<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 EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996

     [ ]     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 of                   (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, 1996 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, 1996 . . . . . . . . . .  1

     (b)  Statements of Operations (Unaudited) - Nine months
          ended September 30, 1996 and 1995 and Period from
          Inception (December 1, 1987) to September 30, 1996 . . . . . . . .  2

     (c)  Statements of Operations (Unaudited) - Three months
          ended September 30, 1996 and 1995. . . . . . . . . . . . . . . . .  3

     (d)  Statement of Stockholders' Equity (Unaudited) - 
          Period from Inception (December 1, 1987) to September 30, 1996 . .  4

     (e)  Statements of Cash Flows (Unaudited) - Nine months
          ended September 30, 1996 and 1995 and Period from
          Inception (December 1, 1987) to September 30, 1996 . . . . . . . .  5

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


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


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


<PAGE>

                               COLECCIONES DE RAQUEL, INC.

                              (A DEVELOPMENT STAGE COMPANY)

                                       BALANCE SHEET
                                        (UNAUDITED)


                                                       SEPTEMBER 30,
                                                                1996
                                                                ----
ASSETS
  Current assets
    Cash and equivalents                                    $813,251
    Inventory                                                 84,677
    Deposit paid and other                                    14,995
                                                            --------
    Total current assets                                     912,923

  Equipment, Furniture & Fixtures, net of accumulated 
    depreciation of $5,549                                    30,883
                                                            --------

  Total assets                                              $943,806
                                                            --------
                                                            --------

Liabiliites and Stockholders Equity
  Current liabilities
    Taxes payable                                              1,489
    Total current liabilities                                  1,489
                                                            --------

  Stockholders 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        (435,527)
                                                            --------
    Total stockholders equity                                942,317
                                                            --------

  Total liabilities and stockholders equity                 $943,806
                                                            --------
                                                            --------


             See accompanying notes to financial statements.



<PAGE>

                               COLECCIONES DE RAQUEL, INC.
                              (A DEVELOPMENT STAGE COMPANY)

                                 STATEMENTS OF OPERATIONS
                                        (UNAUDITED)

<TABLE>
                                                                         PERIOD FROM
                                                                           INCEPTION
                                                                      (DEC. 1, 1987)
                                                                                  TO
                                     NINE MONTHS ENDED SEPTEMBER 30,   SEPTEMBER 30,
                                                    1996        1995            1996
                                                    ----        ----            ----

<S>                                               <C>           <C>       <C>       
SALES                                         $    4,313   $     926       $  17,926
Cost of goods sold                                 1,251         305           5,994
                                              ----------   ---------       ---------

Gross profit                                       3,061         621          11,932

Selling, general, and administrative 
 expenses                                        242,575      70,220         491,056
                                              ----------   ---------       ---------

(Loss) from operations                          (239,514)    (69,599)       (479,124)

Interest income                                   25,197        -             25,197

Litigation settlement income                        -         20,000          20,000
                                              ----------   ---------       ---------

Loss before provision for income taxes          (214,317)    (49,599)       (433,927)

Provision for income taxes                          -            800           1,600
                                              ----------   ---------       ---------
Net loss                                      $ (214,317)  $ (50,399)      $(435,527)
                                              ----------   ---------       ---------
                                              ----------   ---------       ---------

Net loss per common share                     $   (0.003)  $   (0.01)
                                              ----------   ---------

Weighted average number of common shares      24,000,000   3,664,233
                                              ----------   ---------
                                              ----------   ---------
</TABLE>

             See accompanying notes to financial statements.

<PAGE>

                         COLECCIONES DE RAQUEL, INC.
                        (A DEVELOPMENT STAGE COMPANY)

                          STATEMENTS OF OPERATIONS
                                 (UNAUDITED)


                                            THREE MONTHS ENDED SEPTEMBER 30, 
                                            -------------------------------- 
                                                            1996        1995 
                                                            ----        ---- 

Sales                                                 $    1,389   $      65 

Cost of goods sold                                           403          21 
                                                      ----------   --------- 

Gross profit                                                 986          44 

Selling, general, and administrative expenses             71,904      35,728 
                                                      ----------   --------- 

Loss from operations                                     (70,918)    (35,684)

Interest income                                           10,278        -    

Income (loss) before provision for income taxes          (60,640)    (35,684)

Provision for income taxes                                  -           -    
                                                      ----------   --------- 

Net income (loss)                                     $  (60,640)  $ (35,684)
                                                      ----------   --------- 
                                                      ----------   --------- 

Net loss per common share                             $  (0.003)   $   (0.01)
                                                      ----------   --------- 
                                                      ----------   --------- 

Weighted average number of common shares              24,000,000   3,494,506 
                                                      ----------   --------- 
                                                      ----------   --------- 



             See accompanying notes to financial statements.

<PAGE>

                         COLECCIONES DE RAQUEL, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                      STATEMENT OF STOCKHOLDERS' EQUITY
    FOR THE PERIOD FROM DECEMBER 1, 1987 (INCEPTION) TO SEPTEMBER 30, 1996

<TABLE>
                                  Preferred Stock          Common Stock
                                 ------------------    -------------------   Additional       MMI     Deficit During      Net
                                 Number of             Number of              Paid-in     Settlement    Development   Shareholders'
                                  Shares     Amount     Shares      Amount    Capital      Agreement       Stage         Equity
                                 ---------   ------    ----------  -------  -----------  ------------ --------------  -------------
<S>                                <C>         <C>       <C>         <C>       <C>          <C>         <C>              <C>
Net loss from inception
 through December 31, 1993            --      $ --           --    $   --   $       --   $        --    $ (36,640)    $   (36,640)
                                 --------     -----    ----------  -------   ----------   -----------   ---------     -----------
Balance, December 31, 1993            --        --           --        --           --            --      (36,640)        (36,640)
Common stock issued in 
 reorganization                       --        --     20,000,000    2,000       34,754           --          --           36,754
Common Stock issued in
 initial public offering              --        --      1,000,000      100       90,990           --          --           91,090
Preferred stock exchanged for
 common stock                     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, December 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, December 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
Common stock exchanged for
 Preferred stock                 (100,000)     (100)   20,000,000    2,000   $   (1,900)
Net loss, nine months                 --        --            --       --           --            --     (214,317)       (214,317)
                                 --------     -----    ----------  -------   ----------   -----------   ---------     -----------
Balance, September 30, 1996           --        --     24,000,000  $ 2,400   $1,375,444           --    $ 435,527     $   942,317
                                 --------     -----    ----------  -------   ----------   -----------   ---------     -----------
                                 --------     -----    ----------  -------   ----------   -----------   ---------     -----------
</TABLE>



                See accompanying notes to financial statements


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

                                                                 PERIOD FROM  
                                                                  INCEPTION   
                                         NINE MONTHS ENDED      (DEC. 1, 1987)
                                            SEPTEMBER 30,             TO      
                                       -----------------------  SEPTEMBER 30, 
                                         1996         1995           1996     
                                       ---------    ----------  ------------- 
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                             $(214,317)   $  (50,399)  $ (435,527)
  Adjustments to reconcile net loss 
   to net cash used in operating 
   activities 
    Depreciation                           2,826           450        5,549 
    (Increase) in inventory              (42,527)      (11,578)     (84,677)
    Decrease (increase) in prepaid 
     expenses and other                   20,879       (10,000)      (8,459)
    (Increase) decrease in deposits       (3,422)        2,800       (6,536)
    Increase (decrease) in accounts 
     payable, loans payable, and 
     accrued salary                      (27,662)       23,696        1,488 
                                       ---------    ----------   ---------- 

    Net cash used in operating 
     activities                         (264,223)      (45,031)    (528,162)
                                       ---------    ----------   ---------- 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of equipment, furniture & 
   fixtures, and leasehold 
   improvements                          (28,358)            -      (36,431)
                                       ---------    ----------   ---------- 

    Net cash used in investments         (28,358)            -      (36,431)
                                       ---------    ----------   ---------- 

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from MMI settlement 
   agreement                             400,125       250,000    1,250,000 
  Net proceeds from initial public 
   offering                                    -             -       91,090 
  Loans and paid in capital from 
   preferred stockholder                       -         1,000       36,754 
                                       ---------    ----------   ---------- 
    Net cash provided by financing 
     activities                          400,125       251,000    1,377,844 
                                       ---------    ----------   ---------- 

Net increase (decrease) in cash and 
 equivalents                             107,544       205,969      813,251 

Cash and equivalents at beginning   
 of period                               705,707        12,874            - 
                                       ---------    ----------   ---------- 

Cash and equivalents at end of 
 period                                $813,251     $  218,843   $  813,251 
                                       ---------    ----------   ---------- 
                                       ---------    ----------   ---------- 

Supplemental information of non-cash 
 investing and financing activities: 
 exercise of warrants and related 
 settlement agreement                  $       -    $1,000,000   $1,250,000 
                                       ---------    ----------   ---------- 
                                       ---------    ----------   ---------- 


             See accompanying notes to financial statements  

<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 and olive complexions.

2.   UNAUDITED FINANCIAL STATEMENTS

     The financial statements as of September 30, 1996 and for the periods ended
     September, 1996 and 1995 included heron 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 November 1994, all of the A 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 


<PAGE>

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


3.   WARRANTS AND RELATED SETTLEMENT AGREEMENT (CONTINUED)
     
     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 June
     30, 1996, the Company had received all of the settlement.

     The Company has agreed within one year of the Agreement 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
     C Warrants which were issued upon exercise of the B Warrants and
     subsequently canceled by the Company.  As part of the Agreement with MMI,
     the Company has consented to MMI commencing legal proceedings in the name
     of MMI or the Company against third parties to recover MMI's damages
     suffered as a result of or in connection with MMI's purchase of the Shares
     and has agreed to assist and cooperate with MMI in any such action.


4.   LEGAL PROCEEDING

     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 Releasewith 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" 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.  The Company
     and Rixima are negotiating an Amended Covenant Not to Sue for the purpose
     of clarifying that the Company is bound by the covenant and permitting the
     Company to use "Colecciones de Raquel" in connection with any product.


5.   LEASE

     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.


<PAGE>


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


     MATERIAL CHANGES IN RESULTS OF OPERATIONS

     Although the Company continued to have limited operations and sales during
     the three month period ended September 30, 1996, revenues exceeded revenues
     for the three month period ended September 30, 1995, as a result of sales
     from the Company's two boutiques, one in operation since May of 1996 and
     one in operation since September 1996.  For the nine month period ended
     September 30, 1996, revenues exceeded revenues for the nine month period
     ended September 30, 1995, due to both sales from the boutiques and from the
     test-marketing of the Company's fragrance "Sabor A Mi, Melody of Eternal
     Passion" during January and February of 1996.  The test marketing was
     terminated and the Company's full line of cosmetics, skincare, fragrance,
     and lingerie is now sold from the Beverly Hills boutique and from the
     downtown Los Angeles boutique.

     Selling, general, and administrative expenses increased substantially over
     those for the three month period for the prior year.  The increase was
     largely due to accounting and legal expenses in conjunction with the filing
     of reports under the Securities Exchange Act of 1934, expenses in
     conjunction with the refurbishment and opening of the downtown boutique,
     and also due to increased payroll expenses.

     Due to the Company's limited operations, management does not believe that
     historical revenues, margins, or expenses for the period ended September
     30, 1996, are indicative of future operating results.


     MATERIAL CHANGES IN FINANCIAL CONDITION

     During the three month period ended September 30, 1996, 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 increased for the three month period ended
     September 30, 1996, as the Company produced and purchased products for
     sale.  Interest income increased during the three month period ended
     September 30, 1996.

     The Company's available cash at September 30, 1996, is expected to be
     sufficient to defray the Company's operating expenses through calendar year
     1996, and possibly for some time thereafter.  At such time as the cash is
     exhausted, the Company's continued existence will be dependent on its
     ability to generate significant product sales and ultimately to achieve
     profitable operations.

<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" 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.  The Company
     and Rixima are negotiating an Amended Covenant Not to Sue for the purpose
     of clarifying that the Company is bound by the covenant and permitting the
     Company to use "Colecciones de Raquel" in connection with any product.


Item 2.  CHANGES IN SECURITIES

     The rights of the holder of the Series A Preferred stock (the entire issue
     of 100,000 shares being held by the President, Raquel Zepeda) have been
     amended by the Board of Directors to allow the conversion of said Series A
     Preferred stock into common stock at the rate of one share of Series A
     Preferred stock for 200 shares of Common stock at any time.

     The Board of Directors has further directed the Corporation to issue
     20,000,000 shares of common stock to the President, Raquel Zepeda, in
     exchange for the 100,000 shares of Series A Preferred stock held by her,
     and to retire the said Series A Preferred stock.  This brings the total of
     issued and outstanding common stock of the Corporation to 24,000,000
     shares.  This action is anticipated to have a material dilutive effect on
     the holders of the Corporation's outstanding common stock.

<PAGE>

Item 3.  DEFAULTS UPON SENIOR SECURITIES.

     Inapplicable.


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

     Inapplicable.


Item 5.  OTHER INFORMATION

     The Corporation mailed a Proxy and Information Statement and 1995 Annual
     Report to its' stockholders of record (as of August 15, 1996) commencing on
     September 26, 1996 in preparation for the Annual Meeting of Stockholders on
     October 12, 1996.


Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)  EXHIBITS

          Inapplicable.

     (b)  REPORTS ON FORM 8-K

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

<PAGE>

                                   SIGNATURES


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

                                      COLECCIONES DE RAQUEL, INC.
                                      (Registrant)


Dated: November 9, 1996               By: /s/  RAQUEL ZEPEDA 
                                         --------------------------------------
                                         Raquel Zepeda, Chief Financial Officer