<PAGE>



                       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 December 31, 2004
                                       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)


<TABLE>
<S>                                              <C>                             <C>
           Delaware                              5990                            94-3054267
(State or other jurisdiction of      (Primary Standard Industrial             (I.R.S. Employer
incorporation or organization)        Classification Code Number)            Identification No.)
</TABLE>


                                909 Motor Parkway
                            Hauppauge, New York 11788
                                 (631) 582-5204
               (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.


<TABLE>
<CAPTION>
CLASS                                       OUTSTANDING AT February 14,2005
-----                                       -------------------------------
<S>                                                   <C>
Common Stock, par value                               17,465,476
$ .01 per share
</TABLE>







<PAGE>



                             FRAGRANCENET.COM, INC.

                          FORM 10-QSB-December 31, 2004

                                      Index


<TABLE>
<CAPTION>

                                                                               PAGE
                                                                               ----
<S>                                                                           <C>
Part I.  Financial Information

Item 1. Financial Statements

   Condensed Consolidated Balance Sheets at
     December 31, 2004 (Unaudited) and March 31, 2004                          3 - 4

   Unaudited Condensed Consolidated Statements of Income
     for the Three and Nine Months Ended December 31, 2004 and 2003                5

   Unaudited Condensed Consolidated Statements of Cash Flows
     for the Nine Months Ended December 31, 2004 and 2003                      6 - 7

   Notes to Unaudited Condensed Consolidated Financial Statements             8 - 12


Item 2 - Management's Discussion and Analysis
 of Results of Operations and Financial Condition                            13 - 15

Item 3 - Controls and Procedures                                                  16

Part II.  Other Information

Item 6 - Exhibits                                                                 16

Signatures                                                                        17

Exhibit Index                                                                     18
</TABLE>






<PAGE>




ITEM 1 - FINANCIAL STATEMENTS

                             FRAGRANCENET.COM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      December 31, 2004 and March 31, 2004

<TABLE>
<CAPTION>

                                                                           December 31,       March 31,
                                                                               2004             2004
                                                                           ------------     -----------
                                                                           (Unaudited)
<S>                                                                        <C>                <C>
CURRENT ASSETS
--------------
  Cash and cash equivalents                                                $1,505,923         $678,251
  Accounts receivable, net of allowance for returns of $1,000
    in each period                                                            499,196          273,135
  Inventory                                                                 1,893,000          818,837
  Deferred tax asset                                                          235,780          163,800
  Prepaid expenses and other current assets                                    51,797           54,574
                                                                           ----------       ----------

         Total Current Assets                                               4,185,696        1,988,597


PROPERTY AND EQUIPMENT, Net                                                   197,296          147,170


INTANGIBLE ASSET, Net                                                           4,500            4,875

OTHER ASSETS                                                                   23,658           23,658
                                                                           ----------       ----------

         TOTAL ASSETS                                                      $4,411,150       $2,164,300
                                                                           ==========       ==========

</TABLE>










See accompanying notes to condensed consolidated financial statements.


                                        3





<PAGE>



                             FRAGRANCENET.COM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      December 31, 2004 and March 31, 2004

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>

                                                                                  December 31,       March 31,
                                                                                     2004              2004
                                                                                -------------     --------------
                                                                                 (Unaudited)
<S>                                                                              <C>                <C>
CURRENT LIABILITIES

  Accounts payable                                                               $1,174,726         $ 752,781
  Accrued expenses                                                                1,539,865           691,776
  Income taxes payable                                                              378,752            72,850
  Current portion - long-term debt                                                    8,695             8,367
  Deferred revenue                                                                  116,784            78,531
                                                                                  -----------      ----------

       Total Current Liabilities                                                  3,218,822         1,604,305

  Long-term debt                                                                      8,418            14,981
  Other liabilities                                                                      --             1,062
                                                                                 ----------        ----------

       TOTAL LIABILITIES                                                          3,227,240         1,620,348
                                                                                 ----------        ----------

STOCKHOLDERS' EQUITY
  Convertible Series A preferred stock - $.01 par value;
  3,000,000 shares authorized, none issued                                               --                --
  Common stock, $.01 par value; 50,000,000 shares
  authorized, 17,465,476 and 17,468,330 shares issued and outstanding
  at December 31, 2004 and March 31, 2004, respectively                             174,655           174,683
  Additional paid-in capital                                                        413,048           413,020
  Retained earnings (accumulated deficit)                                           596,207           (43,751)
                                                                                -----------       -----------

         TOTAL STOCKHOLDERS' EQUITY                                               1,183,910           543,952
                                                                                -----------       -----------

         TOTAL LIABILITIES AND STOCKHOLDERS'
           EQUITY                                                                $4,411,150        $2,164,300
                                                                                ===========       ===========

</TABLE>




See accompanying notes to condensed consolidated financial statements.

                                        4





<PAGE>



                             FRAGRANCENET.COM, INC.

             CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

      For the Three Months and Nine Months Ended December 31, 2004 and 2003

<TABLE>
<CAPTION>

                                                     Three Months Ended                  Nine Months Ended
                                                        December 31,                        December 31,
                                                --------------------------------------------------------------------
                                                     2004          2003                 2004             2003
                                                --------------------------------------------------------------------
<S>                                             <C>            <C>                  <C>             <C>
NET SALES                                       $  8,834,745   $  5,582,058         $ 17,799,496    $ 10,806,502
---------

COST OF SALES                                      5,456,770      3,455,597           10,865,367       6,726,503
-------------                                   ------------   ------------         ------------    ------------

          GROSS PROFIT                             3,377,975      2,126,461            6,934,129       4,079,999
                                                ------------   ------------         ------------    ------------

OPERATING EXPENSES
------------------
   Selling and marketing                           1,513,601        938,426            3,167,225       1,775,183
   General and administrative expenses             1,268,757        817,321            2,760,006       1,802,322
                                                ------------   ------------         ------------    ------------

          TOTAL OPERATING EXPENSES                 2,782,358      1,755,747            5,927,231       3,577,505
                                                ------------   ------------         ------------    ------------

OPERATING INCOME                                     595,617        370,714            1,006,898         502,494
-----------------------

OTHER INCOME (EXPENSE)                                (4,603)        (4,171)             (15,910)         (6,588)
----------------------                          ------------   ------------         ------------    ------------

INCOME BEFORE INCOME TAXES                           591,014        366,543              990,988         495,906


INCOME TAXES (TAX BENEFIT)                           191,979         (3,350)             351,029          (3,350)
                                                ------------   ------------         ------------    ------------

     NET INCOME                                      399,035        369,893              639,959         499,256
                                                ============   ============         ============    ============


Net income per share:               Basic       $       0.02   $       0.02         $       0.04    $       0.03
                                                ============   ============         ============    ============
                                    Diluted     $       0.02   $       0.02         $       0.04    $       0.03
                                                ============   ============         ============    ============

Weighted average number of
   common shares outstanding        Basic         17,465,476     17,468,330            17,465,476     17,468,330
                                                ============   ============          ============   ============
                                    Diluted       17,497,984     17,468,330            17,479,152     17,468,330
                                                ============   ============          ============   ============

</TABLE>







See accompanying notes to condensed consolidated financial statements.


                                        5





<PAGE>



                             FRAGRANCENET.COM, INC.

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

              For the Nine Months Ended December 31, 2004 and 2003


<TABLE>
<CAPTION>

                                                                    2004             2003
                                                                -----------       -----------
<S>                                                             <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                                     $  639,959         $ 499,256
                                                                ----------         ---------
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization                                  75,623            54,014
     Deferred income taxes                                         (71,980)         (118,800)
     Non-cash stock compensation expense                                --            13,665
  Changes in assets and liabilities:
     Accounts receivable, net                                     (226,061)         (106,010)
     Inventory                                                  (1,074,163)         (446,697)
     Prepaid expenses and other assets                               2,776            (1,737)
     Accounts payable and accrued expenses                       1,268,972           951,115
     Accrued income taxes                                          305,902           113,800
     Deferred revenue                                               38,253            14,335
                                                                ----------         ---------

       TOTAL ADJUSTMENTS                                           319,322           473,685
                                                                ----------         ---------

       NET CASH PROVIDED BY
         OPERATING ACTIVITIES                                      959,281           972,941
                                                                ----------         ---------

CASH FLOWS USED IN INVESTING ACTIVITIES
  Expenditure for property and equipment                          (125,374)          (97,964)
                                                                ----------         ---------

CASH FLOWS FROM FINANCING ACTIVITES:

   Borrowing on loan                                                    --            26,000
   Principal payments of capital lease obligations                      --            (2,873)
   Principal payments of long-term debt                             (6,235)             (626)
                                                                ----------         ---------

    Net Cash (Used In) Provided by Financing Activities             (6,235)           22,501
                                                                ----------         ---------

       NET INCREASE IN CASH AND
         CASH EQUIVALENTS                                          827,672           897,478

CASH AND CASH EQUIVALENTS - Beginning                              678,251           355,251
                                                                ----------         ---------

CASH AND CASH EQUIVALENTS - Ending                              $1,505,923         1,252,729
                                                                ==========        ==========

</TABLE>




See accompanying notes to condensed consolidated financial statements.

                                        6





<PAGE>





                             FRAGRANCENET.COM, INC.

     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), Continued

              For the Nine Months Ended December 31, 2004 and 2003


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the periods for:


<TABLE>
<S>                                                           <C>              <C>
Income taxes                                                  $ 117,800        $   1,650
Interest                                                      $     793        $  15,266
</TABLE>















See accompanying notes to condensed consolidated financial statements.



                                        7





<PAGE>



                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions for Form 10-QSB of Regulation SB. Accordingly, they do not include
all the information and notes required by accounting principles generally
accepted in the United States of America for complete financial statements.
These interim unaudited condensed consolidated financial statements include all
adjustments, consisting only of normal recurring accruals, which management
considers necessary for a fair presentation of the unaudited condensed
consolidated financial statements. The Company is subject to seasonal variations
and the results of operations of these interim periods are not necessarily
indicative of results that may be expected for any other interim period or for
the full year. For further information, refer to the Company's consolidated
financial statements for the year ended March 31, 2004 and notes thereto
included in the Company's annual report on Form 10-KSB.

NOTE 2 - Significant Accounting Policies

                  Stock Options and Similar Equity Instruments

At December 31, 2004, the Company had two stock-based employee plans. As
permitted under Statement of Financial Accounting Standards ("SFAS") No. 148,
"Accounting for Stock-Based Compensation - Transition and Disclosure," which
amended SFAS No. 123, "Accounting for Stock Based Compensation," the Company has
elected to continue to follow the intrinsic value method in accounting for its
stock-based employee compensation arrangements as defined by Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related interpretations including Financial Accounting Standards
Board ("FASB") Interpretation ("FIN") No. 44, "Accounting for Certain
Transactions Involving Stock Compensation," an interpretation of APB No. 25. The
Company applies the intrinsic value method as outlined in Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees", and related
interpretations in accounting for stock options and share units granted under
these programs. Under the intrinsic value method, no compensation expense is
recognized if the exercise price of the Company's employee stock options equals
the market price of the underlying stock on the date of grant. Accordingly, no
compensation cost has been recognized. The Company adopted the disclosure
portion of SFAS No. 148, requiring quarterly SFAS No. 123 pro forma disclosure.

The following table illustrates the effect on earnings and earnings per share as
if the fair value method had been applied to all outstanding and unvested awards
in each period presented.

<TABLE>
<CAPTION>

                                                           Three Months                        Nine Months
                                                         Ended December 31,                 Ended December 31,
                                                    --------------------------------------------------------------
                                                         2004           -2003           -2004              -2003
                                                    ----------         ---------      ---------         --------
                                                           (in thousands, except per share data)

<S>                                                  <C>               <C>              <C>               <C>
Net income, as reported                              $   399           $   370          $    640          $   499
Deduct:  Total stock-based employee compensation
expense determined under fair value method
for all awards, net of related tax effects              (146)                --             (146)              --
                                                     --------          ---------       ---------        ---------
Pro forma net earnings, attributable to common stock $   253           $    370         $    494          $   499
                                                     =======           ========         ========          =======

Earnings per common share (1):
Basic - as reported                                  $  0.02           $   0.02         $   0.04          $  0.03
                                                     =======           ========         ========          =======
Basic - pro forma                                    $  0.01           $   0.02         $   0.03          $  0.03
                                                     =======           ========         ========          =======

Diluted - as reported                                $  0.02           $   0.02         $   0.04          $  0.03
                                                     =======           ========         ========          ========
Diluted - pro forma                                  $  0.01           $   0.02         $   0.03          $  0.03
                                                     =======           ========         ========          ========
</TABLE>


(1) In December 2004, the FASB finalized Statement of Financial Accounting
Standards No. 123R "Share-Based Payment" which will require the Company to
expense stock options based on grant date fair value in our financial
statements. The effect of expensing stock options on the Company's results of
operations using a Black-Scholes option-pricing model is presented in the
preceding pro forma table.




                                        8





<PAGE>





                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS


NOTE 2 - Significant Accounting Policies, continued

                          New Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of ARB No. 43, Chapter 4". SFAS No. 151 clarifies that abnormal inventory costs
such as costs of idle facilities, excess freight and handling costs, and wasted
materials (spoilage) are required to be recognized as current period costs. The
provisions of SFAS No. 151 are effective for the Company's fiscal 2007.
Management is currently evaluating the provisions of SFAS No. 151 and does not
expect that adoption will have a material impact on the Company's consolidated
financial position, results of operations, or cash flows.

In December 2004, the FASB finalized SFAS No. 123R "Shared-Based Payment",
amending SFAS No. 123, effective beginning the Company's fourth quarter
of fiscal 2006. SFAS No.123R will require the Company to expense stock options
based on grant date fair value in its financial statements. Further, the
adoption of SFAS No.123R will require additional accounting related to the
income tax effects and additional disclosure regarding the cash flow effects
resulting from share-based payment arrangements. The effect of expensing stock
options on the results of operations using a Black-Scholes option-pricing model
is presented in Note 2. The adoption of SFAS No. 123R will have no effect on the
Company's cash flows or financial position, but will have an adverse impact on
the Company's results of operations.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- an amendment of APB Opinion No. 29". This statement amends APB Opinion No. 29
to eliminate the exception for nonmonetary exchanges of similar productive
assets and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. The provisions of SFAS No. 153
are effective for the Company's quarter ending September 30, 2005. The adoption
of SFAS No. 153 is not expected to have a material impact on the Companys'
consolidated financial position, liquidity, or results of operations.













                                        9





<PAGE>


                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 2 - Significant Accounting Policies, continued


Management Estimates

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

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs approximated
$678,000 and $374,000 for the three months ended December 31, 2004 and 2003,
respectively, and $1,406,000 and $672,000 for the nine months ended December 31,
2004 and 2003, respectively.

Shipping Expenses

The Company does not charge its customers for shipping costs if the total sale
price exceeds a certain threshold. These shipping costs are included in selling
and marketing expenses in the unaudited condensed consolidated statements of
income. Outbound shipping costs for the shipment of product to customers
approximated $639,000 and $407,000 for the three months ended December 31, 2004
and 2003, respectively, and $1,313,000 and $787,000 for the nine months ended
December 31, 2004 and 2003, respectively.

Earnings Per Share

The following table sets forth the components used in the computation of basic
and diluted earnings per share:

<TABLE>
<CAPTION>

                                                    Three Months Ended                  Nine Months Ended
                                                       December 31,                        December 31,
                                                --------------------------------------------------------------------
                                                     2004           2003                 2004            2003
                                                --------------------------------------------------------------------
<S>                                              <C>            <C>                  <C>             <C>
NUMERATOR FOR BASIC AND DILUETED EARNINGS
 PER SHARE:
     Net Income                                  $   399,035    $   369,893          $    639,959    $   499,256
                                                ============   ============          ============   ============
DENOMINATOR:
     Denominator of basic earnings per share -
         Weighted average shares                  17,465,476     17,468,330            17,465,476     17,468,330

     Effect of dilutive securities:
         Employee stock options                       32,508         --                    13,676         --
                                                 ------------   ------------          ------------   ------------

         Denominator of diluted earnings
            per share                             17,497,984     17,468,330            17,479,152     17,468,330
                                                ============   ============          ============   ============
</TABLE>












                                       10







<PAGE>



                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 3 - Concentration with Suppliers

During the three months ended December 31, 2004, the Company purchased a
substantial portion of its fragrances from one supplier. Purchases from this
supplier amounted to 10% of total purchases. At December 31, 2004, amounts due
to this supplier included in accounts payable approximated $52,000.

During the three months ended December 31, 2003, the Company purchased a
substantial portion of its fragrances from two suppliers. Purchases from these
suppliers amounted to 27% and 11%, respectively, of total purchases. At December
31, 2003, amounts due to these suppliers included in accounts payable
approximated $76,000 and $80,000, respectively.

During the nine months ended December 31, 2004, the Company purchased a
substantial portion of its fragrances from one supplier. Purchases from this
supplier amounted to 12% of total purchases.

During the nine months ended December 31, 2003, the Company purchased a
substantial portion of its fragrances from two suppliers. Purchases from these
suppliers amounted to 27% and 12%, respectively, of total purchases.

NOTE 4 - Stockholders' Equity

On November 25, 2002, the stockholders of the Company approved a one for ten
reverse stock split. The reverse stock split has not yet been effected.

NOTE 5 - Employment Agreements

In August 2003, the Company entered into employment agreements with its Chief
Executive Officer, Chief Operating Officer and Vice President that include
annual base salaries of $175,000, $290,000 and $125,000, respectively. In
January 2004, the Vice President received an increase in salary of $50,000
bringing his base salary to $175,000. In addition, each executive is entitled to
an incentive bonus equal to one percent (1%) of the Company's sales in excess of
target sales, as defined. For the fiscal year ending March 31, 2005, target
sales are approximately $14,705,000. The base salaries shall be increased
annually by an amount equal to the incentive bonuses earned by the executives in
the prior fiscal year. These employment agreements terminate upon the
executive's separation from the Company at which time certain amounts may be
paid, as defined, to the executive or designated beneficiaries. In addition,
upon termination of the Chief Executive Officers' employment, the Company will
be obligated to retain that executive under a Consulting Agreement for a period
of ten (10) years. Annual compensation under the Consulting Agreement shall be
equal to the sum of 75% of the executive's highest rate of salary with the
Company in effect during the one-year period ending on the date of termination
plus 50% of the executive's average incentive bonus with respect to the last
five (5) completed fiscal years of the Company preceding the date of
termination, payable in equal monthly installments in advance on the first day
of each month during the consulting period.

For the nine months ended December 31, 2004 and 2003, the Company incurred
interest expense at 7% per annum on unpaid bonuses of approximately $17,200 and
$12,700, respectively, which has been included in interest expense in the
unaudited condensed consolidated statement of income. Accrued bonuses and
interest of approximately $677,000 and $469,000 were included in accrued
expenses at December 31, 2004 and March 31, 2004, respectively.

Pursuant to these employment agreements these individuals were entitled to
bonuses aggregating approximately $143,000 for the years ended March 31, 2004.
For the three and nine months ended December 31, 2004, $110,000 and $190,000,
respectively, have been accrued for these individuals.

NOTE 6 - Stock Options

On November 5, 2004, the Company's Board of Directors adopted the 2004 Long-Term
Incentive Plan (the "Plan") under which the Company's Board of Directors may
grant stock options and other forms of stock-based awards to employees and
directors of the Company and to consultants and other individuals providing
services to the Company. The Plan authorizes grants of awards covering up to 4.5
million shares of common stock. The number of shares of common stock subject to
all awards granted to any individual under the Plan in any one-year period shall
not exceed 1,000,000 shares.





                                       11





<PAGE>




                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 6 - Stock Options (continued)

The exercise price per share of options may not be less than the fair market
value of the common stock on the date of grant. The term of each option will
generally be fixed by the Board, except no stock option may exceed a term of ten
years. At the discretion of the Board, options may be exercised by payment of
the exercise price in cash, stock, outstanding awards or other property having a
fair market value equal to the exercise price.

In November 2004, the Company granted stock options to purchase 500,000 shares
of common stock to a director of the Company at an exercise price of $.75 per
share (the fair value of the common stock on the date of grant). The options are
exercisable as to one-third of the shares on the date of grant, as to an
additional one-third on the first anniversary of the date of grant and as to the
final one-third on the second anniversary of the date of grant. The options have
a term of 10 years.


NOTE 7 - Notes Payable, Bank

In December 2004, the Company increased its credit facility agreement with Bank
of America (formerly Fleet National Bank) from a $250,000 to a $1,000,000 line
of credit. Advances under the line shall bear annual interest at a rate equal to
Bank of America's prime rate (5.25% at December 31, 2004) plus 0.50%, as
defined. The agreement requires monthly installments of interest only and
principal advances are due and payable on demand. At December 31, 2004, the
Company did not have any outstanding balance under the line of credit. The line
of credit is collateralized by all of the Company's assets and is personally
guaranteed by the Company's Chief Executive Officer and the Company's President.
In addition, the Company is required to maintain certain financial and other
covenants.

In October 2003, the Company entered into a term loan agreement with Bank of
America consisting of a $26,000 promissory note. Proceeds from the note were
used to purchase a vehicle for use in the day to day operations of the Company.
The note bears interest at 5.13% per annum and is payable in 36 monthly
installments of principal and interest. The promissory note is collateralized by
the vehicle and is personally guaranteed by the Company's Chief Executive
Officer. As of December 31, 2004, the Company owes approximately $17,100, of
which approximately $8,700 is classified as a current liability with the balance
is classified as a long-term liability.

NOTE 8 - Income Tax

During the period ended December 31, 2004, the Company recorded a current income
tax provision of $423,009 partially offset by a benefit for deferred income
taxes of $71,980.

NOTE 9 - Products and Services

The Company and its Subsidiary currently operate in one business segment and
have in the three months and nine months ended December 31, 2004 and 2003 sold
products to two separate types of customers, retail and wholesale customers.

<TABLE>
<CAPTION>

                                                 Three Months Ended             Nine Months Ended
                                                     December 31,                  December 31,
                                         ------------------------------------------------------------
                                                         2004                            2004
                                         ------------------------------------------------------------

<S>                                                   <C>                             <C>
         Retail                                       $6,689,283                      $13,581,494
         Wholesale                                     2,145,462                        4,218,002
                                                      -----------                    ------------

                  Total Net Sales                     $8,834,745                      $17,799,496
                                                     ============                     ===========

</TABLE>









                                       12





<PAGE>





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
condensed consolidated financial statements and notes to the condensed
consolidated financial statements.

Results of Operations

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


<TABLE>
<CAPTION>

Three Months Ended December 31                                    2004                2003
-----------------------------------------------------------------------------------------------
<S>                                                            <C>                 <C>
Net sales                                                      $8,834,745          $5,582,058

Cost of sales                                                   5,456,770           3,455,597

Gross profit                                                    3,377,975           2,126,461

Total operating expenses                                        2,782,358           1,755,747

Income from operations                                            595,617             370,714

Other expense                                                      (4,603)             (4,171)

Income taxes (tax benefit)                                        191,979              (3,350)
                                                               ----------          ----------

      Net Income                                               $  399,035          $  369,893
                                                               ==========          ==========

</TABLE>


<TABLE>
<CAPTION>

Nine Months Ended December 31                                    2004               2003
-----------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>
Net sales                                                     $17,799,496         $10,806,502

Cost of sales                                                  10,865,367           6,726,503

Gross profit                                                    6,934,129           4,079,999

Total Operating Expenses                                        5,927,231           3,577,505

Income from operations                                          1,006,898             502,494

Other expense                                                     (15,910)             (6,588)

Income taxes (tax benefit)                                        351,029              (3,350)
                                                             ------------         -----------

          Net Income                                          $   639,959          $  499,256
                                                             ============         ===========
</TABLE>






                                       13





<PAGE>



Overview

FragranceNet.com, Inc. ("FragranceNet" or the "Company") operates one of the
world's largest Internet discount fragrance store offering more than 6,000
brand-name fragrances, scented candles, aromatherapy and hair care products at
the lowest prices. By combining an extensive selection with free U.S. shipping
and handling on orders over $60, FragranceNet customers are treated to a unique
and easy shopping experience. FragranceNet recently formed a new entity, which
is wholly-owned, under the name of FragranceNet Wholesales, Inc. to pursue the
wholesale sale of fragrances and related products. The wholesale business is in
its infancy and generated sales during the fiscal year ended March 31, 2004 of
approximately $1.5 million. FragranceNet performs fulfillment services for
companies who pay a fee for the Company to fulfill orders from other websites.
These fees represent incremental income to the Company performed within its
current warehouse space, with its current employees.

Net Sales

Net sales for the three months ended December 31, 2004 increased to $8,834,745
or 58% compared to the same period in 2003, which was $5,582,058. Net sales for
the nine months ended December 31, 2004 increased to $17,799,496 or 65% more
than the comparable period in 2003, which was $10,806,502. The increase was due
to more effective advertising and promotion.

Cost of Sales

Cost of sales as a percentage of sales was 62% in the three months ended
December 31, 2004 and in the comparable quarter in 2003. Cost of sales as a
percentage of sales was 61% for the nine months ended December 31, 2004 and 62%
for the comparable period in 2003. The decrease was primarily due to better
purchasing of inventory at more favorable prices.

Selling, General and Administrative Expenses

These expenses encompass the entire operation of the business from personnel
required to operate the office to development and hosting of the website. The
expenses increased to $2,782,358 for the three months ended December 31, 2004
compared to $1,755,747 for the three months ended December 31, 2003. These
expenses increased to $5,927,231 for the nine months ended December 31, 2004
compared to $3,577,505 for the comparable period in 2003. As a percentage of
sales, for the three months ended December 31, 2004 and 2003, these expenses
were 31% of sales. For the nine months ended December 31, 2004 and 2003, these
expenses as a percentage of sales remained at 33% for both periods.

Operating Income

The Company posted operating income of $595,617 for the three months ended
December 31, 2004 compared to operating income of $370,714 for the comparable
period in 2003. The Company posted operating income of $1,006,898 for the nine
months ended December 31, 2004 compared to an operating income of $502,494 for
the comparable period in 2003.













                                      14





<PAGE>



Income Taxes

Net operating loss carryforwards were fully utilized as of March 31, 2004,
requiring a provision for income taxes of $423,009 offset by a deferred tax
benefit of $235,780 at December 31, 2004. Due to the full utilization of net
operating loss carryforwards, a provision for income taxes of $115,450 was
provided net of a deferred tax benefit of $118,800 for the three and nine months
ended December 31, 2003.

Liquidity, Capital Resources and Changes in Financial Condition

At December 31, 2004 the Company had working capital of $966,874 and cash and
cash equivalents of $1,505,923 as compared to working capital of $384,292 and
cash and cash equivalents of $678,251 at March 31, 2004. The Company's cash and
cash equivalents were sufficient to enable it to meet its cash requirements
during the period ended December 31, 2004. There was an increase in cash and
cash equivalents of $827,672 during the nine months ended December 31, 2004. The
increase in cash and cash equivalents was mainly due to the net income generated
during the quarter.

In December 2004, the Company increased its credit facility agreement with Bank
of America (formerly known as Fleet National Bank) from a $250,000 to a
$1,000,000 line of credit. Advances under the line shall bear annual interest at
a rate equal to Bank of America's prime rate (5.25% at December 31, 2004) plus
0.50%, as defined. The agreement requires monthly installments of interest only
and principal advances are due and payable on demand. At December 31, 2004, the
Company did not have any outstanding balance under the line of credit. The line
of credit is collateralized by all of the Company's assets and is personally
guaranteed by the Company's Chief Executive Officer and the Company's President.
In addition, the Company is required to maintain certain financial and other
covenants.

In October 2003, the Company entered into a term loan agreement with Bank of
America consisting of a $26,000 promissory note. Proceeds from the note were
used to purchase a vehicle for use in the day to day operations of the Company.
The note bears interest at 5.13% per annum and is payable in 36 monthly
installments of principal and interest. The promissory note is collateralized by
the vehicle and is personally guaranteed by the Company's Chief Executive
Officer.

Forward Looking Statements

Certain statements contained in "Management's Discussion and Analysis of Results
of Operations and Financial Condition", including, without limitation,
statements with respect to the future prospects and cash flow requirements of
the Company, are forward looking statements. Forward-looking statements are
often indicated by words such as "expect", "estimate", "anticipate" or "believe"
and similar expressions. Forward-looking statements involve known and unknown
risks, uncertainties and other factors, including without limitation, the need
for additional financing, the impact of competition, the management of growth,
compliance with applicable regulatory requirements, 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. The reader should
carefully consider these factors, together with the other matters referred to
herein. The Company cautions the reader, however, that these factors may not be
exhaustive.






                                       15





<PAGE>




ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. As of the end of our
fiscal quarter ended December 31, 2004, an evaluation of the effectiveness of
our "disclosure controls and procedures" (as such term is defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) was carried out by our principal executive officer and
principal financial officer. Based upon that evaluation, our principal executive
officer and principal financial officer has concluded that as of the end of that
fiscal quarter, our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in reports that we file or
submit under the Exchange Act is (i) recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms and (ii) accumulated and communicated to the registrant's
management, including its principal executive officer and principal financial
officer, to allow timely decisions regarding required disclosure.

It should be noted that while our management believes that our disclosure
controls and procedures provide a reasonable level of assurance, they do not
expect that our disclosure controls and procedures or internal controls will
prevent all errors and fraud. A control system, no matter how well conceived or
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met.

(b) Changes in internal controls. During the fiscal quarter ended December 31,
2004, there was no change in our internal control over financial reporting that
has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.

Part II. Other Information

ITEM 6. EXHIBITS

See Exhibit Index







                                       16







<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: February 14, 2005

                             FRAGRANCENET.COM, INC.
                                  (Registrant)




                       By  /s/ DENNIS M. APFEL
                       --------------------------------------
                       Dennis M. Apfel
                       Chairman, Chief Executive Officer
                       and Chief Financial Officer




                                       17








<PAGE>


                                  EXHIBIT INDEX


<TABLE>
<CAPTION>

Exhibit        Description
-------        -----------
<S>            <C>
   31.1        Rule 13e-14(a) Certification of Chief Executive Officer and
               Chief Financial Officer

   32.1        Section 1350 Certification of Chief Executive Officer and
               Chief Financial Officer

</TABLE>







                                       18