SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                     ------
                                    FORM 10-Q
(Mark  One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF  1934.

     For  the  quarterly  period  ended   June  30,  2002
                                         -----------------

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

For  the  transition  period  from  _______________  to  _______________

                        Commission file number    0-27415

                              The Topaz Group, Inc.
--------------------------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

         Nevada                                          91-1762285
----------------------------------------    ------------------------------------
(State or Other Jurisdiction                (I.R.S. Employer Identification No.)
of Incorporation or Organization)     .

                            126/1 Krungthonburi Road
                           Banglampoo Lang, Klongsarn
                             Bangkok 10600 Thailand
--------------------------------------------------------------------------------
    (Address of Principal Executive Offices)                      (Zip Code)

Registrant's  Telephone  Number,  including  area  code  (425) 392-3144
                                                         --------------
                                    - N/A -
--------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

     Indicate  by  check  mark whether the registrant: (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.

Yes  X    No
   ----     ----
<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS

<BTB>
<S>          <C>                                                                                     <C>
PART  I.     FINANCIAL  INFORMATION                                                                  Page

Item  1.     Financial  Statements

             Consolidated  Balance  Sheets  as  of  December  31,  2001  and  June  30,  2002
                (Unaudited)                                                                           2

             Consolidated  Statements  of  Operations for the Three and Six Months Ended June
                30,  2001  and  2002  (Unaudited)                                                     3

             Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2001 and
 (Unaudited)                                                                      4

             Notes  to  Consolidated  Financial  Statements  (Unaudited)                              5

Item  2.     Management  Discussion  and  Analysis  of  Financial  Condition and
               Results  of  Operations                                                                7

Item  3.     Quantitative  and  Qualitative  Disclosures  About  Market  Risks                       10

PART  II.     OTHER  INFORMATION

Item  1.     Legal  Proceedings                                                                      12

Item  2.     Changes  in  Securities  and  Proceeds                                                  12

Item  3.     Default  Upon  Senior  Securities                                                       12

Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders                             12

Item  5.     Other  Information                                                                      12

Item  6.     Exhibits  and  Reports  on  Form  8-K                                                   12

</TABLE>
<PAGE>
                     The Topaz Group, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>

                                                                 December 31,   June 30,
                                                                    2001         2001
                                                                ------------ ------------
                                                                             (unaudited)

<S>                                                                      <C>          <C>
CURRENT ASSETS
  Cash and cash equivalents                                      $   351,565  $   720,901
  Accounts receivable, net of allowance of
    $788,369 and $857,241                                          5,891,767    3,745,760
  Inventories                                                     19,004,800   24,355,070
  Prepaid expenses and deposits                                      372,285      510,053
                                                                 ------------ ------------
            Total current assets                                  25,620,417   29,331,784

PROPERTY AND EQUIPMENT - NET                                       2,308,017    2,427,370

OTHER ASSETS                                                          36,928       57,113
                                                                 ------------ ------------
Total assets                                                     $27,965,362  $31,816,267
                                                                 ============ ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Lines of credit                                               $ 2,054,698  $ 2,504,401
  Accounts payable                                                2,559,005    5,200,377
  Accrued liabilities                                             1,171,030      763,694
  Payables to related party                                         546,061    2,067,397
                                                                 ------------ ------------
            Total current liabilities                             6,330,794   10,535,869

REDEEMABLE ORDINARY SHARES                                        4,736,115    5,039,310

COMMITMENTS                                                               -            -

STOCKHOLDERS' EQUITY
  Class A preferred stock, liquidation preference of
    8,130,570 and $7,814,397                                       3,555,511    3,555,511
  Class B preferred stock, liquidation preference of
    2,811,193 and $2,701,875                                           1,007        1,007
Common stock                                                           2,135        2,135
Additional paid in capital                                         1,673,330    1,673,330
Retained earnings                                                 11,666,470   11,009,105
                                                                 ------------ ------------
                                                                  16,898,453   16,241,088
                                                                 ------------ ------------

            Total liabilities and stockholders' equity           $27,965,362  $31,816,267
                                                                 ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.

                                        2
<PAGE>



                     The Topaz Group, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>


                                             Three months ended June 30, Six months ended June 30,
                                             ---------------------------  -------------------------
                                                   2001          2002        2001          2002
                                             ------------- ------------  ------------  ------------
<S>                                            <C>          <C>           <C>          <C>
Sales                                          $4,899,963   $ 4,906,225   $9,486,245   $10,531,495
Cost of goods sold                              3,386,618     4,722,456    6,666,915     8,878,853
                                             ------------- ------------  ------------  ------------
  Gross profit                                  1,513,345       183,769    2,819,330     1,652,642

Selling, general and administrative expenses    1,038,315     1,106,611    1,877,097     2,027,688
                                             ------------- ------------  ------------  ------------
  Earnings (loss) from operations                 475,030      (922,842)     942,233      (375,046)

Other income (expense)
  Exchange rate gain (loss)                      (111,084)       (5,782)     (17,727)        2,577
  Interest expense                                (13,245)      (41,381)     (27,848)      (58,596)
  Gain (loss) on remeasurement                    608,779      (226,439)   1,290,444      (295,235)
  Other, net                                       15,789        11,032       30,459        68,935
                                             ------------- ------------  ------------  ------------
                                                  500,239      (262,570)   1,275,328      (282,319)
                                             ------------- ------------  ------------  ------------
NET EARNINGS (LOSS)                            $  975,269   $(1,185,412)  $2,217,561   $  (657,365)
                                             ============= ============  ============  ============

NET EARNINGS (LOSS) PER SHARE:
  Basic                                        $     0.74   $     (0.56)  $     1.78   $     (0.31)
                                             ============= ============  ============  ============
  Diluted                                      $     0.16   $     (0.56)  $     0.37   $     (0.31)
                                             ============= ============  ============  ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                        3
<PAGE>
                     The Topaz Group, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

<TABLE>
<CAPTION>
                                                          Six months ended June 30,
<S>                                                      <C>           <C>
2002
                                                         -----------   ------------
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities
  Net earnings (loss)                                    $ 2,217,561   $  (657,365)
  Adjustments to reconcile net earnings to net
  cash provided by (used in) operating activities
    Depreciation and amortization                             74,294        85,727
    Remeasurement of redeemable ordinary shares             (202,827)      303,195
    Changes in assets and liabilities:
      Receivables                                            784,256     2,146,007
      Inventories                                         (3,033,915)   (5,350,270)
      Prepaid expenses and deposits/other assets            (347,524)     (157,953)
      Payables                                               270,302     4,162,708
      Accrued liabilities                                    322,995      (407,336)
                                                         -----------   ------------
         Net cash provided by operating activities            85,142       124,713

Cash flows from investing activities
  Purchases of property and equipment                       (154,652)     (205,080)
                                                         -----------   ------------
         Net cash used in investing activities              (154,652)     (205,080)

Cash flows from financing activities
  Borrowings on line of credit, net                          400,989       449,703
                                                         -----------   ------------
         Net cash provided by financing activities           400,989       449,703
                                                         -----------   ------------
Net decrease in cash and cash equivalents                    331,479       369,336

Cash and cash equivalents at the beginning of period         321,734       351,565
                                                         -----------   ------------
Cash and cash equivalents at the end of period             $ 653,213   $   720,901
                                                         ===========   ============
Supplemental disclosure of cash flow information:
  Cash paid during the period
    Interest                                               $  55,472   $    70,766
                                                         ===========   ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                        4
<PAGE>
                     The Topaz Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE  A  -  FINANCIAL  STATEMENTS

     The  unaudited  consolidated  financial  statements  of the Company and its
     subsidiaries  have  been  prepared by the Company pursuant to the rules and
     regulations  of the Securities and Exchange Commission. Certain information
     and footnote disclosures normally included in financial statements prepared
     in  accordance  with generally accepted accounting principles of the United
     States  of  America  (GAAP) have been condensed or omitted pursuant to such
     rules  and  regulations.  The results of operations for interim periods are
     not  necessarily  indicative  of  the results to be expected for the entire
     fiscal  year  ending  December  31,  2002. This Form 10-Q should be read in
     conjunction with the Form 10-K that includes audited consolidated financial
     statements  for the years ended December 31, 2000 and 2001, and the related
     consolidated  statements  of  earnings, stockholders' equity and cash flows
     for  the  three  years  in  the  period  ended  December  31,  2001.

NOTE  B  -  BASIS  OF  PRESENTATION

     The  accompanying consolidated financial statements include the accounts of
     the  Company  and  its  wholly-owned Thailand subsidiaries, Creative Gems &
     Jewelry  Limited  (Creative),  Advance Gems & Jewelry Limited (Advance) and
     Advance  Gems Manufacturing Co., Ltd (Advance Manufacturing) (collectively,
     the  Subsidiaries).  All significant intercompany accounts and transactions
     have been eliminated. Except as otherwise disclosed all amounts are in U.S.
     dollars.

NOTE  C  -  INVENTORIES

Inventories  consist  of  the  following:

                            December 31,     June 30,
                                2001          2002
                           ------------     -------------
Raw  materials             $    981,139      $  3,091,016
Finished  stones             17,200,314        19,684,384
Finished  jewelry               823,347         1,579,670
                           ------------     -------------
                           $ 19,004,800      $ 24,355,070
                           ============      ============

                                        5
<PAGE>

                     The Topaz Group, Inc. and Subsidiaries

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE  D  -  EARNINGS  (LOSS)  PER  COMMON  SHARE

The  components  of basic and diluted earnings (loss) per share were as follows:
<TABLE>
<CAPTION>

                                  Three months ended June 30,   Six months ended June 30,
                                  ---------------------------  --------------------------
                                      2001          2002          2001          2002
                                  -----------   -------------  -----------  -------------
BASIC
<S>                             <C>             <C>            <C>          <C>
Net earnings (loss)                $  975,269   $ (1,185,412)  $ 2,217,561  $ (657,365)
                                  ===========   =============  ===========  ===========
Weighted average
  outstanding
  shares of common stock            1,324,886      2,134,886     1,248,643   2,134,886

Net earnings (loss) per share      $     0.74   $     (0.56)   $      1.78  $    (0.31)
                                  ===========   =============  ===========  ===========
DILUTED
Net earnings (loss) available
  to common shareholders           $  975,269   $ (1,185,412)  $ 2,217,561  $ (657,365)
                                  ===========   =============  ===========  ===========
Weighted average
  outstanding shares of
  common stock                      1,324,886     2,134,886      1,248,643   2,134,886

Dilutive effect of preferred
shares (1)                          4,727,563          - (2)     4,803,806       - (2)
                                  -----------   -------------  -----------  -------------
Common stock and
  potentially issuable common
  stock                             6,052,449     2,134,886      6,052,449   2,134,886

Net earnings (loss) per share      $     0.16    $    (0.56)    $     0.37  $    (0.31)
                                  ===========   =============  ===========  ===========
</TABLE>

    (1) The dilutive effect of warrants outstanding during each of the presented
        periods  was immaterial  to  these  computations.
    (2) Excluded  from  computation  due  to  their  anti-dilutive  effect.

NOTE  E  -  SUBSEQUENT  EVENT

Subsequent  to June 30, 2002, the Company borrowed approximately $220,000 from a
company controlled by one of the directors. The borrowing is secured by a 60-day
note  payable that bears 15% interest and could be extended at the option of the
Company  for  an  additional  60-day  period.


                                        6
<PAGE>

Item  2.     Management's  Discussion  and  Analysis  of Financial Condition and
Results  of  Operations

     The  following  discussion  of  the  financial  condition  and  results  of
operations  should  be  read  in  conjunction  with  the  consolidated financial
statements and related notes thereto.  The following discussion contains certain
forward-looking  statements  that  involve  risk  and uncertainties.  Our actual
results could differ materially from those discussed herein.  Factors that could
cause  or  contribute to such differences include, but are not limited to, risks
and  uncertainties related to the need for additional funds, the rapid growth of
the  operations  and  our ability to operate profitably after the initial growth
period is completed.  We undertake no obligation to publicly release the results
of any revisions to those forward-looking statements that may be made to reflect
any  future  events  or  circumstances.

Six  and  Three  Months  Ended  June  30,  2002  and  June  30,  2001

     Sales.  Total  sales  for  six  months ended June 30, 2002 were $10,531,495
compared  to  $9,486,245  for the six months ended June 30, 2001, an increase of
11%.  The increase in sales is primarily attributed to increased revenues during
the three months ended March 31, 2002.  Revenues for the three months ended June
30,  2002  were  $4,906,225,  which represents a slight increase from $4,899,963
during  the  comparable  year  ago  quarter.  Sales were relatively flat for the
second  quarter  ended June 30, 2002 compared to the same period of the previous
year  as  a result of continued softness in the U.S. economy.  The retail market
in  the  U.S. represented approximately 70% of our annual sales for fiscal 2001.

Cost  of  Goods Sold.  Cost of goods sold for the six months ended June 30, 2002
was  $8,878,853  representing 84.3% of sales, compared to $6,666,915 for the six
months  ended  June  30,  2001, which represented 70.3% of sales.  Cost of goods
sold  for  the three months ended June 30, 2002 was $4,722,456 or 96.3% of sales
as  compared  to $3,386,618 or 69.1% of sales during the three months ended June
30,  2001.   The  increase in cost of goods sold was due to a combination of the
following  factors:  the  recovery of the Thai Baht currency, an increase in the
price  of  gold, an increase in the cost per unit of jewelry, an increase in the
consumption  of  gold  in  our  products,  and  a  shift  in  product  mix.

-    Recovery  of  the  Thai  Baht  Currency.  We  bill 70% of our sales in U.S.
     dollars.  U.S. sales are not affected by fluctuations in the Thai currency.
     However,  we maintain direct and indirect overhead and administrative costs
     in  the Thai currency. As a result, conversions from Thai Baht transactions
     into  U.S.  dollars  are performed at a higher current rate, as compared to
     the  previous  period,  because  of  the  increased  value  of  the  Baht.

-    Increase  in the Price of Gold. At the time we quote our customer's orders,
     we  typically  estimate  gold  price fluctuations for the period of time in
     which  our customer's orders are in a material procurement, production, and
     quality  inspection  stage  prior  to  shipping.  However,  gold  prices
     unexpectedly  increased for orders placed during the six months ending June
     30,  2002. Specifically, from the period commencing approximately March 15,
     2002  and  ending June 30, 2002, gold prices increased approximately $50.00
     per  ounce.  As a result, certain orders were exposed to higher gold prices
     and  resulted  in  lower  margins.


                                        7
<PAGE>


-    An  Increase  in  the  Cost  Per  Unit of Jewelry. We maintain two specific
     revenue  streams:  stone  production  and  jewelry  manufacturing.  Stones
     typically  represent approximately 40% of total sales and jewelry typically
     represent  approximately  60%  of  total sales. The overhead costs of stone
     production  is  primarily  comprised  of  piecework (labor) and, therefore,
     direct  labor  per  piece remains the constant per unit production cost. We
     use  salaried skilled labor for jewelry manufacturing. Our sales are highly
     seasonal  so  that the fourth quarter of each year can represent as much as
     40% of total sales. A reduction in the number of skilled workers during the
     slower  months  would  significantly adversely impact our production output
     during  our  busy months. Jewelry sales for the quarter ended June 30, 2002
     decreased  by  13%  as compared to sales during the quarter ended March 31,
     2002, while overhead costs remained constant. As a result, cost per unit of
     jewelry  production  rose  during the quarter ended June 30, 2002 causing a
     erosion  in  our  gross  margin.

-    Increase  in the Consumption of Gold. We allocate overhead costs to jewelry
     sales  based upon grams of gold consumed in the quarter. Profit margins for
     gold jewelry products are significantly lower than profit margins for stone
     or  diamond  products.  Gold consumption in the first and second quarter of
     the  year  ending  December  31,  2002  was  approximately  $700,000  and
     $1,100,000,  respectively. Jewelry sales during the three months ended June
     30,  2002  as  compared  to  the  three  months  ended March 31, 2002, were
     relatively  flat.  However,  applied  overhead  increased  by 67% due to an
     increase  in  consumption  of  gold.  Over  an extended period of time gold
     consumption  should  average normal production levels for costing purposes.
     To  address  this  issue,  we are planning to change the method of overhead
     allocation  to  allocation on the basis of direct labor hours starting with
     January  1,  2003.

-    Shift in Product Mix. We allocate production costs of goods sold based upon
     the  average  cost of certain types of stones. Significant shifts in demand
     to  smaller  stones  cause  actual  gross margins to fluctuate. We apply an
     average  costing  method  due to the significant number of product codes we
     employ  which, over an extended period of time, should represent the actual
     results  of  the  overall  flow  of  costs.  Effective  July  1,  2002,  we
     implemented  the  use  of codes for sub-groups within stone categories. The
     sub-groups  should  improve  our  overall  accuracy  in  precious  gems and
     semi-precious  gems  costing  when  product  mix  varies  significantly. We
     implemented  sub-grouping  for  diamonds  prior  to  the  end of the second
     quarter.  The  net effect increased diamond ending inventory values for the
     quarter  ended  June 30, 2002 by $356,146 and correspondingly increased net
     income  by  the  same  amount.

     Selling,  General  and  Administrative  Expenses.  Selling,  general  and
administrative  expenses  were $1,106,611, or 22.6% of sales, and $2,027,688, or
19.3%  of sales, respectively, for the three and six months ended June 30, 2002,
as  compared to $1,038,315, or 21.2% of sales, and $1,877,097 or 19.8% of sales,
respectively,  for the three and six months ended June 30, 2001. The increase is
primarily  attributed  to  an  increase  in  administrative  salaries.

     Earnings (Loss) from Operations. Net loss from operations for the three and
six  months  ended  June  30,  2002 was ($922,842) and ($375,046), respectively,
compared to net earnings from operations of $475,030 and $942,233, respectively,
for  the  three and six months ended June 30, 2002. The losses are primarily due
to  an  increase  in  the  cost  of  sales.


                                        8
<PAGE>


     Other  Income  (Expenses).  Other  income  (expense)  was  ($262,570)  and
($282,319),  respectively,  for the three and six months ended June 30, 2002, as
compared  to $500,239 and $1,275,328, respectively, for the three and six months
ended  June  30,  2001,  or  a  decrease of 152.5% and 122.1%, respectively. The
change  is primarily due to gains (losses) resulting from currency fluctuations.
The  remeasurement  gain (loss) was ($226,439) and ($295,235), respectively, for
the  three  and  six  months  ended  June  30,  2002,  compared  to $608,779 and
$1,290,444,  respectively, for the three and six months ended June 30, 2001. The
reduced  effect  of  currency fluctuations was principally due to our using U.S.
Dollars  for a majority of our sales transactions. We implemented a new software
package  in  June  2001  to record the Baht transactions in U.S. dollars as they
occur.  Recording  the transactions as they occur in U.S. dollars is intended to
reduce our exposure to currency remeasurement gains and losses. Remeasurement of
the ordinary shares for the six months ended June 30, 2002 represents a currency
loss  on  remeasurement  of  ($295,235).

     Net  Earnings  (Loss). Net loss for the three and six months ended June 30,
2002  was  ($1,185,412)  and  ($657,365),  respectively, compared to earnings of
$975,269  and  $2,217,561, respectively, for the three and six months ended June
30,  2001.  The difference is largely attributed to an increase in cost of sales
and  effects  of  foreign  currency  fluctuations.

Liquidity  and  Capital  Resources

     Our  principal  source  of  working  capital  is  income  from  operations,
borrowings  under  our  revolving  credit facilities and short-term loans from a
company  affiliate.  As  of  June  30,  2002,  we had a cash and cash equivalent
balance  of  $720,901  and  working  capital  of  $18,795,915.

     Our operating activities provided cash of $124,713 for the six months ended
June 30, 2002 as compared to $85,412 for the six months ended June 30, 2001. The
increase  in  cash  provided  by  operating  activities  resulted primarily from
increases  in  accounts  payable.  Our  accounts  payable balance increased as a
result  of  delayed  vendor  payments  caused  by negative operating profits and
increases  in  inventory  balances.

     The  net  cash provided by financing activities for the six months June 30,
2002  was  $449,703 compared to $400,989 for the six months ended June 30, 2001.
This  net  increase  is  due  to  new  borrowings  on  our  lines  of  credit.

     We  have  line-of-credit  arrangements with two Thai financial institutions
and  a line of credit arrangement with a U.S. financial institution entered into
in  October  1999, April 2000 and October 2001, respectively. The Thai lines are
renewable automatically on a yearly basis and the U.S. line expires in September
2002;  the  lines  are  also subject to the banks' periodic reviews resulting in
adjustment  of our credit limit. The Thai lines bear interest at a rate equal to
Thai LIBOR plus two percent (9.25%-10% as of June 30, 2002); the U.S. line bears
interest  at  prime  plus  1.25%  (6%  as  of  June  30, 2002). The 1999 line is
personally guaranteed by two of our directors and collateralized by various real
estate  properties  belonging  to  us and one of our directors. The 2000 line is
also  guaranteed  by two of our directors and secured by a deed on a real estate
property owned by a related party. The U.S. line is secured personally by one of
our  directors, our U.S. receivables and inventory and by a lien on various Thai
real  estate  properties  and  fixed  assets  of a related party. As of June 30,

                                        9
<PAGE>


2002,  approximately  $2,192,910  was  available  for commercial draft borrowing
under  both  the  1999  and  2000  lines.  As  of June 30, 2002, the outstanding
balance  under  the Thai lines of credit and the US line of credit were $559,012
and  $1,939,517, respectively. The effects on liquidity of carrying large values
of  inventory  can be referenced by days of sales in inventory.  On average, for
the  twelve  months  ended June 30, 2002 and 2001, inventory would remain on the
books  for  419  days  and 378 days, respectively, until sold.  The inventory is
classified  as  a  current  asset  on the balance sheet but restricts the use of
working capital until the inventory is sold.  The increase in inventory days was
caused  by  the  build  up  of  inventories  to  support  the  replenishment  of
inventories  with  wholesalers  and  retailers.

     Inventory  is  valued  by  applying  a moving average method for valuation.
Under this method of valuation, generally, the finished stone inventory does not
progressively  devalue  with  age  and  the  prices  per carat remain relatively
stable.  The  average  cost  includes  the  raw  cost  of  the  product plus any
additional  costs  to  bring  it  to its current condition including processing,
transportation,  insurance  and  holding costs. Variances in valuation under the
moving  average  cost  method  occur  when stone prices, overhead cost and other
related  costs,  which make up the value of the inventory, vary significantly up
or  down  within the fiscal period. As such, material variances in the inventory
costs  are  identified  and  valued  separately  to  reflect  true  value.

     Our  business  can  be  classified  into two major groups including sale of
finished  jewelry  and finished stones, to a lesser degree. Most of our finished
jewelry  is  made  to  order and is shipped when completed. Inventory valuations
include  the  lesser of manufactured cost or market valuation per unit times the
quantities  on hand. Lower of cost or market is referenced by recent sale prices
of  the  finished stones compared to the cost to produce or acquire such stones.
If  recent  sales  of  an existing stone are not available, current market price
samples  in  the  selling  market  will  dictate the lower of cost or market for
valuation  purposes.

     Management believes we have the ability to meet our current and anticipated
financing  needs  for  the  next  twelve months with the facilities in place and
funds  from operations, however, given our growth prospects, we may need to seek
increases  in  our credit facilities during the upcoming year to sustain further
revenue  growth.

Item  3.     Quantitative  and  Qualitative  Disclosures  about  Market  Risk

Currency  Fluctuations

1.   Forward-Looking  Statements

     From  time  to  time,  we  may  make  certain  statements  that  contain
"forward-looking"  information.  Words  such  as  "anticipate",  "estimate",
"project",  "believe"  and  similar  expressions  are  intended to identify such
forward-looking  statements.  Forward-looking  statements  may  be  made  by
management  orally  or  in  writing,  including,  but  not  limited to, in press
releases,  as  part  of the Financial Information or Management's Discussion and
Analysis  or  Plan  of  Operations  and  as  part  of  other  sections  of  this
registration  statement.

     Such forward-looking statements are subject to certain risks, uncertainties
and  assumptions,  including without limiting those identified below. Should one
or  more  of  these  risks  or  uncertainties  materialize, or should any of the
underlying  assumptions  prove  incorrect,  actual results of current and future
operations  may  vary materially from those anticipated, estimated or projected.

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<PAGE>


Readers  are  cautioned  not  to  place  undue reliance on these forward-looking
statements,  which  speak  only  as  of  their  respective  dates.

2.   Exchange  Rate  Information

     Our  Consolidated  Financial  Statements are prepared in U.S. dollars.  The
financial  statements  of  our  foreign  subsidiaries  are  remeasured into U.S.
dollars  in  accordance with Statement of Financial Accounting Standards No. 52.
Fluctuations  in  the  value  of foreign currencies cause U.S. dollar amounts to
change  in comparison with previous periods and, accordingly, we cannot quantify
in any meaningful way, the effect of such fluctuations upon future income.  This
is  due  to  the  constantly  changing  exposure  in  the Thai Baht for our Thai
subsidiaries.

     As of June 30, 2002, the average daily interbank exchange rate for the Baht
was  trading  at  41.58 Baht to one US dollar. The exchange rate in Thailand has
shown  signs  of  recovery  in  early  2002  and we anticipate this to stabilize
through  the  latter  part  of 2002. Weakening in the Baht may come from the gap
between  the  U.S.  and  Thai  interest rates giving a further boost to exports.
Regions  of  Thailand continue to promote exports to strengthen their economies.
We  are  unable  to predict whether the trends noted above would have a material
effect  on  our  future financial condition or the results of operations and, if
so,  whether  such  an  effect  will  be  positive  or  negative.

3.     Exchange  Rate  Fluctuation
                                         Thai Baht
                -----------------------------------------------------------
                   First Qtr     Second Qtr     Third Qtr     Fourth Qtr
  2002
  High              44.57          43.82
 Average            43.80          42.85
  Low               43.00          41.26

  2001
  High              45.00          45.85          45.87         45.07
 Average            43.29          45.45          44.98         44.40
  Low               42.19          44.68          43.92         43.37

  2000
  High              38.30          39.45          42.77         44.49
 Average            37.96          38.67          40.97         43.44
  Low               36.71          37.72          39.10         41.88

     Future  volatility  in the Baht may come from the continued strength in the
Thai exports.  Other Asian countries are showing overall weakness in exports and
large  technology industries, with the exception of Japan.  Japan's problems are
primarily  domestic.   Asian  countries  overall  will  weaken with some support
domestically by China and India. We do not anticipate Thailand to be effected by
Japan's economic downturn and that of surrounding Asian region's, however; there
can  be  no  assurance  of  this.


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<PAGE>


     We  anticipate  the  cost  of  raw  materials,  which includes precious and
non-precious  metals,  to  show  moderate  cost  decreases  in  the  short-term.

4.   Foreign  Currency  Risk

     As  of  June  30,  2001,  we  had  no  open  forward-contracts.  Our  Thai
subsidiaries  keep their books in the Thai Baht currency.  As a result, the Thai
balances  are  exposed  to currency gains and losses depending upon the currency
rate  fluctuations  when  compared  to the US dollar for the respective periods.
The  currency  and remeasurement gains and (losses) for the three and six months
ended  June  30,  2002  and  2001,  were ($226,439), ($295,235), $1,290,444, and
$608,779,  respectively.

5.   Interest  Rate  Fluctuations

     Our  interest  expenses  and  income  are  sensitive to changes in interest
rates.  As  of  June 30, 2002, we had $5,269,931 in interest bearing obligations
at  various  rates,  and any fluctuation in the interest rate will have a direct
impact  on  our  interest  expenses,  cash  flow  and  results  of  operations.


                                     PART II

                                OTHER INFORMATION
Item  1.     Legal  Proceedings.
                 None.
Item  2.     Changes  in  Securities  and  Use  of  Proceeds.
                 None.
Item  3.     Defaults  Upon  Senior  Securities.
                 None.
Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders.
                 None.
Item  5.     Other  Information.
                 None.
Item  6.     Exhibits  and  Reports  on  Form  8-K.

(a)     Exhibits:

             99:  Certification  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002

                                       11

(b)     Reports  on  Form  8-K:

        There  were  no reports on Form 8-K filed during the quarter ended
        June 30, 2002


                                       12
<PAGE>

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

Date:  August  19,  2002                      THE  TOPAZ  GROUP,  INC.

                                        By:   /s/  Terrance  C.  Cuff
                                              ----------------------------------
                                              Name:  Terrance  C.  Cuff
                                              Title:   Chief  Financial  Officer

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