<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

(MARK ONE)

/X/      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934

         For the fiscal year ended March 31, 2003


/ /      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

         For the transition period from __________ to __________


                         Commission file number: 0-25377

                                 Nurescell Inc.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

           Nevada                                       33-0805583
(STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER IDENTIFICATION NO.)
 INCORPORATION OR ORGANIZATION)

      P.O. Box 116, North Haven, CT                         06473
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)

                    Issuer's telephone number: (203) 239-9734

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

Title of each class                   Name of each exchange on which registered
       None                                          None

         Securities registered under Section 12(g) of the Exchange Act:
                         Common Stock, $.0001 par value
                                (TITLE OF CLASS)

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

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. / /

         Issuer's net loss for its most recent fiscal year (ended March 31,
2003) was $449,328.

         The aggregate market value of the voting and non-voting common equity
held by nonaffiliates of the issuer, based upon the average bid and asked price
of such common equity on June 25, 2003, as reported by the OTC Bulletin Board,
was approximately $11,470. Shares of Common Stock held by each officer and
director and by each person who owns 5% or more of the outstanding Common Stock
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.

         The number of outstanding shares of the issuer's Common Stock on June
25, 2003 was 46,060,025.

         Documents incorporated by reference: None.

    Transitional Small Business Disclosure Format (CHECK ONE): Yes /X/ No / /

<PAGE>

                                     PART I

              NOTE: NURESCELL INC. HAS ELECTED TO FOLLOW DISCLOSURE
                ALTERNATIVE 2 IN THE PREPARATION OF THIS REPORT.



ITEM 6. DESCRIPTION OF BUSINESS.
--------------------------------

   GENERAL. Nurescell Inc. (the "Company") is a development stage company that
was formed in 1998 for the purpose of developing and commercially exploiting a
proprietary radiation shielding technology (the "Nurescell Technology") for use
by the nuclear power industry and others producing, handling or storing
radioactive materials. The Nurescell Technology material, which is comprised of
a unique composite of materials, was designed for incorporation into the
structural components of new and existing nuclear reactors and other facilities
in order to provide a cost-effective safeguard from the lethal effect of
radiation while achieving a minimal disruption to existing facilities. In
addition, it was expected to provide an innovative shielding material for
various other purposes, including nuclear accelerator and defense research
applications. To date, the Company has failed to generate any significant
revenue from the Nurescell Technology. Having exhausted all of its funding and
without any source of revenue, the Company has been forced to reduce its
operations to a minimal level. On March 21, 2003, the Company entered into a
Restructure Agreement (the "Restructure Agreement") with Triton Private Equities
Fund, L.P. ("Triton"), Advanced Technology Industries, Inc. ("ATI") (a related
party) and ATI's subsidiary, ATI Nuklear AG ("AG"), pursuant to which Triton has
taken control of the Company and the Company will divest itself of the Nurescell
Technology, as described in more detail below.

   PRODUCT TESTING AND MARKETING. Since inception, the Company has spent
approximately $475,000 on research and development activities with respect to
the Nurescell Technology. In light of the Restructure Agreement and the
Company's financial condition, the Company has ceased all product testing and
marketing.

   INTELLECTUAL PROPERTY RIGHTS. To date, patents for the Nurescell Technology
have been granted in the United States, the Russian Federation and Taiwan. In
addition, the Company has applied for certain other foreign patents and
protection of its intellectual property to the extent appropriate under the
circumstances.

   PERSONNEL. From April 1, 2002 until March 21, 2003, the Company had one
full-time employee. Since March 21, 2003, the Company has had no employees, with
the services of Lawrence Shatsoff (the Company's sole director and officer since
that date) being provided pursuant to a consulting agreement between Mr.
Shatsoff, the Company and Triton. See "Item 11. Interest of Management and
Others in Certain Transactions."

   THE RESTRUCTURE AGREEMENT. The Restructure Agreement provides for the
transfer by the Company to ATI or AG of all right, title and interest in and to
the Nurescell Technology in return for the cancellation by ATI and AG of all
debts and other obligations owed to either of them by the Company (the "ATI
Obligations"), consisting primarily of a $1 million promissory note, plus
interest, secured by the Nurescell Technology (among other things) and
approximately $200,000 in short-term cash advances and payments made by ATI to
or on behalf of the Company. The agreement also provides for conversion of the
Company's notes payable to Triton, which will give Triton a controlling interest
in the Company.

   The Restructure Agreement contains various customary provisions relating to
the Company, ATI and AG. Those provisions include, among other things,
representations and warranties with respect to (i) the execution and
enforceability of the Restructure Agreement and (ii) title to, and absence of
liens on, the Nurescell Technology. The preparation and circulation of an
Information Statement to the Company's stockholders is a condition to the
completion of the Restructure Agreement, and, subject to certain provisions of
the Restructure Agreement, it is expected that such completion will occur 23
days after the Information Statement is sent or given to the Company's
stockholders. At this time, it is anticipated that the transfer of the Nurescell
Technology pursuant to the Restructure Agreement will take place in the third
quarter of 2003. In light of AG's security interest in the Nurescell Technology
in connection with the ATI Obligations, the parties have agreed that the
transfer of the Nurescell Technology pursuant to the Restructure Agreement
constitutes a transfer of collateral pursuant to Section 9609 of the California
Uniform Commercial Code.


                                       2
<PAGE>

   Following the transfer of the Nurescell Technology, the Company expects to
have essentially no assets. However, after that transfer, as well as certain
anticipated conversions of outstanding debt into Common Stock, it is expected
that the Company will be left with only approximately $100,000 in liabilities.
It is expected that those remaining liabilities will either be settled for cash
using funds provided by Triton or paid with funds provided by a third party in
conjunction with a possible merger or other consolidation with the Company
(which is currently being investigated by Triton). As the transfer of the
Nurescell Technology will involve a transfer of assets in return for
cancellation of certain indebtedness, the Company's current stockholders will
receive no payment as a result of that transfer and will retain their equity
interests in the Company following the consummation of the transaction. For
accounting purposes, the Company will treat the transfer of the Nurescell
Technology as an exchange for the extinguishment of debt.

ITEM 7. DESCRIPTION OF PROPERTY.
--------------------------------

   For a portion of the past fiscal year, the Company's executive offices were
located in rented premises of approximately 300 square feet with a monthly rent
of $357. That lease has since been terminated and the Company now operates out
of the home of Lawrence Shatsoff at no charge. Due to its minimal level of
operations, the Company expects that this arrangement will be sufficient for its
executive offices for the foreseeable future.

ITEM 8. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.
----------------------------------------------------------------

   Set forth below is information regarding the sole director and officer of the
Company. The Company has no employees.

          Name                      Age                 Positions
          ----                      ---                 ---------

     Lawrence Shatsoff              49           President, Chief Financial
                                                 Officer, Secretary and director

   Mr. Shatsoff has been the Company's sole director and officer since March 21,
2003, when all of the then existing officers and directors resigned pursuant to
the Restructure Agreement. From June 2001 until December 2002, Mr. Shatsoff was
President of Markland Technologies, Inc., a publicly-held technology company
involved in the sale and marketing of home theater products. Prior to becoming
President of Markland Technologies, Mr. Shatsoff served from June 2000 to June
2001 in various executive capacities and as a director of Corzon, Inc., a
publicly-held telecommunications company. From 1995 to 2000, Mr. Shatsoff was
the Vice President and Chief Operations Officer of DCI Telecom, Inc., a
publicly-held company, and from 1991 to 1994, he served as Vice President and
Chief Operations Officer of Alpha Products, a privately-held computer circuit
board sales and manufacturing company. Mr. Shatsoff also performs independent
management consulting services through his own company, Business Analysis Group,
LLC. Mr. Shatsoff graduated in 1975 from Rider College with a B.S. Degree in
Decision Sciences and Computers.

   Subject to prior resignation or removal, the Company's director serves in
that capacity until the next annual meeting of stockholders or until his
successor is elected or appointed and duly qualified. Officers are appointed by
the Board of Directors and serve in that capacity until resignation or removal.
Except as provided in the Restructure Agreement or as agreed upon between Mr.
Shatsoff and Triton, there are no arrangements or understandings between Mr.
Shatsoff and any other person pursuant to which he was selected for his office
or position. Within the past five years (i) no petition under the federal
Bankruptcy Act or any state insolvency law has been filed by or against Mr.
Shatsoff, and no receiver, fiscal agent or similar officer has been appointed by
a court for the business or property of such person, or any partnership in which
such person was a general partner at or within the two years before the time of
such filing, or any corporation or business association of which such person was
an executive officer at or within the past two years and (ii) Mr. Shatsoff has
not been convicted in a criminal proceeding (excluding traffic violations and
other minor offenses).



                                       3
<PAGE>

ITEM 9. REMUNERATION OF DIRECTORS AND OFFICERS.
-----------------------------------------------

   EXECUTIVE COMPENSATION. The following table sets out the compensation paid on
a cash basis during the fiscal year ended March 31, 2003 to (i) each of the
Company's three highest paid officers or directors and (ii) the Company's
officers and directors as a group:


Name or Identity of Group            Title                          Compensation
-------------------------            -----                          ------------

   John Longenecker                Director (1)                        $ 0 (2)

   James Samuelson                 President, Secretary and
                                   Chief Financial Officer (3)         $ 0 (2)

   Shelby Brewer                   Director (3)                        $ 0 (2)

   Lawrence Shatsoff               President, Secretary, Chief
                                   Financial Officer and Director (4)  $ 0 (4)


(1) Resigned June 15, 2002.

(2) Does not include group life, health, hospitalization or other benefit plans
which do not discriminate in scope, terms or operation in favor of officers or
directors and which are available generally to all salaried employees.

(3) Resigned March 21, 2003.

(4) Has occupied the positions shown since March 21, 2003. Mr. Shatsoff is not
an employee of the Company but receives compensation for his services pursuant
to a consulting agreement with the Company and Triton. See "Item 11. Interest of
Management and Others in Certain Transactions."

   STOCK OPTION PLAN. Under the Company's 1998 Stock Option Plan (the "Option
Plan"), all officers and directors of the Company, as well as its employees and
consultants, are eligible to be selected to participate. The purpose of the
Option Plan is to promote the interests of the Company by providing participants
with an inducement to maintain their status with the Company and to further
advance the interests of the Company. Options are granted in consideration of
things such as past and potential future contributions to the Company.

   As of March 31, 2003, no options were outstanding under the Option Plan. The
aggregate number of shares of Common Stock deliverable upon the exercise of all
options granted under the Option Plan cannot exceed 360,000 shares. In the event
of any merger, reorganization, recapitalization, stock dividend, stock split or
reverse split or other act or event which effects a restructure of the Company's
Common Stock (but not including the issuance of additional shares of Common
Stock or preferred stock), the total number of shares covered by the Option
Plan, the exercise price, and number of shares covered by outstanding options
granted pursuant to the Option Plan, and the rights, preferences and privileges
incident to such shares will be appropriately adjusted as to any remaining
options. Any shares covered by options granted pursuant to the Option Plan which
expire or are canceled are available for reissuance under the Option Plan.

   There is no maximum or minimum number of shares which may be subject to
options granted to any one individual under the Option Plan. The exercise price
of the stock covered by each option is determined at the time of grant;
provided, however, that (i) as to incentive stock options, such exercise price
will not be less than an amount equal to 100% of the "fair value" of the stock
(as determined pursuant to the Option Plan) on the date the option is granted
(110% for options granted to persons who hold 10% or more of the Company's
Common Stock) and (ii) as to all other options, such exercise price will not be
less than an amount equal to 85% of the fair value of the stock on the date the
option is granted. Subject to the express provisions of the Option Plan, the
terms of each option granted under the Option Plan, including the exercise
price, manner of exercise, vesting and duration of each option, shall be as
specified in the applicable option agreement between the Company and the option
holder.

                                       4
<PAGE>

   The Board of Directors of the Company may amend, suspend or terminate the
Option Plan at any time. Unless terminated sooner, the Option Plan will
terminate on June 15, 2008 and no options may be granted thereafter. No
amendment, suspension or termination of the Option Plan will, without the
consent of the option holder, be made which would alter or impair any rights or
obligations under any option then outstanding. Upon the dissolution or
liquidation of the Company, the Option Plan will terminate, and any option
previously granted thereunder and not yet exercisable in full will also
terminate. In the event, however, that the Company is succeeded by another
corporation, the Option Plan and any remaining options granted thereunder will
be assumed by such successor corporation, subject to such adjustments as may be
necessary due to the capital structure of the successor corporation. It is not
expected that any options will be granted in the future under the Option Plan.
There is no plan currently to change or terminate the Option Plan due to the
Restructure Agreement.

   COMPENSATION TO DIRECTORS. Except as noted above, the Company has not
compensated its directors for their services as such, although in the past they
have been granted options under the Option Plan. It is, however, the policy of
the Company to reimburse directors for reasonable expenses incurred in attending
meetings of the Board of Directors.

ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS.
-----------------------------------------------------------------------

   COMMON STOCK. The following table sets forth the record ownership of the
Company's Common Stock (the Company's only class of voting stock) as of June 25,
2003 as to (i) each person or entity who owns more than 10% of the Company's
Common Stock, (ii) each person named in the table appearing in "Item 9.
Remuneration of Directors and Officers" and (iii) all officers and directors of
the Company as a group:
<TABLE>
<CAPTION>
Name and Address of Owner                 Number of Shares Owned (1)        Percent of Class (2)
-------------------------                 --------------------------        --------------------
<S>                                            <C>                                <C>
Triton Private Equities Fund, L.P.             30,000,000 (3)                     65.1%
225 N. Market St., Suite 333
Wichita, Kansas  67202

John Longenecker                                  425,900 (3)                     0.92%
13380 Pantera Rd.
San Diego, California 92130

James Samuelson                                       -0- (3)                       N/A
2030 Main Street
Irvine, California 92614

Shelby Brewer                                      15,568 (3)                     0.03%
2151 Jamieson Ave., Suite 1607
Alexandria, Virginia 22314

Lawrence Shatsoff                                     -0- (3)                       N/A
P.O. Box 116
North Haven, Connecticut  06473

All officers and directors                        441,468 (3)                     0.95%
as a group (4 persons) (4)
</TABLE>


(1) To the Company's knowledge, the persons named in the table have sole voting
and investment power with respect to all shares of Common Stock owned by them,
subject to community property laws where applicable.

(2) Based on 46,060,025 shares of Common Stock outstanding, without taking into
account any shares issuable upon the exercise of outstanding options, warrants
or other rights.

(3) Does not include shares which can be obtained pursuant to the exercise of
options, warrants and other stock acquisition rights, as described in the table
below.

(4) Includes John Longenecker, James Samuelson and Shelby Brewer, who are no
longer officers or directors. See "Item 9. Remuneration of Directors and
Officers" above.

   The Company has no class of non-voting securities presently outstanding.


                                       5
<PAGE>

   OPTIONS, WARRANTS AND OTHER RIGHTS. The following table sets forth the
options, warrants and other rights to acquire securities of the Company which
were held as of June 25, 2003 by (i) each person or entity who owns more than
10% of the Company's Common Stock, (ii) each person named in the table appearing
in "Item 9. Remuneration of Directors and Officers," where the total market
value of securities obtainable by such person under all outstanding options
exceeds $10,000, and (iii) all officers and directors of the Company as a group:
<TABLE>
<CAPTION>

                                        Title and Amount of
                                        Common Stock Called
                                     For by Options, Warrants
Name of Holder                            And Other Rights       Exercise Price    Date of Exercise
--------------                            ----------------       --------------    ----------------
<S>                                       <C>                         <C>              <C>
Triton Private Equities Fund, L.P.        1,346,108,980(1)            (1)              (1)

Lawrence Shatsoff                              (2)                    (2)              (2)

All officers and directors
as a group (4 persons) (3)                     (2)                    (2)              (2)
</TABLE>


(1)      Triton holds $305,000 in principal amount of the Company's Series
         1999-A Convertible Promissory Note and $385,000 in principal amount of
         the Company's Series 2000-A Convertible Promissory Note (collectively,
         the "Notes"). The Notes, together with accrued interest thereon and
         certain accrued penalties with respect thereto, were convertible into
         up to 1,257,188,000 shares of Common Stock as of June 25, 2003. The
         conversion amount varies based on a percentage of a specified average
         closing bid price of the Common Stock during a specified period prior
         to the conversion date. In addition, as of June 25, 2003, Triton had
         loaned to the Company or provided for its benefit $87,986 for operating
         expenses (the "Operating Loans"). The Operating Loans, together with
         accrued interest, are convertible into shares of the Company's Common
         Stock at the same rate as the Company's Series 2000-A Convertible
         Promissory Note, resulting in up to 88,920,980 shares of Common Stock
         being issuable to Triton on the Operating Loans as of June 25, 2003.

(2)      For his services to the Company, Mr. Shatsoff is entitled to receive
         shares of the Company's Common Stock in an amount to be determined at
         some future date by mutual agreement between the Company, Triton and
         Mr. Shatsoff. See "Item 11. Interest of Management and Others in
         Certain Transactions."

(3)      Includes John Longenecker, James Samuelson and Shelby Brewer, who are
         no longer officers or directors; however, the options held by such
         persons are excluded from the table because the total market value of
         securities obtainable by such persons under all outstanding options
         does not exceed $50,000.

ITEM 11. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.
-------------------------------------------------------------------

   The following is a description of those transactions by the Company in the
past two fiscal years or which are presently proposed in which (i) any Company
director, officer or greater than 10% stockholder (or a relative or spouse
thereof, or any relative of such spouse) has or is to have a direct or indirect
interest and (ii) the amount involved exceeds $50,000.

   Pursuant to an agreement with Triton, certain creditors of the Company have
agreed to exchange a total of $722,459 in accounts payable, accrued expenses and
amounts due to stockholders and former officers into an aggregate of 72,245,862
shares of the Company's Common Stock. Of those creditors, five are former
officers or directors of the Company who are owed a total of $571,350 by the
Company for unpaid compensation and/or loans. That amount is exchangeable for
57,135,024 shares of the Company's Common Stock.

   On March 21, 2003, the Company entered into the Restructure Agreement with
Triton, ATI and AG, pursuant to which Triton has taken control of the Company
and the Company will divest itself of the Nurescell Technology. ATI is a former
controlling stockholder of the Company. See "Item 6. Description of Business -
The Restructure Agreement."


                                       6
<PAGE>

   Triton currently holds the Notes, which were issued to Triton in 1999 and
2000 and were convertible into up to 1,257,188,000 shares of the Company's
Common Stock as of June 25, 2003. As of June 25, 2003, Triton had also loaned to
the Company, or provided for its benefit, the Operating Loans, such amounts to
be repaid by the Company under the terms of a Convertible Promissory Note dated
March 21, 2003. The Operating Loans, together with accrued interest, are
convertible into shares of the Company's Common Stock at the same rate as one of
the Notes, resulting in up to 88,920,980 shares of Common Stock being issuable
to Triton as a result of the Operating Loans as of June 25, 2003.

   As of April 1, 2003, the Company, Triton and Lawrence Shatsoff entered into a
Consulting Agreement pursuant to which Mr. Shatsoff is to act as an officer and
director of the Company for a one year term (subject to extension at the
Company's option). For his services, Mr. Shatsoff is to be paid $3,000 per month
and is entitled to receive shares of the Company's Common Stock in an amount to
be determined by mutual agreement between the Company, Triton and Mr. Shatsoff.
The agreement is terminable by the Company at any time, with or without cause,
on no more than 30 days prior notice.


                                     PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
        OTHER SHAREHOLDER MATTERS.
---------------------------------------------------------------------------

   The Company's Common Stock is quoted on the OTC Bulletin Board under the
symbol "NUSL." The following table sets forth the quarterly high and low bids
for the Company's Common Stock as reported by the OTC Bulletin Board for the
past two fiscal years:


        Fiscal Year 2002                                      High*       Low*
        ----------------                                      -----       ----

        First quarter ....................................... $0.51      $0.11
        Second quarter ...................................... $0.20      $0.06
        Third quarter ....................................... $0.10      $0.02
        Fourth quarter ...................................... $0.045     $0.005

        Fiscal Year 2003
        ----------------

        First quarter ....................................... $0.045     $0.009
        Second quarter ...................................... $0.015     $0.001
        Third quarter ....................................... $0.001     $0.001
        Fourth quarter ...................................... $0.001     $0.001

* These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

   The Company has not paid any cash dividends on its Common Stock since its
incorporation and anticipates that, for the foreseeable future, any earnings
will be retained for use in its business. As of June 25, 2003, the number of
record holders of the Company's Common Stock was approximately 280.

   For information regarding shares of Common Stock authorized for issuance
under the Company's equity compensation plans, see "Item 9. Remuneration of
Directors and Officers - Stock Option Plan" and "Item 10. Security Ownership of
Management and Certain Security Holders - Options, Warrants and Other Rights."

ITEM 2. LEGAL PROCEEDINGS.
--------------------------

   To the knowledge of management, there is no litigation pending against the
Company.

ITEM 3.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
-------------------------------------------------------

   None, except as previously reported in the Company's reports on Form 8-K.

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

   There were no matters submitted to a vote of security holders during the
quarter ended March 31, 2003.


                                       7
<PAGE>

ITEM 5.  COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
-----------------------------------------------------------

   Section 16 of the Securities Exchange Act requires that officers and
directors of the Company, as well as those persons who beneficially own more
than 10% of the outstanding Common Stock of the Company, file reports of
security ownership and changes in such ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission within specified time periods. Based solely
on a review of copies of such reports furnished to the Company, the Company
believes that during the year ended March 31, 2003, such filing requirements
were complied with by its officers, directors and applicable stockholders,
except that Triton filed its report on Form 3 with respect to its acquisition of
Common Stock pursuant to the Restructure Agreement one day late.

ITEM 6. REPORTS ON FORM 8-K.
----------------------------

     The Company filed no reports on Form 8-K during the quarter ended March 31,
2003.


                                    PART F/S

                         INDEX TO FINANCIAL STATEMENTS




                                                                       Page No.
                                                                       -------

INDEPENDENT AUDITORS' REPORT                                             F-1


BALANCE SHEET                                                            F-2
  At March 31, 2003


STATEMENTS OF OPERATIONS                                                 F-3
  For the Years Ended March 31, 2003 and 2002
  For the Period from Inception (May 12, 1998) to March 31, 2003


STATEMENTS OF STOCKHOLDERS' DEFICIENCY                                  F-4 - 7
  For the Period from Inception (May 12, 1998) to March 31, 2003


STATEMENTS OF CASH FLOWS                                                 F-8
  For the Years Ended March 31, 2003 and 2002
  For the Period from Inception (May 12, 1998) to March 31, 2003


NOTES TO FINANCIAL STATEMENTS                                           F-9 - 22





                                       8
<PAGE>


To the Board of Directors and Stockholders
Nurescell Inc.


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


We have audited the accompanying balance sheet of Nurescell Inc. (a development
stage company) (the "Company") as of March 31, 2003, and the related statements
of operations, stockholders' deficiency and cash flows for the years ended March
31, 2003 and 2002 and for the period from inception (May 12, 1998) to March 31,
2003. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Nurescell Inc. (a development
stage company) as of March 31, 2003 and 2002, and the results of its operations,
changes in stockholders' deficiency and cash flows for the years then ended and
for the period from inception (May 12, 1998) to March 31, 2003, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company incurred losses from
operations since inception and, as of March 31, 2003, had a deficit accumulated
during the development stage of $10,895,909 and a working capital deficit of
$4,226,151. In addition, the Company is in default on its convertible notes
payable. As a result of the debt defaults, on March 21, 2003, the Company
entered into a Restructure Agreement in which it agreed to transfer its
technology and only active business. As discussed further in Note 1 to the
financial statements, these factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 1. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



                                         /S/ MARCUM & KLIEGMAN LLP


New York, New York
June 16, 2003

                                      F-1
<PAGE>


                                 NURESCELL INC.
                      (A Company in the Development Stage)

                                 BALANCE SHEET

                                 MARCH 31, 2003





                                         ASSETS
                                         ------

CURRENT ASSETS:
  Cash                                                             $      5,125
                                                                   -------------
        TOTAL ASSETS                                               $      5,125
                                                                   =============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------


CURRENT LIABILITIES:
  Convertible notes payable - ATI (related party)                  $  1,000,000
  Convertible notes payable - Triton (related party)                    690,000
  Accounts payable                                                      296,399
  Due to stockholders and former officers                               254,022
  Accrued expenses                                                    1,540,855
  Unearned revenue                                                      450,000
                                                                   -------------
        TOTAL CURRENT LIABILITIES                                     4,231,276
                                                                   -------------
STOCKHOLDERS' DEFICIENCY:
  Preferred stock - $0.0001 par value; 1,000,000 shares
    authorized; -0- shares issued and outstanding                            --
  Common stock - $0.0001 par value; 50,000,000 shares
    authorized; 46,070,238 shares issued and 46,060,025
    shares outstanding                                                    4,607
  Additional paid-in capital                                          6,695,151
  Treasury stock, at cost - 10,213 shares                               (30,000)
  Deficit accumulated during the development stage                  (10,895,909)
                                                                   -------------
        TOTAL STOCKHOLDERS' DEFICIENCY                               (4,226,151)
                                                                   -------------
        TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY             $      5,125
                                                                   =============




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

                                      F-2
<PAGE>
<TABLE>

                                    NURESCELL INC.
                         (A Company in the Development Stage)

                               STATEMENTS OF OPERATIONS

<CAPTION>


                                        For the Years Ended        For the Period
                                             March 31,            from May 12, 1998
                                   ----------------------------- (Date of Inception)
                                       2003             2002       to March 31, 2003
                                   -------------   -------------     -------------
<S>                                <C>             <C>               <C>
SALES                              $         --    $         --      $         --

COST OF SALES                                --              --                --
                                   -------------   -------------     -------------
GROSS PROFIT (LOSS)                          --              --                --
                                   -------------   -------------     -------------
OPERATING EXPENSES:
  Bad debts                              25,000           8,700            33,700
  General and administrative             51,326          98,084           151,010
                                   -------------   -------------     -------------
    TOTAL OPERATING EXPENSES             76,326         106,784           184,710
                                   ------------    ------------      ------------
LOSS FROM OPERATIONS                    (76,326)       (106,784)         (184,710)
                                   -------------   -------------     -------------
OTHER INCOME (EXPENSES):
    Interest expense                     (8,313)         (4,854)          (16,236)
                                   -------------   -------------     -------------
    TOTAL OTHER EXPENSES                 (8,313)         (4,854)          (16,236)
                                   -------------   -------------     -------------

LOSS FROM CONTINUING OPERATIONS         (84,639)       (111,638)         (200,946)

LOSS FROM DISCONTINUED OPERATIONS      (364,689)     (2,206,433)      (10,694,963)
                                   -------------   -------------     -------------
NET LOSS                           $   (449,328)   $ (2,318,071)     $(10,895,909)
                                   =============   =============     =============

BASIC AND DILUTED LOSS PER SHARE:
  Continuing operations            $      (0.01)   $      (0.01)
  Discontinued operations                 (0.02)          (0.13)
                                   -------------   -------------
      NET LOSS PER SHARE           $      (0.03)   $      (0.14)
                                   =============   =============
WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING
    Basic and diluted                16,892,156      16,070,238
                                   =============   =============



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

                                         F-3
</TABLE>
<PAGE>
<TABLE>

                                           NURESCELL INC.
                                (A Company in the Development Stage)

                               STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                   FOR THE PERIOD FROM INCEPTION (MAY 12, 1998) TO MARCH 31, 2003


              (All per shares prices are presented rounded within two decimal places)

<CAPTION>

                                                   Common Stock          Additional       Stock
                                            --------------------------    Paid-in      Subscription
                                               Shares        Amount       Capital       Receivable
                                            ------------  ------------  ------------   ------------
<S>                                         <C>           <C>           <C>            <C>
Issuance of common stock
  Cash - Founding Shareholders
   (May and June 1998 at $.001 per share)     2,500,000   $       250   $     2,250    $        --
  Purchase of Technology
   (June 1998 at $.0001)                     10,000,000         1,000        (1,000)            --
  Cash - $1.00 per share (August 1998)          498,000            50       497,950             --
  Cash - $5.00 per share, net of
    issuance cost (September 1998)               79,000             8       349,992             --
  Common stock subscriptions                      5,000            --        25,000             --
Fair value of options granted                        --            --        30,000             --
Net loss, as restated for March 31, 1999             --            --            --             --
                                            ------------  ------------  ------------   ------------
BALANCE, MARCH 31, 1999                      13,082,000         1,308       904,192             --

Issuance of common stock
  Consulting/other services (May 1999
    through December 1999 at
    $1.12 - $3.51 per share)                    692,000            69     1,591,138             --
  Exercise of stock options
    (October 1999 at $.50 per share)            120,000            12        59,988             --
  Exercise of stock options
    (January 2000 at $1.00 per share)            15,000             2        14,998             --
  Exercise of stock options
    (March 2000 at $2.00 per share)              10,000             1        19,999             --
  Settlement of related party accruals
    (January 2000 at $2.13 per share)           524,226            52     1,113,928             --
  Award to directors and officers
    (January 2000 at $2.13 per share)           734,562            74     1,560,870             --
  Cash (April 1999 at $5.00)                     14,000             1        69,999             --
  Purchase of 10,213 shares of
    treasury stock at $2.94 per share                --            --            --             --
Fair value of options granted                        --            --       691,756             --
Fair value of warrants granted                       --            --       102,696             --
Net loss                                             --            --            --             --
                                            ------------  ------------  ------------   ------------
BALANCE, MARCH 31, 2000                      15,191,788   $     1,519   $ 6,129,564             --
                                            ============  ============  ============   ============


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

                                                F-4
</TABLE>
<PAGE>
<TABLE>

                                         NURESCELL INC.
                              (A Company in the Development Stage)

                             STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                 FOR THE PERIOD FROM INCEPTION (MAY 12, 1998) TO MARCH 31, 2003


            (All per shares prices are presented rounded within two decimal places)
<CAPTION>

                                                   Common Stock         Additional    Stock
                                             ------------------------    Paid-in   Subscription
                                                Shares       Amount      Capital    Receivable
                                             -----------  -----------  -----------  -----------
<S>                                          <C>          <C>          <C>          <C>
BALANCE, MARCH 31, 2000                      15,191,788   $    1,519   $6,129,564   $       --

Issuance of common stock
  Exercise of stock options (May 2000
    at $1.00 per share)                           7,500            1        7,499           --
  Exercise of stock options (June 2000
    at $0.25 per share)                         100,000           10       24,990      (25,000)
  Settlement of lawsuit (August 2000
    at $1.03 per share)                          34,000            3       35,058           --
  Settlement of lawsuit (February 2001
    at $0.34 per share)                          50,000            5       17,185           --
  Conversion of debt (August 2000 at
    $0.53 per share)                            250,000           25      132,475           --
  Conversion of debt (January 2001 at
    $0.30 per share)                            336,950           34      100,000           --
  To employee (August 2000 at $0.62
    per share)                                  100,000           10       62,490           --
Fair value of options and warrants granted           --           --      158,890           --
Net loss                                             --           --           --           --
                                             -----------  -----------  -----------  -----------
BALANCE, MARCH 31, 2001                      16,070,238        1,607    6,668,151      (25,000)

Net loss                                             --           --           --           --
                                             -----------  -----------  -----------  -----------
BALANCE, MARCH 31, 2002                      16,070,238        1,607    6,668,151      (25,000)

Conversion of debt (March 2003 at
    $0.001 per share)                        30,000,000        3,000       27,000           --
Write-off of stock subscription receivable           --           --           --       25,000

Net loss                                             --           --           --           --
                                             -----------  -----------  -----------  -----------
BALANCE, MARCH 31, 2003                      46,070,238   $    4,607   $6,695,151   $       --
                                             ===========  ===========  ===========  ===========



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

                                              F-5
</TABLE>
<PAGE>
<TABLE>

                                    NURESCELL INC.
                         (A Company in the Development Stage)

                        STATEMENTS OF STOCKHOLDERS' DEFICIENCY

            FOR THE PERIOD FROM INCEPTION (MAY 12, 1998) TO MARCH 31, 2003

       (All per shares prices are presented rounded within two decimal places)
<CAPTION>


                                              Treasury     Accumulated
                                               Stock         Deficit         Total
                                            ------------   ------------   ------------
<S>                                         <C>            <C>            <C>
Issuance of common stock
  Cash - Founding Shareholders
   (May and June 1998 at $.001 per share)   $        --    $        --    $     2,500
  Purchase of Technology
   (June 1998 at $.0001)                             --             --             --
  Cash - $1.00 per share (August 1998)               --             --        498,000
  Cash - $5.00 per share, net of
    issuance cost (September 1998)                   --             --        350,000
  Common stock subscriptions                         --             --         25,000
Fair value of options granted                        --             --         30,000
Net loss, as restated for March 31, 1999             --       (674,526)      (674,526)
                                            ------------   ------------   ------------
BALANCE, MARCH 31, 1999                              --       (674,526)       230,974

Issuance of common stock
  Consulting/other services (May 1999
    through December 1999 at
    $1.12 - $3.51 per share)                         --             --      1,591,207
  Exercise of stock options
    (October 1999 at $.50 per share)                 --             --         60,000
  Exercise of stock options
    (January 2000 at $1.00 per share)                --             --         15,000
  Exercise of stock options
    (March 2000 at $2.00 per share)                  --             --         20,000
  Settlement of related party accruals
    (January 2000 at $2.13 per share)                --             --      1,113,980
  Award to directors and officers
    (January 2000 at $2.13 per share)                --             --      1,560,944
  Cash (April 1999 at $5.00)                         --             --         70,000
  Purchase of 10,213 shares of
    treasury stock at $2.94 per share           (30,000)            --        (30,000)
Fair value of options granted                        --             --        691,756
Fair value of warrants granted                       --             --        102,696
Net loss                                             --     (6,416,192)    (6,416,192)
                                            ------------   ------------   ------------
BALANCE, MARCH 31, 2000                     $   (30,000)   $(7,090,718)   $  (989,635)
                                            ============   ============   ============


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

                                         F-6
</TABLE>

<PAGE>
<TABLE>


                                      NURESCELL INC.
                           (A Company in the Development Stage)

                          STATEMENTS OF STOCKHOLDERS' DEFICIENCY

              FOR THE PERIOD FROM INCEPTION (MAY 12, 1998) TO MARCH 31, 2003


         (All per shares prices are presented rounded within two decimal places)

<CAPTION>

                                               Treasury      Accumulated
                                                Stock          Deficit          Total
                                             -------------   -------------   -------------
<S>                                          <C>             <C>             <C>
BALANCE, MARCH 31, 2000                      $    (30,000)   $ (7,090,718)   $   (989,635)

Issuance of common stock
  Exercise of stock options (May 2000
    at $1.00 per share)                                --              --           7,500
  Exercise of stock options (June 2000
    at $0.25 per share)                                --              --              --
  Settlement of lawsuit (August 2000
    at $1.03 per share)                                --              --          35,061
  Settlement of lawsuit (February 2001
    at $0.34 per share)                                --              --          17,190
  Conversion of debt (August 2000 at
    $0.53 per share)                                   --              --         132,500
  Conversion of debt (January 2001 at
    $0.30 per share)                                   --              --         100,034
  To employee (August 2000 at $0.62
    per share)                                         --              --          62,500
Fair value of options and warrants granted             --              --         158,890
Net loss                                               --      (1,037,792)     (1,037,792)
                                             -------------   -------------   -------------
BALANCE, MARCH 31, 2001                           (30,000)     (8,128,510)     (1,513,752)

Net loss                                               --      (2,318,071)     (2,318,071)
                                             -------------   -------------   -------------
BALANCE, MARCH 31, 2002                           (30,000)    (10,446,581)     (3,831,823)

Conversion of debt (March 2003 at
    $0.001 per share)                                  --              --          30,000
Write-off of stock subscription receivable             --              --          25,000

Net loss                                               --        (449,328)       (449,328)
                                             -------------   -------------   -------------
BALANCE, MARCH 31, 2003                      $    (30,000)   $(10,895,909)   $ (4,226,151)
                                             =============   =============   =============



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

                                           F-7
</TABLE>

<PAGE>
<TABLE>

                                             NURESCELL INC.
                                  (A Company in the Development Stage)

                                        STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                                           For the Period
                                                               For the Years Ended         from Inception
                                                                     March 31,             (May 12, 1998)
                                                           -----------------------------    to March 31,
                                                               2003            2002             2003
                                                           -------------   -------------   -------------
<S>                                                        <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                 $   (449,328)   $ (2,318,071)   $(10,895,909)
  Adjustments to reconcile net loss to net
    cash used in operating activities:
      Depreciation                                               15,427          15,555          60,145
      Bad debts                                                  25,000           8,700          33,700
      Inventory write-down                                       10,022          54,515          64,537
      Write-off of intangible assets                                 --          87,944          87,944
      Amortization of discount on notes payable                      --              --         556,579
      Loss on abandonment of computer software                   32,248              --          39,026
      Issuance of stock for services                                 --              --       4,380,882
      Fair value of options and warrants                             --              --         880,646
      Gain on conversion of debt                                     --              --        (280,000)
  Changes in Operating Assets and Liabilities:                       --
      Accounts receivable - related party                            --         434,480          (8,700)
      Inventory                                                      --          (4,645)        (64,537)
      Prepaid expenses                                               --          10,132              --
      Accounts payable                                           39,355         101,545         296,399
      Accrued expenses                                          490,855         661,356       1,540,855
      Accrued termination fee                                        --       1,000,000       1,000,000
      Unearned income                                          (200,000)       (200,000)        450,000
                                                           -------------   -------------   -------------
      NET CASH USED IN OPERATING ACTIVITIES                     (36,421)       (148,489)     (1,858,433)
                                                           -------------   -------------   -------------
CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment                                --              --         (99,171)
  Acquisition of intangibles                                         --          (7,059)        (87,944)
                                                           -------------   -------------   -------------
      NET CASH USED IN INVESTING ACTIVITIES                          --          (7,059)       (187,115)
                                                           -------------   -------------   -------------
CASH FLOWS FROM FINANCING ACTIVITIES
  (Repayment of) proceeds from overdraft                           (849)            849              --
  Proceeds from sale of common stock                                 --              --       1,018,000
  Prepaid financing costs                                            --              --         (96,349)
  Proceeds from stockholder and former officers
    loans-net                                                    42,395         140,841         254,022
  Proceeds from issuance of convertible notes                        --              --         875,000
                                                           -------------   -------------   -------------
     NET CASH PROVIDED BY FINANCING ACTIVITIES                   41,546         141,690       2,050,673
                                                           -------------   -------------   -------------
INCREASE (DECREASE) IN CASH                                       5,125         (13,858)          5,125
CASH - BEGINNING OF PERIOD                                           --          13,858              --
                                                           -------------   -------------   -------------
                                                           $      5,125    $         --    $      5,125
                                                           =============   =============   =============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
--------------------------------------------------

  Cash paid during the year for:
    Interest                                               $         --    $         --    $      7,359
                                                           =============   =============   =============
    Income taxes                                           $         --    $        525    $      1,600
                                                           =============   =============   =============
  NON CASH FLOW FINANCING ACTIVITY:

Issuance of common stock upon conversion of note payable
                                                           $     30,000    $         --    $     30,000
                                                           =============   =============   =============



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

                                                  F-8
</TABLE>

<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE  1 -  BUSINESS AND CONTINUED OPERATIONS

Nurescell Inc. (the "Company") is a development stage company that was formed in
1998 for the purpose of developing and commercially exploiting a proprietary
radiation shielding technology (the "Nurescell Technology") for use by the
nuclear power industry and others producing, handling or storing radioactive
materials. The Nurescell Technology material, which is comprised of a unique
composite of materials, was designed for incorporation into the structural
components of new and existing nuclear reactors and other facilities in order to
provide a cost-effective safeguard from the lethal effect of radiation while
achieving a minimal disruption to existing facilities. In addition, it was
expected to provide an innovative shielding material for various other purposes,
including nuclear accelerator and defense research applications. To date, the
Company has failed to generate any significant revenue from the Nurescell
Technology. Having exhausted all of its funding and without any source of
revenue, the Company has been forced to reduce its operations to a minimal
level. On March 21, 2003, the Company entered into a Restructure Agreement (the
"Restructure Agreement") with Triton Private Equities Fund, L.P. ("Triton"),
Advanced Technology Industries, Inc. ("ATI") (a related party) and ATI's
subsidiary, ATI Nuklear AG ("AG"), pursuant to which Triton has taken control of
the Company and the Company will divest itself of the Nurescell Technology, as
described in more detail below.

The Restructure Agreement provides for the transfer by the Company to ATI or AG
of all right, title and interest in and to the Nurescell Technology in return
for the cancellation by ATI and AG of all debts and other obligations owed to
either of them by the Company (the "ATI Obligations"), consisting primarily of a
$1 million promissory note, plus interest, secured by the Nurescell Technology
(among other things) and approximately $200,000 in short-term cash advances and
payments made by ATI to or on behalf of the Company. The agreement also provides
for conversion of the Company's notes payable to Triton, which will give Triton
a controlling interest in the Company.

The Restructure Agreement contains various customary provisions relating to the
Company, ATI and AG. Those provisions include, among other things,
representations and warranties with respect to (i) the execution and
enforceability of the Restructure Agreement and (ii) title to, and absence of
liens on, the Nurescell Technology. The preparation and circulation of an
Information Statement to the Company's stockholders is a condition to the
completion of the Restructure Agreement, and, subject to certain provisions of
the Restructure Agreement, it is expected that such completion will occur 23
days after the Information Statement is sent or given to the Company's
stockholders. At this time, it is anticipated that the transfer of the Nurescell
Technology pursuant to the Restructure Agreement will take place in the third
quarter of 2003. In light of AG's security interest in the Nurescell Technology
in connection with the ATI Obligations, the parties have agreed that the
transfer of the Nurescell Technology pursuant to the Restructure Agreement
constitutes a transfer of collateral pursuant to Section 9609 of the California
Uniform Commercial Code.

                                      F-9
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE  1 -  BUSINESS AND CONTINUED OPERATIONS (Continued)

Following the transfer of the Nurescell Technology, the Company expects to have
essentially no assets. However, after that transfer, as well as certain
anticipated conversions of outstanding debt into common stock, it is expected
that the Company will be left with only approximately $100,000 in liabilities.
It is expected that those remaining liabilities will either be settled for cash
using funds provided by Triton or paid with funds provided by a third party in
conjunction with a possible merger or other consolidation with the Company
(which is currently being investigated by Triton). As the transfer of the
Nurescell Technology will involve a transfer of assets in return for
cancellation of certain indebtedness, the Company's current stockholders will
receive no payment as a result of that transfer and will retain their equity
interests in the Company following the consummation of the transaction. For
accounting purposes, the Company will treat the transfer of the Nurescell
Technology as an exchange for the extinguishment of debt.

The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States of America, which
contemplate continuation of the Company as a going concern. However, as shown in
the accompanying financial statements, the Company is in the development stage
and has incurred losses from operations since inception. As of March 31, 2003,
the Company had an accumulated deficit since inception of $10,895,909. All of
the factors discussed above raise substantial doubt about the Company's ability
to continue as a going concern.

Management's business plan will require additional financing. To support its
operations during the year ended March 31, 2003, the Company borrowed monies
from officers and certain stockholders in the amount of $42,395.

The Company is actively seeking a merger or other business combination with a
private company. The Company's ability to continue as a going concern is
dependent upon additional financing, restructuring its existing liabilities, and
the successful completion of a merger or other business combination. No
assurance can be given that the Company will be successful in locating a
candidate for a merger or other business combination and/or completing such
transaction. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates
----------------

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


                                      F-10

<PAGE>
                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
------------

Deferred taxes represent the tax effects of differences between the financial
reporting and tax bases of the Company's assets and liabilities at the enacted
tax rates in effect for the years in which the differences are expected to
reverse. The Company evaluates the recoverability of deferred tax assets and
establishes a valuation allowance when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. Income tax
expense consists of the tax payable for the period and the change during the
period in deferred tax assets and liabilities.

Research and Development Costs
------------------------------

Research and development costs are expensed as incurred. The amount charged to
research and development for the years ended March 31, 2003 and 2002
approximated $-0- and $404,000, respectively, and is reflected in loss from
discontinued operations in the accompanying statements of operations.

Net Loss Per Common Share
-------------------------

Basic Earnings Per Share ("EPS") is calculated by dividing income available to
common stockholders (the "numerator") by the weighted average number of common
shares outstanding (the "denominator") during the period. The computation of
diluted EPS is similar to the computation of basic EPS, except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the dilutive potential common shares (that is,
securities such as options, warrants, convertible securities, or contingent
stock agreements) had been issued. In addition, in computing the dilutive effect
of convertible securities, the numerator is adjusted to add back (a) any
convertible preferred dividends and (b) the after-tax amount of interest
recognized in the period associated with any convertible debt. The computation
of diluted EPS shall not assume conversion, exercise, or contingent issuance of
securities that would have an antidilutive effect on EPS.

Fair Value of Financial Instruments
-----------------------------------

The reported carrying amount of the Company's cash, convertible notes, accounts
payable, due to stockholders and former officers, accrued expenses and unearned
revenue approximates the estimated fair values due to the short-term maturities
of those financial instruments.

Revenue Recognition
-------------------
The Company recognizes revenue from licensing and sub-licensing sales when the
following criteria are met (1) persuasive evidence of an arrangement exists, (2)
delivery has occurred, (3) the fee is fixed and determinable, and (4)
collectibility is reasonably assured.


                                      F-11
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Stock Options and Similar Equity Instruments
--------------------------------------------

As permitted under SFAS No. 148, "Accounting for Stock-Based Compensation -
Transaction and Disclosure"' which amended SFAS N0. 123, "Accounting for
Stock-Based Compensation", the Company has elected to continue to follow the
intrinsic value method in accounting for its stock-based employee compensation
arrangements as defined by Accounting Principles Board Opinion ("APB") No. 25,
"Accounting for Stock Issued to Employees", and related interpretations
including FASB Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation", an interpretation of APB. 25. No stock-based
employee compensation cost is reflected in operations, as all options granted
under those plans have an exercise price equal to or above the market value of
the underlying common stock on the date of grant. The follow table illustrates
the effect on net loss and net loss per share as if the Company had applied the
fair value recognition provisions of SFAS No. 123 to stock-based employee
compensation:

                                                         For the Year Ended
                                                              March 31,
                                                         2003           2002
                                                     ---------------------------

Net loss attributable to common shareholders
 As reported                                         $  (449,328)   $(2,318,071)
 Less:  Stock-based employee compensation
  expense determined under fair value-based
  method for all awards                                       --             --
                                                     ------------   ------------
 Pro forma                                           $  (449,328)   $(2,318,071)
                                                     ============   ============
Basic and diluted net loss per share
 As reported
           Continuing operations                     $     (0.01)   $     (0.01)
        Discontinued operations                            (0.02)         (0.13)
                                                     ------------   ------------
 Net loss per share                                  $     (0.03)   $     (0.14)
                                                     ============   ============
 Pro forma
            Continuing operations                    $     (0.01)   $     (0.01)
        Discontinued operations                            (0.02)         (0.13)
                                                     ------------   ------------
 Net loss per share                                  $     (0.03)   $     (0.14)
                                                     ============   ============

                                      F-12
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Segment Information
-------------------

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," establishes standards for the way public companies report
information about operating segments and related disclosures about products and
services, geographic areas and major customers in annual financial statements.
The Company views its business as principally one segment.

Recent Accounting Pronouncements and Adoption of New Policies
-------------------------------------------------------------

As of March 31, 2003, the Company has adopted SFAS No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities ("SFAS No. 146")." " SFAS No.
146 requires that a liability for a cost associated with an exit or disposal
activity be recognized when the liability is incurred versus the date an entity
commits to an exit plan under previously existing guidance. SFAS No. 146 also
establishes that fair value is the objective for initial measurement of the
liability. The provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early application
encouraged. The adoption of SFAS No. 146 had no significant impact on the
Company's financial position and results of operations.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others." FIN 45 requires that upon
issuance of a guarantee, the guarantor must recognize a liability for the fair
value of the obligation it assumes under that guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
disclosure requirements are effective for financial statements of interim or
annual periods ending after December 15, 2002. The recognition and measurement
provisions are effective on a prospective basis to guarantees issued or modified
after December 31, 2002. The adoption of Fin 45 did not have a material impact
on the Company's financial position and results of operations.

In January 2003, the FASB issued FASB Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." FIN 46 provides guidance on the
identification of entities for which control is achieved through means other
than through voting rights, variable interest entities, and how to determine
when and which business enterprises should consolidate variable interest
entities. This interpretation applies immediately to variable interest entities
created after January 31, 2003. It applies in the first fiscal year or interim
period beginning after June 15, 2003, to variable interest entities in which an
enterprise holds a variable interest that it acquired before February 1, 2003.
The adoption of this interpretation is not expected to have a material impact on
the Company's financial position and results of operations.


                                      F-13
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements and Adoption of New Policies (Continued)
-------------------------------------------------------------

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity"("SFAS No.
150"). SFAS No. 150 establishes standards for classification and measurement in
the statement of financial position of certain financial instruments with
characteristics of both liabilities and equity. It requires classification of a
financial instrument that is within its scope as a liability (or an asset in
some circumstances). SFAS No. 150 is effective for financial instruments entered
into or modified after May 31, 2003 and, otherwise, is effective at the
beginning of the first interim period beginning after June 15, 2003. The Company
has not yet determined the impact of adopting SAFS No. 150 on its financial
position and results of operations.

Reclassifications
-----------------

Certain amounts have been reclassified in the 2002 financial statements to
correspond to the 2003 presentation.

NOTE 3 - PROPERTY AND EQUIPMENT

During the quarter ending March 31, 2003, the Company wrote-off its remaining
property and equipment in the amount of $32,248 due to abandonment by the
Company. However, before abandoning of such assets, depreciation expense for the
years ended March 31, 2003 and 2002 amounted to $15,427 and $15,555,
respectively. Such amounts are reflected in discontinued operations in the
statements of operations.

NOTE 4 - CONVERTIBLE NOTES PAYABLE - ATI (Related Party)

In 2001 the Company executed a $1 million secured convertible promissory note
payable to AG (formerly known as Nurescell AG) bearing interest at 8% per annum,
with principal and interest to be paid in 32 equal monthly payments of $34,805
each, beginning on November 30, 2001. Any remaining principal balance and
accrued interest is due and payable on September 30, 2004. The note is secured
by (i) 15,000,000 shares of the Company's common stock,(ii) a first priority
security interest in the Company's technology and (iii) all royalties due to AG.
The Company did not make scheduled monthly payments and is in default as to the
principal and interest payments. Interest accrued on this note payable for the
year ended March 31, 2003 amounted to $120,000 and is included in accrued
expenses in the accompanying balance sheet (see Note 11).


                                      F-14
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 5 - CONVERTIBLE NOTES PAYABLE - Triton (Related Party)

On December 15, 1999 and February 8, 2000, respectively, the Company signed
convertible promissory notes to Triton, each with a face value of $385,000 and
bearing interest at 8% per annum ("December Note" and "February Note"). Interest
for the December and February Notes was due quarterly beginning March 31, 2000
and June 30, 2000, respectively. Total interest accrued on both notes as of
March 31, 2003 is $191,525. The Company is also liable for certain penalties due
to a breach of a registration rights agreement in connection with above notes.
Total penalties accrued amounted to $550,038 as of March 31, 2003. Both interest
and penalties are included in accrued expenses as of March 31, 2003.

Interest on the notes can be paid in shares of the Company's common stock at the
discretion of the Company, as defined in the agreement. The notes became due and
payable on December 1, 2001. The holder of the notes can convert them to the
Company's common stock at its option, at any time. The holder is entitled to
convert all or a portion of the original principal face amount of each note into
shares of common stock at a conversion price for each share of common stock
equal to the lesser of (a) one hundred twenty-five percent (125%) of the closing
price of the Company's common stock at the date of the note or (b) 95% of the
average of the three lowest bid prices of the Company's common stock for twenty
(20) trading days prior to the conversion date. At March 31, 2003, the Company
is in default as to the principal and interest payable.

On March 21, 2003, pursuant to the Restructure Agreement, Triton converted
$30,000 in principal amount of the December Note into 30,000,000 shares of
common stock at the price of $.001 per share, thus giving Triton approximately
65% of the Company's outstanding common stock and voting control over the
Company. Future additional conversions are planned as described in Note 1.

NOTE 6 - ACCRUED EXPENSES

Accrued expenses consist of the following at March 31, 2003:

           Accrued directors' fees                       $   58,000
           Accrued salary                                   521,937
           Accrued interest and penalties
             ($126,388 related parties)                     875,999
           Accrued payroll taxes                              5,476
           Other advances                                    79,443
                                                         -----------

                                                         $1,540,855
                                                         ===========

                                      F-15
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 7 - DUE TO STOCKHOLDERS AND FORMER OFFICERS

Due to stockholders and former officers at March 31, 2003 consists of short-term
cash advances of $174,310 from ATI (a major shareholder of the company to which
the Company's technology is licensed). This advance is non-interest bearing and
payable on demand (see Note 11). Also included in the balance is a $63,877 cash
advance from Mr. Adrian Joseph, a stockholder and former officer of the Company,
payable on demand, and bearing interest at 10% per annum. Interest expense on
this loan for the year ended March 31, 2003 and March 31, 2002 was $6,388 per
year, with $76,388 included in accrued expenses at March 31, 2003. Also included
in the balance is a $15,835 cash advance from Mr. James Samuelson, a former
officer and director of the Company. This advance is non-interest bearing and is
payable on demand.

NOTE 8 - COMMON STOCK

In March 1999, the Company received subscriptions for 5,000 shares of the
Company's common stock at $5 per share. Subsequently, in April 1999, the monies
were received and the stock was issued.

During the year ended March 31, 2000, the Company received $95,000 for the
exercise of 145,000 stock options. In addition, the Company issued 14,000 shares
for $70,000 to outside investors.

From May 1999 to December 1999, the Company issued 692,000 shares to employees
and outside third parties for past services pursuant to consulting agreements
and as approved by the Company's Board of Directors. These shares were valued at
prices ranging from $1.12 to $3.51 per share based upon closing prices of the
Company's common stock on the dates of the agreements.

In January 2000, the Board of Directors approved the issuance of 524,226 shares
of common stock for the payment of past director fees, annual salaries and
various unreimbursed expenses due to officers and directors. In addition, the
Board of Directors approved an award of 734,562 shares of common stock to
officers and directors on that same date. These issuances were valued at
approximately $2.13 per share, based upon the closing price of the Company's
common stock on the date of approval.

During the year ended March 31, 2001, the Company received $7,500 for the
exercise of 7,500 stock options. In addition, the Company issued 100,000 shares
of restricted stock at $0.25 per share and recorded a stock subscription
receivable. Restriction on this stock will not be removed until the $25,000 is
received.

From May to July 2000, the Company borrowed $412,500 from a non-related party.
This debt was converted to 250,000 shares of common stock on August 11, 2000 at
a fair market value of $0.53 per share. The Company recognized a gain on
conversion of debt of $280,000.


                                      F-16
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 8 - COMMON STOCK (Continued)

On August 17, 2000 the Company issued 34,000 shares of common stock with a fair
market value of approximately $1.03 per share in settlement of a lawsuit.

On September 13, 2000 the Company issued a stock bonus to William Wilson, a
former President of the Company. A total of 100,000 shares with a fair market
value of $0.625 per share were issued.

Triton converted a portion of its promissory notes on January 9, 2001 into
336,950 shares of common stock of the Company with a fair market value of
approximately $0.30 per share.

On February 20, 2001, the Company settled a lawsuit by issuing 50,000 shares of
its common stock with a fair market value of approximately $.34 per share.

On March 21, 2003 pursuant to the Restructure Agreement, Triton converted
$30,000 in principal amount of a convertible promissory note previously issued
to Triton by the Company into 30,000,000 shares of common stock at the price of
$.001 per share, thus giving Triton approximately 65% of the Company's
outstanding common stock and voting control over the Company.

Stock Options
-------------

The Company has a Non-Qualified Stock Option Plan (the "Plan") whereby the
Company may grant options to directors, officers, employees or consultants to
purchase the Company's common stock at the fair market value at the time of
grant. The aggregate number of Company's common shares, which may be granted
under the plan, is 360,000 shares.

The following is a summary of Plan and Non-Plan stock options activity through
March 31, 2003:

                                                                   Weighted
                                                                    Average
                                             Number of Shares       Prices
                                             ----------------   -------------

     Balance outstanding at March 31, 1999        484,000            $0.63
       Granted                                    661,000            $1.24
       Exercised                                 (145,000)           $0.66
       Expired                                       -                 -
                                                ----------           -----
     Balance outstanding at March 31, 2000      1,000,000            $1.03
       Granted                                    150,000            $0.83
       Exercised                                 (107,500)           $0.30
       Expired                                   (585,000)             -
                                                ----------           -----
     Balance outstanding at March 31, 2001        457,500            $1.46
       Granted                                       -                 -
       Exercised                                     -                 -
       Expired                                   (207,500)             -
                                                ----------           -----
     Balance outstanding at March 31, 2002        250,000            $1.64
       Granted                                       -                 -
       Exercised                                     -                 -
       Expired                                   (250,000)           (1.64)
                                                ----------          ------
     Balance outstanding at March 31, 2003           -              $  -
                                                ==========          ======

There is no plan currently to change or terminate the Option Plan due to the
Restructure Agreement.



                                      F-17
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 8 - COMMON STOCK (Continued)

Warrants
--------

The following is a summary of all warrants granted to stockholders, consultants
and others to acquire the Company's common stock through March 31, 2003:

                                    Number of Shares
                                       Subject to         Exercise
                                        Warrants        Price Range
                                    ----------------  --------------

         Balance - April 1, 1999            98,000         $1.00
           Granted                         100,000    $2.25 - $4.00
           Exercised                          -             -
                                         ---------   ---------------
         Balance - March 31, 2000          198,000     $1.00 - $4.00
           Granted                            -              -
           Exercised                          -              -
           Expired                            -              -
                                         ---------   ----------------
         Balance - March 31, 2001          198,000     $0.50 - $4.00
           Granted                            -              -
           Exercised                          -              -
                                         ---------   ----------------
         Balance - March 31, 2002          198,000     $0.50 - $4.00
           Granted                            -              -
           Exercised                          -              -
           Expired                        (198,000)  $(0.50) - $(4.00)
                                         ---------   ----------------

         Balance - March 31, 2003             -      $       -
                                         =========   ================

Securities that could potentially dilute basic earnings per share ("EPS") in the
future, and were not included in the computation of diluted EPS because to do so
would have been anti-dilutive for the periods presented, consist of the
following:

           Common stock reserved for the conversion of
             note payable to ATI                               15,000,000
           Convertible notes payable (assumed conversion
             at March 31, 2003 at a market price of $.001)  1,346,109,000
                                                            -------------
           Total as of March 31, 2003                       1,361,109,000

           Subsequent to March 31,2003

              Accounts payable, accrued expenses and due to
             stockholders & former officers                    72,246,000
                                                            -------------
                                                            1,433,355,000
                                                            =============

                                      F-18
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 9 - INCOME TAXES

During the years ended March 31, 2003 and 2002, no provision for taxes was
required, except for minimum state franchise tax, since the Company has recorded
valuation allowances against its net operating loss carryforwards for tax
purposes.

For Federal income tax purposes, approximately $10,000,000 of net operating loss
carryforwards exists to offset future taxable income. These carryforwards expire
in 2015; however utilization may be subject to limitation upon ownership change,
as defined by the Internal Revenue Code. If such a change should occur, the
actual utilization of the Company's net operating loss carryforwards, for tax
purposes, would be limited annually to a percentage of the fair market value of
the Company at the time of such change.

No tax benefit has been reported in the accompanying financial statements,
however, because of the uncertain realization of these benefits. Accordingly, at
March 31, 2003, the $3,400,000 estimated tax benefit of the cumulative
carryforwards has been offset by a valuation allowance of the same amount.

NOTE 10 - OTHER RELATED PARTY TRANSACTION

The Company entered into a consulting contract with one of its former directors
as a means of inducing the director to devote additional time and effort to the
Company over and above the time normally expected of a director. This contract
provided for payments of $2,000 per month to said director under contract, and
has no stated termination date, but is cancelable by either party on 30 days
written notice. The amounts expensed by the Company under this contract were
$6,000 and $24,000 during the years ended March 31, 2003 and 2002 respectively,
and are included in loss from discontinued operations. The total amount due to
this former director for his services as of March 31, 2003 was $48,000 and
included in accrued expenses. This contract was terminated during the quarter
ended June 30, 2002.





                                      F-19
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 11 - ATI NUKLEAR AG (RELATED PARTY)

Effective August 15, 2000, the Company entered into a licensing agreement (the
"AG License"), whereby the Company granted to AG (a German company owned by ATI)
the exclusive right and license to market and sell the Nurescell Technology for
a period of five years in a specified territory. As consideration for the
license, AG was to pay a total of $1,000,000 through August 20, 2001. The
Company recorded this transaction as unearned revenue to be recognized over a
period of 5 years (the term of the AG License). As of March 31, 2003, $550,000
has been recognized as revenue, which leaves unearned revenue of $450,000
remaining, all of which has been reflected as current in contemplation of the
Restructure Agreement (see Note 1). In connection with the AG License, the
Company incurred $399,764 of research and development expenses, which were paid
on its behalf by ATI. These expenses were offset against the $1,000,000
receivable from ATI for the grant of the license.

On June 11, 2001, the Company entered into an agreement to modify the AG License
(the "Modification Agreement"). The Modification Agreement granted to AG an
exclusive, transferable, right and license to market, distribute, sublicense,
sell, transfer and, otherwise, commercially market the Nurescell Technology and
products in the European Union, the British Isles, Russian Federation,
Uzbekistan, Krygikistan, Afghanistan, Pakistan, Kazakhstan, Iran, Turkey,
Ukraine, the Baltic Republics, Georgia, Poland, Hungary, Czech Republic,
Slovakia, Slovenia, Egypt, South Africa, Israel, Algeria, Libya, the UAE, Iraq,
Lebanon, Saudi Arabia and Kuwait.

Under the Modification Agreement, AG is to pay the Company a royalty in the
amount of 8% of the net sales of the Nurescell Technology. In the event that the
technology or products are incorporated into another product, the royalty is to
be computed on the entire price of the products, as well as the coating or
application of the product on another substance or substances. Under the terms
of the Modification Agreement, the Company also agreed to relinquish all
ownership in AG, as well as execute a convertible promissory note for all
amounts advanced by AG under the AG License (the "Convertible Note"). As part of
the agreement, ATI agreed to continue to finance certain amounts of the
Company's continued monthly operations on a non-interest bearing basis,
advancing a total of $174,310 through March 31, 2003 (see Note 4).

A termination fee of $1,000,000 is due under a convertible note payable to ATI
under the Modification Agreement. This amount is reflected in discontinued
operations in the accompanying statement of operations for the year ended March
31, 2002.

As of September 30, 2001, the Company, ATI and AG modified the Modification
Agreement, the result of which was, among other things, (i) the Company was
released from any and all past, present and future obligations, whether past due
or otherwise, with respect to the funding of AG, (ii) the Company agreed that
all payments required of AG, pursuant to the AG License (other than the 8%
royalty payments), were deemed paid in full, (iii) the Convertible Note was
cancelled and (iv) the Company executed a $1 million secured convertible
promissory note payable to AG (see Note 4).


                                      F-20
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 12 - DISCONTINUED OPERATIONS

In connection with the Restructure Agreement (see Note 1), the Company has
transferred its technology to AG. Accordingly, the Company's operations have
been reflected as discontinued operations in the accompanying statements of
operations.

The following information summarizes the operating results of the Nurescell
Technology for the periods indicated below:
<TABLE>
<CAPTION>

                                                                      For the Period
                                       For the Year Ended March 31,  From May 12, 1998
                                      ----------------------------- (Date of Inception)
                                          2003            2002       to March 31, 2003
                                      -------------   -------------   -------------
<S>                                   <C>             <C>             <C>
Operating Results:
  Revenue - net                       $    200,000    $    204,895    $    546,661
                                      -------------   -------------   -------------
  Expenses:
    Research and development                    --         404,049         472,476
    General and administrative
      expenses                             238,862         515,527       8,306,892
    Depreciation expense                    15,427          15,555          58,923
    Interest expense, net                  310,400         476,197       1,491,826
    Termination fee                             --       1,000,000       1,000,000
    Loss on inventory write down                --              --          64,537
    Write-off of intangible assets              --              --          87,944
    Loss on abandonment of computer
      software                                  --              --          39,026
   Gain on conversion of debt                   --              --        (280,000)
                                      -------------   -------------   -------------
        Total Expenses                     564,689       2,411,328      11,241,624
                                      -------------   -------------   -------------
  Loss from discontinued
    operations                        $   (364,689)   $ (2,206,433)   $(10,694,963)
                                      =============   =============   =============
</TABLE>


Additionally, liabilities associated with the discontinued operations include
the following at March 31, 2003:


  Convertible notes payable - ATI (related party)           $ 1,000,000
  Convertible notes payable - Triton (related party)            690,000
  Accounts payable                                              196,399
  Due to stockholders and former officers                       254,022
  Accrued expenses                                            1,540,855
  Unearned revenue                                              450,000
                                                            -----------
                                                            $ 4,131,276
                                                            ===========


                                      F-21
<PAGE>

                                 NURESCELL INC.
                      (A Company in the Development Stage)

                          NOTES TO FINANCIAL STATEMENTS


NOTE 13 - SUBSEQUENT EVENT


On April 1, 2003, the Company entered into a Consulting Agreement with Larry
Shatsoff, d/b/a Business Analysis Group, LLC (the "Consultant"). The Consultant
will act as the President, Secretary, Treasurer and a director of the Company
and perform all duties customarily required or expected in such capacities. As
part of the consideration for this agreement, the Company will pay $3,000 per
month for the term of one year and will issue to the Consultant shares of common
stock in an amount to be determined.











                                      F-22
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS.
-------------------------------------

   THIS SECTION CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS
REGARDING THE COMPANY'S PROSPECTS FOR CONTINUED OPERATION AND EXISTENCE AND
STATEMENTS REGARDING THE COMPANY'S PLANS, OBJECTIVES, EXPECTATIONS AND
INTENTIONS. THOSE FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT'S CURRENT
EXPECTATIONS AND ARE SUBJECT TO A NUMBER OF RISKS, FACTORS AND UNCERTAINTIES
THAT MAY CAUSE ACTUAL RESULTS, EVENTS AND PERFORMANCE TO DIFFER MATERIALLY FROM
THOSE REFERRED TO IN THE FORWARD-LOOKING STATEMENTS. THOSE RISKS, FACTORS AND
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, THE COMPANY'S HISTORY OF NET
LOSSES, UNCERTAINTY AS TO THE AVAILABILITY OF REQUIRED FUNDING AND UNCERTAINTY
AS TO THE COMPANY'S ABILITY TO MAINTAIN OPERATIONS AT ANY LEVEL. THE CAUTIONARY
STATEMENTS MADE IN THIS SECTION SHOULD BE READ AS BEING APPLIED TO ALL RELATED
FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS DOCUMENT.

    PLAN OF OPERATION. The Company is a development stage company, with its
operations to date principally consisting of research, development, testing and
marketing of the Nurescell Technology. From inception to March 31, 2003, the
Company obtained approximately $918,000 in financing through the sale of equity
securities in two private offerings and approximately $102,500 through the
exercise of stock options, as well as $770,000 through the issuance of
convertible promissory notes (the "Notes") to Triton. The Company utilized all
of those funds to (i) commence and pursue patent applications for the Nurescell
Technology, (ii) identify, negotiate and finalize suitable research, development
and testing contracts, (iii) identify, negotiate and finalize marketing
consulting contracts and (iv) provide working capital for the ongoing
administrative and financing acquisition costs of the Company.

    The Company has incurred losses since inception, including a net loss of
$449,328 for the fiscal year ended March 31, 2003. From May 12, 1998 (inception)
through March 31, 2003, the Company has had a cumulative loss of $10,895,909.

    Despite its efforts, the Company has failed to generate any significant
revenue from the Nurescell Technology. Having exhausted all of its funding and
without any source of revenue, the Company has been forced to reduce its
operations to a minimal level. Faced with increasing pressure from Triton
regarding the Company's obligations under the Notes, on March 21, 2003, the
Company entered into the Restructure Agreement pursuant to which Triton has
taken control of the Company and the Company will divest itself of the Nurescell
Technology, as described in more detail in "Item 6. Description of Business -
The Restructure Agreement." At this time, the Company believes that for the
foreseeable future Triton will provide funding for at least minimal Company
operations (including continued reporting under the Securities Exchange Act)
while it determines whether the Company has value as a candidate in a merger or
other business combination (on terms that may or may not be favorable to the
Company's existing stockholders). It is not expected, however, that Triton's
funding will continue indefinitely. Should Triton eventually determine that the
Company has no value that would justify continued funding, it is expected that
the Company will be required to discontinue operations entirely, seek protection
under Federal bankruptcy laws, or both.

     RESULTS OF OPERATIONS FOR THE FISCAL YEARS ENDED MARCH 31, 2003 AND 2002.
The Company had net sales of $0 for each of the fiscal years ended March 31,
2003 and March 31, 2002. As the Company has been in the development stage,
revenue generated since inception has been minimal.


                                        9
<PAGE>

     Operating expenses of $76,326 for the fiscal year ended March 31, 2003 were
significantly lower than the operating expenses of $106,784 for the fiscal year
ended March 31, 2002, due primarily to decreases in general and administrative
expenses which were primarily attributable to a significant decrease in
overhead, including salaries, rent, travel and legal expenses, as the Company
reduced it operations to a minimal level.

     Loss from discontinued operations of $364,689 for the fiscal year ended
March 31, 2003 was significantly lower than the loss from discontinued
operations of $2,206,433 for the fiscal year ended March 31, 2002 due to the
fact that the Company reduced its operations to a minimal level in 2003.

     Interest expense of $8,313 for the fiscal year ended March 31, 2003 was
higher than the interest expense of $4,854 for the fiscal year ended March 31,
2002 due to the imposition of penalties by Triton for failure to register the
shares of common stock issuable upon conversion of the Notes.

     Licensing fees generated revenue of $200,000 in each of the fiscal years
ended March 31, 2003 and 2002. During the fiscal year ended March 31, 2002, the
Company incurred a $1,000,000 termination fee charge from AG.

     As a result of the above factors, the net loss for the fiscal year ended
March 31, 2003 was $449,328, or $0.03 per share, as compared to a net loss of
$2,318,071, or $0.14 per share, for the fiscal year ended March 31, 2002.

       FINANCIAL POSITION. Total assets decreased from $57,697 at March 31, 2002
to $5,125 at March 31, 2003. The decrease is primarily attributed to
depreciation expense and write-offs of fixed assets and inventories.

     Total liabilities increased from $3,889,520 at March 31, 2002 to $4,231,276
at March 31, 2003. The increase is primarily attributed to an increase in
accrued expenses of $490,855, an increase in amounts due to stockholders of
$42,395, and an increase in accounts payable of $39,355, offset in part by a
decrease in unearned revenue of $250,000.

     Total stockholders' deficiency increased from $3,831,823 at March 31, 2002
to $4,226,151 at March 31, 2003. The increase was primarily caused by the net
loss of $449,328 for the fiscal year ended March 31, 2003.

    LIQUIDITY AND CAPITAL RESOURCES. The Company requires significant funding
for continued operations, even at minimal levels. At this point, the amount of
expenditures required to maintain operations far exceeds existing cash, which
was $5,125 at March 31, 2003.

     The Company's cash flow used in operating activities decreased from
$148,489 for the fiscal year ended March 31, 2002 to $36,421 for the fiscal year
ended March 31, 2003. This is primarily attributed to chargebacks to the Company
resulting from an agreement with ATI in March 31, 2002, offset in part by a
decrease in the Company's other operating expenses, such as rent, salaries,
taxes, phone, travel and utilities.

     During the fiscal year ended March 31, 2003, the Company has obtained
liquidity primarily from loans from ATI and Triton.


                                       10
<PAGE>


      The Company's financial statements for the year ended March 31, 2003 have
been prepared assuming the Company will continue as a going-concern. As noted in
this annual report on Form 10-KSB, the presence of significant losses, negative
cash flows and limited working capital, together with the uncertainties
associated with the ability of the Company to obtain additional capital, raise
substantial doubts as to the Company's ability to continue as a going concern.
The Company's ability to continue as a going concern will be questionable until
such time as it is able to generate sufficient revenues in excess of expenses to
sustain its normal business activities. Until that time, the Company will depend
on its ability to raise additional capital through either loans or equity or
debt offerings. There can, however, be no guarantee that such financing will be
obtained or that any additional financing will be available on terms favorable
to the Company or its stockholders, if at all. As noted above, the Company
believes that for the foreseeable future Triton will provide funding for at
least minimal Company operations while it determines whether the Company has
value as a candidate in a merger or other business combination. It is not
expected, however, that Triton's funding will continue indefinitely. Should
Triton eventually determine that the Company has no value that would justify
continued funding, it is expected that the Company will be required to
discontinue operations entirely, seek protection under Federal bankruptcy laws,
or both.

CRITICAL ACCOUNTING POLICIES

     The Company's critical accounting policies are those that it believes
require significant judgments, often as a result of the need to make estimates
about the effect of matters that are inherently uncertain.

Revenue Recognition
-------------------

     The Company generally recognizes revenue when persuasive evidence of an
arrangement exists, delivery has occurred, the price is fixed or readily
determinable, and collectibility is probable. The Company recognizes revenue in
accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements."

Stock-Based Compensation
------------------------

     As permitted under SFAS No. 148, "Accounting for Stock-Based Compensation -
Transaction and Disclosure"' which amended SFAS No. 123, "Accounting for
Stock-Based Compensation", the Company has elected to continue to follow the
intrinsic value method in accounting for its stock-based employee compensation
arrangements as defined by Accounting Principles Board Opinion ("APB") No. 25,
"Accounting for Stock Issued to Employees", and related interpretations
including FASB Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation", an interpretation of APB. 25. No stock-based
employee compensation cost is reflected in operations, as all options granted
under those plans have an exercise price equal to or above the market value of
the underlying common stock on the date of grant.

                                       11
<PAGE>

CONTROLS AND PROCEDURES.
------------------------

     The Company's Chief Executive Officer and Chief Financial Officer has
conducted an evaluation of the Company's disclosure controls and procedures as
of a date (the "Evaluation Date") within 90 days before the filing of this
annual report. Based on his evaluation, the Company's Chief Executive Officer
and Chief Financial Officer has concluded that the Company's disclosure controls
and procedures are effective to ensure that information required to be disclosed
by the Company in reports that it files or submits under the Securities Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the applicable Securities and Exchange Commission rules and forms.

      Subsequent to the Evaluation Date, there were no significant changes in
the Company's internal controls or in other factors that could significantly
affect those controls, nor were any corrective actions required with regard to
significant deficiencies and material weaknesses.



                                       12
<PAGE>

                                    PART III

INDEX TO EXHIBITS AND DESCRIPTION OF EXHIBITS.

   The following exhibits are included as part of this Report (with the
numbering corresponding to that used in the Company's prior filings on Form
10-QSB):

  Exhibit Number               Description
  --------------               -----------

       3.1            Articles of Incorporation, as amended (1)

       3.2            Bylaws (1)

       4.1            Form of $385,000 Series 1999-A Convertible Promissory Note
                      due December 1, 2001 (2)

       4.2            Form of $385,000 Series 2000-A Convertible Promissory Note
                      due December 1, 2001 (3)

       4.3            Secured Promissory Note dated September 30, 2001 for
                      $1,000,000 from the Company to ATI Nuklear AG (4)

       4.4            Securities Purchase Agreement between the Company and
                      Triton Private Equities Fund, L.P. dated December 15, 1999
                      (2)

       4.5            Securities Purchase Agreement between the Company and
                      Triton Private Equities Fund, L.P. dated February 8, 2000
                      (3)

       4.6            Registration Rights Agreement between the Company and
                      Triton Private Equities Fund, L.P. dated December 15, 1999
                      (2)

       4.7            Registration Rights Agreement between the Company and
                      Triton Private Equities Fund, L.P. dated February 8, 2000
                      (3)

       4.8            Promissory Note dated April 6, 2000 for $165,000 from the
                      Company to the Glenn A. Cramer Separate Property Trust (3)

       4.9            Promissory Note dated May 1, 2000 for $82,500 from the
                      Company to the Glenn A. Cramer Separate Property Trust (3)

       4.10           Promissory Note dated June 1, 2000 for $82,500 from the
                      Company to the Glenn A. Cramer Separate Property Trust (3)

       10.1           Consulting Agreement between the Company and John
                      Longenecker dated June 26, 1998 (1)

       10.2           Form of Stock Option Agreement between the Company and its
                      officers and directors (1)

       10.3           1998 Stock Option Plan (1)

       10.4           Form of Indemnification Agreement between the Company and
                      its officers and directors (1)

       10.5           Consulting Agreement between the Company and Shelby T.
                      Brewer dated December 1, 1999 (3)

       10.6           Investment Agreement between the Company and Nurescell AG
                      dated August 17, 2000 (5)

       10.7           License Agreement between the Company and Nurescell AG
                      dated as of August 15, 2000 (5)

       10.8           Registration Rights Agreement between the Company and
                      Nurescell AG dated August 15, 2000 (5)

                                       12
<PAGE>

       10.9           Modified License Agreement between the Company and
                      Advanced Technology Industries, Inc. Dated as of June 11,
                      2001(6)

       10.10          Transaction Restructure Agreement between the Company,
                      Advanced Technology Industries, Inc. and ATI Nuklear AG
                      dated as of September 30, 2001(4)

       10.11          Restructure Agreement between the Company, Triton Private
                      Equities Fund, L.P., Advanced Technology Industries, Inc.
                      and ATI Nuklear AG dated as of March 21, 2003 (7)

       10.12          Convertible Promissory Note dated March 21, 2003 from the
                      Company to Triton Private Equities Fund, L.P.

       10.13          Consulting Agreement dated as of April 1, 2003 between the
                      Company, Larry Shatsoff and Triton Private Equities Fund,
                      L.P.

       99.1           Certificate of the Company's Chief Executive Officer and
                      Chief Financial Officer pursuant to Section 906 of the
                      Sarbanes-Oxley Act of 2002
-------------

(1)      Incorporated by reference from the Company's Registration Statement on
         Form 10-SB (File No. 0- 25377).

(2)      Incorporated by reference from the Company's Report on Form 10-QSB for
         the quarter ended December 31, 1999 (File No. 0-25377)

(3)      Incorporated by reference from the Company's Report on Form 10-KSB for
         the year ended March 31, 2000 (File No. 0-25377)

(4)      Incorporated by reference from the Company's Report on Form 10-QSB for
         the quarter ended September 30, 2001 (File No. 0-25377)

(5)      Incorporated by reference from the Company's Report on Form 10-QSB for
         the quarter ended September 30, 2000 (File No. 0-25377)

(6)      Incorporated by reference from the Company's Report on Form 10-QSB for
         the quarter ended June 30, 2001 (File No. 0-25377)

(7)      Incorporated by reference from the Company's Report on Form 10-QSB for
         the quarter ended December 31, 2002 (File No. 0-25377)



                                       13
<PAGE>

                                   SIGNATURES

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

Date: June 30, 2003                         NURESCELL, INC.

                                            By: /s/ LAWRENCE SHATSOFF
                                                --------------------------------
                                                Lawrence Shatsoff, President and
                                                Chief Financial Officer



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


/s/ LAWRENCE SHATSOFF            President, Chief Financial        June 30, 2003
----------------------------     Officer, Secretary and Director
Lawrence Shatsoff



<PAGE>

                                 CERTIFICATIONS

I, Lawrence Shatsoff, certify that:

1. I have reviewed this annual report on Form 10-KSB of Nurescell Inc. (the
"Company");

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

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

4. The Company's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

         (a) designed such disclosure controls and procedures to ensure that
         material information relating to the Company, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

         (b) evaluated the effectiveness of the Company's disclosure controls
         and procedures as of a date within 90 days prior to the filing date of
         this annual report (the "Evaluation Date"); and

         (c) presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

5. The Company's other certifying officers and I have disclosed, based on our
most recent evaluation, to the Company's auditors and the audit committee of the
Company's board of directors (or persons performing the equivalent functions):

         (a) all significant deficiencies in the design or operation of internal
         controls which could adversely affect the Company's ability to record,
         process, summarize and report financial data and have identified for
         the Company's auditors any material weaknesses in internal controls;
         and

         (b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the Company's internal
         controls; and

6. The Company's other certifying officer and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: June 30, 2003                        /s/ LAWRENCE SHATSOFF
                                           -------------------------------------
                                           President and Chief Financial Officer