<PAGE>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark one)

    [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
        EXCHANGE ACT OF 1934.

                 For the quarterly period ended June 30, 2000
                                      OR
    [_] 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 0-16819

                            FRAGRANCENET.COM, INC.
            (exact name of registrant as specified in its charter)


           Delaware                     5990                    94-3054267

(State or other jurisdiction of (Primary Standard Industrial  (I.R.S. Employer
incorporation or organization) Classification Code Number)   Identification No.)


                              2070 Deer Park Avenue

                            Deer Park, New York 11729

                                (516) 242-3205
             (Address, including zip code, and telephone number,
      including area code, of registrant's principal executive offices)



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   ___
    -------

      Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

CLASS                                    OUTSTANDING AT JUNE 30, 2000
-----                                    ----------------------------
Common Stock, par value                           16,968,330
$  .01 per share


<PAGE>


                                      Index

                             FRAGRANCENET.COM, INC.

<TABLE>
<CAPTION>
                                                                      PAGE NUMBER
                                                                      -----------
<S>                                                                   <C>

Part I.     Financial Information

Item 1.     Consolidated Financial Statements (Unaudited):



            Consolidated Balance Sheets at June 30, 2000
            and March 31, 2000..................................................3

            Consolidated Statements of Operations for the Three
            Months Ended June 30, 2000 and June 30, 1999........................4

            Consolidated Statements of Cash Flows for the Three
            Months Ended June 30, 2000 and June 30, 1999........................5



            Notes to Consolidated Financial Statements..........................6-7

Item 2.     Management's Discussion and Analysis
            of Results of Operations and Financial Condition....................7-9

Item 3.     Quantitative and Qualitative Disclosures about Market Risk..........10

Item 6.     Exhibits and Reports on Form 8-K....................................11

Signatures......................................................................12

</TABLE>

                                       2
<PAGE>

Item 1. Financial Statements

BALANCE SHEETS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
                                                          June 30, 2000   March 31,
                                                                            2000
                                                            (Unaudited)
-----------------------------------------------------------------------------------
<S>                                                       <C>             <C>
ASSETS

Current Assets:

   Cash and cash equivalents                               $  227,503      283,433
   Accounts receivable, net                                    25,672       22,049
   Inventory                                                   48,000       54,896

   Prepaid expenses and other current assets                   91,652       24,054

Total Current Assets                                          392,800      384,432
                                                            ---------    ---------
   Property and equipment, net                                 29,672       28,517
   Intangible asset, net                                        6,750        6,875
   Other assets                                                12,700       12,700

Total Assets                                                $ 441,922    $ 432,524
                                                            =========    =========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities

   Accounts payable and accrued expenses                    $ 503,554    $ 455,097
   Deferred Revenue                                            22,215       20,387

Total Liabilities                                             525,769      475,484
                                                            ---------    ---------

Stockholders' Defecit:

   Common Stock, $.01 par value; 50,000,000 shares
   Authorized, 16,968,330 shares issued and outstanding       169,683      169,683
   Additional paid-in-capital                                 368,020      368,020
   Accumulated deficit                                       (621,550)    (580,663)
                                                            ---------    ---------

            Total stockholders' deficit                       (83,847)     (42,960)
                                                            ---------    ---------

            Total liabilities and stockholders' deficit     $ 441,922      432,524
                                                            ---------    ---------

</TABLE>


See accompanying notes to the financial statements.


                                       3
<PAGE>

STATEMENTS OF OPERATIONS

(Unaudited)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------

                                                         Three Months Ended June 30,
                                                             2000            1999
------------------------------------------------------------------------------------
<S>                                                     <C>            <C>


Net Sales                                              $  1,786,561    $    383,611

Cost of Sales                                             1,171,849         259,855
                                                       ------------    ------------

Gross Profit                                                614,712         123,756
                                                       ------------    ------------


Operating Expenses:

      Selling and marketing                                 365,954          91,193
      General and administrative                            292,204         101,918
                                                       ------------    ------------

   Total Operating Expenses                                 658,158         193,111
                                                       ------------    ------------

Loss From Operations                                        (43,446)        (69,355)

Interest Income                                               2,559               -
                                                       ------------    ------------

Net Loss                                               $    (40,887)   $    (69,355)
                                                       ============    ============


Basic and diluted net loss per share                   $      (0.00)   $      (0.00)
                                                       ------------    ------------

Weighted average number of common shares outstanding     16,968,330      15,195,140
                                                       ------------    ------------

</TABLE>


See accompanying notes to the financial statements.


                                       4
<PAGE>

STATEMENTS OF CASH FLOWS

(Unaudited)

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------

                                                          Three Months Ended June 30,
                                                               2000         1999
-------------------------------------------------------------------------------------
<S>                                                      <C>            <C>

Cash flows from operating activities:

    Net Loss                                            $ (40,887)   $ (69,355)
    Adjustments to reconcile net loss to net cash
    provided by operating activities:
             Depreciation and amortization                  3,308        3,151
             Changes in:
                   Accounts receivable                     (3,623)        --
                   Inventory                                6,896         --
                   Prepaid expenses and other current     (67,571)        --
                     assets

                   Accounts payable                        48,457       65,609
          Deferred revenue                                  1,828         --
                                                        ---------    ---------
             Net cash used in operating activities        (51,592)        (595)
                                                        ---------    ---------

Cash flows from investing activities:

             Acquisition of property and equipment         (4,338)        --
                                                        ---------    ---------

             Net cash used in investing activities         (4,338)        --
                                                        ---------    ---------

Net decrease in cash and cash equivalents                 (55,930)        (595)

Cash and cash equivalents, beginning of period            283,433       85,095
                                                        ---------    ---------
Cash and cash equivalents, end of period                $ 227,503       84,500
                                                        ---------    ---------
Supplemental disclosure of cash flow information:
        Cash paid during the period for income taxes    $     550          380
                                                        =========    =========
        Cash paid during the period for interest        $     932         --
                                                        =========    =========
</TABLE>


See accompanying notes to the financial statements.


                                       5
<PAGE>

Notes to Unaudited Financial Statements

1.    Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions of Form 10-Q of Regulation S-X. Accordingly, they do
not include all the information and notes required by generally accepted
accounting principles for complete financial statements. For further
information, refer to the Company's financial statements for the year ended
March 31, 2000 and notes thereto included in the Company's annual report on Form
10-KSB. For the three months ended June 30, 2000 and 1999, 52% and 65% of
purchases were from one distributor.

2.    Merger of TeleScents and FragranceNet.com, Inc.

 On July 28, 1999, National Capital Management Corporation ("NCMC") entered into
 an Agreement and Plan of Merger (the "Merger Agreement") to acquire TeleScents,
 Inc., a New York corporation ("TeleScents"). Pursuant to the Merger Agreement,
 NCMC issued to the shareholders of TeleScents an aggregate of 4,900,000 shares
 of its common stock and an aggregate of 1,029,514 shares of its Series A
 Preferred Stock (the "Preferred Stock"). The Preferred Stock was convertible
 into common stock on a 1-for-10 basis at such time as the Certificate of
 Incorporation of the Company was amended to increase the authorized shares of
 common stock to a number of shares sufficient to effect the conversion. The
 Preferred Stock had voting privileges on an "as converted" basis. Accordingly,
 the shareholders of TeleScents, in the aggregate, held approximately 90% of the
 total voting power of the Company's voting stock. The conversion of the
 Preferred Stock into 10,295,140 shares of common stock occurred subsequent to
 the Shareholders' meeting on November 16, 1999 where an amendment to the
 Company's Certificate of Incorporation was approved to increase the authorized
 shares of common stock from 6,666,666 to 50,000,000.

In   connection   with  the   Merger,   the   Company   changed  its  name  to
FragranceNet.com, Inc. and changed its ticker symbol to "FRGN".

The Company's acquisition of TeleScents was accounted for as a reverse
acquisition with TeleScents as the accounting acquirer, as the shareholders of
TeleScents gained voting control of the Company pursuant to the merger. The only
asset remaining in NCMC at the time of the merger was $437,703 of cash.
Accordingly, the reverse acquisition was accounted for as a recapitalization of
TeleScents with the issuance of shares of common stock to the pre-transaction
stockholders of FragranceNet.com in exchange for cash. For periods prior to the
business combination, the equity of the combined enterprise is the historical
equity of the accounting acquirer prior to the merger retroactively restated to
reflect the number of shares received in the business combination.

3.    New Accounting Pronouncements


                                       6
<PAGE>

In June 1998, the Financial  Accounting  Standards  Board issued  Statement of
Financial   Accounting   Standards  No.  133,   "Accounting   for   Derivative
Instruments and Hedging  Activities" ("SFAS No. 133"). Among other provisions,
SFAS No. 133  establishes  accounting  and reporting  standards for derivative
instruments  and for  hedging  activities.  It also  requires  that an  entity
recognize  all  derivatives  as either  assets or  liabilities  in the balance
sheet and measure those  instruments at fair value.  SFAS No. 133 is effective
for  financial  statements  for fiscal  years  beginning  after June 15, 2000.
Management has not determined the effect, if any, of adopting SFAS No. 133.

In March 2000, FASB Interpretation No. 44 - "Accounting for Certain Transactions
involving Stock Compensation, an interpretation of APB Opinion No.25" (FIN 44)
was issued. FIN 44 clarifies the application of APB 25 regarding the (a) the
definition of employee for purposes of applying APB No. 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequences of various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation awards in a business combination. FIN 44 does not address the
application of the fair value method of Statement No. 123. This Interpretation
is effective July 1, 2000, but certain conclusions in this Interpretation cover
specific events that occur after either December 15, 1998, or January 12, 2000.
To the extent that this Interpretation covers events occurring during the period
after December 15, 1998, or January 12, 2000, but before the effective date on
July 1, 2000, the effects of applying this Interpretation are recognized on a
prospective basis from July 1, 2000. We believe the adoption of FIN 44 will not
have a significant effect on the Company's financial statements.

On December 3, 1999,  the  Securities  and  Exchange  Commission  (SEC) issued
Staff  Accounting  Bulletin  No.  101  -  "Revenue  Recognition  in  Financial
Statements"  (SAB No. 101).  SAB No.101  provides the SEC staff's views on the
recognition  of  revenue.  SAB No.  101  requires  registrants  to  adopt  the
accounting  guidance  contained therein by no later than the fourth quarter of
2000.  Management of the Company does not believe that applying the accounting
guidance of SAB No. 101 will have a material effect on its financial  position
or results of operations.

In the fourth quarter of fiscal 2000, the Company implemented the provisions of
EITF No. 00-14, "Accounting for Sales Incentives", and reflects its sales
incentives as a reduction of sales.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
                      OF OPERATIONS AND FINANCIAL CONDITION

The following discussion and analysis should be read in conjunction with the
financial statements and notes to the financial statements.

                                  Results of Operations

The following table sets forth for the periods indicated certain financial
information derived from the Company's statements of operations. There can be no
assurance that trends in sales growth will continue in the future.


                                       7
<PAGE>

Three Months Ended  June 30,                    2000                1999
--------------------------------------------------------------------------------

Net Sales                                   $1,786,561        $    383,611

Cost of Sales                                1,171,849             259,855

Gross Profit                                   614,712              123,756

Total Selling, General and Administrative
Expenses                                       658,158             193,111

Loss from Operations                           (43,446)            (69,355)

Other Income - Interest Income                   2,559                   -

Net Loss                                       (40,887)             (69,355)

Overview

The Company sells brand name fragrances and related products over the Internet
through a website located at www.fragrancenet.com. The Company purchases
products from 10 different suppliers and does not purchase the products until
they are ordered and paid for by the customer. Payment is made by credit card or
by check and goods are not shipped to the customer until the check clears and/or
authorization from the credit card company is obtained. The Company does not
carry any significant level of inventory and has no accounts receivable other
than amounts due from the credit card companies.

Net Sales

Net Sales for the quarter ended June 30, 2000 increased to $1,786,561 or 366%
over the comparable period in 1999 which was $383,611. The increase was due to
greater marketing efforts and an increased number of customers which resulted in
higher sales.

Cost of  Sales

Cost of sales as a percentage of sales was 66% in the quarter ended June 30,
2000 and 68% in the quarter ended June 30, 1999. The decrease was primarily due
to obtaining better prices from suppliers.

Selling, General and Administrative Expenses

These expenses encompass the entire operations of the business from personnel
required to operate the office to website development and hosting of the
website. The expenses increased to $658,158 in the quarter ended June 30, 2000
compared to $193,511 in the June 30, 1999 quarter. As a percentage of sales
however, the expenses decreased from 50% at June 30, 1999 to 37% at June 30,
2000. This is the result of economies of scale that were effected by the
Company.

Net Loss

As a result of the Company's increased number of personnel, purchase of computer
hardware and software, aggressive actions to attract affiliates, customers and
custom scripting for the website the Company reduced the loss from operations to
$43,446 compared to $69,355 for the quarter ended June 30, 2000 and June 30,
1999, respectively.

Income Taxes

Due to the net loss, no income taxes were provided for either quarter.


                                       8
<PAGE>

Liquidity, Capital Resources and Changes in Financial Condition

The Company's cash was sufficient to enable it to meet its cash requirements
during the quarter ended June 30, 2000. The main requirements for capital are to
acquire merchandise for sale over the Internet through the Company website, for
the maintenance of the website and for advertising and promotion to bring
consumers to the website. The decrease in cash and cash equivalents of $55,930
during the three months ended June 30, 2000 was primarily due to the Company's
operating loss during the period.

At June 30, 2000 the Company had a working capital deficit of $132,969 and cash
and cash equivalents of $227,503 as compared to a working capital deficit of
$98,260 and cash and cash equivalents of $84,500 at June 30, 1999. The Company
had a net loss from operations of $43,446 for the quarter ended June 30, 2000.

Forward Looking Statements

Certain statements contained in "Management's Discussion and Analysis of Results
of Operations and Financial Condition" concerning future prospects of the
Company and cash flow requirements are forward looking statements which may
involve known and unknown material risks, uncertainties and other factors not
under the Company's control including without limitation the need for additional
financing, the impact of competition, the management of growth, compliance with
applicable regulatory requirements, the Company's ability to implement its long
term business plan for acquiring complementary businesses, and the Company's
ability to enter into agreements with marketing or distribution partners, which
may cause actual results, performance and material achievements of the Company
to be materially different from the Company's expectations.


                                       9
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET RISK

The Company has no risks which are required to be disclosed.


                                       10
<PAGE>

Item 6.     Exhibits and Reports on Form 8-K

            (a)   Exhibits
                  27.  Financial Data Schedule

            (b)   Reports on Form 8-K:  None


                                       11
<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.

      Dated: August 14, 2000               FRAGRANCENET.COM, INC.
                                           -----------
                                           (Registrant)


      Dated: August 14, 2000               By / s /  JASON S. APFEL
                                           ----------------------------
                                           Jason S. Apfel
                                           President and
                                           Chief Executive Officer

      Dated: August 14, 2000               By / s / DENNIS M. APFEL
                                           ----------------------------
                                           Dennis M. Apfel, Esq.
                                           Chief Financial Officer


                                       12
<PAGE>

                                INDEX TO EXHIBITS

                        -----------------------------




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


27                Financial Data Schedule                         14



                                       13