<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 September 30, 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 November 8, 2004
-----                                       -------------------------------
<S>                                         <C>
Common Stock, par value                               17,465,476
$ .01 per share
</TABLE>




<PAGE>


                             FRAGRANCENET.COM, INC.

                         FORM 10-QSB-September 30, 2004

                                      Index


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

Item 1. Financial Statements

   Condensed Consolidated Balance Sheets at
     September 30, 2004 (Unaudited) and March 31, 2004                          3 - 4

   Unaudited Condensed Consolidated Statements of Income
     for the Three and Six Months Ended September 30, 2004 and 2003                 5

   Unaudited Condensed Consolidated Statements of Cash Flows
     for the Six Months Ended September 30, 2004 and 2003                       6 - 7

   Notes to Unaudited Condensed Consolidated Financial Statements              8 - 11


Item 2 - Management's Discussion and Analysis
 of Results of Operations and Financial Condition                             12 - 14


Item 3 - Controls and Procedures                                                   15


Part II.  Other Information


Item 6 - Exhibits and Reports on Form 8-K                                          15


Signatures                                                                         16

Exhibit Index                                                                      17
</TABLE>




<PAGE>


ITEM 1 - FINANCIAL STATEMENTS

                             FRAGRANCENET.COM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      September 30, 2004 and March 31, 2004


<TABLE>
<CAPTION>
                                                                          September 30,       March 31,
                                                                               2004             2004
                                                                           ------------     -----------
                                                                           (Unaudited)
<S>                                                                       <C>               <C>
CURRENT ASSETS
--------------
  Cash and cash equivalents                                                  $799,951         $678,251
  Accounts receivable, net of allowance for returns of $1,000
    in each period                                                            281,880          273,135
  Inventory                                                                   992,184          818,837
  Deferred tax asset                                                          193,900          163,800
  Prepaid expenses and other current assets                                    41,153           54,574
                                                                           ----------       ----------


         Total Current Assets                                               2,309,068        1,988,597


PROPERTY AND EQUIPMENT, Net                                                   186,538          147,170


INTANGIBLE ASSET, Net                                                           4,625            4,875

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


         TOTAL ASSETS                                                      $2,523,889       $2,164,300
                                                                           ==========       ==========
</TABLE>




See accompanying notes to condensed consolidated financial statements.

                                        3




<PAGE>


                             FRAGRANCENET.COM, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      September 30, 2004 and March 31, 2004

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                 September 30,      March 31,
                                                                                     2004             2004
                                                                                -------------      ----------
                                                                                 (Unaudited)
<S>                                                                             <C>                <C>
CURRENT LIABILITIES

  Accounts payable                                                                $ 748,096        $  752,781
  Accrued expenses                                                                  723,727           691,776
  Income taxes payable                                                              144,200            72,850
  Current portion - long-term debt                                                    8,584             8,367
  Deferred revenue                                                                  103,772            78,531
                                                                                  ---------        ----------

       Total Current Liabilities                                                  1,728,379         1,604,305


  Long-term debt                                                                     10,634            14,981
  Other liabilities                                                                      --             1,062
                                                                                 ----------        ----------

       TOTAL LIABILITIES                                                          1,739,013         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 September 30, 2004 and March 31,
  2004, respectively                                                                174,655           174,683
  Additional paid-in capital                                                        413,048           413,020
  Retained earnings (accumulated deficit)                                           197,173           (43,751)
                                                                                -----------       -----------

         TOTAL STOCKHOLDERS' EQUITY                                                 784,876           543,952
                                                                                -----------       -----------

         TOTAL LIABILITIES AND STOCKHOLDERS'
           EQUITY                                                                $2,523,889        $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 Six Months Ended September 30, 2004 and 2003


<TABLE>
<CAPTION>
                                                     Three Months Ended                   Six Months Ended
                                                       September 30,                        September 30,
                                                --------------------------------------------------------------------
                                                     2004          2003                 2004             2003
                                                --------------------------------------------------------------------
<S>                                             <C>            <C>                  <C>             <C>
NET SALES                                       $  4,650,094   $  2,711,469         $  8,964,751    $  5,224,444
---------

COST OF SALES                                      2,834,569      1,731,255            5,409,513       3,270,906
-------------                                   ------------   ------------         ------------    ------------

          GROSS PROFIT                             1,815,525        980,214            3,555,238       1,953,538
                                                ------------   ------------         ------------    ------------

OPERATING EXPENSES
------------------
   Selling and marketing                             872,673        418,571            1,653,624         836,757
   General and administrative                        782,142        524,226            1,491,249         985,001
                                                ------------   ------------         ------------    ------------

          TOTAL OPERATING EXPENSES                 1,654,815        942,797            3,144,873       1,821,758
                                                ------------   ------------         ------------    ------------

OPERATING INCOME                                     160,710         37,417              410,365         131,780
-----------------------

OTHER (EXPENSE) INCOME                                (5,238)         1,647              (10,391)         (2,417)
----------------------                          ------------   ------------         ------------    ------------

   Income Before Income Taxes                        155,472         39,064              399,974         129,363
   Income Taxes                                       60,300             --              159,050              --
                                                ------------   ------------         ------------    ------------

       NET INCOME                               $     95,172   $     39,064         $    240,924    $    129,363
                                                ------------   ------------         ------------    ------------


Basic and diluted net income per share          $       0.01   $       0.00         $       0.01    $       0.01
                                                ============   ============         ============    ============

Weighted average number of
   common shares outstanding                      17,465,476     17,468,330           17,465,476     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 Six Months Ended September 30, 2004 and 2003


<TABLE>
<CAPTION>
                                                                    2004             2003
                                                                -----------       -----------
<S>                                                             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                                     $  240,924         $ 129,363
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation and amortization                                  45,661            28,938
     Deferred income taxes                                         (30,100)               --
     Non-cash stock compensation expense                                --             9,110
  Changes in assets and liabilities:
     Accounts receivable, net                                       (8,745)          (79,213)
     Inventory                                                    (173,347)         (198,823)
     Prepaid expenses and other assets                              13,421           (43,249)
     Accounts payable and accrued expenses                          26,204           184,118
     Income taxes payable                                           71,350                --
     Deferred revenue                                               25,241             8,198
                                                                ----------         ---------

       TOTAL ADJUSTMENTS                                           (30,315)          (90,921)
                                                                ----------         ---------

       NET CASH PROVIDED BY
         OPERATING ACTIVITIES                                      210,609            38,442
                                                                ----------         ---------

CASH FLOWS USED IN INVESTING ACTIVITIES
  Expenditure for property and equipment                           (84,779)               --
                                                                ----------         ---------


CASH FLOWS FROM FINANCING ACTIVITES:

   Principal payments of capital lease obligations                      --            (1,780)
   Principal payments of long-term debt                             (4,130)               --
                                                                ----------         ---------

    NET CASH USED IN FINANCING ACTIVITIES                          (4,130)           (1,780)
                                                                ----------         ---------

       NET INCREASE IN CASH AND
         CASH EQUIVALENTS                                          121,700            36,662

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

CASH AND CASH EQUIVALENTS - Ending                              $  799,951         $ 391,913
                                                                ==========         =========
</TABLE>




See accompanying notes to condensed consolidated financial statements.

                                        6




<PAGE>


                             FRAGRANCENET.COM, INC.

     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), Continued

              For the Six Months Ended September 30, 2004 and 2003

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the periods for:


<TABLE>
<CAPTION>
                                                         2004             2003
                                                      -----------     ----------
<S>                                                   <C>              <C>
Income taxes                                          $ 117,800        $     620
Interest                                              $     555        $  15,085
</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 September 30, 2004, the Company had one stock-based employee plan. 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. No
stock-based employee compensation cost is reflected in operations, as all
options granted under the plan had an exercise price equal to the market value
of the underlying common stock on the date of grant. Outstanding options were
granted and vested in fiscal 2000. Accordingly, pro forma financial information
for the three and six months ended September 30, 2004 and 2003 is not required.


                                        8




<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
$399,000 and $144,000 for the three months ended September 30, 2004 and 2003,
respectively, and $728,000 and $297,000 for the six months ended September 30,
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 $342,000 and $185,000 for the three months ended September 30, 2004
and 2003, respectively, and $674,000 and $381,000 for the six months ended
September 30, 2004 and 2003, respectively.


                                        9




<PAGE>


                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 3 - Concentration with Suppliers

During the three months ended September 30, 2004, the Company purchased a
substantial portion of its fragrances from one supplier. Purchases from this
supplier amounted to 13% of total purchases. At September 30, 2004, amounts due
to this supplier included in accounts payable approximated $52,000.

During the three months ended September 30, 2003, the Company purchased a
substantial portion of its fragrances from two suppliers. Purchases from these
suppliers amounted to 28% and 13%, respectively, of total purchases. At
September 30, 2003, amounts due to these suppliers included in accounts payable
approximated $50,000 and $24,000, respectively.

During the six months ended September 30, 2004, the Company purchased a
substantial portion of its fragrances from one supplier. Purchases from this
supplier amounted to 14% of total purchases.

During the six months ended September 30, 2003, the Company purchased a
substantial portion of its fragrances from two suppliers. Purchases from these
suppliers amounted to 29% and 13%, 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




                                       10




<PAGE>


                             FRAGRANCENET.COM, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS

NOTE 5 - Employment Agreements, continued

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 six months ended September 30, 2004 and 2003, the Company incurred
interest expense at 7% per annum on unpaid bonuses under these agreements of
approximately $11,400 and $8,600, respectively, which has been included in
interest expense in the unaudited condensed consolidated statement of income.
Under these agreements, for the three and six months ended September 30, 2004,
bonuses of $30,000 and $80,000, respectively, have been accrued for the year
ending March 31, 2005. Accrued bonuses and interest of approximately $561,000
and $470,000 were included in accrued expenses at September 30, 2004 and March
31, 2004, respectively.


NOTE 6 - Notes Payable, Bank

In September 2003, the Company entered into a credit facility agreement with
Fleet National Bank ("Fleet") consisting of a $250,000 line of credit. Advances
under the line shall bear annual interest at a rate equal to Fleet's prime rate
(4.75% at September 30, 2004) plus 0.50%, as defined. The agreement requires
monthly installments of interest only and principal advances are due and payable
on demand. At September 30, 2004, the Company did not have any outstanding
balance under the line of credit. The line of credit is collateralized by the
Company's Fleet Money Market bank account and is personally guaranteed by the
Company's Chief Executive Officer. 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 Fleet
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
September 30, 2004, the Company owes approximately $19,200, of which
approximately $8,600 is classified as current liability.

NOTE 7 - Income Tax

During the six months ended September 30, 2004, the Company recorded a current
income tax provision of $189,150 partially offset by a benefit for deferred
income taxes of $30,100.

NOTE 8 - Products and Services

The Company and its Subsidiary currently operate in one business segment and
have sold products to two separate types of customers, retail and wholesale
customers as follows:

<TABLE>
<CAPTION>
                                             Three Months Ended                   Six Months Ended
                                              September 30,2004                 September 30, 2004
                                        ----------------------------------------------------------------
<S>                                          <C>                                <C>
------

      Retail                                      3,585,004                           6,969,244
      Wholesale                                   1,065,090                           1,995,507
                                                -----------                        ------------

           Total Net Sales                       $4,650,094                         $ 8,964,751

                                                ===========                        =============
</TABLE>

NOTE 9 -  Subsequent Events

       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.

       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 that 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.

       On November 5, 2004, the Board of Directors granted a ten year option to
       purchase 500,000 shares of common stock to a director of the Company at
       an exercise price of $.75 per share (the fair market value of the common
       stock on the date of grant). The option is 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.


                                       11




<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 September 30                                    2004                2003
-----------------------------------------------------------------------------------------------
<S>                                                            <C>                 <C>
Net sales                                                      $4,650,094          $2,711,469

Cost of sales                                                   2,834,569           1,731,255

Gross profit                                                    1,815,525             980,214

Total operating expenses                                        1,654,815             942,797

Income from operations                                            160,710              37,417

Other (expense) Income                                             (5,238)              1,647

Income taxes                                                       60,300                  --
                                                               ----------          ----------

      Net Income                                               $   95,172          $   39,064
                                                               ==========          ==========
</TABLE>


<TABLE>
<CAPTION>
Six Months Ended September 30                                      2004                2003
-----------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>
Net sales                                                     $ 8,964,751         $ 5,224,444

Cost of sales                                                   5,409,513           3,270,906

Gross profit                                                    3,555,238           1,953,538

Total Operating Expenses                                        3,144,873           1,821,758

Income from operations                                            410,365             131,780

Other expense                                                      10,391               2,417

Income taxes                                                      159,050                  --
                                                              -----------          ----------

          Net Income                                          $   240,924          $  129,363
                                                              ===========          ==========
</TABLE>


                                       12




<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 formed an 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 our
current warehouse space, with its current employees.

Net Sales

Net sales for the three months ended September 30, 2004 increased to $4,650,094
or 71% compared to the comparable period in 2003, which was $2,711,469. Net
sales for the six months ended September 30, 2004 increased to $8,964,751 or 72%
more than the comparable period in 2003 which was $5,224,444. The increase was
due to more effective advertising and promotion.

Cost of Sales

Cost of sales as a percentage of sales was 61% in the three months ended
September 30, 2004 and 64% in the comparable quarter in 2003. Cost of sales as a
percentage of sales was 60% for the six months ended September 30, 2004 and 63%
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 $1,654,815 for the three months ended September 30, 2004
compared to $942,797 for the three months ended September 30, 2003. These
expenses increased to $3,144,873 for the six months ended September 30, 2004
compared to $1,821,758 for the comparable period in 2003. As a percentage of
sales, for the three months ended September 30, 2004, these expenses were 36% of
sales as compared to 35% for the three months ended September 30, 2003. For the
six months ended September 30, 2004 and the six months ended September 30, 2003,
these expenses as a percentage of sales remained at 35%

Operating Income

The Company posted operating income of $160,710 for the three months ended
September 30, 2004 compared to operating income of $37,417 for the comparable
period in 2003. The Company posted operating income of $410,365 for the six
months ended September 30, 2004 compared to an operating income of $131,780 for
the comparable period in 2003.


                                       13




<PAGE>


Income Taxes

Net operating loss carryforwards were fully utilized as of March 31, 2004,
therefore a required provision for income taxes of $189,150 is partially offset
by a deferred tax benefit of $30,100 at September 30, 2004. Due to the
utilization of net operating loss carryforwards, no income taxes were provided
for the three months ended September 30, 2003.

Liquidity, Capital Resources and Changes in Financial Condition

At September 30, 2004 the Company had working capital of $580,689 and cash and
cash equivalents of $799,951 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 September 30, 2004. There was an increase in cash and cash
equivalents of $121,700 during the six months ended September 30, 2004. The
increase in cash and cash equivalents was mainly due to the net income generated
during the period.

In September 2003, the Company entered into a credit facility agreement with
Fleet National Bank ("Fleet") consisting of a $250,000 line of credit. Advances
under the line shall bear annual interest at a rate equal to Fleet's prime rate
plus 0.50%, as defined. The agreement requires monthly installments of interest
only and principal advances are due and payable on demand. At September 30,
2004, the Company did not have any outstanding balance under the line of credit.
The line of credit is collateralized by the Company's Fleet Money Market bank
account and is personally guaranteed by the Company's Chief Executive Officer.
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 Fleet
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, together with the other matters referred to herein, these
factors. The Company cautions the reader, however, that these factors may not be
exhaustive.


                                       14




<PAGE>


ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. As of the end of our
fiscal quarter ended September 30, 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 recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms.

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 September 30,
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 AND REPORTS ON FORM 8-K

(a) See Exhibit Index

(b) Reports on Form 8-K: None


                                       15




<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: November  12, 2004


                             FRAGRANCENET.COM, INC.
                                  (Registrant)



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


                                       16




<PAGE>


                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
Exhibit        Description
-------        -----------
<S>            <C>
   10.11       FragranceNet.com, Inc. 2004 Long Term Incentive Plan

   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>