites.

Revenue From Operating Business

     With our shift in the fourth quarter of 2001 to an
affiliate model, the majority of our tenants pay on a
commission basis whereby we are compensated when a visitor
from our site makes a purchase from the tenant.  We also
generate revenue on a cost per click basis from a small
number of clients whereby we are paid whenever a visitor
from our site clicks through to the tenant site.  Finally,
we maintain a database of roughly 500,000 e-mail addresses
and 100,000 physical addresses to which we send promotional
e-mails for a fee and which we lease to outside firms for a
rental payment.


Customer loyalty and retention

     While we earn far less from affiliate payments than we
do through traditional advertising contracts, since the
relationships are based purely on the amount of sales
delivered, we expect turnover in our customer base to be
lower than it has been historically.


Competition

     We compete with other web sites, including in
particular, apparel shopping areas of Internet portals, for
Internet advertisers' and e-commerce marketers' dollars.
Many of our current and potential competitors have longer
operating histories, larger customer bases, greater brand
recognition and significantly greater financial, marketing
and other resources than we do. Increased competition may
result in reduced operating margins, loss of market share
and a diminished brand franchise.
(5)



     Many of our competitors have recently announced
reductions in their cost per thousand impressions ("CPM")
and other rate card prices for on-line advertising, and
others have begun to accept advertising on an affiliate
basis.  There can be no assurance that we can continue to
recruit advertising on our sites, or, if we can, that we can
do so at rates considered beneficial to us.

Technology

     We use both commercially available software, as well
as our own proprietary software. Our systems combine our
proprietary technologies and commercially available licensed
technologies. We have moved the hosting of our sites from
dedicated equipment that we owned and housed in a co-
location facility to an outsourced service provider who
supplies all equipment, bandwidth and most of the required
software in exchange for a monthly hosting fee.

Trademarks and patents

     The value of our copyrighted material, domain names,
trade secrets and similar intellectual property rely on
trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with our
employees, customers, partners and others to protect our
proprietary rights. We have registered the domain names
"fashionmall.com" "outletmall.com", "boo.com" and various
others.  There can be no assurance that we will be able to
secure significant protection for these names and our other
proprietary information.  Other than our registration of the
fashionmall.com domain name, we do not have any other
protection for such domain name. We do not believe that we
or anyone else can obtain protection for such name in the
United States. It is possible that competitors or others
will adopt product or service names similar to
"fashionmall.com", "outletmall.com" or "boo.com", thereby
impeding our ability to build brand identity and possibly
leading to customer confusion. Our inability to protect our
domain names adequately could have a material adverse effect
on us.

     In the second quarter of fiscal 2000, we acquired the
domain names and pending trademarks to Boo.com.  We were
awarded the trademark for the name Boo in February 2002.

Government regulation

     We are not currently subject to direct regulation by
any domestic or foreign governmental agency, other than
regulations applicable to businesses generally, and laws
or regulations directly applicable to access to online
commerce. However, due to the increasing popularity of the
Internet and other online services, a number of laws and
regulations have been adopted with respect to the Internet
or other online services covering issues such as user privacy,
pricing, content, copyrights, distribution, and characteristics
and quality of products and services. Furthermore, the growth
and development of the market for online commerce may prompt
more stringent consumer protection laws that may impose
additional burdens on those companies conducting business
online.

     We had become more active conducting our business
globally since the acquisition of Boo.com, and could be
subject to the growing body of international laws and
regulations applicable to access to or commerce on the
Internet, as well as other international laws and
regulations based on that activity.
(6)
These international
legal requirements may vary widely from country to country
and may differ substantially from current or future U.S.
regulations.  Compliance with international laws and
regulations may impose additional burdens on us, and may
affect our ability to conduct business internationally.  In
addition, governments in foreign jurisdictions may increase
regulation of the Internet or other online services in such
areas as content, privacy, network security, encryption or
distribution.  Any such new legislation or regulation, the
application of laws and regulations from jurisdictions whose
laws do not currently apply to our business   or the
application of existing laws and regulations to the Internet
could materially increase our costs of doing business or
harm our business.  No assurance can be given that changes
in current or future regulations adopted by foreign
regulators will not materially increase our costs of doing
business or otherwise materially harm our business.

Employees

     At March 23, 2002, we employ one full time
employee, Benjamin Narasin, our Chief Executive Officer and
President.

Item 2.  Description of Property.

     We maintain our executive offices in approximately
450 square feet of dedicated space at our CEO's home in
Incline Village, NV.  Our monthly lease payments are
approximately $750 per month on a month-to-month basis.

Item 3.  Legal Proceedings.

     We are not a party to any material legal
proceedings. In our normal course of business we may be
subject to certain litigation. In the opinion of
the Company's management, settlement of litigation will not
have a material adverse effect on the Company's results of
operations,financial position or cash flows.

     On November 20, 2001, we resolved our dispute with
Teknowledge by paying the amount of $165,000 as full and
final settlement of their claim of $452,204.  On February
22, 2002, we received summary judgment against Boo,Inc. in
their action against us related to our Boo trademark.

     On March 27th, 2002 we agreed to abandon our lawsuit against
TWEC.com and  Trans World Entertainment Corp. in exchange for payment
of $220,000 from TWEC.COM, LLC. to our firm.

Item 4. Submission of Matters to a Vote of Security Holders.

     There were no matters submitted to a vote of stockholders
during the fourth quarter of the year ended December 31, 2001.

(7)


                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.

     The Common Stock commenced trading on the Nasdaq National Market
on May 21,1999, the date of our IPO, under the symbol "FASH." The
following table sets forth, for the fiscal periods indicated, the
high and low closing prices of our Common Stock as reported by the
Nasdaq National Market. Such quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.

                                               High             Low
                                              ------           ------
Fiscal Year 2001
     Quarter ended March 31,2001...........   $ 3.44           $ 1.44
     Quarter ended June 30,2001............   $ 2.20           $ 1.41
     Quarter ended September 30,2001.......   $ 2.50           $ 2.12
     Quarter ended December 31,2001........   $ 3.12           $ 2.12

Fiscal Year 2000
     Quarter ended March 31,2000...........   $ 5.75           $ 3.19
     Quarter ended June 30,2000............   $ 3.75           $ 2.00
     Quarter ended September 30,2000.......   $ 2.63           $ 1.75
     Quarter ended December 31,2000........   $ 5.00           $ 1.25

     As of March 19, 2002, there were approximately 53 holders of record
of our Common Stock.  On March 19, 2002, the last reported sales price of
our stock as reported by Nasdaq was $3.05.

     We have not paid dividends on the Common Stock since
inception; however, we are considering the payment of
dividends to our stockholders in the future as one possible
option as we explore new opportunities. The declaration of
dividends in the future will be at the election of the Board
of Directors and will depend upon our earnings, capital
requirements, financial position, general economic
condition, and other factors the Board of Directors deems
relevant.


Item 6.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations.

     The following discussion should be read in conjunction with our
Consolidated Financial Statements and related notes thereto.
All statements contained herein that are not historical facts,
including but not limited to, statements regarding our current business
strategy and our plans for future development and operations, are based
upon current expectations. These statements are forward-looking in nature
and involve a number of risks and uncertainties.

     Generally, the words "anticipates," "believes," "estimates," "expects"
and similar expressions as they relate to us and our management are intended
to identify forward-looking statements.  Actual results may differ materially.
Among the factors that could cause actual results to differ materially are
those set forth under the caption "Cautionary Statements Regarding
Forward-Looking Statements." The Company wishes to caution readers not to
place undue reliance on any such forward-looking statements, which statements
speak only as of the date made.

Overview

     fashionmall.com, Inc. has historically operated multiple Internet
properties within the fashion and lifestyle segments and generated revenues
from these properties by charging fees for the placement of either store
links, advertising, content or other materials on the sites.


(8)
To reduce operating costs and to maximize traffic available to affiliate
links we have consolidated our properties into one central location at
www.fashionmall.com with multiple "floors" to represent the individual
brands.

     While clients historically paid a fixed or variable fee for site
placements tied to the location and or amount of traffic they are exposed to,
we have shifted our Internet properties to a primarily affiliate operating
based model whereby we receive commissions for sales made from visitors
to various merchants represented by our sites.  The affiliate operating model
allows our existing Internet properties to continue to generate some,
though minimal, revenue and protect some of the value in the sites
themselves, their traffic and their database of customers.

     We had previously cautioned our stockholders and investors that future
revenues from the historical fashionmall.com business model would decrease
dramatically in the quarter ending December 31, 2001 and for the
foreseeable future.  Revenues were down dramatically in the fourth quarter
of 2001 and will most likely be minimal in the future. In light of our
decision to devote minimal resources to maintaining our web site and
continuing the operating business, the following risk factors may be
overstated and not as relevant if we determine to discontinue the operating
business entirely.

     There is no assurance that we will be able to find opportunities,
investments, new business models or other solutions to increase revenue, or
even generate revenue, in the future.

     As disclosed in a prior quarterly report, management had examined
whether the continued operations merited the then current staff levels, and
further stated that management was  considering the further downsizing of the
staff and potentially the elimination of the majority of current staff
positions if necessary to make our business profitable or to focus on other
opportunities. We did eliminate all but one full-time position by the
end of 2001 and currently maintain only one employee and a small group of
independent consultants who we use on an as needed basis.
Notwithstanding the foregoing, we may choose to entirely discontinue the
current operating business.

Significant Accounting Policies


Revenue Recognition

     The Company's primary source of revenue is from
tenant fees and affiliate relationships.  Manufacturers,
retailers, magazines and others pay fees to the Company to
lease space on the Company's web sites. Revenues are
recognized as services are rendered. The Company recognizes
revenue earned from tenant fees in accordance with its
customer contracts, which specify either a fixed fee or a
fee based on performance.  The Company recognizes revenue
from affiliate relationships when the payment is received
from the affilate network or the affiliate.  The payment is
a commission based on revenues, net of returns, generated
by the Company's visitors to the affiliates' websites.

Barter Arrangements

     In January 2000, the Emerging Issues Task Force (the
"EITF") of the Financial Standards Accounting Board ("FASB")
reached a consensus on EITF Issue 99-17, "Accounting for
Advertising Barter Transactions." The EITF agreed that
advertising barter transactions entered into after January
20, 2000 should be accounted for at fair value on a one-for-
one basis with revenue from similar advertising sold in a
cash transaction that occurred in the preceding six months
with comparable terms, such as length of program, cost and
type of advertisement.   A cash transaction may be used only
(9)
once as the basis for providing fair value evidence for a
barter transaction. As a result, revenue from barter is
effectively limited to no more than 50% of total revenue per
year.

     The Company enters into barter arrangements with
certain of its customers, whereby the Company's services are
exchanged for either advertising space in various magazines
and journals or on web sites, or for consulting services.
The fair value of the online web site advertising is
determined based upon the online providers' "cost per
thousand impressions" and the number of impressions
delivered. The consulting services received by the Company
are primarily marketing and public relations. Expenses for
consulting services are recorded as incurred, based upon the
consulting firms' established rates.

     Barter revenue and the related advertising expense
is recognized in accordance with the established advertising
rate card, of the advertiser customer, which represents the
rates charged to cash buyers based on their level of advertising.
Barter revenue is recognized over the term of the customer
contract, commencing upon the placement of the customer's
advertisement on the Company's web sites. Generally, barter
revenues equal barter expenses; however, due to timing,
barter accounts receivable and barter accounts payable may
result. Barter expenses are included in advertising and
marketing expenses in the accompanying statements of
operations for the years ended December 31, 2001 and 2000.
The Company had revenue from barter transactions of $799,000
and $893,000 for the years ended December 31, 2001 and 2000,
respectively.

Cash and Cash Equivalents

     Cash and cash equivalents of $15,947,000 consist of
money market funds or other highly-liquid investments with
original maturities of three months or less.

Marketable Securities and Investments

     The Company accounts for marketable securities and
investments in accordance with the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 115
"Accounting for Certain Investments in Debt and Equity
Securities."

     Management determines the appropriate classification of
securities at the time of purchase and re-evaluates such designation
as of each balance sheet date. Management has determined that all of
the Company's marketable securities are available-for-sale.
Available-for-sale securities are stated at fair value with the
unrealized gains and losses, net of tax effect, reported as
a separate component of stockholders' equity.

Results of Operations

Year Ended December 31, 2001 vs. Year Ended December 31, 2000

     Site Revenues.  Total revenues decreased by
$2,699,000 or 50% to $2,687,000 for the year ended December
31, 2001 as compared to $5,386,000 for the year ended
December 31, 2000. Barter revenue decreased by $94,000 or
11% to $799,000 for the year ended December 31, 2001 from
$893,000 for the year ended December 31, 2000. Barter
revenue represented 30% and 17% of total revenues for the
years ended December 31, 2001 and 2000, respectively. The
revenue decrease was due to continued decline in advertising
revenue, and our decision to eliminate virtually all of our
(10)
staff, including sales staff, based on our belief that the
expense of maintaining that staff would continue to surpass
the revenue we could generate for the foreseeable future.

     Costs and expenses. Total costs and expenses of the
business decreased by $8,155,000 or 63% to $4,889,000 for
the year ended December 31, 2001 from $13,044,000 for the
year ended December 31, 2000. As the declining revenue trend
was identified, management significantly reduced costs and
expenses in response.  These reductions included the
reduction of personnel to the point where the Company has
one employee, reducing advertising expenses and the
reduction of overhead costs and expenses, such as rent.
During the year ended December 31, 2001, we incurred certain
non-cash charges relating to the Chazen options totaling
$185,000 as compared to $444,000 in the year ended December
31, 2000.

     Site Development, Merchandise and Content Expenses.
Site development, merchandise and content expenses decreased by
$474,000 or 66% to $248,000 for the year ended December 31, 2001
from $722,000 for the year ended December 31, 2000.
The decrease was primarily due to the downsizing of staff,
such that payroll in this area has been eliminated by year-
end, the elimination of paying for site content creation and
the reduction in merchandise costs consistent with the
declining trend in revenue.

     Advertising and Marketing Expenses. Advertising and
marketing expenses decreased by $3,744,000 or 79% to $984,000 for
the year ended December 31, 2001 from $4,728,000 for the year ended
December 31, 2000. The decrease is primarily due to the
significant reduction in advertising expenditures to the
point that management is not currently planning on any
significant spending in advertising and marketing due to the
declining trend in revenue.

     Selling Expenses. Selling expenses decreased by $768,000 or
55% to $618,000 for the year ended December 31, 2001 from $1,386,000
for the year ended December 31, 2000. The selling expense decrease was
due to the decrease in our sales force as a result of the declining
trend in revenue; such that, the sales force has been eliminated by
December 31, 2001.

     General and Administrative Expenses. General and
administrative expenses decreased by $3,169,000 or 51% to
$3,039,000 for the year ended December 31, 2001 from
$6,208,000 for the year ended December 31, 2000. Expenses
within general and administrative expenses have been sharply
reduced by the elimination of staff, the reduction of office
space as well as a general focus to reduce, if not eliminate
expenses in conjunction with current business trends.
During the year ended December 31, 2001, we incurred certain
non-cash charges relating to the Chazen options totaling
$185,000 as compared to $444,000 for the year ended December
31, 2000.

     Other Income and Expense. Net interest and dividend
income decreased by $859,000 or 33% to $1,711,000 for the year
ended December 31, 2001 from $2,570,000 for the year ended December 31,
2000. The decrease primarily reflects that current interest
rates are significantly lower this fiscal year as compared
to the prior fiscal year.  Also, the cash and cash equivalent balances,
marketable securities and investments available to us were less than
the prior year due primarily to the purchase of treasury stock during
2001 for $2,228,000 as well as the operating losses which we realized
in the current fiscal year.

(11)

Liquidity and Capital Resources

     From inception, we have financed substantially all of our operations
from private investment and the proceeds from our IPO. A lesser portion has
been financed with cash generated from operations.

     As of December 31, 2001, we had cash, cash equivalents, marketable
securities and investments on hand of $32,683,000. Of this amount, the cash
and cash equivalents portion was $15,947,000 and the marketable securities
and investments portion was $16,736,000. As of December 31, 2000, cash, cash
equivalents and marketable securities were $35,333,000. The decrease in funds
primarily can be attributed to the purchase of treasury stock for
$2,228,000 as well as the funding of operating losses generated in 2001. We
expect that our current cash position, without taking revenues into account,
will be sufficient to meet our cash requirements for at least the next two
years.

     Net cash used in operating activities was $316,000 for the year ended
December 31, 2001 as compared to net cash used by operating activities of
$4,992,000 for the year ended December 31, 2000. The decrease of $4,676,000
in net cash used in operating activities for the year ended December 31, 2001
was primarily due to a decrease in the net loss of $4,597,000.
(see "Results of Operations").

     Net cash used in investing activities was $8,040,000 for the year ended
December 31, 2001 as compared to net cash used in investing activities of
$2,115,000 for the year ended December 31, 2000. The increase of net cash
used in investing activities of $5,925,000 was primarily due to the increase
in the net purchases of marketable securities.

     Net cash used in financing activities was $2,209,000 for the year ended
December 31, 2001 as compared to net cash provided by financing activities of
$495,000 for the year ended December 31, 2000. The increase of $1,714,000
in net cash used by investing activities was primarily due to the purchase of
treasury stock of $2,228,000 as compared to the purchase of treasury stock in
2000 of $286,000.


Certain Relationships, Related Party Transactions and Commitments.

     On March 2, 1999, we sold to FM/CCP Investment
Partners, LLC ("FM/CCP") 225,000 shares of our common stock for $1,000,000
($4.44 per share). In addition, FM/CCP loaned us $1,000,000 evidenced by a
promissory note in the principal amount of $1,000,000, bearing interest at
6% per annum and due on the earlier of the closing of the offering or
March 2, 2002. In connection with the foregoing promissory note, FM/CCP
received a warrant, expiring March 2, 2004, to purchase up to 95,000 shares
of common stock at an exercise price of $13.65 per share. With a portion of
the proceeds from the IPO, the Company repaid the $1 million promissory note
plus accrued interest. Mr. Jerome Chazen ("Mr. Chazen"), one of our directors
and a former senior consultant, and certain affiliates of Mr. Chazen are
investors in FM/CCP Investment Partners, LLC. Pursuant to certain
anti-dilution provisions, we will issue up to an additional 12,500 shares of
common stock to FM/CCP upon the exercise of such warrants and certain options
granted to Mr.Chazen.

     On March 2, 1999, we entered into a consulting agreement (the "Consulting
Agreement") with Jerome M. Chazen. The Consulting Agreement, which expired on
May 26, 2001, stipulated that Mr. Chazen shall provide consulting services to
us aggregating at least 30 hours per month. Mr. Chazen received an aggregate
of $150,000 over the term of the Consulting Agreement plus five-year options
to purchase 135,000 shares of common stock at an exercise price of $1.11 per
share and options to purchase 107,500 shares of common stock at an exercise
price of $3.25 per share. In addition, Mr. Chazen is one of our directors.

     In addition, we have agreed to grant FM/CCP and Mr.Chazen certain demand
and "piggyback" registration rights, commencing May 27, 2000 and terminating
on March 2, 2004, as to the common stock acquired by them and underlying their
warrants and options.
(12)
     On April 22, 1999, the Company entered into an agreement
with TRG Net Investors LLC ("TRG Net"), an affiliate of Taubman Centers, Inc.,
a real estate investment trust and a mall developer in the U.S., whereby
TRG Net purchased, for $7,417,000, a 9.9% membership interest in our
predecessor LLC (the "Series B Interest") and warrants (the "Warrants") to
purchase an additional 10% membership interest. Upon closing of the IPO, the
Series B Interest was contributed for 824,084 shares of convertible preferred
stock (the "Preferred Stock"), which in turn was convertible into an aggregate
of 824,084 common shares and warrants that can be exercised to purchase
924,898 common shares.  The warrants expired unexercised in July 2000.
The Preferred Stock was convertible into 824,084 shares of common stock for
one year beginning on May 26, 2000 at an effective conversion price
of $9.00 per share and the exercise price of the warrants was $13.00 per
share. Such preferred stock was not converted and remains outstanding.
Upon closing of Taubman's investment
(the "Taubman Investment"), we allocated $2,377,000 of the $7,417,000 to
represent the fair value of the Warrants. The remaining portion of the net
proceeds of $5,040,000 represents the beneficial conversion feature of the
Preferred Stock, which was allocated to additional paid-in capital and
accreted to the book value of the Preferred Stock. The accretion period
was one year, which began on May 26, 1999. For the years ended
December 31, 2000 and 1999, respectively, we accreted $1,939,000 and
$3,101,000 to the book value of the Preferred Stock. For the year ended
December 31, 2001 there was no accretion. Over the one-year accretion period,
earnings per share was negatively impacted by the beneficial conversion
feature amount of $5,040,000. In connection with this transaction,
Robert S. Taubman, the Chief Executive Officer and the President of Taubman
Centers, Inc., joined our Board of Directors.

     The Company, in accordance with a month-to-month sublease arrangement,
utilized approximately 300 square feet of office space subleased from
Richard A. Eisner and Company, LLP, a limited liability partnership and
founding member of IFM. The rental space has been significantly reduced
as we began the year with 6,700 square feet under the same sub-lease
arrangement.  The sublease arrangement with Richard A. Eisner and Company,
LLP will end on April 30, 2002.  Rent expense for the years ended December 31,
2001 and 2000 was approximately $197,000 and $357,000, respectively.

     We entered into a three-year employment agreement with Benjamin Narasin,
effective as of May 26, 1999, pursuant to which Mr. Narasin shall serve as our
Chief Executive Officer, President and Chairman of the Board and has
received an annual base salary of $262,048, $238,225 and $180,000 during fiscal
years 2001, 2000 and 1999, respectively. Such base salary will be subject to
additional increases and bonuses within the discretion of the Board of
Directors, which will take into account, among other things, our
performance and the performance, duties and responsibilities of Mr. Narasin.
We also agreed to pay for certain life insurance policies for the benefit of
Mr. Narasin's family and to indemnify him and his minor son, Grant Narasin,
for tax liabilities arising from our reorganization into a C corporation.

     Mr. Narasin's agreement also permits him to devote up to 10% of his time
to Boston Prepatory Co., an apparel company owned by him, provided that the
Board of Directors makes a determination that such company is not directly
competitive to us. In the event of a change of control as defined in the
agreement, Mr. Narasin may terminate the agreement and receive three times
his compensation, including bonuses earned during the previous 12 months, and
his compensation for the balance of the term.

     We currently maintain our executive offices in approximately 450 square
feet of dedicated space at our CEO's home in Incline Village, NV.  Our
monthly lease payments are approximately $750 per month on a month-to-month
basis.
     In April 2000, we loaned to Benjamin Narasin, our Chief Executive
Officer, the amount of $185,000.  The note accreted interest monthly at the
rate of prime plus 1% per annum and the entire balance outstanding was payable
in April 2001.  The Board of Directors extended the term of the note by 180
days, payable in October 2001.  On September 7, 2001, the Board of Directors
instructed Mr. Narasin to repay the loan by deducting, from his current
compensation, one half of the gross amount of his compensation with the
(13)
balance payable in full no later than the termination date of his current
employment agreement, May 28, 2002.

Risk Factors

Cautionary Statements Regarding Forward-Looking Statements.

     Statements in this Annual Report on Form 10-KSB under the captions
"Description of Business," "Management's Discussion and Analysis," and
elsewhere in this Form 10-KSB, as well as statements made in press
releases and oral statements that may be made by the Company or by officers,
directors or employees of the Company acting on the Company's behalf that
are not statements of historical fact, constitute forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors, including those described in this Form 10-KSB under the
caption "Risk Factors," that could cause the actual results of the Company to
be materially different from the historical results or from any future results
expressed or implied by such forward-looking statements. In addition to
statements which explicitly describe such risks and uncertainties, readers are
urged to consider statements with the terms "believes," "belief," "expects,"
"plans," "anticipates," or "intends," to be uncertain and forward-looking.
All cautionary statements made in this Form 10-KSB should be read as being
applicable to all related forward-looking statements wherever they appear.
Investors should consider the following risk factors as well as the risks
described elsewhere in this Form 10-KSB.

     In light of our decision to devote minimal resources to maintaining our
web site and continuing the operating business, the following risk factors
may be overstated and not as relevant if we determine to discontinue the
operating business entirely.

     We may not be successful in identifying and evaluating suitable business
opportunities or in consummating a business combination.

     We do not have a current arrangement, agreement or understanding with
respect to engaging in a business combination with a specific entity.  There
can be no assurance that we will be successful in identifying and evaluating
suitable business opportunities or in consummating a business combination.
No particular industry or specific business within an industry has been
selected for a target company.  Accordingly, we may enter into a business
combination with a business entity having no significant operating history,
losses, limited or no potential for immediate earnings, limited assets,
negative net worth or other negative characteristics.  In the event
that we complete a business combination, the success of our operations will
be dependent upon the management of the target company and numerous other
factors beyond our control.  There is no assurance that we will be able to
negotiate a business combination on terms favorable to us, or at all.

We currently have one full-time employee and are dependent on independent
contractors and consultants for the operation of our business.

     Our Chief Executive Officer and President, Benjamin Narasin, is our sole
employee and officer.  Since Mr. Narasin has limited experience and lacks
expertise in financial matters, we use an independent contractor to carry out
the functions of a bookkeeper.  We rely entirely on outside suppliers,
consultants and other third parties for the operation of our web site. The
loss of the services of Mr. Narasin would adversely affect the development of
our business and our likelihood of continuing operations.

Our principal stockholder can control most matters requiring approval by all
of our stockholders.

     Benjamin Narasin, our Chief Executive Officer and President, together
with his minor children, beneficially own an aggregate of 3,768,665 shares of
our common stock, or 57.4% of our outstanding shares. As a result, Mr. Narasin
has the ability to determine the election of our directors, direct our policies
and control the outcome of substantially all matters which are subject to the
vote of our stockholders, including the approval of significant corporate
transactions. Such influence could delay or prevent a change of control.

The trading of our securities on the Nasdaq National Market could be
jeopardized if we enter into an unsuccessful business combination.

     If we were to enter into a business combination that proved to be
unsuccessful, we could be unable to meet the continued listing requirements
of the Nasdaq National Market.  The continued trading of our common stock on
the Nasdaq National Market is conditioned upon meeting certain asset, capital
and surplus, earnings, and stock price requirements. If we fail any of the
requirements, our common stock may be delisted from trading on the Nasdaq
National Market.  The effects of delisting include the limited releases of
the market prices of our common stock and limited news coverage of us.
Delisting may restrict investors' interest in our securities and materially
adversely affect the trading market and prices for such securities and our
ability to issue additional securities or to secure additional financing.

We may be subject to regulation under the Investment Company Act if we were
to engage in certain activities or business combinations.

     In the event that we engage in a business combination or engage in other
activities, which result in us holding passive investment interests in a
number of entities, we could be subject to regulation under the Investment
Company Act of 1940.  In such event, we would be required to register as an
investment company and could be expected to incur significant registration
and compliance costs.

     In light of our decision to devote minimal resources to maintaining our
web site and continuing the operating business, the following risk factors may
be overstated and not as relevant if we determine to discontinue the operating
business entirely.  In a new and rapidly evolving market like the Internet,
numerous risks and uncertainties exist. Some of these risks and uncertainties
relate to our ability to:

     - develop further brand awareness and loyalty;

     - attract a larger audience to, and increase frequency of use of,
       the Company's web sites;

     - increase customer acceptance of the online purchase of apparel and
       related merchandise through our clients' sites;

     - generate revenues through our web sites from consumers, apparel
       manufacturers and retailers and other commercial vendors;

     - generate revenues from the affiliate model, advertising and sponsorship;

     - anticipate and adapt to the changing market for Internet services;

     - respond to actions taken by our competitors;

     - increase our internal sales and merchandising force;

     - implement our advertising and marketing strategies;

     - develop and renew strategic relationships;

     - attract, retain and motivate qualified personnel;

     - offer content on our web sites that is attractive to our visitors;

     - continue to upgrade and enhance our technologies and services to
       accommodate expanded service offerings and increased consumer traffic;
       and

- integrate acquired businesses, technologies and services.



(15)

     We may not be successful in accomplishing any or all of these objectives,
and we currently anticipate that our revenues will be minimal for fiscal 2002.
Please see "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

We expect continuing losses from operations, and future profitability remains
uncertain.

     Our ability to generate revenue is uncertain and we expect revenues to
decrease in fiscal 2002. As of December 31, 2001, our accumulated deficit was
$16,618,000. We incurred a loss from operations in fiscal 2001 of $2,202,000
and had a loss from operations in fiscal 2000 of $7,658,000. Although we are
in a cost cutting mode, we expect losses from operations and negative cash
flows for the foreseeable future. Please see "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

     The current economic environment is not favorable for Internet companies.
The market valuations of virtually all of such companies have decreased by at
least 50% and a number of such companies have gone out of business.  Many of
those that have remained in business have scaled back their operations
considerably and are finding it increasingly difficult to obtain financing.
In large measure this has been the result of skepticism that the e-commerce
or e-advertising business models will ever result in profitable operations.
All of these pressures are decreasing our customer base, either by forcing
them out of business or imposing pressure on them to preserve cash. In
addition, doubt as to the viability of the Internet model has caused
other customers, in healthier financial situations, to decrease their Internet
activities.  This has had and is currently having an adverse effect on our
revenues.  As a result, we have scaled back our operations and are currently
looking to pursue other opportunities that will maximize our residual value
to our stockholders.

We are experiencing increased customer losses and derive a substantial
percentage of our business from a few customers.

     We have experienced a significant loss of customers recently due to
non-renewal of contracts. In the current environment, with access to capital
limited, and with a number of questions being asked about the viability of e-
tailing and e-advertising, a number of customers are cutting down on
expenditures or are insisting on new agreements which are uneconomic for us.
In addition to general economic conditions, customers cited the viability of
tracking the conversion of advertisements on our sites to sales as a reason
for not renewing contracts.  The loss of customers is expected to lead to a
reduction in revenues. Additionally, as of December 31, 2001, one customer
accounted for 92% of accounts receivable and one customer accounted for 25%
of total revenues for the year ended December 31, 2001.  If this customer is
unable to pay our fees in the future, or chooses to stop or significantly
decrease doing business with us, this could have an adverse effect on our
business, results of operations and financial condition.

Decreased use of the Internet as an advertising medium may have an adverse
effect on our results of operations.

     The viability and utility of web based advertising is now being routinely
questioned.  The Internet advertising market is relatively new and rapidly
evolving, and it will be difficult to gauge its effectiveness as compared to
traditional advertising media. Most of our current or potential advertising
and e-commerce partners have little or no experience using the Internet for
advertising purposes, and they have allocated only a limited portion of their
advertising budgets to Internet advertising. The adoption of Internet
advertising, particularly by those entities that have historically relied upon
traditional media for advertising, requires the acceptance of a new way of
conducting business, exchanging information and advertising products and
services. Advertisers that have traditionally relied upon other advertising
media may be reluctant to advertise on the Internet. Such customers may find
Internet advertising to be less effective than traditional advertising media
for promoting their products and services. No standards have been widely
accepted to measure the effectiveness of Internet advertising or to measure
the demographics of a company's user base.
(16)
If such standards do not develop, advertisers may not advertise on the
Internet. Advertisers and e-commerce marketers may choose not to
advertise on our web sites or may pay less for advertising on our web
sites if they do not perceive our measurements to be reliable, which
could have an adverse effect on our business, results of operations
and financial condition.

Our operating results are volatile, which could affect our and your ability
to predict our operating results for any given period and could also affect
our market price.

     You should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance. It is possible that in some
future periods our results of operations may be below the expectations of
public market analysts and investors. In this event, the price of our common
stock is likely to fall. We expect quarterly operating results to vary
significantly in the future due to a variety of factors, many of which are
outside of our control. These factors include:

     - the demand for marketing on the Internet in general or on our sites in
       particular;

     - traffic levels on our web sites and on other web sites that refer
       consumers to our web sites;

     - the ability to attract and retain tenants and advertising partners;

     - the announcement or introduction of new or enhanced sites, services and
       products by our competitors, or us;

     - the ability to attract and retain qualified personnel in a timely and
       effective manner;

     - acceptance by consumers and companies of the Internet for apparel and
       fashion-related products and advertising;

     - the ability to maintain and implement strategic alliances and
       relationships with manufacturers, retailers, magazines, catalogs,
       high-traffic web sites and portals and other third parties;

     - changes in tenant fees resulting from competition or other factors;

     - technical difficulties or system downtime affecting the Internet or the
       operation of our web sites;

     - the amount and timing of our costs related to advertising and marketing
       efforts, sales and other initiatives and the timing of revenues
       generated from such activities;

     - fees that may need to be paid for distribution or content or other
       costs that may be incurred as operations are expanded;

     - changes in state and federal government regulations and their
       interpretations, especially with respect to the Internet;

     - costs related to possible acquisitions of businesses, technologies and
       services; and

     - general economic conditions and those conditions that specifically
       affect the Internet and Internet services.

     As we expect to be substantially dependent on revenues from fees from
affiliate sales for the foreseeable future, quarterly revenues are likely to
be particularly affected by traffic levels on our web sites by the acceptance
of our model by advertisers and tenants, which is not assured. Our operating
expenses are based on expectations of future traffic levels and revenues and
are relatively fixed in the short term. If a greater than expected shortfall
occurs in revenues in relation to our expenses, then the business, results of
operations and financial condition would be materially and adversely affected.
(17)
This could affect the market price of our common stock.

If Internet usage decreases as a result of declines in user confidence in the
integrity of the Internet, our business could be adversely affected.

     Our future success is substantially dependent on the continued growth in
the use of the Internet. The Internet is relatively new and is rapidly
evolving. Our business would be adversely affected if Internet usage does not
continue to grow. Internet usage may be inhibited for a number of reasons,
such as:

     - the Internet infrastructure may not be able to support the demands
       placed on it, or its performance and reliability may decline as usage
       grows;

     - security and authentication concerns with respect to transmission over
       the Internet of confidential information, such as credit card numbers,
       and attempts by unauthorized computer users, commonly referred to as
       hackers, to penetrate online security systems; and

     - privacy concerns, such as those related to the placement by web sites
       of certain information to gather user information, known as "cookies,"
       on a user's hard drive without the user's knowledge or consent.

We may not be able to adapt to rapidly changing technologies, or we may incur
significant costs in doing so.

     Our market is characterized by rapidly changing technologies, evolving
industry standards, frequent new service introductions and changing customer
demands. To be successful, we must adapt to a rapidly evolving market by
continually enhancing our web site and introducing new services to address
our customers' changing demands. We may use new technologies ineffectively
or we may fail to adapt our web site, transaction processing systems and
network infrastructure to customer requirements, competitive pressures or
emerging industry standards. We could incur substantial costs if we need to
modify our services or infrastructure in order to adapt to these or other
changes affecting providers of Internet services. Our business, results of
operations and financial condition could be adversely affected if we incurred
significant costs to adapt, or cannot adapt, to these changes. Due to the
rapidly changing nature of the Internet business, we may be subject to risks,
now and in the future, of which we are not currently aware.

We depend on relationships with third parties, and the loss, or change in
terms, of any relationship could adversely affect us.

     Our business could be adversely affected if we do not maintain our
existing commercial relationships. We have entered into commercial
relationships with various third parties, some of which require us to
feature them prominently in certain sections of our web sites. Existing and
future arrangements may prevent us from entering into other, advertising or
affiliate arrangements or other commercial relationships. Many companies that
we may pursue for a commercial relationship may also offer competing services.
As a result, these competitors may be reluctant to enter into commercial
relationships with us.

     We also depend on establishing and maintaining a number of commercial
relationships for the hosting and support of our web sites. Our reliance on
these providers could effect the ability to maintain our live web sites if
the provider was to fail or experience difficulties which made our sites
inaccessible.

Our inability to continually develop our content and service offerings may
reduce traffic, clients and revenue.

     Other than adding new clients and/or affiliates, we do not intend to
update our websites and this may have an adverse effect on the business,
results of operations and the revenue the sites generate.


(18)
     Increased competition could result in less traffic to our web sites,
price reductions for our tenant fees and reduced margins or loss of
market share, any of which would have an adverse effect on the business,
results of operations and financial condition.

     We compete with other web sites, including, in particular, apparel
shopping areas of Internet portals, for Internet advertisers' and
e-commerce marketers' dollars.

     We believe that the ability to compete depends on many factors, many of
which are beyond our control. We believe that the principal competitive
factors in attracting consumers to our web site are:

         - brand awareness and loyalty;

         - the ability to attract high quality manufacturers, retailers,
           catalogs and magazines as tenants on the Company's web sites;

         - strategic relationships with high-traffic web sites and networks;

         - a positive shopping and purchasing experience for the consumer in
           our client's sites;

         - breadth and depth of selection of merchants and merchandise within
           merchant sites;

         - price of products offered for sale by our clients;

         - ease of use;

         - quality of content, other service offerings, and speed of our site;

         - quality of content, fulfillment and customer service by our
           clients; and

         - web site functionality, responsiveness, reliability, and speed.

     Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than we do. This may allow them to devote greater resources than we
can to the development and promotion of customer services. Such competitors
may also engage in more extensive research and development, undertake more
far-reaching marketing campaigns, adopt more aggressive pricing policies and
make more attractive offers to existing and potential employees,
manufacturers, retailers, distribution partners, and advertisers and e-
commerce partners.  Competitors may develop services that are equal or
superior to ours or that achieve greater market acceptance than our web sites.
In addition, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties to
increase the ability of their services to address the needs of advertisers and
e-commerce marketers. As a result, it is possible that new competitors may
emerge and rapidly acquire significant market share. We may not be able
to compete successfully or competitive pressures may have an adverse effect
on our business, results of operations and financial condition.

     We also compete with television, radio, cable and print media for a
share of advertisers' total advertising budgets. If advertisers perceive the
Internet or the Company's web sites to be a limited or ineffective advertising
medium, advertisers may be reluctant to devote a significant portion of their
advertising budgets to Internet advertising or to advertise on the Company's
web sites.

If the Internet does not grow as a medium for commerce, our business could be
adversely affected.

     Our future success and revenue growth will depend upon the adoption of
the Internet by consumers and manufacturers and retailers as a mainstream
medium for commerce. While we believe that our services offer significant
(19)
advantages to consumers and manufacturers and retailers, we cannot be certain
that widespread acceptance of Internet commerce in general, or of our services
in particular, will occur. Our success assumes that consumers who have
historically relied upon traditional means of commerce to purchase apparel
or related products, including touching fabrics and trying on merchandise,
will accept new methods of conducting business and exchanging information.
Moreover, critical issues concerning remote purchases on the Internet,
including clarity of picture, and the commercial use of the Internet,
including ease of access, security, reliability, cost, and quality of service,
remain unresolved and may impact the growth of Internet use. If the market for
Internet-based apparel sales fails to develop, develops more slowly than
expected or becomes saturated with competitors, or if our services do not
achieve market acceptance, the business, results of operations and financial
condition could be adversely affected.

     The market for Internet-based purchasing services has only recently
begun to develop and is rapidly evolving. While many Internet commerce
companies have grown in terms of revenue, few are profitable. It cannot be
assured that we will be profitable, and losses are anticipated for the
foreseeable future. As is typical for a new and rapidly evolving industry,
demand and market acceptance for recently introduced services and products
over the Internet are subject to a high level of uncertainty and there are
few proven services and products. Moreover, as the market for selling apparel
online is relatively new and evolving, it is difficult to predict the future
growth rate, if any, and size of this market.

We may be subject to liability for the Internet content we publish.

     We could be exposed to liability for third-party information that may
be accessible through our web site. Such claims might assert, among other
things that, by directly or indirectly providing links to web sites operated
by third parties, we should be liable for copyright or trademark infringement
or other wrongful actions by such third parties through such web sites. It is
also possible that, if any third-party content information provided on our web
site contains errors, consumers might make claims against us for losses
incurred in  reliance on such information.

     At times, we enter into agreements with other companies under which any
revenue that results from the purchase of services through direct links to or
from our web site is shared. Such arrangements may expose us to additional
legal risk and uncertainties, including local, state, federal and foreign
government regulation and potential liabilities to consumers of these
services, even if we do not provide the services ourselves. We cannot assure
you that any indemnification provided to us in our agreements with these
parties, if available, will be adequate.

     Even to the extent any of the claims referred to above do not result in
liability to us, we could incur significant costs in investigating and
defending against such claims. The imposition on us of potential liability
for information carried on or disseminated through our system could require
us to implement measures to reduce our exposure to such liability, which
might require the expenditure of substantial resources or limit the
attractiveness of our services to consumers, manufacturers, retailers and
others.

We may not be able to obtain and maintain adequate insurance.

     We do not maintain general insurance.  Any significant imposition of
liability that is not covered by insurance could have a material adverse
effect on our business, results of operations and financial condition.
There is also no assurance that we will be able to renew our existing
Directors & Officers insurance which could expose the company to direct
costs of litigation in the event of any shareholder lawsuits or suits against
the Company's board or directors.

If our online security measures fail, our business would be adversely affected.

     Our network is vulnerable to computer viruses, physical or electronic
break-ins and similar disruption. We expect that these problems will occur
(20)
from time to time. The inadvertent transmission of computer viruses could
expose us to litigation or to a material risk of loss. Such security
breaches and inadvertent transmissions could have a material adverse effect
on our business, results of operations and financial condition.

     In our prior offerings of certain online payment services, we relied on
technology licensed from third parties to provide the security and
authentication necessary to affect secure transmission of confidential
information, such as consumer credit card numbers. Advances in computer
capabilities, new discoveries in the field of cryptography, or other events
or developments may result in a compromise or breach of the algorithms that
we use to protect our consumers, transaction data or our software vendors and
products.  Any well-publicized compromise of security could deter use of the
Internet in general or use of the Internet to conduct transactions that
involve transmitting confidential information or downloading sensitive
materials. Someone who is able to circumvent our security measures could
misappropriate proprietary information or cause interruptions in our
operations. We may be required to expend significant capital and other
resources to protect against such security breaches or alleviate problems
caused by such breaches.  Such expenditures could have a material adverse
effect on our business, results of operations and financial condition.

We may be unsuccessful entering new business areas.

     We may choose to expand operations by developing new web sites,
promoting new or complimentary products or formats, expanding the breadth and
depth of products and services offered or expanding our market presence
through relationships with third parties. In addition, we may pursue the
acquisition of new or complementary businesses, products or technologies.
If we acquire a company we could face difficulties in assimilating that
company's personnel and operations. In addition, key personnel of the
acquired company might decide not to work for us. Furthermore, any new
business or web site launched by us not favorably received by consumers could
damage the reputation of the Company's brands. The lack of market acceptance
of such efforts or our inability to generate satisfactory revenues from such
expanded services or products to offset their cost could have a material
adverse effect on the business, results of operations and financial condition.

If government regulation increases, we may need to change the manner in which
we conduct our business.

     The adoption of new legislation or regulation, which impacts Internet
businesses, the application of laws and regulations from jurisdictions whose
laws do not currently apply to our business, or the application of existing
laws and regulations to the Internet and other online services could have a
material adverse effect on our business. We are not currently subject to
direct regulation by any domestic or foreign governmental agency, other than
regulations applicable to businesses generally, and laws or regulations
directly applicable to access to online commerce. However, due to the
increasing popularity and use of the Internet and other online services,
it is possible that laws and regulations may be adopted with respect to the
Internet or other online services covering issues such as user privacy,
pricing, content, copyrights, distribution, and characteristics and
quality of products and services. Furthermore, the growth and development
of the market for online commerce may prompt more stringent consumer
protection laws that may impose additional burdens on those companies
conducting business online. The adoption of any additional laws or regulations
may decrease the growth of the Internet or other online services, which could,
in turn, decrease the demand for our products and services and increase our
cost of doing business. Moreover, the applicability to the Internet and
other online services of existing laws in various jurisdictions governing
issues such as property ownership, sales and other taxes and personal privacy
is uncertain and may take years to resolve. In addition, as our web site is
available over the Internet in many states and foreign countries, and as we
sell to numerous consumers residing in such states and foreign countries,
such jurisdictions may claim that we are required to qualify to do business
as a foreign corporation in each such state and foreign country.
We are qualified to do business in only two states, and our failure to qualify
as a foreign corporation in a jurisdiction where such qualification is
(21)
required could subject us to taxes and penalties for the failure to qualify.

If the protection of our intellectual property rights is inadequate, our
business may be adversely affected.

     Although our ability to compete depends, to some extent, upon copyright
law and confidentiality agreements, we believe that the technical and creative
skills of our personnel, continued development of our proprietary systems and
technology, brand name recognition and reliable web site maintenance are more
essential in establishing and strengthening our brand. Despite efforts to
protect our proprietary rights, unauthorized parties may attempt to copy
aspects of our services or to obtain and use information that we regard as
proprietary. Policing unauthorized use of our proprietary rights is
difficult. Other than our registration of certain domain names, we do not have
any other protection for the "fashionmall.com" or the "Outletmall.com".
We do not believe that we or anyone else can obtain protection for such names
in the United States. Effective trademark, service mark, copyright and trade
secret protection may not be available in every country in which our products
and services are made available online. In addition, litigation may be
necessary in the future to enforce or protect our intellectual property rights
or to defend against claims or infringement. As part of our confidentiality
procedures, we generally enter into agreements with our employees and
consultants. We cannot assure that the steps taken by us will prevent
misappropriation of technology or that the agreements entered into for that
purpose will be enforceable. Misappropriation of our intellectual property
or the costs associated with litigation related thereto could have a material
adverse effect on our business, results of operations and financial condition.
We also have a registered trademark for the Boo.com name and related words
and phrases.

Our common stock price has been volatile, which could result in substantial
losses for individual stockholders.

     The price of our Common Stock has fluctuated substantially since the
IPO. The trading price of our Common Stock may continue to be volatile in
response to factors such as:

         - actual or anticipated variations in our quarterly operating results;

         - announcements of new product or service offerings;

         - technological innovations;

         - competitive developments;

         - changes in financial estimates by securities analysts;

         - conditions and trends in the Internet and electronic commerce
           industries;

         - changes in the economic performance and/or market valuations of
           other Internet, online commerce or retail companies;
	   and

         - general market conditions and other general factors.

It may be difficult to acquire us.

     Certain provisions of our Certificate of Incorporation, our Bylaws,
Delaware law and Mr. Narasin's ownership of approximately 57.4% of the
outstanding common stock, could make it difficult for a third party to
acquire us, even if doing so might be beneficial to our stockholders.

We do not anticipate paying dividends.

     We have never paid cash or other dividends on our common stock; however,
we are considering the payment of dividends as one of several possible options
in the future. Payment of dividends on our common stock is within the
discretion of the Board of Directors and will depend upon our earnings,
(22)
our capital requirements and financial condition, and other factors deemed
relevant by the Board.

We may be unable to meet our future capital requirements.

     We may need to raise additional funds in the future in order to fund
expansion, to develop new or enhanced services, to respond to competitive
pressures or to acquire complementary businesses, technologies or services,
or to enter into a new business or acquire another business.

     It cannot be assured that any required additional financing will be
available on terms favorable to us, or at all, particularly in the current
investment environment in which dot-com's, particularly in the business to
consumer area, are out of favor. If additional funds are raised by our
issuing equity securities, stockholders may experience dilution of their
ownership interest and such securities may have rights senior to those of
the holders of our common stock.  If additional funds are raised by our
issuing debt, we may be subject to certain limitations on our operations,
including limitations on the payment of dividends. If adequate funds are not
available or not available on acceptable terms, we may be unable to fund
potential expansion, successfully promote our brand name, take advantage of
acquisition opportunities, develop or enhance services or respond to
competitive or business pressures, which could have a material adverse effect
on our business, results of operations and financial condition.

Item 7.  Financial Statements.

     The Financial Statements and Notes thereto can be found beginning on
page F-1, "Index to Financial Statements," following Part III of this Annual
Report on Form 10-KSB.

Item 8.  Changes In and Disagreements With Accountants on Accounting and
         Financial Disclosure.

       None.


                             PART III


Item 9.  Directors and Executive Officers of the Registrant.

         Our current executive officers and directors are set forth below:

               Name                     Age          Position

Benjamin Narasin....................     36  	  Chief Executive Officer,
                                    		  President, Chief
                                                  Accounting Officer and
                                                  Chairman of the
						  Board of Directors

Richard C. Marcus(1)................     62       Director

Jerome A. Chazen(1).................     75       Director and Senior
						  Consultant

Robert S. Taubman(1)................     48       Director


(1)      Member of the Audit Committee

     Directors are elected to serve until the next annual meeting of
stockholders and until their successors have been elected and have qualified.
Mr. Taubman serves as the director designee of the preferred stockholder.
Other than stock options, non-employee directors do not currently receive
remuneration for their services as such, but may be reimbursed for expenses
incurred in connection therewith, such as the cost of travel to Board
meetings. Officers serve at the pleasure of the Board of Directors until
(23)
their successors have been elected and have qualified. The Audit Committee
has the authority to recommend annually to the Board of Directors the
engagement of our independent certified public accountants and to review
the scope and results of the audits, our internal accounting controls, our
audit practices and the professional services furnished by the independent
auditors.

     Benjamin Narasin has served as our Chairman of the Board, Chief
Executive Officer and President and the predecessor since
our inception in 1994. Prior to joining us, from 1986 to
1994, Mr. Narasin served as President for Boston Prepatory
Co., an apparel company which he still owns and at which he
developed the concept of fashionmall.com.  Mr. Narasin has
also assumed the role of Chief Accounting Officer.

     Richard C. Marcus has served as consultant to us
since February 1997 and has served as a director since March
1999. Since January 1997, Mr. Marcus has served as a Senior
Advisor to Peter J. Solomon Company, a New York investment
banking firm. Mr. Marcus was principal of InterSolve Group
Inc., a management services firm, from its inception in 1991
until January 1997. From January 1989 to
January 1992, Mr. Marcus was a principal of RCM Consulting,
a provider of consulting services to the retail industry.
From 1979 to 1988, he served as Chairman and Chief Executive
Officer of Neiman-Marcus, a department store retailer. Mr.
Marcus is currently a director of Zale Corporation, Michaels
Stores, Inc and Land's End, Inc.

     Jerome A. Chazen has served as a senior consultant
and one of our directors since March 1999. Since 1996,
Mr. Chazen has been Chairman of Chazen Capital Partners,
LLC. Mr. Chazen was a founder of Liz Claiborne, Inc., an
apparel company, where he served in various senior executive
positions until his retirement in 1996 and as a director until 1997.
Mr. Chazen also serves as a director of Taubman Centers, Inc. and as
Chairman of the American Craft Museum, as a Trustee of Columbia University,
as Chairman of the Board of Overseers of the Columbia University Business
School, and as Vice-Chairman of the Greater New York Council of the
Boy Scouts of America. Mr. Chazen has various relationships with
FM/CCP Investment Partners, LLC.

     Robert S. Taubman has served as a director since April 1999.
He has been a director and the President and Chief Executive Officer
of Taubman Centers, Inc., a real estate investment trust which is a
leading developer of malls since 1992. Mr. Taubman is also a director of
Comerica Bank and of Sotheby's Holdings, Inc., the international art auction
house, a member of the Board of Governors of the National Association of
Real Estate Investment Trusts, a director of the Real Estate Roundtable,
a trustee of the Urban Land Institute and a former trustee of the
International Council of Shopping Centers.

Item 10. Executive Compensation.

     The following tables set forth the annual and long-term compensation
for services in all capacities for the three years ended December 31, 2001 paid
to Benjamin Narasin, President, Chief Executive Officer, Chief Accounting
Officer and Chairman of the Board of Directors.










(24)

                            SUMMARY COMPENSATION TABLE

                               Annual Compensation

							      Securities
							      Underlying
       Name and         Fiscal				      Options/
Principal Position       Year        Salary    Bonus	       SARs (#)

Benjamin Narasin,        2001      $262,048     --	        --
President/CEO, Chief     2000      $238,225     --	        --
Accounting Officer       1999      $180,000   $40,000      100,000
and Chairman of the
Board of Directors

     The following table sets forth information regarding stock option
exercises during the year ended December 31, 2001 by Mr.Narasin and the
values of his options as of December 31, 2001:

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                        AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
                              			       Number of Securities     Value of unexercised
                              			       Underlying Unexercised   in the money options
                                                       Options at 	        at Fiscal Year End ($)
                                                       Fiscal Year End (#)

                           Shares         Value
                          acquired      Realized
         Name           on exercise        ($)   	Exercisable Unexercisable Exercisable Unexercisable
<S>			<C>		<C>	<C>	    <C>		  <C>	      <C>
Benjamin Narasin
President/CEO and
Chairman of the Board
of Directors                 -           $  -       100,000		-          $  -        $  -
</TABLE>


Director Compensation

     The directors did not receive monetary compensation for serving on the
Board of Directors during the fiscal year ended December 31, 2001.

Employment and Consulting Agreements

          We entered into a three-year employment agreement
with Benjamin Narasin, effective as of May 26, 1999,
pursuant to which Mr. Narasin shall serve as our Chief
Executive Officer, President and Chairman of the Board and
has received an annual base salary of $180,000, $238,225 and $262,048
during fiscal years 1999, 2000 and 2001, respectively. Such
base salary will be subject to additional increases and
bonuses within the discretion of the Board of Directors,
which will take into account, among other things, our
performance and the performance, duties and responsibilities
of Mr. Narasin. We also agreed to pay for certain life
insurance policies for the benefit of Mr. Narasin's family
and to indemnify him and his minor son, Grant Narasin, for
tax liabilities arising from our reorganization into a C
corporation.

     Mr. Narasin's agreement also permits him to devote up
to 10% of his time to Boston Prepatory Co., an apparel
company owned by him, provided that the Board of Directors
makes a determination that such company is not directly
competitive to us. In the event of a change of control as
defined in the agreement, Mr. Narasin may terminate the
agreement and receive three times his compensation,
including bonuses earned during the previous 12 months, and
his compensation for the balance of the term.

     In April 2000, the company loaned to its CEO the amount
(25)
of $185,000.  The note accrues interest monthly at the rate
of prime plus 1% per annum and the entire balance
outstanding was payable in April 2001.  The Board of
Directors extended the term of the note by 180 days, payable
in October 2001.  On September 7, 2001, the Board of
Directors has instructed the CEO to repay the loan by
deducting, from his current compensation, one half of the
gross amount of his compensation with the balance payable in
full no later than the termination date of his current
employment agreement, May 28, 2002.

     On March 2, 1999, we entered into a consulting
agreement(the "Consulting Agreement") with Jerome Chazen,
the sole owner of FM/CCP, Inc., which is the manager of
FM/CCP Investment Partners, LLC.  The Consulting Agreement,
which expired on May 26, 2001, stipulated that Mr. Chazen
provided consulting services to us aggregating at least 30
hours per month. In addition, Mr. Chazen agreed to become a
director.  Mr. Chazen received an aggregate of $150,000 over
the term of the Consulting Agreement plus five-year options
to purchase 135,000 shares of common stock at an exercise
price of $1.11 per share and options to purchase 107,500
shares of common stock at an exercise price of $3.25 per
share.

     We currently do not have written employment agreements
with any of our other officers or directors.


1999 Stock Option Plan

     We adopted the 1999 Stock Option Plan in May 1999.  The
1999 Plan provides for the grant of options to purchase up
to, but not in excess of, 1,125,000 shares of common stock
to our officers, directors, agents, consultants and
independent contractors. Options may be either "incentive
stock options" within the meaning of Section 422 of the
Internal Revenue Code, or non-qualified options. Incentive
stock options may be granted only to our employees or
employees of our subsidiaries, while non-qualified options
may be issued to non-employee directors and consultants, as
well as to our employees or employees of our subsidiaries.

     The 1999 Plan is administered by a committee selected
by the Board of Directors or by the Board of Directors (the
"Administrator"), which determines, among other things,
those individuals who receive options, the time period during
which the options may be exercised, the number of shares of
common stock issuable upon the exercise of each option and the
option exercise price. Pursuant to the 1999 Plan, the Administrator
determines, among other things, those individuals who receive options,
the time period during which the grants will be made, the
number of shares of common stock to be granted and the price
(if any) to be paid by such key employees thereafter.

     The exercise price per share of common stock subject to
an incentive stock option may not be less than the fair market value
per share of common stock on the date the option is granted. The per
share exercise price of the common stock subject to a non-qualified
option may be established by the Administrator. If the aggregate fair
market value, as determined as of the date the option is
granted, of common stock for which any person may be granted
incentive stock options which first become exercisable in any calendar
year exceeds $100,000, such stock option shall be treated, to the
extent of such excess, as an option which does not qualify as an
incentive stock option. No person who owns, directly or indirectly,
at the time of the granting of an incentive stock option to such person,
10% or more of the total combined voting power of all classes of
stock of the company (a "10% Shareholder") shall be eligible
(26)
to receive any incentive stock options under the 1999 Plan
unless the exercise price is at least 110% of the fair
market value of the shares of common stock subject to the
option, determined on the date of grant. Non-qualified
options are not subject to such limitation.

     No stock option may be transferred by an optionee other
than by will or the laws of descent and distribution, and, during the lifetime
of an optionee, the option will be exercisable only by the optionee.
In the event of termination of employment other than by death, retirement,
permanent and total disability, unless extended by the Administrator on or
before such employee's date of termination of employment,
the optionee will have no more than three months after such
termination during which the optionee shall be entitled to
exercise all or any part of such employee's option, unless
otherwise determined by the Administrator. Upon termination
of employment of an optionee by reason of death, retirement,
permanent and total disability, such optionee's options
remain exercisable for one year thereafter to the extent
such options were exercisable on the date of such
termination.

     Options under the 1999 Plan must be issued within ten
years from the effective date of the Plan. Incentive stock options granted
under the 1999 Plan cannot be exercised more than ten years from the date of
grant. Incentive stock options issued to a 10% Shareholder are limited to
five-year terms. All options granted under the 1999 Plan will provide for
the payment of the exercise price in cash or check or by delivery to us of
shares of common stock having a fair market value equal to the exercise
price of the options being exercised, or by a combination of such methods,
or by such other methods approved by the Administrator pursuant to the
1999 Plan. Therefore, an optionee may be able to tender shares of
common stock to purchase additional shares of common stock and may
theoretically exercise all of such optionee's stock options with no
monetary investment.

     Each director holds office until our annual meeting of stockholders and
until his successor is duly elected and qualified. Officers are elected by
the Board of Directors and hold office at the discretion of the Board of
Directors. There are no family relationships between any of our directors
or executive officers. See footnote No. 9 to the consolidated financial
statements for a breakout of the stock option activity for the year ended
December 31, 2001.

Section 16(a) Beneficial Ownership Reporting Compliance.

     Section 16(a) of the Securities Exchange Act of 1934,
as amended, requires our directors and executive officers,
and persons who beneficially own more than ten percent of a
registered class of our equity securities, to file with the
Securities and Exchange Commission (the "Commission")
initial reports of ownership and reports of changes in
ownership of Common Stock and our other equity securities.
Officers, directors, and persons who beneficially own more
than ten percent of a registered class of our equities are
required by the regulations of the Commission to furnish us
with copies of such reports. Based on our review of such
reports furnished to us during the fiscal year ended
December 31, 2001, all Section 16(a) filing requirements
applicable to our officers, directors, and greater than ten
percent of a registered class of equity securities.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information known to the
Company, as of December 31, 2001, regarding the beneficial ownership of
the Company's voting securities by (i) each person who is known by the
Company to beneficially own more than 5% of the outstanding Common
Stock, (ii) each of the Company's directors and each of the executive
(27)
officers named in the compensation table under Item 10, "Executive
Compensation", and (iii) all directors and executive officers of the
Company as a group. Unless otherwise indicated, each of the stockholders
listed in the table below has sole voting and dispositive power with
respect to shares beneficially owned by such stockholder.


<TABLE>
<CAPTION>


                                             Amount and nature          Percentage of
                                             of beneficial              outstanding
Name of beneficial owner (1)                 ownership                  owned

<S>					     <C>			<C>
Benjamin Narasin (2).................       3,768,665 shares               57.4%
Robert S. Taubman (3) ..............           12,700 shares                *
Jerome Chazen (4)...................          298,750 shares                4.4%
Richard Marcus (5)..................           20,000 shares                *
Executive Officers and Directors (6)
  as a group (four persons) ........        4,100,115 shares               59.9%
</TABLE>
__________________
* Less than 1%

(1)  Except as otherwise indicated, the address for the
referenced stockholders is c/o fashionmall.com, Inc., 774
Mays Blvd Bldg 10 Unit 259, Incline Village, NV 89451.

(2)  Includes 427,500 shares owned by Grant Narasin, the
minor son of Mr. Narasin, 427,500 shares owned by Electa
Narasin, the minor daughter of Mr. Narasin, and 100,000
shares of common stock underlying options.   Mr. Narasin has
voting power over Grant and Electa Narasin's shares until
April 9, 2018 and September 9, 2020, respectively.

(3)  Includes 10,000 shares of common stock underlying
options, and 2,700 shares of common stock owned by Mr.
Taubman's wife. The address of Robert S. Taubman is 200 East
Long Lake Road, Suite 300, Bloomfield Hills, Michigan 48303-
0200.  Does not include 824,084 shares of preferred stock
owned by an affiliate of the Taubman Realty Group Limited
Partnership.

(4)  Includes 56,250 shares of common stock beneficially owned
by trusts of which Mr. Chazen is the trustee and 242,500 shares
underlying options held by Mr. Chazen. The address of Jerome Chazen
is 767 Fifth Avenue, New York, New York 10153.

(5)  Includes 20,000 shares of common stock underlying
options.

(6)  See footnotes (2), (3), (4), and (5) above.

Item 12. Certain Relationships and Related Party
Transactions.

     On March 2, 1999, we sold to FM/CCP Investment
Partners, LLC ("FM/CCP") 225,000 shares of our common stock
for $1,000,000 ($4.44 per share). In addition, FM/CCP loaned
us $1,000,000 evidenced by a promissory note in the
principal amount of $1,000,000, bearing interest at 6% per
annum and due on the earlier of the closing of the offering or
March 2, 2002. In connection with the foregoing promissory note,
FM/CCP received a warrant, expiring March 2, 2004, to
purchase up to 95,000 shares of common stock at an exercise
price of $13.65 per share. With a portion of the proceeds from
the IPO, the Company repaid the $1 million promissory note plus
(28)
accrued interest. Mr. Jerome Chazen ("Mr. Chazen"), one of our
directors and a former senior consultant, and certain affiliates
of Mr. Chazen are investors in FM/CCP Investment Partners, LLC.
Pursuant to certain anti-dilution provisions, we will issue up to an
additional 12,500 shares of common stock to FM/CCP upon the
exercise of such warrants and certain options granted to Mr.
Chazen.

     On March 2, 1999, we entered into a consulting
agreement (the "Consulting Agreement") with Jerome M. Chazen.
The Consulting Agreement, which expired on May 26, 2001, stipulated
that Mr. Chazen shall provide consulting services to us aggregating
at least 30 hours per month. Mr. Chazen received an aggregate of
$150,000 over the term of the Consulting Agreement plus five-
year options to purchase 135,000 shares of common stock at
an exercise price of $1.11 per share and options to purchase
107,500 shares of common stock at an exercise price of $3.25
per share. In addition, Mr. Chazen is one of our directors.

     In addition, we have agreed to grant FM/CCP and Mr.
Chazen certain demand and "piggyback" registration rights,
commencing May 27, 2000 and terminating on March 2, 2004, as
to the common stock acquired by them and underlying their
warrants and options.

     On April 22, 1999, the Company entered into an agreement with TRG Net
Investors LLC ("TRG Net"), an affiliate of Taubman Centers, Inc., a real
estate investment trust and one of the leading mall developers in
the U.S., whereby TRG Net purchased, for $7,417,000, a 9.9% membership
interest in the Company (the "Series B Interest") and warrants
(the "Warrants") to purchase an additional 10% membership interest.
Upon closing of the IPO, the Series B Interest was contributed for 824,084
shares of convertible preferred stock (the "Preferred Stock"), which in turn
are convertible into an aggregate of 824,084 common shares and the Warrants
can be exercised to purchase 924,898 common shares. The warrants expired
unexercised in July 2000.  The Preferred Stock was convertible for one year
beginning on the first anniversary of the closing of the IPO by the Company
and, based on the $13.00 per share initial public offering price, the
effective conversion price of the Preferred Stock was $9.00 per share and
the exercise price of the Warrants was $13.00 per share. Such preferred stock
was not converted and remains outstanding.  Upon closing of Taubman's investment
(the "Taubman Investment"), we allocated $2,377,000 of the $7,417,000 to
represent the fair value of the Warrants. The remaining portion of the net
proceeds of $5,040,000 represents the beneficial conversion feature of the
Preferred Stock, which was allocated to additional paid-in capital and
accreted to the book value of the Preferred Stock. The accretion period
was one year, which began on May 26, 1999. For the years ended
December 31, 2000 and 1999, respectively, we accreted $1,939,000 and
$3,101,000 to the book value of the Preferred Stock. For the year ended
December 31, 2001 there was no accretion. Over the one-year accretion period,
earnings per share was negatively impacted by the beneficial conversion
feature amount of $5,040,000.  In connection with this
transaction, Robert S. Taubman, the Chief Executive Officer and the President
of Taubman Centers, Inc., joined the Company's Board of Directors.

     The Company, in accordance with a month-to-month sublease arrangement,
utilized approximately 300 square feet of office space subleased from
Richard A. Eisner and Company, LLP, a limited liability partnership and
founding member of IFM. The rental space has been significantly
reduced as we began the year with 6,700 square feet under the same sub-lease
arrangement.  The sublease arrangement with Richard A. Eisner and Company,
LLP will end on April 30, 2002.  Rent expense for the years ended December 31,
2001 and 2000 was approximately $197,000 and $357,000, respectively.

     We currently maintain our executive offices in approximately 450 square
feet of dedicated space at our CEO's home in Incline Village, NV.  Our monthly
lease payments are approximately $750 per month on a month-to-month basis.

     In April 2000, we loaned to Benjamin Narasin, our Chief Executive Officer,
(29)
the amount of $185,000.  The note accreted interest monthly at the rate of prime
plus 1% per annum and the entire balance outstanding was payable in April 2001.
The Board of Directors extended the term of the note by 180 days, payable in
October 2001.  On September 7, 2001, the Board of Directors instructed
Mr. Narasin to repay the loan by deducting, from his current compensation,
one half of the gross amount of his compensation with the balance payable
in full no later than the termination date of his current employment
agreement, May 28, 2002.


Item 13.   Exhibits and Reports on Form 8-K.

(a) Exhibits

Exhibit No.             Description

3.1  Certificate of Incorporation of the Company (1)
3.2  By-Laws of the Company (1)
3.3  Certificate of Designations, Preferences, and Rights of Series A
     Preferred Stock (2)
4.1  Form of Representative's Warrant (2)
4.2  Form of Stock Certificate (2)
4.3  Warrant executed in connection with the FM/CCP Financing (1)
10.1 Employment Agreement effective as of May 26, 1999, by and between the
     Company and Benjamin Narasin (2)
10.2 Consulting Agreement dated March 2, 1999, by and between the Company
     and Jerome Chazen (1)
10.3 Subscription Agreement dated March 2, 1999, by and between FM/CCP
     Investment Partners, LLC and the Company (1)
10.4 Subscription Agreement dated March 2, 1999, by and between Jerome
     Chazen and the Company (1)
10.5 1999 Stock Option Plan (3)
10.6 Unit Purchase Agreement, dated April 22, 1999, among Internet Fashionmall
     LLC, fashionmall.com, Inc. and TRG Net Investors LLC (1)
21.1 Subsidiaries of the registrant
23.1 Consent of BDO Seidman, LLP

  (1)  Incorporated by reference from the Company's
       Registration Statement on Form SB-2, filed March 9, 1999.
  (2)  Incorporated by reference from the Company's Amendment
       No. 1 to the Form SB-2, filed April 23, 1999.
  (3)  Incorporated by reference from the Company's
       Registration Statement on Form S-8, filed November 1, 1999.

(b) Current reports on Form 8-K

           None.





















(30)



         Index to Consolidated Financial Statements


                                                                   Page

Report of Independent Certified Public Accountants............     F-2
Consolidated Balance Sheet as of December 31,2001.............     F-3
Consolidated Statements of Operations for the years ended
December 31, 2001 and 2000.....................................    F-4
Consolidated Statements of Comprehensive Loss for the years
ended December 31, 2001 and 2000...............................    F-5
Consolidated Statements of Stockholders' Equity for the
years ended December 31, 2001 and 2000.........................    F-6
Consolidated Statements of Cash Flows for the years ended
December 31, 2001 and 2000.....................................    F-7
Notes to Consolidated Financial Statements.....................    F-8



















































(31)

                         F-2

Report of Independent Certified Public Accountants

The Stockholders and Board of Directors
fashionmall.com, Inc.

     We have audited the accompanying consolidated
balance sheet of fashionmall.com, Inc. as of December 31, 2001, and the
related consolidated statements of operations, comprehensive
loss, stockholders' equity and cash flows for the years
ended December 31, 2001 and 2000. These consolidated
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audit.

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

     In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of fashionmall.com, Inc. as of December 31, 2001,
and the 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.


                               /s/  BDO Seidman,LLP

                                    BDO Seidman, LLP
New York, New York
March 28, 2002



























(32)

                         F-3

                fashionmall.com, Inc.
              Consolidated Balance Sheet
                December 31, 2001

                Assets

CURRENT ASSETS
Cash and cash equivalents                            $  15,947,000
Marketable securities                                   12,092,000
Accounts receivable, net of allowance of $140,000          303,000
Loan to officer                                            190,000
Prepaid expenses and other current assets                  376,000

         Total Current Assets                           28,908,000

INVESTMENTS                                              4,644,000
PROPERTY AND EQUIPMENT,
  net of accumulated depreciation of $70,000                25,000
OTHER ASSETS,
  net of accumulated amortization of $550,000              160,000

          Total Assets                               $  33,737,000

       Liabilities and Stockholders' Equity

CURRENT LIABILITIES
Accounts payable                                     $     340,000
Accrued expenses                                           390,000
Customer deposits                                           68,000

           Total Liabilities                               798,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
Preferred stock - $.01 par value; 3,000,000 shares
    authorized; 824,084 shares issued and outstanding	        8,000
Common Stock - $.01 par value; 35,000,000 shares
    authorized; 7,500,000 shares issued and outstanding     75,000
Treasury Stock, at cost, 1,033,203 shares               (2,514,000)
Additional paid-in capital                              51,964,000
Unrealized gain on marketable securities and investments,
    available for sale                                      26,000
Accumulated deficit                                    (16,620,000)

Total stockholders' equity                              32,939,000

Total liabilities and stockholders' equity           $  33,737,000

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














(33)

                         F-4

                fashionmall.com, Inc.
       Consolidated Statements of Operations

                                 		      For the
                               			     Years Ended
                               			     December 31,
                               			    2001        2000

SITE REVENUES                                 $ 2,687,000  $ 5,386,000


COSTS AND EXPENSES:
    Site development, merchandise and content     248,000      722,000
    Advertising and marketing                     984,000    4,728,000
    Selling expense                               618,000    1,386,000
    General and administrative expense          3,039,000    6,208,000

Total costs and expenses                        4,889,000   13,044,000

Loss from operations                           (2,202,000)  (7,658,000)


Interest and dividend income                    1,711,000    2,570,000

Net loss                                       $ (491,000) $(5,088,000)




Basic and diluted loss per share  		 $   (0.07)  $   (0.68)

Basic and diluted weighted-average shares       6,977,000    7,490,000

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































(34)




                               F-5

                  fashionmall.com, Inc.
       Consolidated Statements of Comprehensive Loss


                  		      For the Years Ended
				         December 31,

			         ---------------------------
                                   2001          2000
				 -----------   ----------
Net loss                         $(491,000)   $(5,088,000)

Unrealized loss on marketable
securities and investments
available-for-sale, net of tax     (10,000)       (10,000)
                                 -----------   ----------

Comprehensive loss               $(501,000)   $(5,098,000)
				 ===========  ============



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








































(35)


                                 F-6

                             fashionmall.com, Inc.
              Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>

				      Convertible
                                      Preferred Stock          Common Stock                                 Treasury Stock
                                      ---------------          ------------                                 --------------

					                         	              Additional
	          	             Par                       Par                      Paid-in
			             Shares        Value       Shares        Value      Capital        Shares       Amount
--------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>         <C>            <C>       <C>               <C>          <C>
Balance at January 1, 2000           824,084       $8,000     7,500,000      $75,000    $49,396,000         --           --

Purchase of treasury stock            --             --          --            --          --            (165,600)  $ (286,000)

Non-cash compensation expense         --             --          --            --           444,000         --           --

Accretion of preferred stock
   beneficial conversion feature      --             --          --            --         1,939,000         --           --

Unrealized loss on
  marketable securities
  and investments
  available for sale	                --             --          --            --          --               --           --

Net loss                              --             --          --            --          --               --           --
--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2000         824,084       $8,000     7,500,000      $75,000    $51,779,000      (165,600)   $ (286,000)

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


Purchase of treasury stock            --             --          --            --          --            (867,603)  $(2,228,000)

Non-cash compensation expense         --             --          --            --           185,000          --          --

Unrealized loss on
  marketable securities
  and investments
  available for sale                  --             --          --            --          --                --          --

Net loss                              --             --          --            --          --                --          --
--------------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 2001         824,084       $8,000     7,500,000      $75,000     $51,964,000    (1,033,203) $(2,514,000)

================================================================================================================================
<CAPTION>
							   Total
				Comprehensive   Accumulated   Stockholders'
				  Income          Deficit 	 Equity
			        ----------------------------------------------------
<S>              		<C>              <C>            <C>
Balance at January 1, 2000         $46,000       $(9,102,000)    $40,423,000

Purchase of treasury stock            --              --            (286,000)

Non-cash compensation expense         --              --             444,000

Accretion of preferred stock
   beneficial conversion feature      --          (1,939,000)          --

Unrealized loss on
  marketable securities
  and investments
  available for sale               (10,000)           --             (10,000)

Net loss                              --          (5,088,000)     (5,088,000)
			       ----------------------------------------------------
Balance at December 31, 2000       $36,000      $(16,129,000)    $35,483,000

			       ====================================================
Purchase of treasury stock            --              --          (2,228,000)

Non-cash compensation expense         --              --             185,000

Unrealized loss on
  marketable securities
  and investments
  available for sale               (10,000)           --             (10,000)

Net loss                             --            (491,000)        (491,000)
			        ----------------------------------------------------
Balance at December 31, 2001      $ 26,000     $(16,620,000)     $32,939,000

                   		====================================================
</TABLE>

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













(36)





                                F-7

		                fashionmall.com, Inc.
	              Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

								       Year Ended
								      December 31,
						            ---------------------------
		 					       2001		 2000
		 				            -----------     -----------
<S>							     <C>	      <C>
Operating Activities
Net loss				     	         $    (491,000)  $   (5,088,000)
Adjustments to reconcile net loss to net cash
    used in operating activities:
        Depreciation and amortization		               468,000          394,000
        Write-down of software and fixed assets                357,000             -
        Non-cash compensation expense		               185,000          444,000
        Bad debt expense			               150,000          489,000
Changes in operating assets and liabilities:
    Accounts receivable			                       745,000         (890,000)
    Inventories			                                  -             191,000
    Prepaid expenses and other current assets	               121,000          (63,000)
    Accounts payable			                      (976,000)      (1,469,000)
    Accrued expenses			                      (800,000)         896,000
    Customer deposits			                       (75,000)         129,000
    Deferred Revenue		 	                          -             (25,000)

Net cash used in operating activities		               (316,000)      (4,992,000)

Investing Activities
Purchases of marketable securities and investments,net       (7,925,000)      (1,379,000)
Purchases of property and equipment, net	                (45,000)         (34,000)
Software development costs			                  -              (82,000)
Purchases of other assets                                       (70,000)        (620,000)

Net cash used in investing activities		             (8,040,000)      (2,115,000)

Financing Activities
Purchase of treasury stock			             (2,228,000)        (286,000)
Loan to officer                                                  19,000         (209,000)

Net cash used in financing activities		             (2,209,000)        (495,000)

Decrease in cash and cash equivalents		            (10,565,000)      (7,602,000)

Cash and cash equivalents - beginning of period              26,512,000       34,114,000

Cash and cash equivalents - end of period	          $  15,947,000   $   26,512,000

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.



















(37)

                                         F-8

                            	     fashionmall.com, Inc.
                          Notes to Consolidated Financial Statements
                          	 December 31, 2001 and 2000

1. Description of Business

     Internet Design Group, Ltd. commenced operations on December 22, 1994
and continued operations until August 19, 1995 when it became Internet Fashion
Mall, L.P. ("IFM LP"). Effective June 26, 1996, IFM LP was reorganized as a
Delaware limited liability company, Internet Fashion Mall LLC ("IFM").  The
Company was incorporated in Delaware as a C corporation on February 26, 1999.

     Pursuant to its initial public offering ("IPO") completed on May 21,1999,
IFM changed its name to fashionmall.com, Inc. (the "Company"). In connection
with the IPO and immediately prior thereto, the existing members of IFM
contributed all of their membership interests in IFM in exchange for
4.5 million shares of common stock of the Company. On May 21, 1999, the
Company completed its IPO of 3.0 million shares of its common stock.
The IPO resulted in net proceeds, after related expenses, of
approximately $35 million.

     Activities from the date of inception to December 31, 2001 have been to
develop the Company's brands through a marketing strategy that includes the
exchange of the Company's services for advertising space in various magazines,
journals and web sites or consulting services.

     Historically, the Company engaged in the business of marketing,
promoting, advertising and selling fashion apparel and related accessories
or products to the public on the Internet, via the Company's web sites. The
Company combines an online shopping mall with fashion content to provide a
centralized site for manufacturers, retailers, magazines and catalogs to
advertise, display and sell their product lines.

     While clients historically paid a fixed or variable fee for site
placements tied to the location and or amount of traffic they are
exposed to, we have shifted our Internet properties to a primarily
affiliate based operating model whereby we receive commissions for
sales made to visitors from our sites.  The affiliate operating model
allows our existing Internet properties to continue to generate some,
though minimal, revenue from tenants while at the same protecting some
of the value in the sites themselves, their traffic and their database
of customers.

     We have more cash than is needed to fund our current operations and we
are exploring how best to use such cash, including, possibly, by making
acquisitions, issuing special dividends or finding other options to provide
opportunities for liquidity and/or new operating or investment opportunities
for our shareholders at some time in the future. We are exploring other
opportunities for our corporation, which may include, without limitation,
entering into a new line of business or engaging in a merger transaction
or a sale of some or all of our assets.

     Notwithstanding the foregoing, future profitability remains uncertain.
If our new affiliate operating model proves to be unsustainable, or the
value of our assets proves to be difficult to monetize, we may choose to
entirely discontinue the current operating business.

2. Summary of Significant Accounting Policies

Principles of Consolidation

     The accompanying consolidated financial statements include the accounts
of the Company and subsidiaries. All significant intercompany balances and
transactions have been eliminated.

(38)

				F-9

Revenue Recognition

     The Company's primary source of revenue is from tenant fees and affiliate
relationships.  Manufacturers, retailers, magazines and others pay fees to the
Company to lease space on the Company's web sites. Revenues are recognized as
services are rendered. The Company recognizes revenue earned from tenant fees
in accordance with its customer contracts, which specify either a fixed fee or
a fee based on performance.

The Company recognizes revenue from affiliate relationships when the payment
is received from the affilate network or the affiliate.  The payment is
a commission based on revenues, net of returns, generated by the Company's
visitors to the affiliates' websites.

Barter Arrangements

     In January 2000, the Emerging Issues Task Force ("EITF") of the
Financial Standards Accounting Board (FASB) reached a consensus on EITF
Issue 99-17, "Accounting for Advertising Barter Transactions. The EITF
agreed that advertising barter transactions entered into after
January 20, 2000 should be accounted for at fair value on a one-for-one
basis with revenue from similar advertising sold in a cash transaction that
occurred in the preceding six months with comparable terms, such as length
of program, cost and type of advertisement.   A cash transaction may be used
only once as the basis for providing fair value evidence for a barter
transaction. As a result, revenue from barter is effectively limited to no
more than 50% of total revenue per year.

     The Company enters into barter arrangements with certain of its
customers, whereby the Company's services are exchanged for either
advertising space in various magazines and journals or on web sites,
or for consulting services. The fair value of the online web site
advertising is determined based upon the online providers' "cost per
thousand impressions" and the number of impressions delivered. The consulting
services received by the Company are primarily marketing and public
relations. Expenses for consulting services are recorded as incurred, based
upon the consulting firms' established rates.

     Barter revenue and the related advertising expense is recognized in
accordance with the established advertising rate card, of the advertiser
customer, which represents the rates charged to cash buyers based on their
level of advertising. Barter revenue is recognized over the term of the
customer contract, commencing upon the placement of the customer's
advertisement on the Company's web sites. Generally, barter revenues equal
barter expenses; however, due to timing, barter accounts receivable and
barter accounts payable may result. Barter expenses are included in
advertising and marketing expenses in the accompanying statements of
operations for the years ended December 31, 2001 and 2000. The Company
had revenue from barter transactions of $799,000 and $893,000 for the
years ended December 31, 2001 and 2000, respectively.

Cash and Cash Equivalents

     Cash and cash equivalents of $15,947,000 consist of money market funds
or other highly-liquid investments with original maturities of three months
or less.

Marketable Securities and Investments

     The Company accounts for marketable securities and investments in
accordance with the provisions of Statement of Financial Accounting Standards
(SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity
Securities."

     Management determines the appropriate classification of securities
at the time of purchase and re-evaluates such designation as of each
balance sheet date. Management has determined that all of the Company's
marketable securities are available-for-sale.  Available-for-sale securities
(39)
are stated at fair value with the unrealized gains and losses, net of
tax effect, reported as a separate component of stockholders' equity.


                            F-10

Property and Equipment

     Property and equipment are stated at cost, net of accumulated
depreciation and amortization on a straight-line basis over estimated
useful lives of three to five years. Depreciation expense for the years
ended December 31, 2001 and 2000, was $86,000 and $104,000, respectively,
and is included in general and administrative expenses in the accompanying
statements of operations.

Capitalized Software Costs

     In accordance with Statement of Position (SOP) 98-1, Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use and
EITF Issue No. 00-2 Website Development Costs, the Company capitalizes costs
incurred in the application development stage of new projects created for its
web site. The capitalized costs include third party costs as well as payroll
and payroll-related costs for the employees who are directly associated with
and who devote time to the internal-use computer software project, to the
extent of the time spent directly on the project. Capitalized software costs
are amortized on a straight-line basis over an estimated useful life of
three years. Capitalized software costs for the years ended
December 31, 2001 and 2000, are approximately $0 and $34,000, respectively.
Amortization expense for the years ended December 31, 2001 and 2000 was
$0 and $122,000, respectively, and is included in general and administrative
expenses in the accompanying statements of operations.

Long-Lived Assets

     The Company accounts for long-lived assets in accordance with SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of.  SFAS No. 121 establishes financial accounting and
reporting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be
held and used, and for long-lived assets and certain identifiable
intangibles to be disposed of.  Long-Lived Assets are evaluated for impairment
when events or changes in circumstances indicate that the carrying amount of
the assets may not be recoverable through the estimated undiscounted future
cash flows from the use of these assets.  When any such impairment exists,
the related assets will be written down to fair value.  For the year ended
December 31, 2001, the Company has identified an impairment of property and
equipment, capitalized software and other assets of $357,000.

Income Taxes

     Under the asset and liability method of SFAS No. 109, Accounting for
Income Taxes, deferred tax assets and liabilities are recognized for the
difference between the financial statement carrying amounts and tax bases
of assets and liabilities. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets or liabilities of a change in tax rates
is recognized in the period that the tax change occurs.

Advertising Expense

     A significant source of advertising expense is generated from the
Company's barter activities. The expense is recognized based on the
fair value of the services received as determined by each magazine's
or journal's printed advertising rate card with pricing provided to
cash buyers based on frequency of advertisement placement or by a web
site provider's "cost per thousand impressions" and the number of
impressions delivered. In accordance with Statement of
Position No. 93-7, "Reporting On Advertising Costs", the Company expenses
(40)
its advertising costs as incurred.  Advertising expense for the years
ended December 31, 2001 and 2000 was $984,000 and $4,728,000, respectively.

Use of Estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and

                            F-11

assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent assets and liabilities as of the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ for those estimates.

Stock-Based Compensation

     The Company accounts for stock-based compensation under the intrinsic
value based method of accounting prescribed by Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees," and
discloses the effect of the difference which would result had the Company
applied the fair value based method of accounting on a pro forma basis, as
required by SFAS No. 123, "Accounting for Stock-Based Compensation".

Comprehensive Loss

     Comprehensive loss is the total of net loss and all other non-owner
changes in equity (or other comprehensive income) such as unrealized
gains/losses on securities classified as available-for-sale, foreign
currency translation adjustments and minimum pension liability adjustments.

Fair Value of Financial Instruments

     The carrying amounts of cash and cash equivalents, accounts receivable
and accounts payable approximate fair value due to the short-term maturity
of these instruments.  Marketable securities and investments are stated at
fair value.

Business Concentrations and Credit Risks

     All of the Company's cash and cash equivalents, marketable securities
and investments as of December 31, 2001 are on deposit with one major
financial institution. Deposits at any point in time may exceed the federally
insured limits. The Company performs periodic evaluations of the relative
credit standing of this institution.

     As of December 31, 2001, one customer accounted for 92% of net trade
receivables and 25% of total revenues for the year then ended.

Net Loss per Share

     The Company computes net loss per share in accordance with SFAS No. 128,
"Earnings per Share." Basic net loss per share is computed by dividing the
net loss attributable to common stockholders for the period by the weighted
average number of common shares outstanding during each period. Diluted net
loss per share is computed by dividing the net loss for the period by the
weighted average number of common shares and common share equivalents
outstanding during each period. Common share equivalents, composed of common
shares issuable upon the exercise of stock options and warrants, are included
in the net loss per share to the extent such shares are dilutive.

New Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board ("FASB") finalized
SFAS No. 141, "Business Combinations", and SFAS No. 142, "Goodwill and Other
Intangible Assets".
SFAS No. 141 requires the use of the purchase method of accounting and
prohibits the use of pooling-of-interests method of accounting for business
(41)
combinations initiated after June 30, 2001.  SFAS No. 141 also requires that
the Company recognize acquired intangible assets apart from goodwill if the
acquired intangible assets meet certain criteria.  SFAS No. 141 applies to
all business combinations initiated after June 30, 2001 and for purchase
business combinations completed on or after July 1, 2001.  It also requires,
upon adoption of SFAS No. 142, that the Company reclassify the carrying
amounts of intangible assets and goodwill based on the criteria in
SFAS No. 141.

	                      F-12

SFAS No. 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.
In addition, SFAS No. 142 requires that the Company identify reporting
units for the purposes of assessing potential future impairments of goodwill,
reassess the useful lives of other existing recognized intangible assets, and
cease amortization of intangible assets with an indefinite useful life.  An
intangible asset with an indefinite useful life should be tested for
impairment in accordance with the guidance in SFAS No. 142.  SFAS No. 142 is
required to be applied in fiscal years beginning after December 15, 2001 to
all goodwill and other intangibles assets recognized at that date, regardless
of when those assets were initially recognized.  SFAS No. 142 requires
the Company to complete a transitional goodwill impairment test within six
months after the date of adoption.  The Company is also required to reassess
the useful lives of other intangible assets within the first interim quarter
after adoption of SFAS No. 142.

     The Company's previous business combinations were accounted for using
the purchase method.  As of December 31, 2001, the net carrying value of
goodwill is $160,000.  Amortization expense for the year ended
December 31, 2001 was $382,000.  Currently, the Company is assessing but
has not yet determined how the adoption of SFAS No. 141 and SFAS No. 142 will
impact its financial position and results of operations.

     In August 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment of Disposal of Long-Lived Assets. SFAS No. 144 requires that
those long-lived assets be measured at the lower of carrying amount of fair
value less cost to sell, whether reported in continuing operations or in
discontinued operations.  Therefore, discontinued operations will no longer
be measured at net realizable value or include amounts for operating losses
that have not occurred.  SFAS No. 144 is effective for financial statements
issued for fiscal years beginning after December 15, 2001 and, generally, is
to be applied prospectively.  The Company does not expect the adoption of
SFAS No. 144 to have a material effect on its financial condition or
results of operations.

3. Marketable Securities and Investments

     Marketable securities and investments, available for sale at
December 31, 2001 were as follows:

   Market
                                               Cost                Value

Corporate bonds (maturity less than
1 year but greater than 3 months)      	$  7,755,000        $  7,798,000
Corporate bonds (maturity greater than
   1 year)                                 4,747,000           4,644,000
Government bonds (maturity less
than 1 year but greater than 3 months)     2,508,000           2,590,000
Certificate of deposits (maturity less
than 1 year but greater than 3 months)     1,700,000           1,704,000
  					  ----------        ------------
Total marketable securities              $16,710,000        $ 16,736,000
                                          ===========        ============

4. Stockholders' Equity

     Effective February 26, 1999, the Company received a $1 million equity
(42)
investment from FM/CCP Investment Partners, LLC, ("FM/CCP"), a third party,
and issued a $1 million promissory note ("FM/CCP Note") and warrants
("FM/CCP Warrants") in exchange for an additional $1 million
(the "FM/CCP Private Placement").  The FM/CCP Warrants, which expire
March 2, 2004, became exercisable upon the closing date of the Company's
IPO to purchase up to 95,000 shares of common stock at an exercise price of
$13.65 per share.
In connection with the FM/CCP Warrants, the Company recognized non-cash
consulting expense of $106,000 for the year ended December 31, 1999.
With a portion of the proceeds from the IPO, the Company repaid the
$1 million plus accrued interest due under FM/CCP Note.



                              F-13

     A principal of FM/CCP, Jerome Chazen (Chazen) agreed to provide
consulting services to the Company for the period ending on the earlier
of the three year anniversary date of the equity investment or on the
two year anniversary date of the closing of the Company's IPO. The Company
was obligated to and paid Chazen an aggregate of $150,000, after the
termination of the agreement in May 2001. Pursuant to this agreement,
the Company recognized consulting expense of $37,500 and $94,000 for the
years ended December 31, 2001 and 2000, respectively.

     Additionally, Chazen received options to purchase up to 5% ownership
interest in the Company in consideration for his consulting services.
These options vest over three years and expire on the fifth anniversary
of the grant date. The vesting period accelerated upon the closing of
the Company's IPO, such that 50% became exercisable upon consummation of
the IPO, an additional 16% became exercisable on March 1, 2000, and the
balance became exercisable in equal monthly installments over the one
year period commencing March 2, 2000.  Chazen received 135,000 options
at an exercise price of $1.11 per share and 107,500 options at an exercise
price of $3.25 per share. All grants of options to individuals other than
those considered employees must be accounted for under SFAS No. 123. Under
SFAS No. 123, the fair value of these options as of the date of grant,
using the Black Scholes pricing model, was $1,987,000. The fair value
was recognized as consulting expense over the term of the consulting
agreement.  The future exercise of 135,000 of these options and the
FM/CCP Warrants referred to above will not dilute the original 5%
ownership interest purchased by FM/CCP and Chazen.
As a result, if these options and warrants are exercised in full,
FM/CCP and Chazen will receive an additional 5,000 and 7,500 shares of common
stock, respectively.  The Company recognized $185,000 and $444,000 of
non-cash consulting expense in connection with these options for the years
ended December 31, 2001 and 2000, respectively. In connection with this
transaction, Chazen joined the Company's Board of Directors.

The Company paid to its placement agent $85,000, and issued a warrant
to purchase 22,500 shares of Common Stock at an exercise price of $4.44 per
share and a warrant to purchase 9,500 shares of Common Stock at an exercise
price of $13.65 per share, as a finder's fee in connection with the consummation
of the FM/CCP Private Placement. The warrants are exercisable for five years
from the date of grant. The fair value of the warrants as of the
date of grant was $74,000, calculated using the Black-Scholes pricing model.
One-half of the cash payment and one-half of the fair value of the warrants
was offset against the proceeds of the $1 million equity investment as
offering costs. The remaining amount was recognized as interest expense upon
the repayment of the FM/CCP Note.

     On April 22, 1999, the Company entered into an agreement with TRG Net
Investors LLC ("TRG Net"), an affiliate of Taubman Centers, Inc., a real
estate investment trust and one of the leading mall developers in the
U.S., whereby TRG Net purchased, for $7,417,000, a 9.9% membership
interest in the Company (the "Series B Interest") and warrants
(the "Warrants") to purchase an additional 10% membership interest.
Upon closing of the IPO, the Series B Interest was
contributed for 824,084 shares of convertible preferred stock (the "Preferred
(43)
Stock"), which was convertible into an aggregate of 824,084 common shares and
the Warrants could have been exercised to purchase 924,898 common shares. The
Warrants expired unexercised in July 2000.  The Preferred Stock was
convertible for one year beginning on the first anniversary of the closing
of the IPO by the Company and, based on the $13.00 per share initial public
offering price, the effective conversion price of the Preferred Stock was
$9.00 per share and the exercise price of the Warrants was $13.00 per share.
Such preferred stock was not converted and the preferred stock remains
outstanding.  Upon closing of Taubman's investment, the Company allocated
$2,377,000 of the $7,417,000 to represent the fair value of the Warrants.
The remaining portion of the net proceeds of $5,040,000 represents the
beneficial conversion feature of the Preferred Stock, which was allocated
to additional paid-in capital upon the closing of the IPO and was accreted to
the book value of the Preferred Stock. The accretion period was one year,
beginning on the date of closing of the IPO. For the years ended
December 31, 2000 and 1999, the Company accreted $1,939,000 and $3,101,000,
respectively, to the book value of
the Preferred Stock. In connection with this transaction, Robert S. Taubman,
the Chief Executive Officer and the President of Taubman Centers, Inc., joined
the Company's Board of Directors.

5. Income Taxes

     The net deferred tax asset at December 31, 2001 and 2000 consists of
the following:

                                  F-14


                                              2001                2000
                                          -----------          ---------
Net operating loss carryforwards          $ 2,844,000        $ 2,303,000
Deferred compensation                          76,000            204,000
Other                                           --                 8,000
                                           -----------          ---------
Total deferred tax asset                    2,920,000          2,515,000
Less: valuation allowance                  (2,920,000)        (2,515,000)
                                           -----------          ---------
Deferred tax asset, net                   $     --             $    --
                                           ===========          =========

The Company has a net operating loss carry forward of approximately
$7,500,000 for income tax purposes expiring through 2021. The net deferred
tax asset has been fully offset by a valuation allowance due to uncertainties
regarding realization of benefits from these future tax deductions.  As a
result of the change of control provisions of Internal Revenue Code
Section 382, a significant portion of these net operating loss carryforwards
may be subject to limitation on future utilization.




















(44)

6. Net Loss per Share

     A reconciliation between the numerator and denominator of basic and
diluted net loss per share is as follows:
<TABLE>
<CAPTION>

                                                      For the Years Ended December 31,
                                                      -------------------------------
                                                           2001           2000
							-----------    -----------
<S>							<C>            <C>
Numerator:
Net loss                                                $ (491,000)    $(5,088,000)

Accretion of beneficial conversion feature of
     convertible preferred stock                              --        (1,939,000)
                                                        -----------    -----------

Net loss available to common shareholders               $ (491,000)    $(7,027,000)
                                                        ===========   ============
Basic and diluted loss per share                        $  (.07)       $  (.94)
						        ===========    ===========

Basic and diluted weighted average shares                6,977,000       7,490,000
							===========    ===========
</TABLE>

    The effect of the exercise of certain warrants and options issued in
previous years are not included as their effect on diluted earnings per
share would be anti-dilutive.  The number of warrants and options is
547,500 and 695,500, respectively for the years ended December 31,
2001 and 2000.

7. Related Party Transactions

     The Company, in accordance with a month-to-month sublease arrangement,
utilized approximately 300 square feet of office space subleased from
Richard A. Eisner and Company, LLP, a limited liability partnership and
founding member of IFM. The rental space has been significantly reduced
as we began the year with 6,700 square feet under the same sub-lease
arrangement.  The sublease arrangement with Richard A. Eisner and Company,
LLP will end on April 30, 2002.  Rent expense for the years ended
December 31, 2001 and 2000 was approximately $197,000 and $357,000,
respectively.

     We currently maintain our executive offices in approximately
450 square feet of dedicated space at our CEO's home in
Incline Village, NV.  Our monthly lease payments are approximately
$750 per month on a month-to-month basis.

     In April 2000, the Company loaned to its CEO the amount of $185,000.
The note accrues interest monthly at the rate of prime plus 1% per annum
and the entire
                            F-15

balance outstanding was payable in April 2001.  The Board of Directors
extended the term of the note by 180 days, payable in October 2001.
On September 7, 2001, the
Board of Directors has instructed the CEO to repay the loan by deducting,
from his current compensation, one half of the gross amount of his
compensation with the balance payable in full no later than the termination
date of his current employment agreement, May 28, 2002.  On
December 31, 2001, the balance of the loan to officer was $190,000,
inclusive of accrued interest.

8. Stock Option Plan

     The Company adopted the 1999 Stock Option Plan (the "1999 Plan") in May
(45)
1999. The 1999 Plan provides for the grant of options to purchase up to, but
not in excess of, 1,125,000 shares of common stock to the Company's officers,
directors, agents, consultants and independent contractors. Options may be
either "incentive stock options" within the meaning of Section 422 of the
United States Internal Revenue Code, or non-qualified options. Incentive
stock options may be granted only to the Company's employees while
non-qualified options may be granted to non-employee directors and
consultants

     The 1999 Plan is administered by a committee selected by the Board of
Directors or by the Board of Directors (the "Administrator"), which
determines, among other things, those individuals who receive options,
the time period during which the options may be exercised, the number of
shares of common stock issuable upon the exercise of each option and the
option exercise price.

     The exercise price per share of common stock subject to an incentive
option may not be less than the fair market value per share of common stock on
the date the options are granted. The per share exercise price of the common
stock subject to non-qualified options may be established by the Administrator.
If the aggregate fair market value, as determined as the date the options are
granted, of common stock for which any person may be granted incentive stock
options which first become exercisable in any calendar year exceeds $100,000,
such stock options shall be treated, to the extent of such excess, as an option
which does not qualify as an incentive stock option. No person who owns,
directly or indirectly, at the time of the granting of incentive stock options
to such person, 10% or more of the total combined voting power of all classes
of stock of the company (a "10% Shareholder") shall be eligible to receive any
incentive stock options under the 1999 Plan unless the exercise price is at
least 110% of the fair market value of the shares of common stock subject to
the option, determined on the date of grant. Non-qualified options are not
subject to such limitation.

     No stock option may be transferred by an optionee other than by will or
the laws of descent and distribution, and, during the lifetime of an optionee,
the option will be exercisable only by the optionee. In the event of
termination of employment other than by death, retirement, permanent and
total disability, unless extended by the Administrator on or before such
employee's date of termination of employment, the optionee will have no
more than three months after such termination during which the optionee
shall be entitled to exercise all or any part of such employee's option,
unless otherwise determined by the Administrator. Upon termination of
employment of an optionee by reason of death, retirement, permanent and
total disability, such optionee's options remain exercisable for one year
thereafter to the extent such options were exercisable on the date of such
termination.

     Options under the 1999 Plan must be issued within ten years from the
effective date of the Plan. Incentive stock options granted under the 1999 Plan
cannot be exercised more than ten years from the date of grant. Incentive stock
options issued to a 19% Shareholder are limited to five-year terms. All options
granted under the 1999 Plan will provide for the payment of the exercise price
in cash or check or by delivery to us of shares of common stock having fair
value equal to the exercise price of the options being exercised, or by a
combination of such methods, or by such other methods approved by the
Administrator pursuant to the 1999 Plan. Therefore, an optionee may be
able to tender shares of common stock to purchase additional shares of
common stock and could theoretically exercise all of such optionee's stock
options with no investment.

                                   F-16


Stock option activity, excluding grants to non-employees (See Note 4),
for the years ended December 31, 2001 and 2000 is as follows:



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                                                            Weighted Average
                                                           Exercise Price Per
Activity                                        Options           Share
--------                                        -------          ------
Options outstanding at 1/1/00                   251,750          $ 7.74
Options granted in 2000                         166,500          $ 3.90
Options cancelled in 2000                       (60,250)         $ 4.31
					        -------          ------
Options outstanding at 12/31/00                 358,000          $ 7.26

Options cancelled in 2001                      (148,000)         $ 7.18
					        -------          ------
Options outstanding at 12/31/01                 221,000          $ 7.43
					        =======          ======
Options exercisable at 12/31/01                 135,000          $ 6.56
                                                =======          ======
Weighted average fair value of options
granted in 2000						         $ 2.88
							         ======

     The following table summarizes information about shares under option at
December 31, 2001:
<TABLE>
<CAPTION>

                             Stock Options Outstanding                       Options Exercisable
                             -------------------------                       -------------------
 <C>                <C>            <C>                  <C>               <C>               <C>
                               Weighted average
 Range of                        remaining           Weighted                          Weighted average
 exercise        Number of      contractual           average           Number of          exercise
  prices          options          life            exercise price     stock options          price
  ------          -------          ----            --------------     -------------          -----
$2.00-$4.99        30,000           8.8                 $2.03              30,000             $2.03

$5.00-$13.00      180,000           7.4                 $8.33             105,000             $7.86

</TABLE>

     The table below sets forth the 2001 and 2000 earnings as if compensation
expense relative to the fair value of the options granted had been recorded
under the provisions of SFAS No. 123 "Accounting for Stock-Based Compensation.
The fair value of each option grant in 2000 was estimated using the
Black-Scholes option-pricing model with the following assumptions used;
an expected life of 9.3 years; a volatility rate of 82%;
a risk-free interest rate of 6.5%; and no dividend payments.
There were no options granted in 2001.

                                             For the Years Ended December 31,
                                                   2001              2000
                                            --------------     --------------
Net loss:
As reported                                  $(491,000)       $  (5,088,000)
					     ==========        =============

Pro forma                                    $(868,000)       $  (5,556,000)
                                             ==========         ============
Basic and diluted loss per share:

As reported                                  $  (0.07)        $      (.68)
Pro forma                                    $  (0.12)        $      (.74)

9.  Commitments and Contingencies

     The Company is not a party to any material legal proceedings, but in
its normal course of business, may be subject to certain litigation. In the
opinion of the Company's management, settlements of litigation will not have
a material adverse effect on the Company's results of operations, financial
position or cash flows.

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F-17

     The Company entered into a three-year employment agreement with
Benjamin Narasin, effective as of May 26, 1999, pursuant to which Mr. Narasin
shall serve as Chief Executive Officer, President and Chairman of the Board
and received a salary during 2001, 2000, and 1999 of $262,048, $238,225 and
$180,000, respectively.

     Such base salary will be subject to additional increases and bonuses
within the discretion of the Board of Directors, which will take into
account, among other things, the Company's performance and the performance,
duties and responsibilities of Mr. Narasin. The Company also agreed to pay
for certain life insurance for the benefit of Mr. Narasin's family which is
still due and to indemnify him and his minor son, Grant Narasin, for tax
liabilities arising from our reorganization into a C corporation.
Mr. Narasin may terminate the agreement and receive three times his
compensation, including bonuses earned during the previous twelve months,
and his compensation for the balance of the term.


F-18

 SIGNATURE

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

                                    fashionmall.com, Inc.


                             By:    /s/ Benjamin Narasin

 				    Benjamin Narasin
                                    Chief Executive Officer,
                                    President, Chief Accounting Officer and
                                    Chairman of the Board of Directors

     In accordance with the Securities Exchange Act of 1934, this report has
been signed by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.

          Signature                   Title                     Date

/s/ Benjamin Narasin   	    Chief Executive Officer
	Benjamin Narasin    President, Chief Accounting
	                    Officer and Chairman of the
	                    Board of Directors
			    (Principal Executive Officer)     April 16, 2002

/s/ Richard Marcus
    	Richard Marcus      Director        		      April 16, 2002

/s/ Jerome Chazen
        Jerome Chazen       Director                          April 16, 2002

/s/ Robert S. Taubman
        Robert S. Taubman   Director  			      April 16, 2002


F-19

Exhibit 21.1 -- Subsidiaries of fashionmall.com, Inc.

         E-com, Inc.
         Outletmall.com, Inc.
         Stylexperts, LLC owned by E-com, Inc.
  	 Boo.com, Inc owned by E-com, Inc.

(48)
                       F-20


Exhibit 23.1

                   CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference of the previously filed
Registration Statement on Form S-8 (File No. 333-90135) of fashionmall.com,
Inc of our report dated March 28, 2002, relating to the consolidated financial
statements of fashionmall.com, Inc. appearing in the Annual Report on
Form 10K-SB for the year ended December 31, 2001.

                                               /s/ BDO Seidman, LLP
       	                                           BDO Seidman, LLP

New York, New York
April 11, 2002


















































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