<PAGE>



                       U.S. SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.  20549

                                     FORM 10-QSB

(Mark One)
    [X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES AND EXCHANGE ACT OF 1934
                                           
For the quarterly period ended September 30, 1997

    [ ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                         THE SECURITIES EXCHANGE ACT OF 1934
                                           
                   For the transition period from ______ to ______
                                           
Commission File Number 0-24798
                                       
                             COLECCIONES DE RAQUEL, INC.
-------------------------------------------------------------------------------
          (Exact name of small business issuer as specified in its charter)

            NEVADA                                      93-1123005
-------------------------------------------------------------------------------
(State or other jurisdiction                          (IRS Employer
      of Incorporation)                            Identification Number)

           9873 S. SANTA MONICA BLVD., BEVERLY HILLS, CALIFORNIA 90212 
       ----------------------------------------------------------------------
                       (Address of principal executive offices)

                                    (310) 203-9240
                     ---------------------------------------------
                               (Issuer's telephone number)

-------------------------------------------------------------------------------
   (Former name, former address and former fiscal year, if changed since last
                                     report)



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


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

At September 30, 1997, 24,000,000 shares of the Company's $.0001 par value
common stock were outstanding.



<PAGE>

PART 1 - FINANCIAL INFORMATION


ITEM 1.  Financial Statements                                              PAGE

    (a)  Balance Sheet (Unaudited) -September 30, 1997 . . . . . . . . . . .  1

    (b)  Statements of Operations (Unaudited) - Nine Months
         ended September 30, 1997 and 1996 Period from
         Inception (December 1, 1987) to September 30, 1997. . . . . . . . .  2


    (c)  Statements of Cash Flows (Unaudited) -Third Quarters
         ended September 30, 1997 and 1996 and Prior 1997 Second Quarter . .  3

    (d)  Statement of Stockholder's Equity (Unaudited) -
         Period from Inception (December 1, 1987) to September 30, 1997. . .  4


    (e)  Statements of Cash Flows (Unaudited) - Nine Months
         ended September 30, 1997 and 1996 and Period from
         Inception (December 1, 1987) to September 30, 1997. . . . . . . . .  5

    (f)  Notes to Unaudited Financial Statements . . . . . . . . . . . . . .  6

ITEM 2.  Management's Discussion and Analysis or
         Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . . .  8



PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . .  9


                                       ii
<PAGE>

                             COLECCIONES DE RAQUEL, INC.
                            (A Development Stage Company)
                                    BALANCE SHEET
                                     (Unaudited)



                                                             SEPTEMBER  30, 1997
                                                             -------------------
ASSETS

    Current Assets

         Cash and equivalents                                       $518,772
         Inventory                                                    73,090
         Deposits paid and other assets                               20,655
                                                                    --------
         Total Current Assets                                       $612,517

    Equipment, Furniture & Fixtures, net of accum. depr. $16,607      26,953
                                                                    --------
    Total Assets                                                    $639,470
                                                                    --------
                                                                    --------

LIABILITIES AND STOCKHOLDERS EQUITY

    Current Liabilities
         Accounts payable                                             $5,554
         Taxes payable                                                   650

         Total current liabilities                                    $6,204


    Stockholder's equity
         Common stock - $.0001 par value, 50,000,000 shares 
         authorized, 24,000,000 shares issued and outstanding          2,400

         Additional paid in capital                                1,375,444

         Deficit accumulated during the development stage           (744,578)

         Total stockholder's equity                                  633,266

    Total liabilities and stockholder's equity                      $639,470
                                                                    --------
                                                                    --------



                    See accompanying notes to financial statements


                                                                             1
<PAGE>

                             COLECCIONES DE RAQUEL, INC.
                            (A Development Stage Company)
                               STATEMENTS OF OPERATIONS
                                     (Unaudited)

<TABLE>
<CAPTION>
                                                                                PERIOD FROM
                                                                           INCEPTION(DEC.1, 1987)
                                                                                     TO
                                             NINE MONTHS ENDED SEPTEMBER 30,    SEPTEMBER 30,
                                                     1997         1996              1997
                                                 ----------    ---------         ------------

<S>                                              <C>           <C>               <C>
Sales                                                5,787        4,313              24,965
Cost of Goods Sold                                   2,293        1,251               8,961
                                                ----------   ----------           ---------
Gross Profit                                         3,494        3,061              16,004

Selling, general, and administrative expenses      241,837      242,575             836,403
                                                ----------   ----------           ---------
(Loss) from operations                            (238,342)    (239,514)           (820,339)

Interest Income                                     23,111       25,197              58,162

Litigation settlement income                                                         20,000

Loss before provision for income taxes            (215,231)    (214,317)           (742,177)

Provision for income taxes                                                            2,400

Net Loss                                         ($215,231)   ($214,317)          ($744,578)
                                                ----------   ----------           ---------
                                                ----------   ----------           ---------
Net Loss per share                                  ($.001)      ($.003)
                                                ----------   ----------           ---------
                                                ----------   ----------           ---------
Weighted average number of common shares        24,000,000   24,000,000
                                                ----------   ----------           ---------
                                                ----------   ----------           ---------
</TABLE>

                    See accompanying notes to financial statements

                                                                             2
<PAGE>

                             COLECCIONES DE RAQUEL, INC.
                            (A Development Stage Company)
                               STATEMENTS OF OPERATIONS
                                     (Unaudited)

<TABLE>
<CAPTION>
                                                       THIRD QUARTER         SECOND QUARTER
                                                      ENDED SEPTEMBER,         ENDED JUNE,
                                                     1997          1996            1997
                                                   --------      --------        --------
<S>                                                <C>           <C>             <C>
Sales                                                 1,166         1,390          2,794
Cost of Goods Sold                                      552           404          1,098
                                                ----------   ----------           ---------
Gross Profit                                            614           986          1,696

Selling, general, and administrative expenses        72,382        71,904         89,510
                                                ----------   ----------           ---------
(Loss) from operations                              (71,768)      (70,918)       (87,814)

Interest Income                                       7,173        10,279          7,820

Litigation settlement income                                                        

Loss before provision for income taxes              (64,595)      (60,639)       (79,994)

Provision for income taxes                                                          

Net Loss                                           ($64,595)     ($60,639)       (79,994)
                                                 ----------    ----------     ----------
                                                 ----------    ----------     ----------
Net Loss per share                                   ($.001)       ($.001)        ($.001)
                                                 ----------    ----------     ----------
                                                 ----------    ----------     ----------
Weighted average number of common shares         24,000,000    24,000,000     24,000,000
                                                 ----------    ----------     ----------
                                                 ----------    ----------     ----------

</TABLE>
                    See accompanying notes to financial statements


                                                                             3

<PAGE>
                             COLECCIONES DE RAQUEL, INC.
                            (A DEVELOPMENT STAGE COMPANY)
                          STATEMENT OF STOCKHOLDERS' EQUITY
        FOR THE PERIOD FROM DECEMBER 1, 1987 (INCEPTION) TO SEPTEMBER 30, 1997
                                     (UNAUDITED)

<TABLE>
<CAPTION>
                                    PREFERRED STOCK        COMMON STOCK                                    DEFICIT
                                  --------------------  ------------------        ADDITIONAL      MMI     DURING THE      TOTAL
                                   NUMBER                  NUMBER                  PAID-IN   SETTLEMENT  DEVELOPMENT  SHAREHOLDER'S
                                  OF SHARES    AMOUNT    OF SHARES     AMOUNT      CAPITAL    AGREEMENT     STAGE        EQUITY
                                  ---------   --------  -----------   --------     --------   ----------  ---------    --=---------
<S>                               <C>         <C>       <C>           <C>          <C>        <C>          <C>          <C>
Net loss from the 
 inception through
 December 31, 1992                      -     $    -             -     $    -   $        -     $       -     ($29,178)   ($29,178)
Net Loss, 1993                          -          -             -          -            -             -       (7,462)     (7,462)
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------
Balance, Dec. 31, 1993                  -          -             -          -            -             -      (36,640)    (36,640)
 Common Stock Issued
 In reorganization                      -          -    20,000,000      2,000       34,754             -            -      36,754
Common Stock Issued in IPO              -          -     1,000,000        100       90,990             -            -      91,090
Preferred Stock exchanged for
 Common Stock per IPO             100,000        100   (20,000,000)    (2,000)       1,900             -            -           -
Exercise of A Warrants                  -          -     1,000,000        100      249,900             -            -     250,000
MMI Settlement Agreement                -          -             -          -            -      (250,000)           -    (250,000)
Net Loss, 1994                          -          -             -          -            -             -      (58,052)    (58,052)
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------
Balance, Dec. 31, 1994            100,000        100     2,000,000        200      377,544      (250,000)     (94,692)     33,152

Exercise of B Warrants                  -          -     2,000,000        200      999,800             -            -   1,000,000
MMI settlement agreement                -          -             -          -            -    (1,000,000)           -  (1,000,000)
Cash received from MMI                  -          -             -          -            -       849,875            -     849,875
Net loss, 1995                          -          -             -          -            -             -     (126,518)   (126,518)
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------
Balance, Dec. 31, 1995            100,000        100     4,000,000        400    1,377,344      (400,125)    (221,210)    756,509
Cash received from MMI                  -          -             -          -            -       400,125            -     400,125
Net Loss                                -          -             -          -            -             -          ( -)        ( -)
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------
Cash received from MMI                  -          -             -          -            -             -      400,125     400,125
Common Stock exchanged 
  for Preferred Stock            (100,000)      (100)   20,000,000      2,000       (1,900)
Net Loss                                                                                                     (308,137)   (308,137)
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------
Balance Dec. 31, 1996                   -     $    -    24,000,000     $2,400   $1,375,444     $       -    ($529,347)   $848,497
Net Loss 9 months                                                                                           ($215,231)

Balance September 30, 1997              -     $    -    24,000,000     $2,400   $1,375,444     $       -    ($744,578)   $633,266
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------
                                 --------    -------  ------------    -------   ----------     ---------    ---------    --------

</TABLE>


                      See accompanying notes to financial statements


                                                                             4
<PAGE>



                             COLECCIONES DE RAQUEL, INC.
                            (A Development Stage Company)
                               STATEMENTS OF CASH FLOWS
                                     (Unaudited)
<TABLE>
<CAPTION>

                                                                                             PERIOD FROM
                                                              FOR THE PERIOD ENDED       INCEPTION TO CURRENT
                                                                   SEPTEMBER 30,           DECEMBER 31, 1987 -
                                                                1997          1996        SEPTEMBER 30, 1997
                                                             ----------    ----------     --------------------
<S>                                                         <C>           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                   $(64,594)     $(214,317)          $(744,577)
   Adjustments to reconcile net loss to net cash used in
     operating activities
          Depreciation                                           2,181          2,826              16,607
     (Increase) decrease in
          Inventory                                                304        (45,527)            (73,090)
          Prepaid expenses & other assets                       (3,099)        20,879             (16,977)
          Deposits                                                   0         (3,422)             (3,581)
     (Increase) decrease in 
          Accounts Payable & accrued expenses                      644        (27,622)              6,108
                                                              --------       --------            --------
          Net cash used in operating activities               $(64,564)     $(264,223)          $(815,510)
                                                              --------       --------            --------
CASH FLOWS FROM INVESTING ACTIVITIES
          Purchase of Equipment                                     98        (28,358)            (43,433)
          Leasehold Improvements                                     0              0                (129)
                                                              --------       --------            --------
            Net cash used in investing activities                   98       (28,358)             (43,562)

CASH FLOWS FROM FINANCING ACTIVITIES
          Proceeds from MMI settlement agreement                     -       $400,125          $1,250,000
          Proceeds from sale of common stock                         -              -              91,090
          Payments for offering costs                                -              -                   -
          Loans & paid-in capital from preferred stockholder         -              -              36,754
                                                              --------       --------            --------
          Net cash provided by financing activities                  -       $400,125          $1,377,844
                                                              --------       --------            --------
          Net increase in cash and cash equivalents            (64,466)      $107,544            $518,772

CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD                  $583,238       $705,707            $583,238
                                                              --------       --------            --------
CASH & CASH EQUIVALENTS, END OF PERIOD                        $518,772       $813,251            $518,772
                                                              --------       --------            --------
                                                              --------       --------            --------
</TABLE>


                    See accompanying notes to financial statements


                                                                             5
<PAGE>

                             COLECCIONES DE RAQUEL, INC.
                            (A Development Stage Company)
                            NOTES TO FINANCIAL STATEMENTS
                                     (Unaudited)
                                           

1. BUSINESS

    COLECCIONES DE RAQUEL, INC. (The "Company") designs and markets cosmetics,
    skin care, fragrance, and lingerie.  The Company's cosmetics line is
    specifically designed for golden skin tones such as sallow and olive
    complexions.

2.  UNAUDITED FINANCIAL STATEMENTS

    The financial statements as of September 30, 1997 and for the periods ended
    September, 1997 and 1996 included herein are unaudited; however, such
    information reflects all adjustments consisting of normal recurring
    adjustments, which are, in the opinion of management, necessary for a fair
    presentation of the information for such periods.  In addition, the results
    of operation for the interim periods are not necessarily indicative of
    results for the entire year.  The accompanying financial statements should
    be read in conjunction with the Company's annual report filed on Form
    10-KSB.

3.  WARRANTS AND RELATED SETTLEMENT AGREEMENT

    In August 1994, the Company completed an initial public offering of its
    securities.  The Company sold 1,000,000 units at $.10 per unit for gross
    proceeds of $100,000 on a self-underwritten basis.  Expenses of the
    offering were $8,910.  Each unit consists of one share of common stock and
    one Class A Warrant.  The Class A Warrants were exercisable for one share
    of common stock and two Class B Warrants at a price of $.25 each.  The
    Class B Warrants were exercisable for one share of common stock and one
    Class C Warrant at a price of $.50 each.  The Class C warrants were to be
    exercisable for one share of common stock at a price of $1.00 each.

    In February 1995, all of the B Warrants were exercised in a transaction
    which the Company claims was fraudulent.  Although the Company received no
    portion of the $250,000 exercise price, Units consisting of one share of
    common stock and two B Warrants were issued by the Company's transfer agent
    without the knowledge of the Company's officers or directors to persons
    purportedly exercising the A Warrants.

    In February 1995, all of the B Warrants were exercised in a transaction
    which the Company claims was fraudulent.  Although the Company received no
    portion of the $1,000,000 exercise price, Units consisting of one share of
    common stock and one C warrant were issued by the Company's transfer agent
    without the knowledge of the Company's officers or directors to persons
    purportedly exercising the B Warrants.

    The shares of common stock issued in the Company's initial public offering
    and upon exercise of the A Warrants and B Warrants (collectively, "Shares")
    have been publicly traded.  Although the C Warrants were also purportedly
    exercised without the receipt by the Company of the exercise price, the
    Company believes that the shares issued upon exercise of the C Warrants
    were not traded and the Company has canceled the C Warrants and the shares
    issued upon their exercise.

    In September 1995, the Company entered into an Agreement with Moore
    McKenzie, Inc., a Philippine corporation ("MMI"), which purchased and
    resold the shares following their exercise by third party entities.  MMI
    has expressly denied any involvement in the exercise of the A Warrants, B
    Warrants, and C Warrants.  Solely for the purpose of protecting and
    preserving its investment in the Shares and its reputation and goodwill,
    MMI agreed to pay the Company the exercise price of the A Warrants
    ($250,000) and B Warrants ($1,000,000).  As of February  29, 1996, the
    Company had received all of the settlement.

                                                                             6
<PAGE>

3.  WARRANTS AND RELATED SETTLEMENT AGREEMENT (CONTINUED)

    Further, the  Company agreed to sell MMI an additional 1,000,000 shares of
    common stock  at a price of $1.00 per share in place of the shares which
    could have been purchased upon exercise of the canceled C Warrants.  The
    option to purchase the additional 1,000,000 shares at $1.00 per share
    expired in September, 1996.   MMI did not purchase the additional 1,000,000
    and no additional shares were issued.   As part of the Agreement with MMI,
    the Company agreed to assist and cooperate with MMI in any action against
    third parties to recover MMI's damages suffered as a result of or in
    connection with MMI's purchase of the Shares.

4.  LEGAL PROCEEDINGS

    On December 8, 1993, Raquel Zepeda dba Colecciones de Raquel, a California
    sole proprietorship, filed a civil action in the State of California
    Superior Court, Los Angeles County, against Rixima, Inc. ("Rixima") and
    J.C. Penny, Inc., alleging violation of the Lanham Act, trade name
    infringement , unfair competition, invasion of privacy and conspiracy,
    claiming that Rixima had used Ms. Zepeda's likeness in connection with the
    marketing of cosmetic products using its "Raquel" and "Raquelle"
    trademarks.  Ms. Zepeda also filed an objection to the trademark
    applications filed by Rixima.  Rixima removed the action to the United
    States District Court, Central District of California.

    On June 20, 1995, Ms. Zepeda entered into a Settlement Agreement and
    General Mutual Release with Rixima pursuant to which Ms. Zepeda agreed to
    dismiss the action brought against Rixima and the objection to Rixima's
    pending trademark applications for "Raquel" and "Raquelle" trademark
    applications for "Raquel" and "Raquelle" in consideration of payment by
    Rixima of the sum of $20,000.  The parties also agreed to a covenant not to
    sue which obligates Rixima not to sue Ms. Zepeda or the Company for
    trademark infringement or unfair competition in connection with the sale of
    its line of cosmetic products to Hispanic women.  

    On December 17, 1996, the United States District Court, Central District of
    California, denied a motion by Rixima for an order declaring that
    Colecciones de Raquel, Inc. is a party to the covenant not to sue.

    There are no other material pending legal proceedings to which the Company
    or the property of the Company are subject.  In addition, no proceedings
    are known to be contemplated by a governmental authority against the
    Company or any officer or director of the Company.

5.  LEASES

    On October 1, 1995, the Company entered into a two  year lease for a store
    front located in Beverly Hills, California.  The space is approximately 700
    square feet, and the monthly rent is  $1,100.  In May 1996, the Company
    entered into a three year lease for a 900 square foot store front in
    downtown Los Angeles, California.  Monthly rent for the space, which the
    Company is utilizing for its second showroom/boutique location, is $1,451
    per month.

                                                                             7
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

    MATERIAL CHANGES IN RESULTS OF OPERATIONS

    The 1996 Third Quarter revenues slightly exceeded those of 1997.  Although
    1997 sales were higher in 1997, 1996 interest income was higher.  Selling,
    general, and administrative expenses for the 1997 Second Quarter year to
    date period were slightly lower than 1996's Second Quarter year to date.  
    However, 1997 Third Quarter General and Administrative expenses were 19.1%
    lower than the prior quarter (2nd 1997).  This decrease in General and
    Administrative expenses is largely attributed to a decrease in personnel.   
    
    MATERIAL CHANGES IN FINANCIAL CONDITION

    During the nine month period ended September 30, 1997 the Company's cash
    position decreased due to the continued low level of sales relative to its
    cost of operations, without any offsetting inflows from financing
    activities.  Inventory levels were slightly lower from year-end 1996 due to
    sales.  In comparison to Second Quarter 1996, Inventory levels were much
    higher due to production of cosmetics and stocking of lingerie.   

    The Company's available cash at September 30, 1997 is expected to be
    sufficient to defray the Company's operating expenses through calendar year
    1997.  The Company's continued existence will be dependent on its ability
    to generate significant product sales and ultimately to achieve profitable
    operations.

                                                                             8
<PAGE>

                             PART II - OTHER INFORMATION 

Item 1.  LEGAL PROCEEDINGS

    On December 8, 1993, Raquel Zepeda dba Colecciones de Raquel, a California
    sole proprietorship, filed a civil action in the State of California
    Superior Court, Los Angeles County, against Rixima, Inc. ("Rixima") and
    J.C. Penny, Inc., alleging violation of the Lanham Act, trade name
    infringement , unfair competition, invasion of privacy and conspiracy,
    claiming that Rixima had used Ms. Zepeda's likeness in connection with the
    marketing of cosmetic products using its "Raquel" and "Raquelle"
    trademarks.  Ms. Zepeda also filed an objection to the trademark
    applications filed by Rixima.  Rixima removed the action to the United
    States District Court, Central District of California.

    On June 20, 1995, Ms. Zepeda entered into a Settlement Agreement and
    General Mutual Release with Rixima pursuant to which Ms. Zepeda agreed to
    dismiss the action brought against Rixima and the objection to Rixima's
    pending trademark applications for "Raquel" and "Raquelle" trademark
    applications for "Raquel" and "Raquelle" in consideration of payment by
    Rixima of the sum of $20,000.  The parties also agreed to a covenant not to
    sue which obligates Rixima not to sue Ms. Zepeda or the Company for
    trademark infringement or unfair competition in connection with the sale of
    its line of cosmetic products to Hispanic women.  

    On December 17, 1996, the United States District Court, Central District of
    California, denied a motion by Rixima for an order declaring that
    Colecciones de Raquel, Inc. is a party to the covenant not to sue.

    There are no other material pending legal proceedings to which the Company
    or the property of the Company are subject.  In addition, no proceedings
    are known to be contemplated by a governmental authority against the
    Company or any officer or director of the Company.

Item 2.  CHANGES IN SECURITIES

    Inapplicable.

Item 3.  DEFAULTS UPON SENIOR SECURITIES

    Inapplicable.

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

    Inapplicable.


                                                                             9
<PAGE>

Item 5.  OTHER INFORMATION

    As of July, 1997 Ms. Vasquez, who was acting as Vice President of Sales is
no longer with the company.

Item 6.  EXHIBITS AND REPORTS ON FORM 8K

    (a)  EXHIBITS

         Inapplicable.

    (b)  REPORTS ON FORM 8-K

         No reports on Form 8-K were filed during the period covered by this
         report.

                                      SIGNATURES

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

                                  COLECCIONES DE RAQUEL, INC.
                                  (Registrant)




Dated: November 10, 1997          By: /s/ Raquel Zepeda
                                      ---------------------------------------
                                      Raquel Zepeda, Chief Financial Officer


                                                                            10