PERFUMANIA COM INC, S-1, 1999-06-04

PERFUMANIA COM INC
S-1, 1999-06-04

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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PERFUMANIA.COM, INC.
(Exact Name of Registrant as Specified in Its Charter)
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<TABLE>
<S> <C> <C>
FLORIDA 5912 65-0884688
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer Identification
Incorporation or Organization) Classification Code Number) Number)
</TABLE>

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11701 NW 101ST ROAD
MIAMI, FLORIDA 33178
(305) 889-1600
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)

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ILIA LEKACH, CHAIRMAN AND CHIEF EXECUTIVE OFFICER
PERFUMANIA.COM, INC.
11701 NW 101ST ROAD
MIAMI, FLORIDA 33178
(305) 889-1600
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code of
Agent For Service)

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COPIES TO:

<TABLE>
<S> <C>
JEFFREY R. HOULE, ESQ. DALE S. BERGMAN, P.A.
GREENBERG TRAURIG MICHAEL D. KARSCH, ESQ.
1750 TYSONS BOULEVARD, SUITE 1200 BROAD AND CASSEL
MCLEAN, VIRGINIA 22102 201 BISCAYNE BOULEVARD, SUITE 3000
(703) 749-1300 MIAMI, FLORIDA 33131
(703)749-1301 (FAX) (305) 373-9400
(305) 373-9493 (FAX)
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this registration statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [X]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED UNIT PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value $0.01 per
share(2).............................. 2,875,000 $9.00 $25,875,000 $7,193.25
Representatives' warrants............... 250,000 $.001 $250 $ -- (3)
Common stock, par value $0.01 per share
issuable upon exercise of the
representatives' warrants(4).......... 250,000 $10.80 $2,700,000 $ 750.60
Total............................... $7,943.85
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act.
(2) Includes up to 375,000 shares that may be purchased by the underwriters
pursuant to the over allotment option.
(3) No fee required pursuant to Rule 457(g) under the Securities Act.
(4) Pursuant to Rule 416, includes any shares that may be issued pursuant to the
anti dilution provisions of the representatives' warrants.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(a), MAY DETERMINE.
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<PAGE> 2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THIS REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED JUNE 4, 1999

2,500,000 SHARES OF COMMON STOCK

PERFUMANIA.COM, INC. [LOGO]

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perfumania.com operates a leading online store that specializes in the sale
of fragrances, fragrance related products and bath and body products on a retail
and wholesale basis.

We are offering 2,500,000 shares of our common stock at between $7.00 and
$9.00 per share.

No public market currently exists for our common stock. We have applied to
list our common stock on the American Stock Exchange under the symbol "PCI".

SEE "RISK FACTORS" BEGINNING ON PAGE 5 TO READ ABOUT FACTORS YOU SHOULD
CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PER SHARE TOTAL
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<S> <C> <C>
Public offering price....................................... $ $
Underwriting discounts and commissions...................... $ $
Proceeds to perfumania.com, inc............................. $ $
</TABLE>

We have granted the underwriters an option for 45 days to purchase up to
375,000 additional shares at the same price indicated above to cover over
allotments.

CRUTTENDEN ROTH INCORPORATED
PENNSYLVANIA MERCHANT GROUP

The date of this prospectus is , 1999
<PAGE> 3

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary..................
Risk Factors........................
Forward Looking Statements..........
Use of Proceeds.....................
Dividend Policy.....................
Capitalization......................
Dilution............................
Selected Financial Data.............
Management's Discussion and Analysis
of Financial Condition and Results
of Operations.....................
Business............................
</TABLE>

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Management..........................
Principal Shareholders..............
Certain Transactions................
Description of Capital Stock........
Shares Eligible for Future Sale.....
Underwriting........................
Legal Matters.......................
Experts.............................
Where Can You Find More
Information.......................
Index to Financial Statements....... F-1
</TABLE>

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The terms "perfumania.com," "we," "our," and "us" refer to perfumania.com,
inc. unless the context suggests otherwise. The terms "you" and "your" refer to
a prospective investor. The term "common stock" means perfumania.com, inc.'s
common stock, par value $0.01 per share.

Unless otherwise stated, all information contained in this prospectus
assumes no exercise of (a) the over-allotment option to purchase up to 375,000
shares of our common stock granted to the underwriters, (b) warrants to purchase
250,000 shares of our common stock to be granted to the representatives of the
underwriters upon completion of this offering and (c) options to purchase
587,000 shares of our common stock outstanding under perfumania.com's 1999
Incentive Stock Option Plan and 413,000 shares of our common stock reserved for
further issuance under the plan. All per share information in this prospectus
gives effect to a 5,000-for-1 stock split to be implemented prior to this
offering.

The underwriters are offering the shares subject to various conditions and
may reject all or part of any order. The shares should be ready for delivery on
or about , 1999.

Until , 1999 (the 25th day after the date of this prospectus) all
dealers effecting transactions in the common stock, whether or not participating
in this distribution, may be required to deliver a prospectus. This is in
addition to the obligation of dealers to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE INFORMATION DIFFERENT FROM THAT CONTAINED IN
THIS PROSPECTUS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR SALE OF COMMON
STOCK MEANS THAT INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AFTER THE
DATE OF THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR SOLICITATION
OF AN OFFER TO BUY OUR COMMON STOCK IN ANY CIRCUMSTANCES UNDER WHICH THE OFFER
OR SOLICITATION IS UNLAWFUL.
<PAGE> 4

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
You should read this entire document carefully. You should consider the
information set forth under "Risk Factors" and our financial statements and
accompanying notes that appear elsewhere in this prospectus.

OUR BUSINESS

perfumania.com operates a leading online store that specializes in the sale
of fragrances, fragrance related products and bath and body products on a retail
and wholesale basis. We launched our online store in February 1999 and offer
retail customers over 1,700 products at significant price discounts, including
hard-to-find and discontinued brands. The business-to-business component of our
online store offers our products on a wholesale basis to the largely underserved
market of smaller specialty retailers. Users can easily browse and locate
products using our search engines. Our online store offers personalized customer
service, secure ordering, numerous shipping options and fast delivery.

We are a subsidiary of Perfumania, Inc., a leading discount fragrance
retailer that operates a chain of approximately 290 specialty fragrance stores.
Our relationship with our parent provides us with the following advantages:

- exclusive online use of the highly recognized Perfumania brand name;

- cross marketing our online store with Perfumania, Inc.;

- access to Perfumania, Inc.'s extensive supply relationships; and

- Perfumania, Inc.'s considerable fragrance industry experience and
expertise.

THE PERFUMANIA.COM ADVANTAGE

We believe the retail fragrance industry is large, fragmented and consists
of consumers with distinct purchasing patterns. Additionally, we believe online
retailers offer significant advantages over traditional retailers by providing
substantial improvements in convenience, product selection and price. We are
well positioned to capitalize on what we believe to be the increasing demand and
future growth prospects for online sales of fragrances and fragrance related
products. Our competitive advantages include:

- HIGHLY RECOGNIZED BRAND NAME. Our ability to market ourselves using the
already developed Perfumania brand name gives us instant brand
recognition and product credibility.

- ESTABLISHED INDUSTRY RELATIONSHIPS. Our arrangements with our parent
give us access to their extensive network of suppliers.

- CONVENIENT SHOPPING EXPERIENCE. Our online store is available 24 hours a
day, seven days a week and may be electronically visited from any PC with
access to the Internet.

- EXTENSIVE PRODUCT SELECTION. We have virtually unlimited shelf space and
can offer consumers a wider selection of products than most traditional
brick and mortar businesses.
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- COMPETITIVELY PRICED PRODUCTS. By offering our products online and at
discounted prices, we can service customers who focus intensely on price.

- SUPERIOR BUSINESS-TO-BUSINESS SERVICES. The business-to-business
component of our online store, perfumaniawholesale.com, can fulfill the
needs of underserved smaller specialty retailers by offering a wide
selection of products at discounted prices and with superior customer
service.

- FOCUS ON THE EXPANDING INTERNATIONAL MARKET. We believe that the global
reach of the Internet will allow us to service the expanding
international market for fragrances and fragrance related products.

OUR STRATEGY

Our objective is to become the leading destination for retail consumers and
smaller specialty retailers seeking to purchase fragrances and fragrance related
products over the Internet. Key elements of our strategy include:

- CAPITALIZING AND EXPANDING UPON THE PERFUMANIA BRAND NAME. We will
continue to employ numerous advertising and promotional methods to drive
traffic to our online store and strengthen the highly recognized
Perfumania brand name.

- ENHANCING OUR ONLINE SHOPPING EXPERIENCE. We will continue to enhance
and develop features to accommodate our customer's purchasing habits and
preferences.

- LEVERAGING OUR INDUSTRY RELATIONSHIPS. We will continue to use our
management's and our parent's extensive industry contacts and operational
experience to help us obtain products on the most favorable terms.

- ADDRESSING THE GROWING INTERNATIONAL DEMAND FOR FRAGRANCES. We intend to
address the large and expanding international fragrance market by
establishing an international franchise network.

OUR STRATEGIC RELATIONSHIPS

We have entered into a variety of relationships with several Internet sites
to build traffic and attract customers, including Yahoo!, Lycos, Double
Click/AltaVista and Microsoft Sidewalk. We have engaged USinternetworking, Inc.
and Digital Pulp, Inc. to design, develop, and host our online store. We intend
to enter into similar arrangements in the future.

OUR HISTORY

We were incorporated in January 1999 in the State of Florida. Our principal
executive offices are located at 11701 NW 101st Road, Miami, Florida 33178 and
our phone number is (305) 889-1600. Our online store is located at
www.perfumania.com and www.perfumaniawholesale.com. Information contained on our
Web pages does not constitute part of this prospectus.
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<PAGE> 6

THE OFFERING

Common stock offered............ 2,500,000 shares

Common stock outstanding after
the offering.................... 7,500,000 shares

Use of proceeds................. To fund anticipated operating losses,
enhance our online store, repay an
approximate $1.6 million advance from
Perfumania, Inc., and for working capital
and other general corporate purposes. See
"Use of Proceeds."

Proposed American Stock Exchange
symbol........................ PCI

Risk factors.................... Investment in our common stock involves
significant risk and you could lose your
entire investment.

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<PAGE> 7

SUMMARY FINANCIAL DATA

You should read the following summary financial data together with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and notes thereto included elsewhere in
this prospectus. All per share information in this prospectus gives effect to a
5,000-for-1 stock split to be implemented prior to this offering. Our fiscal
year is comprised of 52 or 53 weeks, ending on the Saturday closest to the last
day of January.

<TABLE>
<CAPTION>
AS OF MAY 1, 1999
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ACTUAL AS ADJUSTED(1)
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<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................ $ 100,808 $16,408,476
Working capital (deficit)............................ (1,064,801) 16,860,199
Total assets......................................... 631,221 16,938,889
Due to parent........................................ 1,617,332 --
Shareholder's equity (deficit)....................... (1,038,152) 16,886,848
</TABLE>

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(1) Adjusted to give effect to the sale of common stock that we are offering at
the assumed initial public offering price of $8.00 per share and the
application of the estimated net proceeds.
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<PAGE> 8

RISK FACTORS

You should carefully consider the risks and uncertainties described below
and the other information in this prospectus before deciding whether to invest
in shares of our common stock. Additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also impair our business
operations and your investment. If any of the following risks actually occur,
our business, financial condition or operating results could be harmed. In such
case, the trading price of our common stock could decline and you may lose part
or all of your investment.

OUR OPERATING HISTORY IS VERY LIMITED.

We launched our online store in February 1999. Accordingly, we have a
limited operating history upon which you can evaluate our performance. Before
investing in our common stock, you should consider the risks and difficulties we
may encounter as an early-stage company in the new and rapidly evolving
e-commerce market. These risks include our ability to:

- implement our business model;

- anticipate and adapt to rapid changes in our markets;

- retain existing customers, attract new customers and maintain customer
satisfaction;

- introduce new and enhanced Web sites, services, products and alliances;

- maintain our profit margins notwithstanding price competition or rising
wholesale prices;

- minimize technical difficulties, system downtime and the effect of
Internet brown-outs; and

- manage the timing of perfumania.com promotions and sales programs.

If we do not successfully manage these risks, our business will suffer. We
cannot assure you that we will successfully address these risks or that our
business strategy will be successful.

WE HAVE NO HISTORY AS AN INDEPENDENT COMPANY AND OUR FINANCIAL STATEMENTS
CONTAIN ALLOCATIONS FOR CERTAIN EXPENSES FROM PERFUMANIA, INC.

We do not have an operating history as an independent company. Prior to
this offering, we have operated as a wholly-owned subsidiary of Perfumania, Inc.
We have relied on Perfumania, Inc. to provide corporate, fullfillment, inventory
supply, advertising space-sharing and other administrative services. We will
continue to receive those services pursuant to an intercompany agreement with
Perfumania, Inc. for the foreseeable future. If Perfumania, Inc. fails to
adequately provide us services or if we fail to develop management and financial
systems, our business could suffer until we develop our own sufficient
operational, administrative and other systems and infrastructure.

5
<PAGE> 9

The historical financial statements contained in this prospectus include
allocations for administrative, distribution and other expenses incurred by
Perfumania, Inc. for services rendered to us. While we believe that these
allocations are reasonable, they are not necessarily indicative of, and it is
not practical for us to estimate, the levels of expenses that would have
resulted if we were operating as a separate, stand-alone company. We have also
relied on Perfumania, Inc. to provide financing for our operations. Therefore,
investors should not rely on our cash flows to date as indicative of the cash
flows that would have resulted if we had been operating as an independent
company during the periods presented.

OUR BUSINESS MAY BE HARMED BY PERFUMANIA, INC.'S FINANCIAL CONDITION.

The report of Perfumania, Inc.'s independent certified public accountants
that accompanied our audited financial statements as of January 30, 1999
expressed substantial doubt about Perfumania, Inc.'s ability to continue as a
going concern. The concern stemmed from Perfumania, Inc.'s recurring net losses,
its $3.8 million working capital deficit, and Perfumania, Inc.'s default on a
line of credit agreement. Because we are dependent on Perfumania, Inc. for many
services, our business would suffer if Perfumania, Inc. is unable to
successfully remedy its problems.

Perfumania, Inc's $35.0 million line of credit agreement requires
Perfumania, Inc. to maintain a minimum tangible net worth and book value and
comply with other covenants. The outstanding balance on this line of credit on
January 30, 1999 was $30,035,019. Perfumania, Inc. has violated several of these
covenants. Because of the default, the lender can demand payment of all amounts
owed to it and has imposed a default rate of interest.

As a result of the factors described above and other factors related to our
business, the report of our independent certified public accountants contains an
explanatory paragraph regarding our ability to continue as a going concern.

Our business may suffer if Perfumania, Inc. cannot remedy this situation
and is unable to continue as a going concern. We depend on Perfumania, Inc. to
provide numerous services to us, to supply merchandise to us, and to license to
us its brand name. If Perfumania, Inc. cannot continue its operations, we may be
unable to find substitute services or merchandise and may lose the right to use
the Perfumania brand name.

We face additional risks as a result of Perfumania, Inc.'s majority
ownership of our common stock. The common stock held by Perfumania, Inc. is
pledged to secure its line of credit. If Perfumania, Inc.'s lender were to
foreclose on the common stock, it would become the majority shareholder of our
company and might control perfumania.com in a manner that is detrimental to its
public shareholders. Moreover, if Perfumania, Inc. is forced to sell its
business to avoid liquidation or either Perfumania, Inc. or its lender were to
sell its perfumania.com common stock, a successor to Perfumania, Inc. may also
control perfumania.com in a manner that is detrimental to our public
shareholders.

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<PAGE> 10

WE EXPECT TO INCUR SUBSTANTIAL NET LOSSES FOR THE FORESEEABLE FUTURE.

Since inception, perfumania.com has been operating at a loss. Our net
losses of $764,657 for the three months ended May 1, 1999 primarily relate to
start-up costs. We expect that operating losses and negative cash flow will
continue for the foreseeable future as we must invest in marketing and
promotional activities, technology and operating systems. We cannot be certain
when and if we will achieve sufficient revenues in relation to expenses to
become profitable. We believe that increasing our revenues will depend in large
part on our ability to:

- increase consumer awareness of our online store and develop effective
marketing and other promotional activities to drive traffic to our Web
site;

- enhance our online store, transaction-processing systems and network
infrastructure to support increased traffic;

- provide our customers with superior e-commerce experiences; and

- develop strategic relationships.

Our future profitability depends on generating and sustaining high revenue
growth while maintaining reasonable expense levels. Slower revenue growth than
we anticipate or operating expenses that exceed our expectations would harm our
business. If we achieve profitability, we cannot be certain that we would be
able to sustain or increase profitability in the future.

WE MAY NEED ADDITIONAL CAPITAL TO CONTINUE OUR BUSINESS IF WE DO NOT GENERATE
ENOUGH REVENUE.

We require substantial working capital to fund our business and may need
more in the future. We will likely experience negative cash flow from operations
for the foreseeable future. The net proceeds from this offering, together with
our available funds, should be sufficient to meet our needs for working capital
and capital expenditures needs for the next 12 months. If, however, we need to
raise additional funds through the issuance of equity, equity-related or debt
securities, your rights may be subordinate to other investors and your stock
ownership percentage may be diluted. We cannot be certain that additional
financing will be available to us.

OUR MANAGEMENT'S EXPERIENCE IN THE E-COMMERCE INDUSTRY IS LIMITED AND WE MAY
FAIL TO HIRE, RETAIN AND INTEGRATE KEY PERSONNEL.

Our success depends on the expertise of our key technical, sales and senior
management personnel. perfumania.com's senior management has limited experience
operating and managing an online store engaged in the sale of fragrances and
fragrance related products.

We depend heavily on the continuing service of our management and on their
ability to quickly develop an expertise in the e-commerce aspects of our
business. Loss of the services of Ilia Lekach, our chairman and chief executive
officer, Rachmil Lekach, our president, Albert Friedman, our chief operating
officer and interim chief financial officer, and Richard Veliz, our chief
technology officer, or other key employees would hurt our business.

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<PAGE> 11

We anticipate hiring additional persons to serve on our management team, in
particular a chief financial officer. Our success depends on our ability to
continue to attract, retain and motivate skilled employees who can effectively
manage an online fragrance business. Competition for qualified e-commerce
employees is intense. We may be unable to retain our present key employees or to
attract, assimilate or retain other qualified employees in the future. We may
experience difficulty in hiring and retaining skilled employees with appropriate
qualifications. Our business will be harmed if we fail to attract and retain key
employees.

OUR OPERATING RESULTS ARE SUBJECT TO SIGNIFICANT FLUCTUATIONS AND SEASONALITY.

Our revenues and operating results may vary significantly from quarter to
quarter due to a number of factors. Many of these factors are outside our
control and include:

- seasonal fluctuations in consumer purchasing patterns and advertising
spending;

- changes in the growth rate of Internet usage and online user traffic
levels;

- actions of our competitors;

- the timing and amount of costs relating to the expansion of our
operations and acquisitions of technology or businesses; and

- general economic and market conditions.

Because we have a limited operating history, our future revenues are
difficult to forecast. A shortfall in revenues will damage our business and
would likely affect the market price of our common stock. Our limited operating
history and the new and rapidly evolving Internet market make it difficult to
ascertain the effects of seasonality on our business. If seasonal and cyclical
patterns emerge in Internet purchasing, our results of operations from quarter
to quarter may vary greatly and may cause our business to suffer.

Fragrance sales are generally lower in the first half of each year and
increase substantially during the Christmas purchasing season and near other
holidays. We expect to experience similar seasonality in our business. You
should not rely on quarter-to-quarter comparisons of our results of operations
to gauge our future performance. It is possible that in some future periods our
results of operations may be below the expectations of public market analysts
and investors. In this event, our stock price may fall.

WE MAY NOT BE ABLE TO SUCCESSFULLY COMPETE AS WE FACE INTENSE COMPETITION FROM
INTERNET-BASED AND RETAIL-BASED BUSINESSES.

We cannot assure you that we will be able to compete successfully or that
competitive pressures will not damage our business. Our competition includes:

- traditional department stores and stand-alone perfume retailers;

- nationally known discount perfume retailers;

- competition from other retailers who seek to purchase high demand or
limited supply products;

- Web sites maintained by online retailers of fragrances and fragrance
products;

- catalog retailers of fragrance and fragrance related products; and

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<PAGE> 12

- Internet portals and online service providers that feature shopping
services, such as America Online, Yahoo!, Excite and Lycos.

We believe that our ability to compete depends upon many factors,
including:

- the market acceptance of our Web sites and online services;

- the success of our sales and marketing efforts;

- the performance and reliability of our services;

- the price of our products; and

- the effectiveness of our customer service and support efforts.

Our competitors may be larger than us and may have substantially greater
financial, distribution and marketing resources. In addition, our competitors
may be able to secure products from vendors on more favorable terms, fulfill
customer orders more efficiently and adopt more aggressive pricing or inventory
availability policies than we can. Traditional store-based retailers also enable
customers to see, feel, and smell products in a manner that is not possible over
the Internet. Some online competitors may be able to use the Internet as a
marketing medium to reach significant numbers of potential customers more
effectively than we can.

Our wholesale competitors will likely have more established distribution
channels than us and may have entered into exclusive supply arrangements with
retailers who constitute part of our potential wholesale market. These factors
may preclude us from competing effectively in the wholesale fragrance
distribution market.

WE MAY BE UNABLE TO SUPPORT INCREASED VOLUME ON OUR WEB SITE.

A key element of our strategy is to generate a high volume of traffic on
our Web site. However, growth in the number of users of our online store may
strain or exceed the capacity of our computer systems and lead to declines in
performance or systems failure.

We believe that our present systems will not be adequate to accommodate
rapid growth in user demand. We believe that we will therefore need to add
additional hardware and software and to continually improve and enhance the
functionality and performance of our e-commerce, customer tracking and other
technical systems. We intend to upgrade our existing systems and implement new
systems as we anticipate new demand. Failure to implement these systems
effectively or within a reasonable period of time would cause decreased levels
of customer service and satisfaction.

We must also introduce additional or enhanced features and services to
retain current users and attract new users to our online store. If a new service
is not favorably received, our current customers may visit our online store less
frequently. These new services or features may not function well and we may need
to significantly modify the design of these services to correct errors. If users
encounter difficulty with or do not accept our services or features, our
business would be damaged.

WE FACE GREY MARKET RISKS.

perfumania.com purchases its products from domestic and foreign
manufacturers and secondary sources such as distributors, wholesalers, importers
and retailers. Our purchases

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<PAGE> 13

include trademarked and copyrighted products manufactured in foreign countries.
Our merchandise may be manufactured by entities, particularly foreign licensees,
who are not the owners of the trademarks or copyrights for the merchandise. If
we are called upon or challenged by the owner of a particular trademark or
copyright to demonstrate that specific merchandise was produced and sold with
the proper authority and cannot do so, perfumania.com may be restricted from
reselling the particular merchandise or be subjected to other liabilities.

We cannot always know or demonstrate that the manufacturer of specific
merchandise had proper authority from the trademark or copyright owner to
produce the merchandise or permit it to be resold in the United States.
perfumania.com's suppliers generally will not disclose the identity of their
suppliers, which they consider to be proprietary trade information. As a result,
we cannot determine specifically what portion of our merchandise purchased from
grey market sources may not have been manufactured with a proper trademark or
copyright. Future judicial, legislative or administrative agency action,
including possible import, export, tariff or other trade restrictions, may limit
or eliminate some of the secondary sources of supply used by us or our business
activities. In addition, our business activities may become the subject of legal
or administrative actions brought by manufacturers, distributors or others.

WE WILL INCREASINGLY RELY UPON ONLINE AND TRADITIONAL ADVERTISING TO GENERATE
SALES.

Our traditional advertising efforts to date have consisted primarily of
advertising in Perfumania, Inc.'s stores, print and other media materials. We
intend to commit substantial resources to promoting our online store and
enhancing our brand name through online advertising, advertising in Perfumania,
Inc.'s stores and other advertising materials. Our online advertising may
include strategic relationships that require large, long-term commitments. We
cannot assure that this advertising will effectively attract users to our online
store or lead to a substantial amount of sales. Our inability to develop and
maintain effective advertising campaigns may harm our business.

WE NEED TO EFFECTIVELY MANAGE GROWTH OF OUR OPERATIONS.

perfumania.com's success depends upon effective planning and growth
management. Excluding part-time employees, at May 31, 1999 we had a total of
five employees and two independent consultants. We intend to continue to
increase the scope of our operations and the number of our employees.
perfumania.com also faces challenges associated with upgrading and maintaining
our information systems and internal controls, particularly those related to our
purchase and receipt of inventory. If we do not successfully implement and
integrate these new systems or fail to scale these systems with our growth, we
may not have adequate, accurate and timely forecasting and financial
information.

OUR FAILURE TO RESPOND TO CHANGES IN CONSUMER TRENDS MAY HINDER OUR BUSINESS.

The market for fragrances and fragrance related products largely depends on
trends in consumer tastes, the fashion and accessory industry and advertising
efforts. Our success depends on accurately predicting and responding to these
trends by being able to obtain popular products and delivering them on a timely
basis.

10
<PAGE> 14

WE DEPEND ON THIRD PARTY SHIPPERS, COMMUNICATIONS PROVIDERS AND VENDORS TO
OPERATE OUR BUSINESS.

perfumania.com depends upon a number of third parties to deliver goods and
services to it and its customers. For example, perfumania.com relies on the
United States Postal Service, United Parcel Service, Federal Express and other
carriers to ship merchandise to its customers. Strikes or other service
interruptions affecting our shippers would impair our ability to deliver
merchandise on a timely basis.

We depend on communications providers to provide our Internet users with
access to our online store. Our online store could experience disruptions or
interruptions in service due to failures by these providers. In addition, our
users depend on Internet service providers and Web site operators for access to
our online store. Each of these groups has experienced significant outages in
the past and could experience outages, delays and other difficulties due to
system failures unrelated to our systems. These types of occurrences could cause
users to perceive our online store as not functioning properly and therefore
cause them to stop using our services.

Our business depends on the ability of third-party vendors, including
Perfumania, Inc., to provide to us and Perfumania, Inc. with popular, high
demand fragrances at competitive prices and in sufficient quantities. We have
purchased more than 98% of our merchandise from Perfumania, Inc. since our
inception. Many of the smaller suppliers used by us and Perfumania, Inc. have
limited resources, production capacities and operating histories. Our business
could be harmed if either our or Perfumania, Inc.'s ability to procure products
were limited.

PROTECTION OF OUR DOMAIN NAME IS UNCERTAIN.

Perfumania, Inc. holds various Internet domain names relating to our brand,
including "perfumania.com" and "perfumaniawholesale.com". We have obtained the
exclusive right to use these domain names online under a technology transfer and
licensing agreement with Perfumania, Inc. The acquisition and maintenance of
domain names currently is regulated by governmental agencies and their
designees. perfumania.com may not license acquire or maintain adequate domain
names and intellectual property; therefore we may be unable to prevent third
parties from acquiring domain names that damage our trademarks, proprietary
rights licensed from Perfumania, Inc. or our business.

WE MAY BE SUBJECT TO SALES AND OTHER TAXES.

perfumania.com does not currently collect sales or other similar taxes for
physical shipments of goods into states other than Florida. One or more local,
state or foreign jurisdictions may seek to impose sales tax collection
obligations on us. In addition, any new operation in states outside Florida
could subject our shipments in such states to state sales taxes under current or
future laws. If one or more states or any foreign country successfully asserts
that we should collect sales or other taxes on the sale of our products the
resulting tax liability could impair our business.

WE FACE YEAR 2000 COMPLIANCE RISKS.

Many existing computer programs and systems use only two digits to identify
a year in the date field. These programs and systems were designed and developed
without

11
<PAGE> 15

considering the impact of the upcoming turn of the century. If not corrected,
these computer applications could fail or create erroneous results in the Year
2000.

The failure of any of our software or systems to be Year 2000 compliant
could inhibit users from accessing our online store and prevent us from being
able to process or fulfill orders from our customers. Our financial and
management controls and reporting systems may also be damaged. Any failure, if
not quickly remedied, would hurt our business, results of operations and
financial condition. We have not completed tests on all of our material
operating software and systems to assess and ensure Year 2000 compliance. We
cannot assure you that all of perfumania.com's material operating software and
systems will be Year 2000 compliant.

In addition to the systems and software that we use directly, our
operations also depend on the performance of software and systems of our third
party service providers. These include providers of financial,
telecommunications and parcel delivery services. We also cannot assure you that
our service providers have, or will have, operating software and systems that
are Year 2000 compliant. We have limited or no control over the actions of our
providers. Since all purchases at our online store will be made with a credit
card, our business and financial condition may be damaged if our customers
cannot use their credit cards due to Year 2000 issues.

THERE ARE RISKS RELATED TO OUR RELATIONSHIP WITH PERFUMANIA, INC.

WE DEPEND ON PERFUMANIA, INC.'S BRAND NAME, MERCHANDISE AND SERVICES. We
have entered into a technology transfer and license agreement and an
intercompany service agreement with Perfumania, Inc. We depend on Perfumania,
Inc. to provide us with trademark rights, domain names, merchandise, corporate
and administrative services and cross marketing efforts that are key to our
success. The termination of these agreements, the failure of Perfumania, Inc. to
satisfactorily perform its obligations under these agreements or an adverse
change in the terms of agreement would damage our business.

PERFUMANIA AND ITS PRINCIPAL SHAREHOLDERS MAY EXERT CONTROL OVER OUR
BUSINESS. After this offering, Perfumania, Inc. will own and control the voting
power of approximately 66 2/3% of our common stock. As a result of its share
ownership and the other rights described in this prospectus, Perfumania, Inc.
will be able to elect a majority of the members of our board of directors and
make other decisions that significantly affect our business. This concentration
of ownership and other rights could also delay or prevent a change of control.

If Perfumania, Inc. sells all or some of its investment in our stock to a
third party, other people or companies may control perfumania.com. Such a sale
may reduce the market price of our common stock and may harm perfumania.com's
business.

OVERLAPPING MANAGEMENT AND DIRECTORS COULD CAUSE CONFLICTS OF INTEREST
BETWEEN US AND PERFUMANIA, INC. Our chairman of the board and chief executive
officer and one of our non-employee directors also serve in the same capacities
for Perfumania, Inc. Dual service as a director or executive officer of both
perfumania.com and Perfumania, Inc. could create or appear to create potential
conflicts of interest if faced with decisions that have different implications
for each company. These decisions may relate to potential acquisitions of
businesses, the agreements between the companies, competition, the issuance or
disposition of securities, the election of new or additional directors, and the

12
<PAGE> 16

payment of dividends by perfumania.com. Moreover, Ilia Lekach is devoting only a
portion of his working time to our affairs.

In many instances, the efforts of our directors and officers who serve in a
similar capacity for Perfumania, Inc. will involve activities that are
unrelated, and in some circumstances, adverse, to the interests of
perfumania.com. We have not established any minimum time that our directors and
officers will be required to spend on matters related to perfumania.com.

Some of our executive officers and directors will continue to hold shares
of and/or options to purchase common stock of Perfumania, Inc. After this
offering, some employees of perfumania.com may be eligible to participate in
other benefit plans of Perfumania, Inc. that provide opportunities to receive
additional shares of common stock of Perfumania, Inc. These equity interests in
Perfumania, Inc. may present these persons with incentives potentially adverse
to perfumania.com's shareholders.

WE DEPEND ON TRADEMARKS AND OTHER ONLINE CONTENT LICENSED FROM PERFUMANIA,
INC. Pursuant to the technology transfer and license agreement, we license the
logo, name, domain names, other valuable trademarks and some online content from
Perfumania, Inc. and its other subsidiaries on an exclusive basis for Internet
use. If our technology transfer and license agreement with Perfumania, Inc. were
terminated, we would need to change the domain names of our Web pages and devote
substantial resources towards building new brand names. Perfumania, Inc. may
terminate the technology transfer and license agreement if any person other than
Perfumania, Inc., its affiliates or strategic partners acquires 75% or more of
the voting power of perfumania.com and under other limited circumstances.

The technology transfer and license agreement contains restrictions that
may prevent us from marketing our products and services in the same way we would
if we owned these trademarks. These restrictions could damage our marketing.

The agreement obligates our parent to protect and defend its marks and
domain names. Our parent's actions to protect its proprietary rights may not be
adequate. Third parties may infringe or misappropriate its intellectual
property, and we or our parent may be able to detect unauthorized use and take
appropriate steps to enforce our rights. Our parent's inability to protect its
marks adequately could have a material adverse effect on the acceptance of the
Perfumania brand and on our business, financial condition and operating results.

In addition, although we believe that our parent's proprietary rights and
our use of our license, use of its marks and domain names do not infringe on the
intellectual property rights of others, we cannot guarantee that other parties
will not assert infringement claims against our parent or us.

WE DEPEND ON PERFUMANIA, INC. FOR CROSS MARKETING EFFORTS. Pursuant to the
intercompany services agreement, Perfumania, Inc. has agreed to provide us with
advertising and promotional space in its retail stores and in its traditional
advertising. Perfumania, Inc. may control the timing and placement of these
advertisements and promotions. Perfumania, Inc. also does not guarantee to us
the demographic composition of the target audience. Advertising and promotion
are important elements of our strategy to further enhance awareness of the
Perfumania brand name. If we were not able to advertise in Perfumania, Inc.'s
retail stores, we would make substantially fewer sales on our

13
<PAGE> 17

Web sites. The advertising obligations can be terminated by Perfumania, Inc.
under the same circumstances as the technology transfer and license agreement.

WE NEED PERFUMANIA, INC. TO PROVIDE SERVICES THAT WE CANNOT
PERFORM. Pursuant to the intercompany services agreement, Perfumania, Inc. will
provide us with services, such as merchandising, inventory management,
marketing, human resources, and other administrative services. If Perfumania,
Inc. fails to provide these services satisfactorily, we would be required to
perform these services or obtain these services from another provider. We may
incur additional costs in order to obtain these services and we may be unable to
obtain these services on commercially reasonable terms. If we choose to perform
these services, we may not be able to perform them adequately, and may lose
customers.

The service obligations can be terminated by Perfumania, Inc. under limited
circumstances. Substantially all of our sales orders are currently processed and
fulfilled through Perfumania, Inc.'s systems. As a result, our future revenue
depends on Perfumania, Inc.'s ability to fulfill our e-commerce sales in an
accurate and timely manner.

PERFUMANIA, INC. DOES NOT HAVE LONG TERM SUPPLIER AGREEMENTS. Pursuant to
the intercompany services agreement, perfumania.com purchases products from
Perfumania, Inc. for resale on our online store. We anticipate that a
significant portion of our revenue for the foreseeable future will be derived
from the online sale of merchandise obtained primarily from Perfumania, Inc.
Accordingly, our future revenues and business success partly depend on
Perfumania, Inc.'s ability to maintain and renew relationships with its existing
vendors and to establish relationships with additional vendors.

Perfumania, Inc. does not have long-term contracts with any of its
suppliers. In addition, many of the smaller vendors used by Perfumania, Inc.
have limited resources, production capacities and operating histories. The
supply obligations can be terminated by Perfumania, Inc. or may remain
unsatisfied. Our ability to obtain merchandise in a timely manner is critical to
our success.

WE ARE SUBJECT TO RISKS RELATED TO THE E-COMMERCE INDUSTRY.

WE DEPEND ON CONTINUED GROWTH IN USE OF THE INTERNET. A decrease in the
growth of Web usage would hurt our business. The following factors may inhibit
growth in Web usage:

- inadequate Internet infrastructure;

- security and privacy concerns;

- inconsistent quality of service; and

- unavailability of cost-effective and high-speed service.

OUR SUCCESS DEPENDS UPON THE ABILITY OF THE INTERNET INFRASTRUCTURE TO
SUPPORT INCREASED USE. The performance and reliability of the Internet may
decline as the number of users increases or the bandwidth requirements of users
increase. The Web has experienced a variety of outages due to damage to portions
of its infrastructure. If outages or delays frequently occur in the future, Web
usage, including usage of our Web site, could grow slowly or decline. Even if
the necessary infrastructure or technologies are developed, we may have to spend
considerable amounts to adapt our solutions accordingly.

14
<PAGE> 18

WE DEPEND ON CONTINUED GROWTH OF E-COMMERCE. Our future revenue and
profits depend upon the widespread acceptance and use of the Web as an effective
medium of commerce. Failure of the Web and online services to become a viable
commercial marketplace would hurt our business. Rapid growth in the use of the
Web and commercial online services is a recent phenomenon. We cannot assure you
that a large base of consumers will adopt and continue to use the Web for
commerce. Demand for recently introduced services and products over the Web and
online services is subject to a high level of uncertainty. The successful
development of the Web and online services is subject to a number of factors,
including:

- continued growth in the number of users of such services;

- concerns about transaction security;

- continued development of the necessary technological infrastructure; and

- the development of complementary services and products.

WE DEPEND ON THE STORAGE OF PERSONAL INFORMATION ABOUT OUR USERS. Web
sites typically place identifying data, or cookies, on a user's hard drive
without the user's knowledge or consent. Perfumania.com and other Web sites use
cookies for a variety of reasons, including the collection of data derived from
users' Internet activity. Any reduction or limitation in the use of cookies
could limit the effectiveness of our sales and marketing efforts. Most currently
available Web browsers allow users to remove cookies at any time or to prevent
cookies from being stored on their hard drive. In addition, some commentators,
privacy advocates and governmental bodies have suggested limiting or eliminating
the use of cookies. Furthermore, the European Union recently adopted a directive
addressing data privacy that may limit the collection and use of information
regarding Internet users. This directive may limit our ability to target
advertising or collect and use information in European countries.

OUR SALES COULD DECLINE OR WE MAY BE LIABLE FOR BREACHES OF ONLINE
SECURITY. Consumer concerns over the security of transactions conducted on the
Internet or the privacy of users may inhibit the growth of the Internet and
online commerce. We rely on encryption and authentication technology licensed
from third parties to securely transmit confidential information, such as
customer credit card numbers. A compromise or breach of our technology used to
protect customer transaction data may occur. Furthermore, our servers may be
vulnerable to computer viruses, physical or electronic break-ins and similar
disruptions.

perfumania.com may need to expend significant additional capital and other
resources to protect against a security breach or to alleviate problems caused
by any breaches. Our business and your investment may be harmed if security
measures do not prevent security breaches. We cannot assure prevention against
all security breaches. This is a risk in e-commerce. Under current credit card
practices, a merchant is liable for fraudulent credit card transactions where,
as is our case, merchant does not obtain a cardholder's signature. A failure to
adequately control fraudulent credit card transactions would injure our
business.

WE MAY BE SUED REGARDING PRIVACY CONCERNS. Any penetration of our network
security or misappropriation of our users' personal or credit card information
could subject us to liability. We may be liable for claims based on unauthorized
purchases with credit card information, impersonation or other similar fraud
claims. Claims could also be based on

15
<PAGE> 19

other misuses of personal information, such as for unauthorized marketing
purposes. These claims could result in litigation.

In addition, the Federal Trade Commission and several states have
investigated the use by Internet companies of personal information. In 1998, the
U.S. Congress enacted the Children's Online Privacy Protection Act of 1998. The
Federal Trade Commission has not yet promulgated regulations interpreting this
act. We depend upon collecting personal information from our customers and we
believe that the promulgation of regulations under this act will make it more
difficult for us to collect personal information from some of our customers. We
could incur expenses if new regulations regarding the use of personal
information are introduced or if our privacy practices were investigated.

GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES COULD BURDEN OUR
BUSINESS. The adoption or modification of laws or regulations applicable to the
Internet could harm our business. The U.S. Congress recently passed laws
regarding online children's privacy, copyrights and taxation. The law governing
the Internet, however, remains largely unsettled. New laws may impose burdens on
companies conducting business over the Internet. Although our online
transmissions generally originate in Miami, Florida and Annapolis, Maryland, the
governments of other states or foreign countries might attempt to regulate our
transmissions or levy sales or other taxes relating to our activities. It may
take years to determine whether and how existing laws governing intellectual
property, privacy, libel and taxation apply to the Internet and online
advertising. In addition, the growth and development of online commerce may
prompt calls for more stringent consumer protection laws, both in the United
States and abroad. We also may be subject to regulation not specifically related
to the Internet, including laws affecting direct marketers.

WEB SECURITY CONCERNS MAY HINDER ONLINE E-COMMERCE AND ADVERTISING. The
need to securely transmit confidential information such as credit card and other
personal information over the Internet has been a significant barrier to
e-commerce and communications. Any publicized compromise of security could deter
people from accessing the Web or from using it to transmit confidential
information. Furthermore, decreased online traffic and sales as a result of
general security concerns could cause advertisers to reduce their amount of
online spending. Such security concerns could reduce our market for e-commerce.

THERE ARE RISKS RELATED TO THIS OFFERING.

OUR STOCK PRICE COULD BE EXTREMELY VOLATILE, AS IS TYPICAL OF
INTERNET-RELATED COMPANIES. You may not be able to resell your shares of common
stock at or above the initial public offering price due to the possible
volatility of our common stock after this offering. The stock market has
experienced significant price and volume fluctuations, and the market prices of
securities of technology companies, particularly Internet-related companies,
have been highly volatile.

The market price for perfumania.com's common stock is likely to be highly
volatile and subject to wide fluctuations in response to the following factors:

- actual or anticipated variations in our quarterly operating results;

- announcements of technological innovations or new products or services by
us or our competitors;

- changes in financial estimates by securities analysts;

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<PAGE> 20

- conditions or trends in e-commerce;

- changes in the economic performance or market valuations of other
Internet, e-commerce or retail companies;

- announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments;

- additions or departures of key personnel;

- release of lock-up or other transfer restrictions on our outstanding
shares of common stock or sales of additional shares of common stock; and

- potential litigation.

In the past, following periods of volatility in the market price of a
company's securities, securities class action litigation has often been
instituted against such a company. The institution of such litigation against us
could result in substantial costs to us and a diversion of our management's
attention and resources.

YOU ARE UNLIKELY TO RECEIVE DIVIDENDS FOR THE FORESEEABLE FUTURE. We have
never declared or paid cash dividends on our common stock. We currently intend
to retain all available funds and any future earnings for use in the operation
and expansion of our business and do not anticipate paying any cash dividends in
the foreseeable future.

THERE HAS BEEN NO PRIOR PUBLIC MARKET FOR OUR COMMON STOCK. There has been
no public market for perfumania.com common stock. We will apply to have our
common stock listed on the American Stock Exchange but cannot assure you that an
active public market will develop. The initial public offering price will be
negotiated between the representatives of the underwriters and perfumania.com.
Among the factors considered in determining the initial public offering price
will be our future prospects, our industry in general, sales, earnings, and
certain other financial and operating information, and the market prices of
securities and certain financial and other operating information of companies
engaged in activities similar to ours. The initial public offering price may not
be indicative of the market price for the common stock after the offering, which
price may decline below the initial public offering price.

DILUTION. Based upon the estimated initial public offering price of $8.00
per share, purchasers of the common stock in this offering will experience an
immediate and substantial dilution in net tangible book value of $5.75 per share
of common stock purchased. To the extent outstanding options to purchase common
stock are exercised, there may be further dilution.

WE MAY HAVE SUBSTANTIAL SALES OF OUR COMMON STOCK AFTER THE
OFFERING. Sales of substantial amounts of common stock in the public market
following this offering, or the perception that such sales will occur, could
have a material adverse effect on the market price of our common stock. See
"Shares Eligible For Future Sale" for a discussion of the number of shares
outstanding and when those shares may be sold.

CERTAIN PROVISIONS IN OUR CHARTER DOCUMENTS AND FLORIDA LAW MAY HAVE
ANTI-TAKEOVER EFFECTS. Certain provisions of our articles of incorporation, our
bylaws and Florida law could make it more difficult for a third party to acquire
us, even if a change in control would be beneficial to our shareholders. For
more information, see "Description of Capital

17
<PAGE> 21

Stock-Anti-takeover Effects of Our Articles of Incorporation and Bylaws" and
" -- Anti-takeover Effects of Florida Law."

FORWARD-LOOKING STATEMENTS

This prospectus contains certain forward-looking statements that involve
risks and uncertainties. These statements refer to our future plans, objectives,
expectations and intentions. These statements may be identified by the use of
words such as "believes", "may", "will", "expects", "anticipates", "intends",
"plans" and similar expressions. Our actual results could differ materially from
those anticipated in such forward-looking statements. Factors that could
contribute to these differences include, but are not limited to, those discussed
in "Risk Factors" and elsewhere in this prospectus.

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<PAGE> 22

USE OF PROCEEDS

The net proceeds from the sale of our common stock offered at an assumed
initial public offering price of $8.00 per share are estimated to be $17.9
million after deducting underwriting discounts and estimated expenses. If the
underwriters fully exercise the over allotment option, the net proceeds from
this offering will be approximately $20.7 million.

The net proceeds from the offering will be used for the following purposes:

- to fund anticipated operating losses, including sales and marketing
expenses and payments due under strategic relationships and intercompany
agreements with Perfumania, Inc.;

- to enhance our online store;

- to repay an approximately $1.6 million advance from Perfumania, Inc.; and

- for working capital and other general corporate purposes.

perfumania.com reserves the right to vary the use of proceeds among the
categories listed above because our ability to use the proceeds is dependent on
a number of factors, including the degree of market acceptance of our online
store, unexpected expenditures for further technical development, sales and
marketing efforts and the effects of competition.

Until perfumania.com uses the net proceeds of the offering, perfumania.com
will invest the funds in investment grade, interest-bearing securities.

From time to time, we also expect to evaluate possible acquisitions of or
investments in businesses and technologies that are complementary to our
business and technologies, and may use net proceeds from the offering for such
purposes. While from time to time we consider potential investments or
acquisitions, perfumania.com has no firm plans, commitments or agreements with
respect to any such investments or acquisitions.

DIVIDEND POLICY

perfumania.com has not declared or paid any cash dividends on its capital
stock since our inception. We do not expect to pay any cash dividends for the
foreseeable future. We currently intend to retain future earnings, if any, to
finance the expansion of our business.

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<PAGE> 23

CAPITALIZATION

The following table sets forth, the actual capitalization of perfumania.com
as of May 1, 1999, and adjusted for the issuance and sale of common stock in
this offering at an assumed initial public offering price of $8.00 per share.
See "Use of Proceeds." This table should be read in conjunction with the
financial statements and the notes thereto and the other financial information
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
AS OF MAY 1, 1999
-------------------------
ACTUAL AS ADJUSTED
----------- -----------
<S> <C> <C>
Due to parent......................................... $ 1,617,332 $ --
----------- -----------
Shareholder's equity (deficit)
Preferred stock, $0.01 par value, 5,000,000 shares
authorized, no shares issued and outstanding
actual and as adjusted........................... -- --
Common stock, $0.01 par value, 20,000,000
authorized, 1,000 shares issued and outstanding
actual; 7,500,000 shares issued and outstanding
as adjusted...................................... 10 75,000
Additional paid-in capital.......................... -- 17,900,000
Accumulated deficit................................. (1,038,162) (1,088,152)
----------- -----------
Total shareholder's equity (deficit)............. (1,038,152) 16,886,848
----------- -----------
Total capitalization............................. $ 579,180 $16,886,848
=========== ===========
</TABLE>

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<PAGE> 24

DILUTION

Our net tangible deficiency as of May 1, 1999 was approximately $(1.0
million) or $(0.21) per share of common stock. Net tangible deficiency per share
represents the amount of total tangible assets less total liabilities, divided
by the number of shares of common stock outstanding.

After giving effect to the sale of shares of common stock that we are
offering at an assumed initial public offering price of $8.00 per share, and the
receipt of the estimated net proceeds by us, our net tangible book value as of
May 1, 1999 would have been approximately $16.9 million or $2.25 per share. This
represents an immediate increase in net tangible book value of $2.46 per share
to existing shareholders and an immediate dilution of $5.75 per share to new
shareholders purchasing common stock in this offering. The following table
illustrates this dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share..................... $8.00
Net tangible deficiency per share prior to this offering.... $(0.21)
Increase per share attributable to new shareholders......... 2.46
------
Net tangible book value per share after this offering............... 2.25
-----
Total tangible book value dilution per share to new shareholders.... $5.75
=====
</TABLE>

The following table shows the difference between existing shareholders and
new investors with respect to the number of shares purchased from
perfumania.com, the total consideration paid and the price paid per share. The
table assumes that the public offering price will be $8.00 per share.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION PRICE
-------------------- ---------------------- PER
NUMBER PERCENT AMOUNT PERCENT SHARE
--------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C>
Existing shareholder......... 5,000,000 66.7% $ 10 0.0% $0.00
New investors................ 2,500,000 33.3 20,000,000 100.0 $8.00
--------- ----- ----------- -----
Total................... 7,500,000 100.0% $20,000,010 100.0%
========= ===== =========== =====
</TABLE>

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<PAGE> 25

SELECTED FINANCIAL DATA

The selected financial data set forth below should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and notes thereto appearing elsewhere
in this prospectus. The selected statement of operations data for the period
from January 7, 1999 (date of inception) through January 30, 1999 and the
three-month period ended May 1, 1999, and balance sheet data as of January 30,
1999 and May 1, 1999, have been derived from our financial statements, which
have been audited by PricewaterhouseCoopers LLP, independent certified public
accountants, and are included elsewhere in this prospectus.

<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE
FROM JANUARY 7, 1999 THREE-MONTH
(DATE OF INCEPTION) PERIOD ENDED
THROUGH JANUARY 30, 1999 MAY 1, 1999
------------------------ ------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................................... $ -- $ 161,972
Cost of goods sold........................... -- 110,666
---------- -----------
Gross profit............................... -- 51,306
---------- -----------
Operating expenses:
General and administrative................. 60,245 213,698
Management fee to Parent................... 29,644 93,001
Marketing and sales expenses............... 32,852 347,272
Product development expenses............... 18,146 87,633
Consulting expenses........................ 130,019 42,324
---------- -----------
Total operating expenses................... 270,906 783,928
Loss from operations......................... (270,906) (732,622)
Interest expense to Parent................... (2,599) (32,035)
---------- -----------
Net loss..................................... $ (273,505) $ (764,657)
========== ===========
Basic and diluted loss per share............. $ (0.05) $ (0.15)
========== ===========
Weighted average number of common shares
outstanding................................ 5,000,000 5,000,000
========== ===========
</TABLE>

<TABLE>
<CAPTION>
AS OF
------------------------------
JANUARY 30, 1999 MAY 1, 1999
---------------- -----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ 100,000 $ 100,808
Working capital (deficit).......................... (287,708) (1,064,801)
Total assets....................................... 323,868 631,221
Due to parent...................................... 531,326 1,617,332
Shareholder's equity (deficit)..................... (273,495) (1,038,152)
</TABLE>

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<PAGE> 26

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial
statements and related notes included elsewhere in this prospectus. This
discussion contains forward-looking statements that reflect our plans,
estimates, and beliefs and that involve risks and uncertainties. Our actual
results may differ materially from those anticipated in these forward-looking
statements.

OVERVIEW

Perfumania, Inc. has financed our operations since our inception on January
7, 1999. These cash flows are not indicative of the cash flows that would have
resulted had perfumania.com been operating as a separate stand-alone company
during the periods presented. Since our incorporation, we have incurred
significant net losses as a result of our start up costs and for the three-month
period ended May 1, 1999, we had incurred net losses of $764,657.

We intend to enhance the features of our online store. We believe that our
operating expenses will significantly increase as a result of the financial
commitments related to the development of marketing channels, future strategic
relationships and enhancements to our online stores and other capital
expenditures. We expect to incur losses and generate negative cash flow from
operations for the foreseeable future. Our profitability primarily depends upon
our ability to generate traffic and revenues on our online store and
substantially increase net sales. In view of the rapidly changing nature of our
business and our limited operating history, we believe that our historical
operating results are not necessarily meaningful and should not be relied upon
as an indication of future performance.

RESULTS OF OPERATIONS

NET SALES. Net sales include the sale of our fragrances and fragrance
related products, net of returns and outbound shipping charges. Net sales
totaled $161,972 for the three-month period ended May 1, 1999. There were no
sales in the month of January as we launched our online store in February 1999.

COST OF GOODS SOLD. Cost of goods sold consists primarily of the cost of
merchandise sold and outbound and inbound shipping costs. Cost of goods sold
totaled $110,666 for the three-month period ended May 1, 1999. There was no cost
of goods sold in the month of January as all shipping and sales activity began
in February 1999.

GROSS PROFIT. For the three-month period ended May 1, 1999, perfumania.com
had a gross profit of $51,306 or 32%. In the future, we may expand or increase
the discounts offered to customers as well as expand product offerings to areas
that may have lower gross margins than our existing business.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
consist of payroll and related expenses for executive, accounting and
administrative personnel, recruiting, professional fees, and other general
corporate expenses. General and administrative expenses totaled $213,698 for the
three-month period ended May 1, 1999. For the

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<PAGE> 27

period from January 7, 1999 to January 30, 1999 general and administrative
expenses totaled $60,245. General and administrative expenses will continue to
increase as our staff expands and incurs additional costs to support the growth
of the business.

MANAGEMENT FEES. Management fees consist primarily of expenses, which have
been allocated to perfumania.com by Perfumania, Inc. for costs associated with
resources it shares. These fees consist primarily of the prorata cost of rent,
utilities and facilities maintenance. Management fees totaled $93,001 for the
three-month period ended May 1, 1999. For the period from January 7, 1999 to
January 30, 1999, management fees totaled $29,644. Effective May 1, 1999,
perfumania.com and Perfumania, Inc. entered into an intercompany services
agreement covering these services. See "Certain Transactions" and note 2 of
notes to financial statements.

MARKETING AND SALES EXPENSES. Marketing and sales expenses consist of
expenditures related to advertising and promotion. Marketing and sales expenses
totaled $347,272 for the three-month period ended May 1, 1999. During February
1999, perfumania.com began a cross-marketing campaign with Perfumania, Inc. that
it intends to continue. For the period from January 7, 1999 to January 30, 1999,
marketing and sales expenses totaled $32,852. After the offering, we expect to
expand our marketing efforts and, as a result our marketing expenses will
significantly increase.

WEB SITE DEVELOPMENT EXPENSES. Web site development expenses consist
principally of expenses for development of our Web site, network operations and
systems and telecommunications infrastructure. Web site development expenses
totaled $87,633 for the three-month period ended May 1, 1999. This amount
reflects the staffing and associated costs related to building and enhancing our
online store and transaction-processing systems, as well as our investment in
systems and telecommunications infrastructure. For the period from January 7,
1999 to January 30, 1999, web site development expenses totaled $18,146. Web
site development expenses are expected to increase as we continue to enhance our
online store and expand our staff.

CONSULTING FEES. Consulting fees consist primarily of amounts paid to
various technical and managerial consultants for services provided in the
development of perfumania.com. Consulting fees totaled $42,324 for the
three-month period ended May 1, 1999. For the period from January 7, 1999 to
January 30, 1999, consulting fees totaled $130,019. See "Certain Transactions"
and note 4 of notes to financial statements.

INCOME TAXES. perfumania.com was incorporated in January 1999 and has not
yet filed a federal income tax return or a State of Florida income tax return.
perfumania.com's 1999 fiscal year will end on January 31, 2000. perfumania.com
expects to have operating losses for the foreseeable future and does not expect
to have any federal or state income tax liability until it is profitable and
uses its operating loss carry forwards.

NET LOSS. As a result of the factors discussed above, primarily relating
to the significant initial investments made in establishing and developing our
Web site, the net loss totaled $764,657 for the three-month period ended May 1,
1999. For the period from January 7, 1999 to January 30, 1999, the net loss fees
totaled $273,505. We expect to incur net losses for the foreseeable future.

LIQUIDITY AND CAPITAL RESOURCES

Our principal capital requirements are to acquire merchandise, maintain and
improve our online store and engage in advertising and promotional activities.
Since our inception, we have primarily financed this requirement through $1.6
million of advances from

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<PAGE> 28

Perfumania, Inc. and cash flows from operations. The loan accrues interest at
12.5% per annum and all amounts are due on demand. This loan will be repaid with
a portion of the net proceeds of this offering.

At May 1, 1999, we had a working capital deficit of approximately
$1,065,000 and incurred losses since inception of approximately $1,038,000. We
are significantly dependent on Perfumania, Inc. for the conduct of our
operations.

We used $787,794 in our operating activities for the three-month period
ended May 1, 1999. This was the results of a loss of $764,657, offset slightly
by an increase in credit card receivable and prepaid expenses and a decrease in
accounts payable and accrued expenses. We used $13,404 in investing activities
for the three-month period ended May 1, 1999. This expenditure primarily related
to the purchase of computer hardware and software. Our financing activities for
the three-month period ended May 1, 1999, related to $802,006 relating to the
net borrowings from Perfumania, Inc.

We used $196,338 in our operating activities for the period from January 7,
1999 (date of inception) through January 30, 1999. This was the result of a loss
of $273,505, primarily offset by an increase in accounts payable of $66,037. We
used $14,308 in investing activities for the period from January 7, 1999 through
January 30, 1999. This expenditure primarily related to the purchase of computer
hardware and software. Cash used in financing activities for the period from
January 7, 1999, (date of inception) through January 30, 1999, was $310,646,
relating to the net borrowings under the loan from Perfumania, Inc.

The report of Perfumania, Inc.'s independent certified public accountants
that accompanied Perfumania, Inc.'s, audited financial statements as of January
30, 1999 expressed substantial doubt about Perfumania, Inc.'s ability to
continue as a going concern. The concern stemmed from Perfumania, Inc.'s
recurring net losses, its $3.8 million working capital deficit, and the fact
that Perfumania, Inc. is presently in default on a line of credit agreement.
perfumania.com's business may suffer if Perfumania, Inc. cannot remedy this
situation and continue as a going concern. We depend on Perfumania, Inc. to
provide numerous services to us, to supply merchandise to us, and to license to
us its brand name.

Perfumania, Inc.'s line of credit agreement requires it to comply with
various financial covenants, minimum tangible net worth, book value and achieve
specified levels of quarterly results of operations. Perfumania, Inc. has
violated several covenants and, as a result of these violations, Perfumania,
Inc. is in default. Because of the default, the lender can demand payment of all
amounts owed to it and has imposed a default rate of interest.

Perfumania, Inc. indicated in recent SEC filings that it intends to remedy
this situation by generating additional revenues and obtaining a waiver from the
lender for the violations. Perfumania, Inc. also indicated that it may be unable
to generate future net income and may not obtain the waiver. As of June 3, 1999,
the lender has not waived these covenant violations and there is no assurance
that the lender will waive these violations. Although the management of
Perfumania, Inc. believes that a waiver will be obtained for all covenant
violations and that the covenants will be revised to be less restrictive, there
can be no assurance that such waiver or revisions will be provided by the
lender. Should Perfumania, Inc. be unable to obtain the required waiver from the
lender, Perfumania, Inc. may be required to obtain alternative sources of
financing. Perfumania, Inc.'s failure to

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<PAGE> 29

obtain additional financing in an amount sufficient to support its current and
planned levels of operation could adversely affect Perfumania, Inc.'s business.

As a result of the factors described above, the report of our independent
certified public accountants contains an explanatory paragraph regarding our
ability to continue as a going concern.

We believe that funds generated from operations and the net proceeds of
this offering will be sufficient to finance our current and anticipated
operations for at least 12 months after this offering. Our long-term capital
requirements beyond this period will depend on numerous factors, including, but
not limited to, the following:

- The rate of market acceptance of the online store;

- The ability to expand our customer base;

- The cost of upgrades to our online store; and

- The level of expenditures for sales and marketing and other factors.

If the funds from this offering and our revenues are insufficient to fund
the activities in the short or long term, we would need to raise additional
funds by incurring debt or through public or private offerings of our stock. We
may not be able to do either on terms favorable to us, if at all.

YEAR 2000 READINESS

The Year 2000 issue results from computer systems using two digits rather
than four to represent the year so that a date using "00" is recognized as the
year 1900 rather than the year 2000. This situation may disrupt the smooth
operation of both our and third party's computer systems.

We have preliminarily assessed our Year 2000 exposure and believe that we
can achieve Year 2000 readiness by the fourth quarter of 1999. We are developing
a plan of communication with significant business partners to obtain appropriate
assurances that their Year 2000 issues are resolved in a timely manner. Our
remediation costs to date have not been material and we do not anticipate that
our future remediation costs will have a material effect on our business.

In estimating our Year 2000 related costs, we have assumed the continued
availability of certain resources, the ability to acquire accurate information
regarding third parties, and the ability to correct all relevant applications.
Our actual costs could differ materially from our estimates.

Our critical application systems are merchandising, inventory management
and distribution, our computer systems, human resources and finance and
accounting. These areas will be the focus of our remediation efforts. The
merchandising, finance and accounting, and inventory management and distribution
systems are currently being installed utilizing vendor software believed to be
Year 2000 ready. Our human resources systems will be upgraded in the third
quarter of 1999. Our hardware and communications

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<PAGE> 30

network is outsourced to Perfumania, Inc. and is currently being tested by
Perfumania, Inc. and remedied, where needed. In addition, a significant portion
of the purchases from our online store are made with credit cards. We will
continue to take steps to ensure Year 2000 readiness; however we cannot assure
that such efforts will be successful and may be harmed if, as a result of Year
2000 problems, customers cannot use credit cards to make purchases.

We have engaged US internetworking and Digital Pulp to design, develop and
test our Website and utilize other third party equipment and software. If their
equipment or software fails, we may incur expenses to remedy problems that could
harm our business. We initiated formal communications with our significant
suppliers and service providers to determine their Year 2000 readiness. We will
track the Year 2000 compliance status of our material vendors and suppliers via
our own internal vendor compliance effort. We cannot guarantee that the systems
of suppliers or other companies on which we rely will be Year 2000 compliant.

We are preparing our contingency plans, which will include the
identification of worst case scenarios. Currently, the likely sources of risk to
us include:

- the disruption of or Perfumania, Inc.'s internal inventory management
system;
- the inability of principal suppliers or third party providers to be Year
2000 ready;
- failure of hardware and software utilized by our vendors;
- disruption of our Web pages; and
- disruption of communications links affecting our online store.

We cannot conclusively determine at this time whether Year 2000 failures
will harm us. We believe that our compliance efforts have and will reduce the
impact on us of any such failures.

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BUSINESS

OUR BUSINESS

- exclusive online use of the highly recognized Perfumania brand name;

- cross marketing our online store with Perfumania, Inc.;

- access to Perfumania, Inc.'s extensive supply relationships; and

- Perfumania, Inc.'s considerable fragrance industry experience and
expertise.

INDUSTRY BACKGROUND

GROWTH OF THE INTERNET AND E-COMMERCE. The Internet has emerged as a
global medium, enabling millions of people to share information, communicate and
conduct business electronically. International Data Corporation estimates that
the number of worldwide Web users will grow from approximately 100 million in
1998 to approximately 320 million by the end of 2002. This rapid growth
represents a significant opportunity for businesses to advertise and sell
products online to both consumers and businesses.

Business-to-consumer online transactions were approximately $8.0 billion in
1998 and it is anticipated that online consumer transactions will increase to
approximately $60.2 billion by 2003. Forrester Research estimates that
businesses bought and sold approximately $43.0 billion in goods over the
Internet last year and predicts that business-to-business e-commerce will grow
to approximately $327.0 billion by 2002 representing more than 90% of the total
projected e-commerce market.

THE FRAGRANCE INDUSTRY. Industry research indicates that United States
sales of fragrances exceeded $6.0 billion in 1998. The United States market for
fragrances and fragrance related products continues to grow moderately. We also
believe that there is a large and growing international demand for these
products due to increasing product availability and access to emerging markets.

The traditional retail fragrance industry is fragmented with different
competitive strategies used throughout. The industry includes upscale department
stores which compete based on advertising and promotions not on price, specialty
retailers which compete based on pricing, and mass-market retailers and drug
stores which emphasize convenience purchasing.

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<PAGE> 32

We believe that traditional fragrance retailers face a number of challenges
in providing a satisfying shopping experience for consumers:

- The number of SKUs and the amount of product inventory that a traditional
retailer can carry in a store is constrained by the store's physical
space, thereby limiting selection.

- Limited shelf space and store layout constraints limit the merchandising
flexibility of traditional retailers.

- Due to the significant costs of carrying inventory in multiple store
locations, traditional retailers focus their product selection on the
most popular products that produce the highest inventory turns, thereby
further limiting consumer selection.

In addition, we believe that many consumers find the fragrance shopping
experience, especially at large department stores, to be time-consuming,
inconvenient and unpleasant due to factors such as location, product selection,
and high pressure sales tactics.

At the wholesale level, manufacturers of designer fragrances have
restricted their direct sales primarily to upscale department stores and larger
specialty stores. Smaller specialty retailers have traditionally obtained high
demand fragrance products from secondary sources and direct distributors who
principally resell products purchased directly from fragrance manufacturers and
foreign sources.

The unique characteristics of the Internet provide a number of advantages
for retail and wholesale fragrance sellers. Online sellers are able to display a
larger number of products than traditional store-based or catalog sellers at a
lower cost. In addition, online sellers are able to frequently adjust their
featured selections, editorial content and pricing, providing significant
merchandising flexibility. Online sellers also benefit from the minimal cost to
publish on the Web, the ability to reach a large group of customers from a
central location, and the potential for low-cost customer interaction. Unlike
traditional channels, online sellers do not have the burdensome costs of
managing and maintaining a retail store infrastructure or the significant
printing and mailing costs of catalogs. Online sellers can also easily obtain
demographic and behavioral data about customers, increasing opportunities for
direct marketing and personalized services. Because brand loyalty is a primary
factor influencing a fragrance purchase, a customer's presence at the
point-of-sale and ability to physically sense the fragrance product are not
critical to the purchasing decision.

THE PERFUMANIA.COM ADVANTAGE

We are well-positioned to capitalize on what we believe to be increasing
demand and future growth prospects for the online sales of fragrances and
fragrance related products. We believe that our competitive advantages are:

- highly recognized brand name;

- established industry relationships;

- convenient shopping experience;

- extensive product selection;

- competitively priced products;

- superior business to business services; and

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<PAGE> 33

- focus on expanding the international market.

HIGHLY RECOGNIZED BRAND NAME. Our ability to market ourselves using the
Perfumania brand name gives us instant brand recognition and product credibility
in the fragmented retail fragrance industry. Unlike other online retailers who
are not associated with a nationally known specialty fragrance retailer, we can
focus our efforts on enhancing the visibility of Perfumania as an online brand
rather than on creating name recognition with consumers.

ESTABLISHED INDUSTRY RELATIONSHIPS. Strong supply relationships are
crucial to the ability of online retailers to service their customers. Our
arrangement with our parent gives us access to their extensive network of
suppliers. We also believe that our ability to use the highly recognized
Perfumania brand name provides us with an immediate competitive advantage in
attracting Internet users who are interested in making online fragrance
purchases.

CONVENIENT SHOPPING EXPERIENCE. Our online store provides customers with a
user friendly Web site. It is available 24 hours per day, seven days a week and
may be electronically visited from any PC with access to the Internet. We also
make the shopping experience convenient by organizing our products in easy to
use categories and providing our customers with personalized search
capabilities.

EXTENSIVE PRODUCT SELECTION. Online sellers have virtually unlimited shelf
space and can offer consumers a wide selection of products at competitive
prices. Unlike a traditional retailer, an online retailer can offer these
products without the expense generally incurred by brick and mortar retailers.
This is particularly valuable in the fragrance industry because consumer
preference and brand loyalty create varied demand and require a seller to carry
many different fragrance choices.

COMPETITIVELY PRICED PRODUCTS. We believe that the retail fragrance
industry has experienced a shift in the purchasing habits of consumers towards
greater cost-consciousness. The advent of the Internet as an alternative sales
venue and its operating effectiveness are likely to further accelerate this
change in buying habits. Online retailers can offer a wider variety of products
without the traditional expenses of brick and mortar retailers. By offering our
products online at discounted prices, we are able to service the growing base of
price-conscious consumers.

SUPERIOR BUSINESS-TO-BUSINESS SERVICES. Smaller specialty retailers
constitute a significant portion of the retail fragrance market. These retailers
have historically experienced difficulty in obtaining popular products at
competitive prices from manufacturers and distributors. We believe that
perfumaniawholesale.com can fulfill the needs of this underserved market by
offering a wide selection of products at discounted prices and with superior
customer service.

FOCUS ON THE EXPANDING INTERNATIONAL MARKET. We believe that the
international market for fragrances and fragrance related products is large and
expanding. The global reach of the Internet allows us to address this demand.

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OUR STRATEGY

- capitalizing and expanding upon the Perfumania brand name;

- enhancing our online shopping experience;

- leveraging our industry relationships; and

- addressing the growing international demand for fragrances.

CAPITALIZING AND EXPANDING UPON THE PERFUMANIA BRAND NAME. We will
continue to employ numerous advertising and promotional methods to drive traffic
to our online store and strengthen the highly recognized Perfumania brand name.
We will promote our online store in Perfumania, Inc.'s retail stores and
advertising materials.

We also intend to further enhance and expand the Perfumania brand name in
e-commerce through our own independent advertising and promotional efforts. We
believe that as more mainstream consumers come online to make fragrance
purchases, they will recognize the Perfumania brand name and feel comfortable
purchasing products from a seller with a proven track record and an excellent
reputation in the industry.

We will undertake efforts that will maximize repeat purchases such as
offering frequent purchaser discounts. Our online store allows us to create a
database of our online purchasers whom we intend to target through personalized
e-mails and promotions. We will also use other Internet technologies to tailor
our promotional banners to each customer's preferences and purchasing history.
We have entered into and continue to seek strategic marketing alliances with
leading high-traffic Web sites such as Yahoo!, DOUBLECLICK/AltaVista, Lycos,
Microsoft Sidewalk, and Modern Bride.

ENHANCING OUR ONLINE SHOPPING EXPERIENCE. We intend to continue to enhance
our users' browsing and shopping experience. We have engaged USinternetworking,
Inc. and Digital Pulp to design, develop and host our online store emphasizing
customer friendliness and convenience features.

We intend to tailor our online store to the preferences and buying habits
of each individual user by displaying promotional banners tailored to each
customer's interests and providing informational commentary on our fragrance
products. Our Perfumer Recommends feature recommends certain products to
customers for different seasons, moods, occasions, and activities and
preferences. Our online store has a fragrance genealogy feature that directs
purchasers to currently offered fragrances that are comparable to other
fragrance brands. We intend to continue to invest in similar technologies.

LEVERAGING OUR INDUSTRY RELATIONSHIPS. We use our parent's extensive
industry contacts and our management's substantial experience in the fragrance
industry to help us purchase merchandise based on the most favorable combination
of price, quality, quantity and selection.

ADDRESSING THE GROWING INTERNATIONAL DEMAND FOR FRAGRANCES. We intend to
address the large and expanding international fragrance market by establishing
an international franchise network. These franchisees will be licensed to
operate local online stores in their native language and will fill international
orders using local distribution facilities and local

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<PAGE> 35

currency. We anticipate receiving royalties from each franchisee. We currently
fill international orders through our U.S. online store.

SHOPPING AT OUR ONLINE STORE

Our online store provides our retail and wholesale customers with superior
features, pricing, and convenience.

BROWSING. Our online store offers visitors several special features
arranged in simple, easy-to-use formats intended to enhance product search,
selection and discovery. By clicking on the permanently displayed products and
product categories, our users can move directly to the Web page that contains
details about the particular products. Users can quickly browse promotions, such
as our perfume of the month, and other featured products. In addition, customers
can browse our online store by linking to specially designed pages dedicated to
products from well known national and specialty brands. Customers can also link
to pages based on product category, such as women's brand name perfumes, men's
brand name colognes, children's fragrances, gift set specials and bath and body
products.

LARGE PRODUCT OFFERINGS. Our online store offers customers a choice of
over 1,700 designer and private label fragrances, fragrance related products and
bath and body products for men and women at discounted prices. Our products are
sold for between $5 and $100 and include:

<TABLE>
<CAPTION>
FRAGRANCE RELATED BATH AND BODY
FRAGRANCES PRODUCTS PRODUCTS
- ---------- ----------------- -------------
<S> <C> <C>
Designer Fragrances Deodorants Aromatherapy Products
(Giorgio Armani, Shaving Creams Scented Soaps
Cartier, Fendi, Moisturizers Scented Candles
Tommy Hilfiger and Balms Body Washes
other leading brands) Powders Massage Products
Private Label Fragrances Body Splashes
Body Lotions
</TABLE>

SEARCHING. The most prominent feature of our online store is the
interactive, searchable catalog of our extensive line of products. Our search
capabilities allow users to search for a product by name or category. Our
Perfumer Recommends feature recommends fragrances for different seasons, social
occasions, moods, activities and customers' preferences. In addition, for those
customers who wish to try new products, our online store offers several
alternative fragrances similar to a customer's favorite brand or to high demand
brands.

SELECTING PRODUCTS AND CHECKING OUT. To purchase products, customers
simply click on a button to add products to their virtual shopping cart.
Customers can add and subtract products from their shopping cart as they browse
around our store prior to making a final purchase decision, just as in a
physical store. To execute orders, customers click on the checkout button and,
depending upon whether the customer has previously shopped with us, are prompted
to supply shipping details online. We also offer customers a variety of gift
wrapping and shipping options during the checkout process. Prior to finalizing
an order by clicking the submit order button, customers are shown their total
charges along with the various options chosen, such as shipping method, at which
point customers still have the ability to change their order or cancel it
entirely.

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<PAGE> 36

PAYING. To pay for orders, a customer must use a credit card, which is
authorized during the checkout process, but which is charged when we ship the
customer's items. Our online store uses a security technology that works with
the most common Internet browsers and makes it virtually impossible for
unauthorized parties to read information sent by our customers. Our system
automatically confirms receipt of each order via e-mail within minutes and
notifies the customer when we ship the order, which is typically within one to
two business days for in-stock items.

CUSTOMER SERVICE FEATURES. We believe that high levels of customer service
and support are critical to retain and expand our customer base. We monitor
orders from the time they are placed through delivery by providing numerous
points of electronic, telephonic and personal communication to customers. We
confirm all orders and shipments by e-mail. Our customer service representatives
are readily available during regular business hours by telephone.

USAGE. Our average daily page views, which represent the number of times
per day our server delivers a page to a user, has grown consistently increasing
from 5,013 hits per day during February 1999 to 14,080 hits per day during May
1999. User sessions per day have grown from 769 shortly after launch of our
online store to 2,007 as of May 31, 1999. On average, users spend approximately
nine minutes per visit at our online store.

MARKETING AND ADVERTISING

ONLINE MARKETING AND ADVERTISING

We have entered into a variety of relationships with several Internet sites
to build traffic and attract customers.

YAHOO! We have entered into an agreement with Yahoo! to promote and
advertise our online store. We have delivered to Yahoo! content about our online
store that Yahoo! has agreed to insert onto its banners and on its search
results page. In addition, Yahoo! will include a link to our online store as a
clue for their Treasure Hunt game. Yahoo! will also give perfumania.com coupons
to members of the Yahoo! Birthday Club. Under the agreement we will receive 7.2
million page views.

LYCOS. Our advertising agreement with Lycos obligates Lycos to place
perfumania.com banners on its online store. We have also purchased key search
words, which when entered by a user, display our online store as a search
result. Under this agreement Lycos will provide over 9.3 million page views of
our banner advertisement.

DOUBLE CLICK/ALTAVISTA. Our agreement obligates Double Click to advertise
our online store on AltaVista and Modern Bride through banners and keyword
searches. We are receiving up to 50 million page views under this agreement.

MICROSOFT SIDEWALK. We have entered into an agreement with Microsoft
Sidewalk to advertise our banners and tiles on their online shopping guide. We
pay a flat fee per city for continual inclusion on this site. We may remove
cities at our option.

We intend to expand our use of these kinds of alliances in the future. We
will strive to ensure that future alliances are cost-effective in terms of the
potential customers to be acquired, potential revenue to be generated, level of
exclusivity and brand exposure.

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<PAGE> 37

We send e-mails to our customers advising them of our promotions and other
pricing specials for their favorite fragrances. We intend to continue to
advertise in whichever forms of media prove most effective.

TRADITIONAL MARKETING AND ADVERTISING

In February 1999, we began a comprehensive national advertising campaign to
increase awareness of our online store. Our online store is advertised in a
number of national print media sources, including USA Today, The Wall Street
Journal, The New York Times as well as other local media.

Our advertising initiatives also include collaborative advertising efforts
with Perfumania, Inc. Our Web site is advertised in all of Perfumania, Inc.'s
stores and advertising materials. We are participating in the exclusive online
launch of WCW cologne in a joint marketing effort with Perfumania, Inc. and
World Championship Wrestling.

FULFILLMENT AND INVENTORY MANAGEMENT

We offer over 1,700 fragrances and fragrance related products which we
believe is a wider selection of products than offered by most traditional
fragrance sellers. We obtain most of our inventory from Perfumania, Inc. because
they have offered the most favorable pricing and services to date. Our
relationship with our parent gives us access to their extensive network of
suppliers and we may obtain inventory directly from these and other suppliers
depending on which offers us the most favorable selection, pricing quality and
quantity terms.

Our inventory is stocked in our Miami, Florida facility. Products are
generally shipped within 24 hours unless they are out-of-stock in which case
they are generally shipped within 48 to 96 hours. Customers have numerous
shipping options including overnight or international shipping. Orders not
filled through our online network are processed by a telephone order group.

TECHNOLOGY

We believe that we use an advanced e-commerce platform. We believe that our
platform will allow us to grow rapidly while providing reliable, secure, and
cost-effective e-commerce solutions. Our online store is hosted by
USinternetworking in Annapolis, Maryland.

Our Web sites are Microsoft NT Server 4 based, running Internet Information
Server, Site Server Commerce Edition, and SQL Server. Site Server Commerce
Edition and Internet Information Server together offer a comprehensive Web
server platform, optimized for Windows NT Server and conducting business online.

We have taken steps to prevent the failure of our mission-critical business
applications. Routers, switches, firewalls, and servers associated with our Web
sites are all deployed with backup or stand-by components so that we have at
least six different paths to the Internet. Our Web site uses USinternetworking's
total security architecture. This architecture is specially designed and built
to deliver Web-enabled enterprise applications and ensures that customer
information is protected and that transactions are conducted securely over the
Internet. USinternetworking has taken significant measures to provide customers
with secure application hosting services. The security architecture is a layered

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<PAGE> 38

approach that addresses security at every layer from the application down to the
physical wire and ensures the primary aspects of security -- confidentiality,
integrity, and availability -- are addressed and that customer information is
secure.

Our technology allows us to avoid Internet congestion as we have secured
direct access to each of the six major Internet backbones in the U.S. This
enables our customers to achieve LAN-like speeds for over 80% of all Internet
connections, which makes roundtrip performance up to four times faster than can
be achieved using traditional Internet service provider network architectures.

The Web site's workload will be distributed over a web server and a
database server, both high-end Compaq machines. With this solution,
perfumania.com can rapidly achieve its goal of implementing a fully scalable and
a robust e-commerce Web site without investing in hardware, software, servers,
or infrastructure. If, in the future, it becomes necessary to increase the
capacity of the Web site, USinternetworking can easily do this for
perfumania.com by adding new hardware. With a file replication system in place,
identical Web sites can easily be hosted on multiple Web servers. With the
addition of a Cisco Local Director switch, the workload can be dynamically
balanced across the different Web servers. The high-performance switch is
equipped with a failure mechanism that eliminates all points of failure for the
Web server platform.

Credit cards will be authorized and processed securely using Cybercash,
which handles the authorization in real time, while the shopper is online. If
the authorization is successful, the user is presented with an order
confirmation message and number, and the order information is written to a
database at USinternetworking.

All order information written to the USinternetworking Internet site
database is automatically written to the database at perfumania.com. This
synchronization is conducted securely through a virtual private network using
Checkpoint Firewall-1 at both USinternetworking and perfumania.com. If the
connection between the two databases were to go down, the replication would
resume upon reconnection and resynchronize the database. This provides a high
level of fault tolerance. On an hourly basis we move the new order data to our
back office system.

Using our software package's accounting, merchandising, and warehousing
modules, fulfilling orders and running other aspects of the business will be a
very efficient process. RF scanning technology is used when receiving goods from
vendors, fulfilling orders, and conducting inventory counts, making these
processes more accurate and efficient. Our system will print packing slips,
shipping labels, and direct the fulfillment team to conduct efficient product
picking and packing using the RF scanners' LED readout. Once the order is
fulfilled and shipped, the customer will be e-mailed and the Web sites' database
will be updated with the new shipping status. Our software package is capable of
scaling very high, often running businesses much larger than perfumania.com.

COMPETITION

Our competition includes:

- traditional department stores;

- nationally known discount fragrance retailers;

- competition from other retailers who seek to purchase high demand or
limited supply products;

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<PAGE> 39

- Web sites maintained by online retailers of fragrances and fragrance
related products including fragrancecounter.com and fragrancenet.com;

- catalog retailers of fragrances and fragrance related products; and

- Internet portals and online service providers that feature shopping
services.

We believe that our ability to compete depends upon many factors,
including:

- the market acceptance of our online store and services;

- the success of sales and marketing efforts;

- the performance and reliability of our services;

- the price of our products; and

- the effectiveness of our customer service and support efforts.

Our competitors may be larger than us and may have substantially greater
financial, distribution and marketing resources. In addition, our competitors
may be able to secure products from vendors on more favorable terms, fulfill
customer orders more efficiently and adopt more aggressive pricing or inventory
availability policies than we can. Traditional retailers also enable customers
to see, feel, and smell products in a manner that is not possible over the
Internet. Some online competitors including fragrancenet.com and
fragrancecounter.com may be able to use the Internet as a marketing medium to
reach significant numbers of potential customers more effectively that we can.

EMPLOYEES

As of the date of this prospectus, perfumania.com employed five full-time
employees and two part-time employee. We also employ independent contractors to
perform duties in various departments, including software development. The loss
of services of one or more of our key employees could damage our business. Our
employees are not represented by unions, and we consider our relationship with
our employees to be excellent. We believe that success is dependent on our
ability to attract and retain qualified personnel in numerous areas, including
software development.

FACILITIES

Our administrative and warehouse facilities are located in Miami, Florida
and total approximately 20,000 square feet. We believe that these facilities
will be sufficient to accommodate our anticipated growth over the next 12
months. Our space is shared with Perfumania, Inc. pursuant to an intercompany
services agreement. See "Certain Transactions."

LEGAL PROCEEDINGS

perfumania.com is not presently involved in any legal proceedings.

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<PAGE> 40

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Our board of directors and executive officers consist of the following
persons:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Ilia Lekach......................... 50 Chairman of the Board of
Directors and Chief Executive
Officer
Rachmil Lekach...................... 52 President and Director
Albert Friedman..................... 26 Chief Operating Officer, Interim
Chief Financial Officer and
Director
Richard Veliz....................... 30 Chief Technology Officer
Daniel Sawicki...................... 48 Director Nominee
Carole Taylor....................... 52 Director Nominee
</TABLE>

ILIA LEKACH has served as chairman of the board and chief executive officer
of perfumania.com since inception in January 1999. Mr. Lekach is a co-founder of
Perfumania, Inc. and was Perfumania, Inc.'s chairman of the board and chief
executive officer from its incorporation in 1988 until his resignation in April
1994. In October 1998 Mr. Lekach was reappointed Perfumania, Inc.'s chairman of
the board and chief executive officer. Mr. Lekach served as Chairman of the
Board of L. Luria & Son, Inc., a South Florida-based catalog retailer from
January 1997 through August 1997. Mr. Lekach has also served as chairman of the
board and chief executive officer of Parlux Fragrances, Inc., a publicly traded
manufacturer of fragrance and related products since 1990. Mr. Lekach is
expected to devote only a portion of his working time to the business of
perfumania.com.

RACHMIL LEKACH has served as president and a director of perfumania.com
since inception in January 1999 Mr. Lekach is a co-founder of Perfumania, Inc.
and was Perfumania, Inc.'s chief operating officer from 1990 to 1994. Mr. Lekach
joined perfumania.com from Ocean Reef Capital Management, an investment banking
boutique, where he served as chief executive officer from 1996 to 1999. From
August 1996 to February 1997, Mr. Lekach served as chairman of the board and
from August 1996 to August 1997 as chief executive officer and a director of L.
Luria & Son, Inc. From 1993 until 1996, Mr. Lekach served as the president and a
director of Parlux Fragrances, Inc.

ALBERT FRIEDMAN has served as perfumania.com's chief operating officer,
interim chief financial officer and a director since inception in January 1999.
From April 1998 to January 1999, Mr. Friedman was president of Corporate
Communications Solutions, Inc., an investment banking boutique specializing in
financial public relations. From January 1997 to April 1998, Mr. Friedman served
as executive vice president, chief financial officer and a director of L. Luria
& Son, Inc. From July 1996 to December 1996, Mr. Friedman served as an analyst
for ORM, Inc., an investment banking boutique. From 1994 to 1996, Mr. Friedman
was a vice president of Art and Precision, Inc., a manufacturer and distributor
of fine jewelry.

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<PAGE> 41

RICHARD VELIZ has served as perfumania.com's chief technology officer since
April 1999. Mr. Veliz worked in Internet design and development for Strategic
Business Systems from July 1997 until April 1999. He performed the same function
for AIC, a computer consulting business, from August 1998 until April 1999 and
for Sterling Solutions Group, an IT solutions business from February 1997 until
April 1998. Mr. Veliz worked in software design for Blockbuster Entertainment
Group from May 1996 until January 1997 and for The College Experience from
December 1992 until May 1996.

DANIEL SAWICKI will become director of perfumania.com upon completion of
the offering. Mr. Sawicki served as the president of Hero Communications,
Incorporated, a satellite television company from 1986 until 1996. From 1992
until 1998, Mr. Sawicki served as Vice President of Hero Productions, Inc., a
teleport company. Mr. Sawicki also founded HTV, Inc., a cable television
network, in 1995 and served as an executive officer of the company until its
sale in 1999.

CAROLE TAYLOR will become a director of perfumania.com upon completion of
the offering. Ms. Taylor has served as a director of Perfumania, Inc. since June
1993. From 1987 to 1998, Ms. Taylor was the owner and president of the Bayside
Company Store, a retail souvenir and logo store at Bayside Marketplace in Miami,
Florida. She was also a partner of Jardin Bresilien restaurant located at
Bayside Marketplace. Currently, Ms. Taylor is the owner of Miami To Go, Inc., a
retail and wholesale logo and souvenir merchandising and silkscreening company.
She is also a partner in Miami Airport Duty Free Joint Venture with Greyhound
Leisure Services which owns and operates the 19 duty free stores at Miami
International Airport. Ms. Taylor is a Director of the Greater Miami Convention
& Visitors Bureau, the Academy of Travel and Tourism, the Omni Advisory Board,
the Performing Arts Trust Foundation and the Greater Miami Chamber of Commerce
Board of Trustees.

Ilia Lekach and Rachmil Lekach are brothers. There are no other family
relationships among our directors and executive officers.

In August 1996 ORM, Inc. and its affiliates, of which Ilia Lekach and
Rachmil Lekach are principals, purchased a controlling interest in L. Luria &
Son, Inc., a catalog showroom with serious financial problems. Shortly
thereafter they and Albert Friedman joined L. Luria & Son, Inc. in management
positions and attempted to work out its problems with the creditors. Those
efforts failed and on August 13, 1997, L. Luria & Son, Inc. filed for relief
under Chapter 11 of the Bankruptcy Code and has since been liquidated.

Upon completion of this offering, we will establish audit and compensation
committees of our board of directors, which will each have a majority of
non-employee directors.

We are currently conducting a search for a chief financial officer.

Perfumania.com's amended and restated articles of incorporation divides the
board of directors into three approximately equal classes with staggered terms.
Directors are elected for three-year terms and, in each case, until their
successors are duly elected and qualified or until their earlier death,
resignation or removal. The members of each class will be appointed upon
completion of the public offering.

Our executive officers are elected annually by the board of directors and
serve at the discretion of the board of directors.

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<PAGE> 42

COMPENSATION OF DIRECTORS

Our non-employee directors will receive compensation for their services as
a director in the amount of $5,000 per year. We will reimburse them for any
expenses related to attendance of such meeting. Non-employee directors will also
be eligible to receive grants of stock options under our 1999 Incentive Stock
Option Plan. See "-- 1999 Incentive Stock Option Plan" with respect to stock
options granted to our non-employee director nominees.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Our amended and restated articles of incorporation contains provisions to
indemnify directors and officers to the extent permitted by Florida law. Under
current law indemnification or advancement of expenses may not be made to or on
behalf of any director, officer, employee, or agent of perfumania.com if a
judgment or other final adjudication establishes that his or her actions, or
omissions to act, were material to the cause of action so adjudicated and
constitute:

- a violation of the criminal law, unless the director, officer, employee,
or agent had reasonable cause to believe his or her conduct was lawful or
had no reasonable cause to believe his or her conduct was unlawful;

- a transaction from which the director, officer, employee, or agent
derived an improper personal benefit;

- in the case of a director, liability for unlawful distributions; or

- willful misconduct or a conscious disregard for our best interests in a
proceeding by or in the right of the corporation to procure a judgment in
its favor or in the proceeding by or in the right of a shareholder.

Our bylaws provide that perfumania.com will indemnify its directors,
officers and employees against judgments, fines, amounts paid in settlement and
reasonable expenses.

EXECUTIVE COMPENSATION

We were incorporated in January 1999 and have paid compensation to Ilia
Lekach, Rachmil Lekach, and Albert Friedman in the amounts of $50,000, $127,000,
and $32,000, respectively. See "-- 1999 Incentive Stock Option Plan" with
respect to stock options granted to the Messrs. Lekach, Lekach and Friedman.

EMPLOYMENT AGREEMENTS

RACHMIL LEKACH. Effective May 1, 1999, we entered into an employment
agreement with Rachmil Lekach under which Mr. Lekach serves as our president for
an initial period of five years ending in April 2004. The agreement will
automatically renew for additional one year terms unless terminated by Mr.
Lekach or us on not less than 60 days' notice given prior to the expiration of
the initial term or any renewal term. The employment agreement provides for a
base salary of $200,000 and other benefits including certain health benefits.
Pursuant to the employment agreement, Mr. Lekach has been granted options under
the 1999 Incentive Stock Option Plan to purchase 225,000 shares of common stock
at an exercise price equal to the initial public offering price. These stock
options vest as of the date of grant and will expire ten years from the date of
grant.

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<PAGE> 43

If Mr. Lekach's employment is terminated by us without cause, in addition
to his base salary and any accrued but unpaid bonus to the date of such
termination, Mr. Lekach will be entitled to receive a lump sum equal to the base
salary that he would have otherwise received through the end of the initial or
renewal term.

In the event that Mr. Lekach's employment is terminated by us within six
months of a change of control of perfumania.com as defined in the agreement, he
will be entitled to receive a lump sum payment equal to three times his base
salary. In addition, all unvested stock options will immediately vest.

Mr. Lekach is also entitled to terminate his employment and receive the
payments described above if, within six months, following a change in control,
Mr. Lekach's title or duties are diminished in any material respect or Mr.
Lekach is required to relocate out of the South Florida area.

Under the non-competition clause contained in the employment agreement, Mr.
Lekach is prevented from engaging in any business competing with our business
during:

- his active employment with us;

- all times while he is receiving the base salary from us; and

- the period of 12 months following the expiration of the initial term or
any renewal term of the employment agreement.

ILIA LEKACH. Effective May 1, 1999, we entered into an employment
agreement with Ilia Lekach under which Mr. Lekach is to serve as our chief
executive officer for an initial period of five years ending in April 2004. This
agreement will automatically renew for additional one year terms unless
terminated by Mr. Lekach or us on not less that 60 days' notice given prior to
the expiration of the initial or any renewal term. The employment agreement does
not provide for a salary but does grant to Mr. Lekach options under the 1999
Stock Incentive Plan to purchase 200,000 shares of our common stock at an
exercise price equal to the initial public offering price. 100,000 of these
options vest on the date of grant and the other 100,000 options will vest over a
three year period from the date of grant. In the event of a change in control,
as defined in the 1999 incentive stock option plan, all unvested stock options
will immediately vest. The options expire ten years from the date of grant.

Ilia Lekach's employment agreement has a non-competition provision similar
to that in Rachmil Lekach's employment agreement.

RICHARD VELIZ. We entered into an employment agreement with Richard Veliz
which is effective July 1999 pursuant to which Mr. Veliz is to serve as our
chief technology officer for a term of three years expiring in July 2002. The
employment agreement provides for a base salary of $140,000 with an annual
increase of at least 5%, and other benefits including health benefits. Mr. Veliz
has been granted options under our 1999 Incentive Stock Option Plan to purchase
26,000 shares of common stock vesting over a three year period with an exercise
price equal to the initial public offering price. In the event of a change of
control as defined in the employment agreement, Mr. Veliz's salary and stock
options will be doubled and will immediately vest.

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<PAGE> 44

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to this offering, we have not had a compensation committee. All
decisions concerning compensation of executive officers were made by the board
of directors as a whole.

1999 INCENTIVE STOCK OPTION PLAN

GENERAL. perfumania.com's 1999 Incentive Stock Option Plan provides that
options to acquire shares of common stock may be granted to key officers,
employees, consultants, advisors and directors or others designated by the board
of directors. The plan assists in attracting and retaining individuals who will
contribute to our success and achieve appreciation in your investment. Awards
under the plan may take the form of stock options, including corresponding share
appreciation rights or SARs.

SHARE AUTHORIZATION. Up to 1,000,000 shares of our common stock may be
awarded under the plan. Unexercised portions of options, forfeited options and
common stock subject to any awards that are otherwise surrendered by a
participant without receiving any payment or other benefit with respect thereto
may again be subject to new awards under the plan. If the purchase price of an
option is paid through the delivery of common stock designated for options, the
number of shares issuable in connection with the exercise of the option shall
not again be available for the grant of awards under the plan. Shares subject to
options with respect to which SARs are exercised, are not again available for
the grant of awards under the plan.

The shares to be issued or delivered under the plan are authorized and
unissued shares, or issued shares that may be acquired in the open market or
from private sources by perfumania.com, or both.

PLAN ADMINISTRATION. The plan is administered by the compensation
committee. Our board of directors may remove members from, add members to, or
fill vacancies in the compensation committee. The committee may establish such
rules and regulations as it may deem appropriate for the conduct of meetings and
proper administration of the plan. Subject to the provisions of the plan, the
committee may grant awards under the plan, interpret the provisions of the plan
and administer the plan or any award thereunder as it may deem necessary or
advisable.

OPTIONS. Incentive stock options meeting requirements of Section 422 of
the Internal Revenue Code of 1986, as amended, and nonqualified stock options
that do not meet such requirements are both available for grant under the plan.
The term of each option will be determined by the committee. No option will be
exercisable prior to six months from the date of grant or more than ten years
after the date of grant (except in the case of options that are nonqualified
stock options, where the committee can specify a longer period). Options may
also be subject to restrictions on exercise, such as exercise in periodic
installments, as determined by the committee.

In general, the exercise price for incentive stock options must be at least
equal to 100% of the fair market value of the shares on the date of the grant
and the exercise price for nonqualified stock options will be determined by the
compensation committee at the time of the grant and will be at least equal to
50% of the fair market value of the shares on the date of the grant. The
exercise price can be paid in cash, by tendering shares owned by the
participant, or by withholding some of the shares of common stock which are
being purchased. Options are not transferable except by will or the laws of
descent and

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<PAGE> 45

distribution and may generally be exercised only by the participant (or his
guardian or legal representative) during his or her lifetime, provided, however,
the nonqualified stock options may, under certain circumstances, be transferable
to family members and trusts for the benefit of the participant or his family
members.

SHARE APPRECIATION RIGHTS. The plan provides that SARs may be granted in
connection with the grant of options. Each SAR must be associated with a
specific option and must be granted at the time of grant of such option. A SAR
is exercisable only to the extent the related option is exercisable.

ANTIDILUTION PROVISIONS. The number of shares authorized to be issued
under the plan and subject to outstanding awards (and the grant or exercise
price thereof) may be adjusted to prevent dilution or enlargement of rights
under certain circumstances.

CHANGE IN CONTROL. Upon the occurrence of a change in control of
perfumania.com, all options and related SARs may become immediately exercisable,
the restricted shares may fully vest and stock purchase loans may be forgiven in
full.

TERMINATION AND AMENDMENT. The plan will automatically terminate in 2009.
No awards may be made after that date. Awards outstanding on the termination
date will remain valid in accordance with their terms. The terms of awards under
the plan may be amended by the compensation committee.

OUTSTANDING OPTIONS. As of the date of this prospectus, we have granted
options to purchase a total of 587,000 shares of common stock under the plan,
including options to purchase 200,000, 225,000, 100,000 and 26,000 shares
granted to Ilia Lekach, Rachmil Lekach, Albert Friedman and Richard Veliz,
respectively and options to purchase 5,000 shares of common stock granted to
each of our non-employee director nominees. The exercise price of these options
is equal to the initial public offering price. All the options granted to
Rachmil Lekach, Albert Friedman and our non-employee director nominees and
100,000 of the options granted to Ilia Lekach vest immediately; all other
options vest over a three year period. All options expire ten years from the
date of grant.

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<PAGE> 46

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the common stock as of the date of this prospectus by each person
known by perfumania.com to own beneficially more than 5% of the outstanding
shares of common stock, each of perfumania.com's directors, and all directors,
director nominees and executive officers as a group.

<TABLE>
<CAPTION>
AMOUNT AND PERCENT OF CLASS OUTSTANDING
NAME OF BENEFICIAL OWNER OR NATURE OF ---------------------------------
IDENTITY OF GROUP(1)(2) BENEFICIAL OWNERSHIP BEFORE OFFERING AFTER OFFERING
- --------------------------- -------------------- ---------------- --------------
<S> <C> <C> <C>
Perfumania, Inc.................. 5,000,000 100.0% 66.7%
Ilia Lekach...................... 5,100,000(3) 100.0% 67.1%
Rachmil Lekach................... 225,000(4) 4.3% 2.9%
Albert Friedman.................. 100,000(4) 2.0 1.3
Daniel Sawicki................... 5,000(4) * *
Carole Taylor.................... 5,000(5) * *
All directors, director nominees
and executive officers as a
group (six persons)............ 5,335,000(5) 100.0% 67.7%
</TABLE>

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

* represents less than 1% of the outstanding shares of common stock after the
offering.

(1) the address of each person named in the table is c/o perfumania.com, 11701
NW 101st Road, Miami, Florida 33178.

(2) Except as other indicated, the persons named in this table have sole voting
and investment power with respect to all shares of common stock listed,which
includes shares that these people have a right to acquire a beneficial
ownership interest within 60 days of the date of the prospectus.

(3) Represents 5,000,000 shares owned by Perfumania, Inc. and 100,000 shares
issuable upon the exercise of stock options.

(4) Represents shares of common stock issuable upon the exercise of stock
options.

(5) Includes 5,000,000 shares owned by Perfumania, Inc. and 335,000 shares of
common stock issuable upon the exercise of stock options.

CERTAIN TRANSACTIONS

GENERAL

Since January 7, 1999 (date of inception), Perfumania, Inc. has advanced to
us approximately $1.6 million which has been utilized primarily to finance our
start-up costs. Such advance bears interest at a rate of 12.5% per annum and is
payable upon demand. We will use a portion of the net proceeds of this offering
to repay this amount to Perfumania, Inc.

Since inception, we have purchased approximately 98% of our inventory from
Perfumania, Inc. at a price equal to our parent's cost plus five percent. For
the period from January 7, 1999 through January 30, 1999 and for the
three-months ended May 1, 1999,

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<PAGE> 47

such purchases totaled approximately $220,000 and $284,000. We will continue to
obtain merchandise from Perfumania, Inc. pursuant to the intercompany services
agreement described below. We may, however, secure products from other
distributors and suppliers, including Parlux Fragrances, Inc. Ilia Lekach, our
chairman of the board and chief executive officer occupies the same offices at
Parlux Fragrances, Inc.

Since inception, Perfumania, Inc. has provided us with corporate,
fulfillment, inventory supply, advertising, and space-sharing and other
administrative services. Perfumania, Inc. charged us approximately $30,000 and
$93,000 for such services during the period from January 7, 1999 to January 30,
1999 and the three-months ended May 1, 1999. We will continue to receive these
services from Perfumania, Inc. pursuant to the intercompany services agreement.

Ilia Lekach provided consulting services to us amounting to $50,000 during
the period from January 7, 1999 to January 30, 1999. In addition, a party
related to Mr. Lekach provided consulting services to us amounting to $65,000
since our inception to January 30, 1999. We do not expect to receive any further
consulting services from these persons.

TECHNOLOGY TRANSFER AND LICENSING AGREEMENT

Effective May 1, 1999, perfumania.com entered into a technology transfer
and license agreement, pursuant to which we have has been granted an exclusive
royalty-free license to use the Perfumania name and trademarks in our
operations. The license is not revocable unless we default under the agreement
or there is a change in control of perfumania.com. The agreement also gives us
the right to use Perfumania, Inc.'s inventory sourcing and special order
software, customer lists and demographic information. The license agreement
renews annually unless terminated by either party on at least 90 days written
notice prior to the commencement of the renewal year. Perfumania, Inc. may
terminate the technology transfer and transfer and license agreement of any
person other than Perfumania or its affiliates or strategic partners acquires
75% or more of the voting power of perfumania.com and under certain other
limited circumstances.

INTERCOMPANY SERVICES AGREEMENT

Effective May 1, 1999, perfumania.com entered into an intercompany services
agreement with Perfumania, Inc. pursuant to which Perfumania, Inc. will provide
services to us, including corporate, fulfillment, inventory supply, advertising,
space-sharing, and other administrative services. Perfumania, Inc.'s obligations
to deliver those services will terminate if and when the technology transfer and
license agreement is terminated.

CORPORATE SERVICES. Perfumania, Inc. will provide all of the services it
currently provides to perfumania.com, such as merchandising, inventory
management, creative, marketing, technical, human resources, finance,
accounting, administrative, and other services, as well as those services
perfumania.com requires by virtue of its status as an independent public
company. Perfumania, Inc. will provide these services to us at a monthly fee of
$10,000 until such time as our monthly gross sales exceed $50,000, at which time
the fee will be increased to $10,000 plus two percent of monthly gross sales.

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FULFILLMENT SERVICES. Perfumania, Inc. will provide us with warehousing
and fulfillment services, including receiving, quality control, storage,
processing and shipping orders and processing of customer returns. For these
services, we will pay Perfumania, Inc. an amount equal to three percent of the
cost of goods sold by us which have been handled by Perfumania, Inc. under the
intercompany services agreement.

INVENTORY SUPPLY. Perfumania, Inc. will supply inventory to us. We will
pay Perfumania, Inc. an amount equal to 105% of Perfumania, Inc.'s cost for the
inventory. We must pay Perfumania, Inc. within 30 days of invoice.

ADVERTISING. Perfumania, Inc. has agreed to include references to our
business and Web sites in their print and electronic media advertising materials
or in-store displays. We presently intend to participate in all advertising
campaigns of Perfumania, Inc. and will share the advertising costs. We will pay
Perfumania, Inc. either 20% or 50% of the advertising costs, based on the amount
of space we receive in the advertisement.

SPACE-SHARING. Perfumania, Inc. will permit us to use a portion of its
office and warehouse space that we mutually agree upon. Our cost for this space
will be an amount equal to our proportionate share of Perfumania, Inc.'s cost of
the space, initially 15% plus a proportionate share of common area maintenance
changes, taxes and utilities for the space.

APPROVAL OF AFFILIATED TRANSACTIONS.

We believe that each of the foregoing transactions were on terms no less
favorable than those which could have been obtained from unaffiliated third
parties. Following completion of this offering, all transactions between us and
our directors, executive officers and principal shareholders will be on terms no
less favorable than could be obtained from unaffiliated third parties and have
been and will be approved by a majority of our independent outside directors,
when elected.

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DESCRIPTION OF CAPITAL STOCK

GENERAL

The following is a description of perfumania.com's capital stock and
certain provisions of our amended and restated articles of incorporation and the
bylaws. The following discussion summarizes those documents. We recommend that
you refer to the full text of the documents for a complete description of those
documents.

Our authorized capital stock consists of 20,000,000 shares of common stock,
par value $.01 per share and 5,000,000 shares of preferred stock, par value $.01
per share.

COMMON STOCK

All of our 1,000 issued and outstanding shares of common stock are held by
one shareholder, Perfumania, Inc. We plan to effect a 5,000-for-1 stock split
prior to the offering. There will be 7,500,000 shares of common stock
outstanding upon the closing of the offering, 5,000,000 of which will be held by
Perfumania, Inc.

VOTING RIGHTS. The holders of common stock are entitled to one vote per
share on all matters to be voted on by shareholders. Holders are not entitled to
cumulate their votes in the election of directors. Generally, all matters to be
voted on by shareholders must be approved by a majority of common stock present
in person or represented by proxy, voting together as a single class, subject to
any voting rights granted to holders of any preferred stock. Amendments to our
articles of incorporation must be approved by a majority of the outstanding
shares of common stock voting together as a single class. Amendments to the
anti-takeover provisions of our amended and restated articles of incorporation
must be approved by the holders of two-thirds of the shares of common stock.
Perfumania, Inc. as a holder of approximately two-thirds of our common stock
can, on its own, cause us to amend our articles and bylaws.

DIVIDENDS. Holders of common stock will share ratably in any dividend
declared by the board of directors, subject to any preferential rights of any
outstanding preferred stock. No dividends have been paid and we do not
anticipate paying dividends for the foreseeable future.

OTHER RIGHTS. If we merge or consolidate with or into another company and
shares of common stock are converted into or exchanged for shares of stock,
other securities or property including cash in that transaction all holders of
common stock, will be entitled to receive the same kind and amount of shares of
stock and other securities and property including cash.

Upon liquidation, dissolution or winding up, after payment in full of the
amounts required to be paid to holders of preferred stock, if any, all holders
of common stock are entitled to share ratably in all assets available for
distribution to holders of shares of common stock.

No common stock is subject to redemption or has preemptive rights to
purchase additional shares of common stock. Upon consummation of the offering,
all the outstanding shares of common stock will be legally issued, fully paid
and nonassessable.

46
<PAGE> 50

PREFERRED STOCK

The board of directors is authorized, without further shareholder approval,
to issue from time to time up to an aggregate of 5,000,000 shares of preferred
stock and to fix or alter the designations, fix the dividend rights, dividend
rates, conversion rights, voting rights, terms of redemption (including sinking
fund provisions), redemption price or prices, liquidation preferences and the
number of shares constituting any series or designations of such series. No
shares of preferred stock are outstanding and we do not presently anticipate
offering preferred stock for the foreseeable future.

AUTHORIZED BUT UNISSUED SHARES

The authorized but unissued shares of common stock and preferred stock are
available for future issuance without shareholder approval. These additional
shares may be utilized for a variety of corporate purposes, including future
public offerings to raise additional capital, corporate acquisitions and
employee benefit plans. The existence of authorized but unissued shares of
common stock and preferred stock could render more difficult or discourage an
attempt to obtain control of perfumania.com by means of a proxy contest, tender
offer, merger or otherwise.

ANTI-TAKEOVER EFFECTS OF OUR ARTICLES OF INCORPORATION AND BYLAWS

GENERAL. Certain provisions of our articles of incorporation and bylaws
may be deemed to have an anti-takeover effect and may delay, defer or prevent a
tender offer or takeover attempt, including attempts that might result in a
premium being paid over the market price for the shares held by stockholders.

CLASSIFIED BOARD OF DIRECTORS. Our board of directors will be divided into
three classes of directors serving staggered three-year terms. As a result,
approximately one-third of the board of directors will be elected each year.
These and other provisions may deter a shareholder from removing incumbent
directors and simultaneously gaining control of the board of directors by
filling the vacancies created by such removal with its own nominees.

SPECIAL MEETING OF SHAREHOLDERS. Special meetings of our shareholders may
be called only by the chairman of the board of directors, a majority of the
board of directors, or the holders of not less than 50% of all votes entitled to
be cast on any issue proposed to be considered at such meeting. This provision
could make it more difficult for shareholders to take actions opposed by the
board of directors.

ADVANCE NOTICE REQUIREMENTS FOR SHAREHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS. Our bylaws state that shareholders must provide timely notice of
their intention to bring business before an annual meeting of shareholders, or
to nominate candidates for election as directors at an annual meeting of
shareholders.

To be timely, notice must be delivered to, or mailed and received by us,
not less than 120 days nor more than 180 days prior to the first anniversary of
the date of our notice of annual meeting for the previous year's annual meeting.
If we held no annual meeting in the previous year or the date of the annual
meeting of shareholders is more than 30 calendar days earlier than, or 60
calendar days after, such anniversary, a timely notice must be received not more
than 60 days prior to the annual meeting of shareholders or the close of
business on the 10th day following the date of the meeting. The form and content
of a shareholder's notice must comply with the bylaws. These provisions may
preclude

47
<PAGE> 51

shareholders from bringing matters before an annual meeting of shareholders or
from making nominations for directors at an annual meeting of shareholders.

ANTI-TAKEOVER EFFECTS OF FLORIDA LAW

We are subject to several anti-takeover provisions that apply to a public
corporation organized under Florida law, unless the corporation has elected to
opt out of those provisions in its articles of incorporation or bylaws. We have
not elected to opt out of those provisions. Florida law prohibits the voting of
shares in a publicly-held Florida corporation that are acquired in a control
share acquisition unless the holders of a majority of the corporation's voting
shares, exclusive of shares held by officers of the corporation, inside
directors or the acquiring party approve the granting of voting rights as to the
shares acquired in the control share acquisition.

A control share acquisition is defined as an acquisition that immediately
thereafter entitles the acquiring party to 20% or more of the total voting power
in an election of directors. Florida law contains an "affiliated transaction"
provision that prohibits a publicly-held Florida corporation from engaging in a
broad range of business combinations or other extraordinary corporate
transactions with an "interested shareholder" unless:

- the transaction is approved by a majority of disinterested directors
before the person becomes an interested shareholder;

- the interested shareholder has owned at least 80% of the corporation's
outstanding voting shares for at least five years; or

- the transaction is approved by the holders of two-thirds of the
corporation's voting shares other than those owned by the interested
shareholder.

An interested shareholder is defined as a person who together with
affiliates and associates beneficially owns more than 10% of the corporation's
outstanding voting shares. This may include takeover attempts that might result
in a premium over the market price for the shares held by shareholders.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the common stock is Continental Stock
Transfer & Trust Company, New York, New York.

SHARES ELIGIBLE FOR FUTURE SALE

When the offering is completed, we will have a total of 7,500,000 shares of
common stock outstanding, of which the 2,500,000 shares sold in this offering
will be freely tradable. The remaining 5,000,000 shares of our common stock
outstanding after the offering, which are held by Perfumania, Inc. are
restricted shares. These restricted shares may be resold only through
registration under the Securities Act of 1933 or under an available exemption
from registration, such as provided through Rule 144. All of these shares will
be eligible for result beginning in January 2000, subject to the volume
limitation and other requirements of Rule 144 and the lock-up agreement
described in the next paragraph.

48
<PAGE> 52

Perfumania, Inc. and our directors and executive officers, have agreed that
they will not without the prior written consent of Cruttenden Roth Incorporated,
directly or indirectly offer, sell or otherwise dispose of any shares of our
common stock or any other equity security of perfumania.com, or any securities
convertible into or exercisable or exchangeable for our common stock or enter
into any agreement to do any of the foregoing, for a period of 270 days from the
date of this prospectus.

In addition, options to purchase 587,000 shares of Common Stock have been
granted under our 1999 Incentive Stock Option Plan to our directors, executive
officers and other employees. It is anticipated that a registration statement on
Form S-8 covering the common stock that may be issued pursuant to the options
granted under the 1999 Incentive Stock Option Plan will be filed after this
offering. The shares of common stock issued pursuant to the Form S-8
Registration Statement generally may be resold in the public market without
restriction or limitation, except in the case of affiliates of perfumania.com
who generally may only resell such shares in accordance with the provisions of
Rule 144, other than the holding period requirement and subject to the lock-up
agreement.

The sale of a substantial number of shares of common stock, or the
perception that such sales could occur, could adversely affect prevailing market
prices for the common stock. In addition, any such sale or perception could make
it more difficult for perfumania.com to sell equity securities or equity-related
securities in the future at a time and price that we deem appropriate.

49
<PAGE> 53

UNDERWRITING

Subject to the terms and conditions of our underwriting agreement, the
underwriters named below, for whom Cruttenden Roth Incorporated and Pennsylvania
Merchant Group are acting as representative, have severally agreed to purchase
from us and we have agreed to sell to the underwriters, the respective number of
shares of common stock set forth opposite each underwriter's name below:

<TABLE>
<CAPTION>
UNDERWRITERS NUMBER OF SHARES
------------ ----------------
<S> <C>
Cruttenden Roth Incorporated................................
Pennsylvania Merchant Group.................................

---------
Total.................................................. 2,500,000
=========
</TABLE>

Our underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent, including the absence
of any material adverse change in our business, the receipt of certificates,
opinions and letters from our counsel and independent public accountants. The
nature of the underwriters' obligation is such that they are committed to
purchase and pay for all the shares of common stock if any are purchased.

We have been advised by the representatives that the underwriters propose
to offer the shares of common stock directly to the public on the terms set
forth on the cover page of this prospectus. The underwriters may allow selected
dealers a concession of not more than $ per share, and the underwriters
may allow, and such selected dealers may re-allow, a concession of not more than
$ per share, to other dealers. After the initial public offering of our
common stock, the public offering price and other selling terms may be changed
by the representative. No change in these terms will change the amount of
proceeds to be received by us as set forth on the cover page of this prospectus.

We have granted an option to the underwriters, exercisable for a period of
45 days after the date of this prospectus, to purchase up to an additional
375,000 shares of common stock at the same price per share as the initial shares
to be purchased by the underwriters to cover over allotments, if any. To the
extent that the underwriters exercise this option, each of the underwriters will
be committed, subject to certain conditions, to purchase such additional shares
of common stock in approximately the same proportion as set forth in the above
table. The representatives of the underwriters have advised us that they do not
expect any sales of the shares of common stock offered hereby to be made to
discretionary accounts controlled by the underwriters.

We have agreed to pay the representatives a non-accountable expense
allowance equal to 1% of the aggregate price of the shares of common stock
offered hereby including with respect to shares of common stock underlying the
over allotment option, if and to the extent it is exercised as set forth on the
front cover of this prospectus.

The representatives' expenses in excess of the non-accountable expense
allowance, including its legal expenses, will be borne by the representatives.
We have agreed to issue

50
<PAGE> 54

to the representatives at the closing of the offering warrants to purchase up to
250,000 shares of common stock at an exercise price per share equal to 120% of
the initial per share public offering price. The representative's warrants are
exercisable for a period of four years beginning one year from the date of this
prospectus.

The holders of the representatives' warrants will have no voting, dividend
or other shareholder rights until the representatives' warrants are exercised.
The terms of the representative's warrants were established as the result of
negotiations between the representatives and us. If the representatives'
warrants are exercised, the representative may realize additional compensation.
By their terms, the representatives' warrants will be restricted from sale,
transfer, assignment or hypothecation, except to persons that are officers of
the representative.

The number of shares covered by the representatives' warrants and the
exercise price are subject to adjustment to prevent dilution. In addition, we
have granted certain rights to the holders of the representatives' warrants to
register the representatives' warrants and the common stock underlying the
representatives' warrants under the Securities Act of 1933. Total compensation
to the representatives and the underwriters is as follows:

<TABLE>
<S> <C>
Commissions.............................. $ per share of common stock sold
Nonaccountable expense allowance......... per share of common stock sold

Warrants................................. 250,000 shares of common stock at
120% of the initial public offering
price.
</TABLE>

Perfumania, Inc. and our directors and executive officers have agreed that
they will not without the prior written consent of Cruttenden Roth Incorporated,
directly or indirectly offer, sell or otherwise dispose any of our shares of
common stock or any other equity security of perfumania.com, or any securities
convertible into or exercisable or exchangeable for our common stock or enter
into any agreement to do any of the foregoing for a period of 270 days from the
date of this prospectus. Cruttenden Roth Incorporated has no present intention
to release the locked-up shares prior to expiration of the 270-day period
although Cruttenden Roth Incorporated may release the locked-up shares prior to
expiration of such period. The granting of any release would be conditioned, in
the judgment of Cruttenden Roth Incorporated, on such sale not materially
adversely impacting the prevailing trading market for the common stock on the
American Stock Exchange. Specifically, factors such as average trading volume,
recent price trends, and the need for additional public float in the market for
the common stock would be considered in evaluating such a request.

Prior to the offering, there has been no established trading market for the
common stock. Consequently, the initial public offering price for the common
stock offered hereby has been determined by negotiations between the
representatives and us. Among the factors considered in such negotiations were
the preliminary demand for the common stock, the prevailing market and economic
conditions, our results of operations, estimates of our business potential and
prospects, the present state of our business operations, an assessment of our
management, the consideration of these factors in relation to the market
valuation of comparable companies in related businesses, the current conditions
of the markets in which we operate, and other factors deemed relevant. There can
be no assurance that an active trading market will develop for the common stock
or that the common stock will trade in the public market after the offering at
or above the initial public offering price.

51
<PAGE> 55

The representatives have advised us that, pursuant to Regulation M under
the Securities Act of 1933, some persons participating in the offering may
engage in transactions, including stabilizing bids, syndicate covering
transactions or the imposition of penalty bids, that may have the effect of
stabilizing or maintaining the market price of the shares of common stock at a
level above that which might otherwise prevail in the open market. A stabilizing
bid is a bid for or the purchase of shares of common stock on behalf of the
underwriters for the purpose of fixing or maintaining the price of the common
stock. A syndicate covering transaction is the bid for or purchase of common
stock on behalf of the underwriters to reduce a short position incurred by the
underwriters in connection with the offering. A penalty bid is an arrangement
permitting the representatives to reclaim the selling concession otherwise
accruing to an underwriter or syndicate member in connection with the offering
if the common stock originally sold by such underwriter or syndicate member
purchased by the representative in a syndicate covering transaction and has
therefore not been effectively placed by such underwriter or syndicate member.
The representatives have advised us that such transactions may be effected on
the American Stock Exchange or otherwise and, if commenced, may be discontinued
at any time. The underwriting agreement provides that we will indemnify the
underwriters and their controlling persons against liabilities under the
Securities Act of 1933 or will contribute to payments the underwriters and their
controlling persons maybe required to make in respect thereof.

VALIDITY OF COMMON STOCK

The validity of the shares of common stock issued by us in this offering
will be passed upon for perfumania.com by Greenberg Traurig, McLean, Virginia,
and for the underwriters by Broad and Cassel, a partnership including
professional associations, Miami, Florida.

EXPERTS

The financial statements as of January 30, 1999 and May 1, 1999 and the
period from January 7, 1999 (date of inception) through January 30, 1999 and for
the three-month period ended May 1, 1999, included in this prospectus have been
so included in reliance on the report (which contains an explanatory paragraph
relating to perfumania.com's ability to continue as a going concern as described
in Note 2 to the financial statements) of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

WHERE YOU CAN FIND MORE INFORMATION

perfumania.com has filed a registration statement on Form S-1 with the SEC
in connection with this offering. In addition, we will file annual, quarterly
and current reports, proxy statements and other information with the SEC. You
may read and copy the registration statement and any other documents filed by
perfumania.com at the SEC's public reference room at 450 Fifth Street, NW,
Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Our SEC filings are also available to
the public at the SEC's Internet site at http://www.sec.gov. This prospectus is
part of the registration statement and does not contain all of the

52
<PAGE> 56

information included in the registration statement. Whenever reference is made
in this prospectus to any contract or other document of perfumania.com, the
reference may not be complete and you should refer to the exhibits that are part
of the registration statement for a copy of the contract or the document.

53
<PAGE> 57

PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Certified Public Accountants.......... F-2
Balance Sheets as of January 30, 1999 and May 1, 1999....... F-3
Statements of Operations for the period from January 7, 1999
(date of inception) through January 30, 1999 and for the
three-month period ended May 1, 1999...................... F-4
Statements of Changes in Shareholder's Deficit for the
period from January 7, 1999 (date of inception) through
January 30, 1999 and for the three-month period ended May
1, 1999................................................... F-5
Statements of Cash Flows for the period from January 7, 1999
(date of inception) through January 30, 1999 and for the
three-month period ended May 1, 1999...................... F-6
Notes to Financial Statements............................... F-7
</TABLE>

F-1
<PAGE> 58

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and
Shareholder of perfumania.com, inc.

In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of
perfumania.com, inc. (the "Company") at January 30, 1999 and May 1, 1999, and
the results of its operations and its cash flows for the period from January 7,
1999 (date of inception) through January 30, 1999 and the three-month period
ended May 1, 1999 in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has incurred net losses since January 7, 1999
(date of inception) and has a working capital deficit of $1,065,000 at May 1,
1999. In addition, the Company is significantly dependent upon its Parent
(Perfumania, Inc.) for the conduct of its operations. The Parent has incurred
substantial losses in its prior two fiscal years and is in default of its bank
line of credit agreement as a result of its violation of certain debt covenants,
which violations have not been waived by the bank as of May 14, 1999. There is
no assurance that the Company will be able to generate future net income or that
the Company's Parent will be able to obtain the required waivers of default from
the bank and generate profits in the future. These matters create substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

PricewaterhouseCoopers LLP

Miami, Florida
May 14, 1999, except for Note 8 as to which
the date is June 1, 1999

F-2
<PAGE> 59

PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

BALANCE SHEETS

<TABLE>
<CAPTION>
JANUARY 30, MAY 1,
1999 1999
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................. $ 100,000 $ 100,808
Credit card receivable................................ -- 21,042
Prepaid expenses...................................... -- 50,000
Inventory, net........................................ 209,655 432,722
--------- -----------
Total current assets............................... 309,655 604,572
Property and equipment, net........................... 14,213 26,649
--------- -----------
Total assets....................................... $ 323,868 $ 631,221
========= ===========

LIABILITIES AND SHAREHOLDER'S DEFICIT
Current liabilities:
Due to Parent......................................... $ 531,326 $ 1,617,332
Accounts payable and accrued expenses................. 66,037 52,041
--------- -----------
Total current liabilities.......................... 597,363 1,669,373
--------- -----------
Commitments and Contingencies........................... -- --
Shareholder's deficit:
Common stock, $0.01 par value, 20 million shares
authorized, 1,000 shares issued and outstanding.... 10 10
Accumulated deficit................................... (273,505) (1,038,162)
--------- -----------
Total shareholder's deficit........................ (273,495) (1,038,152)
--------- -----------
Total liabilities and shareholder's deficit........ $ 323,868 $ 631,221
========= ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE> 60

PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
JANUARY 7, 1999 FOR THE
(DATE OF INCEPTION) THREE-MONTH
THROUGH PERIOD ENDED
JANUARY 30, 1999 MAY 1, 1999
------------------- ------------
<S> <C> <C>
Net sales......................................... $ -- $ 161,972
Cost of goods sold................................ -- 110,666
--------- ---------
Gross profit...................................... -- 51,306
--------- ---------
Operating expenses:
General and administrative expenses............. 60,245 213,698
Management fees to Parent....................... 29,644 93,001
Marketing and sales expenses.................... 32,852 347,272
Web site development expenses................... 18,146 87,633
Consulting fees................................. 130,019 42,324
--------- ---------
Total operating expenses..................... 270,906 783,928
--------- ---------
Loss from operations.............................. (270,906) (732,622)
Interest expense to Parent........................ (2,599) (32,035)
--------- ---------
Net loss.......................................... $(273,505) $(764,657)
========= =========
Basic and diluted loss per common share:.......... $ * $ *
========= =========
Weighted average number of common shares
outstanding..................................... * *
========= =========
</TABLE>

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

* Amounts to be completed upon amendment after share recapitalization (See Note
8)

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE> 61

PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

STATEMENTS OF CHANGES IN SHAREHOLDER'S DEFICIT
FOR THE PERIOD FROM JANUARY 7, 1999 (DATE OF INCEPTION)
THROUGH JANUARY 30, 1999
AND FOR THE THREE-MONTH PERIOD ENDED MAY 1, 1999

<TABLE>
<CAPTION>
COMMON STOCK
--------------- ACCUMULATED
SHARES AMOUNT DEFICIT TOTAL
------ ------ ----------- -----------
<S> <C> <C> <C> <C>
Balance at January 7, 1999 (date of
inception).......................... 1,000 $10 $ -- $ 10
Net loss for the period from January
7, 1999 (date of inception) through
January 30, 1999.................... -- -- (273,505) (273,505)
----- --- ----------- -----------
Balance at January 30, 1999........... 1,000 10 (273,505) (273,495)
Net loss for the three-month period
ended May 1, 1999................... -- -- (764,657) (764,657)
----- --- ----------- -----------
Balance at May 1, 1999................ 1,000 $10 $(1,038,162) $(1,038,152)
===== === =========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 62

PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
JANUARY 7, 1999 FOR THE
(DATE OF INCEPTION) THREE-MONTH
THROUGH PERIOD ENDED
JANUARY 30, 1999 MAY 1, 1999
------------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................ $(273,505) $(764,657)
Adjustments to reconcile net loss to net cash
used in operating activities:
Provision for inventory...................... 11,035 16,500
Depreciation and amortization................ 95 968
Change in operating assets and liabilities:
Credit card receivable....................... -- (21,042)
Prepaid expenses............................. -- (50,000)
Inventory.................................... -- 44,433
Accounts payable and accrued expenses........ 66,037 (13,996)
--------- ---------
Net cash used in operating activities...... (196,338) (787,794)
--------- ---------
Cash flows from investing activities:
Purchase of property and equipment.............. (14,308) (13,404)
--------- ---------
Net cash used in investing activities...... (14,308) (13,404)
--------- ---------
Cash flows from financing activities:
Net borrowings from Parent...................... 310,646 802,006
--------- ---------
Net cash provided by financing
activities.............................. 310,646 802,006
--------- ---------
Net increase in cash and cash equivalents......... 100,000 808
Cash and cash equivalents at beginning of
period.......................................... -- 100,000
--------- ---------
Cash and cash equivalents at end of period........ $ 100,000 $ 100,808
========= =========
Supplemental cash flow information:
</TABLE>

- No amounts were paid for interest or income taxes for the period from
January 7, 1999 (date of inception) through January 30, 1999 and for the
three-month period ended May 1, 1999.
- Inventory in the amount of approximately $220,000 and $284,000 for the
period from January 7, 1999 (date of inception) through January 30, 1999 and
for the three-month period ended May 1, 1999, respectively, was purchased
from the Parent in a non-cash transaction.

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE> 63

PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS

NOTE 1. NATURE OF OPERATIONS:

perfumania.com, inc., (the "Company") is a wholly-owned subsidiary of
Perfumania, Inc. (the "Parent"), and was incorporated in the State of Florida on
January 7, 1999. The Company is an online retailer of fragrances and fragrance
related products. The Company utilizes the Parent's business relationships and
infrastructure and has relied on the Parent to provide financing for its
operations.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES:

Significant accounting principles and practices used by the Company in the
preparation of the accompanying financial statements are as follows:

FISCAL YEAR END

The Company's fiscal year ends the Saturday closest to January 31 to enable
the Company's operations to be reported in a manner which more closely coincides
with general retail reporting practices and the financial reporting needs of the
Company.

MANAGEMENT ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles 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 amounts of revenues and expenses during the
reporting period. The most significant estimates made by management in the
accompanying financial statements relate to the inventory reserves and estimated
useful lives of property and equipment. Actual results could differ from those
estimates.

MANAGEMENT FEES

Management fees reflected in the statements of operations represents shared
expenses which have been allocated to the Company by the Parent for costs
associated with resources it shares with the Parent. Although no formal
agreement existed through May 1, 1999, management believes these allocations are
reasonable. The financial statements of the Company do not necessarily reflect
the results of operations or financial position that would have existed had the
Company been independent of the Parent.

Effective May 1, 1999, the Company entered into an intercompany services
agreement (the "Agreement") with its Parent. Under the terms of the Agreement,
the Company will pay various management fees to the Parent as follows: for
corporate services, the monthly fee is fixed at $10,000 unless monthly gross
sales exceed $50,000, at which time, the monthly fee will amount to $10,000 plus
two percent of the Company's monthly gross sales; for fulfillment services, the
fee is equal to three percent of the costs of goods sold by the Company and
serviced by the Parent; for advertising services, the fee ranges between 20% to
50% of the cost of the advertisement incurred by the Parent; for shared
facilities,

F-7
<PAGE> 64
PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the fee is equal to a proportionate share of the facility costs incurred by the
Parent, initially 15%; and for inventory purchases, the fee is equal to five
percent of the Parent's cost of such inventory.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the financial
statements, the Company incurred net losses of approximately $765,000 and
$274,000 during the three-month period ended May 1, 1999 and for the period from
January 7, 1999 (date of inception) to January 30, 1999, respectively, and has a
working capital deficit of $1,065,000 at May 1, 1999. The Company is
significantly dependent on its Parent for the conduct of its operations. The
report of PricewaterhouseCoopers LLP that accompanied the Parent's audited
financial statements as of January 30, 1999 contained an explanatory paragraph
indicating factors which create substantial doubt about the Parent's ability to
continue as a going concern. Such factors include the Parent's recurring net
losses in fiscal 1999 and 1998 and a loan default, which has not yet been waived
by the bank as of May 14, 1999, on the Parent's bank line of credit agreement as
a result of its violation of certain debt covenants.

These factors among others may indicate that the Company will be unable to
continue as a going concern for a reasonable period of time. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty. The Company's continuation as a going concern is dependent
upon obtaining adequate financial resources from its Parent or through a
contemplated initial public offering of its shares or otherwise. However, there
can be no assurance that such offerings will be successful or such resources
will be available from its Parent.

REVENUE RECOGNITION

Revenue from on-line retail transactions is recorded upon shipment of
inventory.

INVENTORY

Inventory, consisting of finished goods purchased primarily from the
Parent, is stated at the lower of cost or market, cost being determined on a
moving average cost basis. The cost of inventory includes product cost and
freight charges. The Company recorded a provision of approximately $11,000 and
$17,000 for the period from January 7, 1999 (date of inception) through January
30, 1999 and for the three-month period ended May 1, 1999, respectively, to
reduce the carrying amount of inventory to its net realizable value.

PROPERTY AND EQUIPMENT

Property and equipment is carried at cost, less accumulated depreciation.
Depreciation is calculated using the straight-line method over the estimated
useful lives of the related assets. Costs of major additions and improvements
are capitalized and expenditures for

F-8
<PAGE> 65
PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

maintenance and repairs which do not extend the useful life of the asset are
expensed when incurred. Gains or losses arising from sales or retirements are
included in income currently.

MARKETING AND SALES EXPENSES

Marketing and sales expenses, which consist primarily of advertising and
promotional costs, are charged to operations as incurred.

INCOME TAXES

The Company files a consolidated U.S. Federal income tax return with its
Parent. The provision for income taxes is computed as if the Company filed a
separate tax return, on a stand-alone basis.

The Company utilizes the asset and liability method of accounting for
deferred income taxes. Under this method, deferred tax assets and liabilities
are determined based on the difference between the financial statement and tax
bases of assets and liabilities using tax rates in effect for the year in which
the differences are expected to reverse. A valuation allowance is established
when it is more likely than not that some or all of the deferred tax assets will
not be realized.

DUE TO PARENT

Due to Parent includes amounts payable to the Parent primarily for working
capital requirements. Such amounts are due on demand. Interest is charged at
12.5% per annum. Total interest expense was $2,599 and $32,035 for the period
from January 7, 1999 (date of inception) to January 30, 1999 and for the
three-month period ended May 1, 1999, respectively.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and credit card receivable approximate fair
value as of January 30, 1999 and May 1, 1999.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 Accounting for Derivative Instruments and
Hedging Activities ("SFAS No. 133"). Among other provisions, SFAS No. 133
establishes accounting and reporting standards for derivative instruments and
for hedging activities. It also requires that an entity recognize all
derivatives as either assets or liabilities in the

F-9
<PAGE> 66
PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

statement of financial position and measure those instruments at fair value.
SFAS No. 133 is effective for financial statements for fiscal years beginning
after June 15, 1999. Management has not determined the effect, if any, of
adopting SFAS No. 133.

NOTE 3. PROPERTY AND EQUIPMENT:

Property and equipment includes the following:

<TABLE>
<CAPTION>
ESTIMATED
JANUARY 30, MAY 1, USEFUL LIVES
1999 1999 (IN YEARS)
----------- ------- ------------
<S> <C> <C> <C>
Furniture, fixtures and equipment............... $ -- $11,538 5-7
Computer equipment and software................. 14,308 16,174 3
------- -------
14,308 27,712
Less: Accumulated depreciation.................. (95) (1,063)
------- -------
$14,213 $26,649
======= =======
</TABLE>

NOTE 4. RELATED PARTY TRANSACTIONS:

The Company has purchased a majority of the inventory sold since inception
from the Parent at an amount equal to the Parent's cost plus five percent. For
the period from January 7, 1999 (date of inception) through January 30, 1999 and
for the three-month period ended May 1, 1999, such purchases totaled
approximately $220,000 and $284,000, respectively.

The Company is charged for various services provided by the Parent
including administrative, distribution and other services. Such charges were
approximately $30,000 and $93,000 for the period from January 7, 1999 (date of
inception) to January 30, 1999 and the three-month period ended May 1, 1999,
respectively, and are classified as management fees in the accompanying
statements of operations. Purchases of inventory and expenses charged by the
Parent are not necessarily indicative of costs and expenses which might have
been incurred had the Company been operating as a separate, or stand-alone
company.

The Company's Chief Executive Officer (the "CEO") provided consulting
services to the Company amounting to $50,000 during the period from January 7,
1999 (date of inception) through January 30, 1999 (see Note 6). In addition, a
party related to the CEO provided consulting services to the Company amounting
to $65,000 during the period from January 7, 1999 (date of inception) through
January 30, 1999. These consulting services were not subject to a written
consulting agreement. Management believes that these amounts are representative
of the time both parties spent in providing these consulting services to the
Company during the respective period. Both of these amounts are included in
consulting fees in the accompanying statement of operation during the period
from January 7, 1999 (data of inception) through January 30, 1999.

F-10
<PAGE> 67
PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5. INCOME TAXES:

The income tax provision differs from the amount obtained by applying the
statutory Federal income tax rate to pretax income as follows:

<TABLE>
<CAPTION>
PERIOD FROM FOR THE
JANUARY 7, 1999 THREE-MONTH
(DATE OF INCEPTION) PERIOD ENDED
TO JANUARY 30, 1999 MAY 1, 1999
--------------------- -------------
<S> <C> <C>
Benefit at Federal statutory rates............... $ (95,723) $(267,630)
State income taxes, net of Federal benefit....... (7,193) (20,105)
--------- ---------
(102,916) (287,735)
Valuation allowance.............................. 102,916 287,735
--------- ---------
$ -- $ --
========= =========
</TABLE>

The primary components of temporary differences which give rise to the
Company's net deferred tax assets at January 30, 1999 and May 1, 1999 are as
follows:

<TABLE>
<CAPTION>
JANUARY 30, MAY 1,
1999 1999
----------- ---------
<S> <C> <C>
Deferred tax assets:
Net operating losses carryforward...................... $ 98,763 $ 327,283
Allowances and reserves................................ 4,153 64,425
--------- ---------
Total deferred tax assets........................... 102,916 391,708
Deferred tax liabilities:
Property and equipment................................. -- (1,057)
--------- ---------
Net deferred tax assets................................ 102,916 390,651
Valuation allowance.................................... (102,916) (390,651)
--------- ---------
$ -- $ --
========= =========
</TABLE>

The Company provides a valuation allowance against deferred tax assets if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized. The Company has
established a valuation allowance against deferred tax assets of $102,916 and
$390,651 at January 30, 1999 and May 1, 1999, respectively.

The Company has Federal and State net operating loss carryforwards of
approximately $870,000, both of which will begin to expire in the year 2019.

The Company, which is a wholly owned subsidiary, participates in the
filling of a consolidated U.S. Federal income tax return of its Parent. Once the
Company is no longer a subsidiary of its Parent, the amount of net operating
loss carryforwards may decrease or become limited.

F-11
<PAGE> 68
PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6. COMMITMENTS:

Effective April 15, 1999, the Company entered into a 36 month service
agreement with a software and network provider. Pursuant to the agreement, the
Company must remit 36 equal monthly installments of $12,500, net of a marketing
credit. The Company is subject to an early termination fee of $201,165 if
cancelled within the first 12 months and $100,583 if cancelled after 24 months
of service.

Effective May 1, 1999, the Company entered into an employment agreement
with its CEO for a five year initial term. The employment agreement does not
provide for a salary. A total of 200,000 common stock options were granted at an
exercise price equal to a contemplated initial public offering (the "Offering")
price. Options to purchase 100,000 shares will vest immediately at the date of
grant and options to purchase 100,000 shares will vest over a three-year period.

Effective May 1, 1999, the Company entered into an employment agreement
with its president for a five year initial term. Total annual base salary is
$200,000. A total of 225,000 common stock options were granted at an exercise
price equal to the Offering price. These Options will vest immediately at the
date of grant. Upon change of control of the Company, the president will be
entitled to a lump sum payment equal to three times the annual base salary. Upon
termination without cause the president will be entitled to receive a lump sum
payment equal to the base salary through the end of the initial term of his
employment agreement.

NOTE 7. STOCK OPTION PLAN:

Effective May 1, 1999 the Company adopted the 1999 Incentive Stock Option
Plan (the "Plan"). Officers, key employees and nonemployee consultants may be
granted stock options, stock appreciation rights, stock awards, performance
shares and performance units under the Plan. The Company has reserved 1,000,000
shares of common stock for issuance under the Plan, subject to the share
dividend effective upon the consummation of the Offering and subject to further
antidilution adjustments.

The Company will grant 5,000 non-qualified stock options to each
non-employee director nominee of the Company. The options will allow such
directors to purchase the common stock at an exercise price equal to the
Offering price. These options will have a term of ten years and vest immediately
on the date of grant. A total of 10,000 shares will be granted to non-employee
director nominees.

Prior to establishment of a Compensation Committee (the "Committee") of the
Board of Directors, the Plan will be administered by the Board of Directors of
the Company. The Board of Directors or the Committee will be authorized to
determine, among other things, the key employees to whom, and the time at which,
options and other benefits are to be granted, the number of shares subject to
each option, the applicable vesting schedule and the exercise price. The Board
of Directors or the Committee will also determine the treatment to be afforded
to a participant in the Plan in the event of termination of employment for any
reason, including death, disability or retirement. Under

F-12
<PAGE> 69
PERFUMANIA.COM, INC.
(A WHOLLY-OWNED SUBSIDIARY OF PERFUMANIA, INC.)

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

the Plan the maximum term of an incentive stock option is 10 years and the
maximum term of a nonqualified stock option is 10 years.

The Board of Directors has the power to amend the Plan from time to time.
Shareholder approval of an amendment is only required to the extent that it is
necessary to maintain the Plan's status as a protected plan under applicable
securities laws or the Plan's status as a qualified plan under applicable tax
laws.

Options to purchase an aggregate of 577,000 shares have been granted under
the Plan to employees of the Company at an exercise price equal to the Offering
price of the common stock offered hereby. These options will have a total term
of ten years. Options to purchase 425,000 shares will vest immediately on the
date of grant and options to purchase 152,000 shares will vest as follows: 16%,
34% and 50% of the total number of shares granted on the first, second and third
anniversary of the date of grant.

Statement of Financial Accounting Standards No. 123, Accounting for Stock
Based Compensation ("SFAS No. 123"), encourages, but does not require, companies
to record compensation cost for stock-based employee compensation plans at fair
value. The Company will measure compensation expense for the stock Plans using
the intrinsic value method prescribed by Accounting Principal Board Opinion No.
25, "Accounting for Stock Issued to Employees" ("APB No. 25"). Accordingly,
compensation expense for qualified and non-qualified stock options granted under
the Plan is equal to the difference between the fair market value of the stock
at the date of grant and the amount an employee must pay to acquire the stock.
For options granted to other than employees in exchange for goods or services,
compensation cost is measured in accordance with SFAS No. 123.

NOTE 8. SUBSEQUENT EVENTS:

On June 1, 1999 the Company's shareholder approved an increase in the
number of authorized shares of common stock from 1,000 shares to twenty million
shares. The Company also authorized five million shares, par value $0.01 per
share, of preferred stock.

On June 1, 1999, the Company declared a share dividend of an aggregate of
4,999,000 shares of common stock, $0.01 par value, upon consummation of the
Offering, payable to its shareholder of record in order to effect the equivalent
of a 5,000-for-1 stock split to increase the number of shares of common stock
outstanding from 1,000 shares to 5,000,000 shares.

F-13
<PAGE> 70

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

PROSPECTUS
------------------------

2,500,000 SHARES OF COMMON STOCK

PERFUMANIA.COM, INC. [LOGO]

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

CRUTTENDEN ROTH INCORPORATED

PENNSYLVANIA MERCHANT GROUP

, 1999
<PAGE> 71

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses, other than
underwriting discounts and commissions, in connection with the issuance and
distribution of the shares of common stock being registered, all of which we
will pay:

<TABLE>
<S> <C>
SEC Registration fee........................................ $ 7,943
NASD filing fee............................................. 3,358
American Stock Exchange listing fee......................... 27,000
Printing and engraving...................................... 30,000
Legal fees.................................................. 175,000
Blue Sky fees and expenses.................................. 20,000
Accounting fees............................................. 125,000
Transfer Agent and Registrar fees and expenses.............. 10,000
Miscellaneous............................................... 26,915
--------
Total..................................................... 475,000
========
</TABLE>

All amounts except SEC registration fee and the NASD filing fee are
estimated.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The articles of incorporation and bylaws provide that perfumania.com
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed proceeding by reason of the fact that he
is or was a director or officer of perfumania.com or any other person designated
by the board of directors which may include any person serving at the request of
perfumania.com as a director, officer, employee, agent, fiduciary or trustee of
another corporation, partnership, joint venture, trust, employee benefit plan or
other entity or enterprise, in each case, against certain liabilities including
damages, judgments, amounts paid in settlement, fines, penalties and expenses
including attorneys' fees and disbursements, except where such indemnification
is expressly prohibited by applicable law, where such person has engaged in
willful misconduct or recklessness or where such indemnification has been
determined to be unlawful. Such indemnification as to expenses is mandatory to
the extent the individual is successful on the merits of the matter. Florida law
permits perfumania.com to provide similar indemnification to employees and
agents who are not directors or officers. The determination of whether an
individual meets the applicable standard of conduct may be made by the
disinterested directors, independent legal counsel or the shareholders. Florida
law also permits indemnification in connection with a proceeding brought by or
in the right of perfumania.com to procure a judgment in its favor. Insofar as
indemnification for liabilities arising under the SEC may be permitted to
directors, officers, or persons controlling perfumania.com pursuant to the
foregoing provisions, perfumania.com has been informed that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable.

II-1
<PAGE> 72

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

perfumania.com issued an aggregate of 1,000,000 shares of its common stock
to Perfumania, Inc. in January 1999. The foregoing securities were all issued
without registration under the Securities Act of 1933, as amended, by reason of
the exemption from registration afforded by the provisions of Section 4(2)
thereof, as transactions by an issuer not involving public offering, Perfumania,
Inc. having consented to the imposition of restrictive legends upon the
certificates evidencing such securities.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

The following is a list of exhibits filed as part of this Registration
Statement.

<TABLE>
<CAPTION>
EXHIBIT
- -------
<C> <S>
1.1 Form of Underwriting Agreement.*
3.1 Amended and Restated Certificate of Incorporation
3.2 Bylaws
5.1 Opinion of Greenberg Traurig regarding legality of the
shares of Common Stock being registered *
10.1 1999 Incentive Stock Option Plan(1)
10.2 Intercompany Services Agreement dated as of May 1, 1999 by
and between perfumania.com, inc. and Perfumania, Inc.
10.3 Technology Transfer and License Agreement dated as of May 1,
1999 by and between the perfumania.com, inc. and Perfumania,
Inc.
10.4 Employment Agreement of Ilia Lekach(1)*
10.5 Employment Agreement of Rachmil Lekach(1)*
10.6 Employment Agreement of Richard Veliz(1)*
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Greenberg Traurig (included in its opinion filed
as Exhibit 5.1 hereto).*
23.3 Consent of director nominee Daniel Sawicki
23.4 Consent of director nominee Carole Taylor
24.1 Power of Attorney (included on signature page to this
Registration Statement).
27.1 Financial Data Schedule, January 30, 1999 (for SEC only).
27.2 Financial Data Schedule, May 1, 1999 (for SEC only).
</TABLE>

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

* To be filed by amendment.
(1) Management compensation plan or arrangement

(b) FINANCIAL STATEMENT SCHEDULES

II-2
<PAGE> 73

All schedules for which provision is made in the applicable accounting
regulations of the SEC are not required under the related instructions or are
not applicable, and therefore have been omitted.

ITEM 17. UNDERTAKINGS

(i) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement certificates
in such denominations and registered in such names as required by the
Underwriters to permit prompt delivery to each purchaser.

(ii) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

(iii) The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-3
<PAGE> 74

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Miami, Florida, on June
4, 1999.

perfumania.com, inc.

By: /s/ ILIA LEKACH
-----------------------------------
Ilia Lekach
Chief Executive Officer,
Chairman of the Board

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.

Each person in so signing also makes, constitutes and appoints Ilia Lekach
and Rachmil Lekach, and each of them acting alone, his true and lawful
attorney-in-fact, with full power of substitution, to execute and cause to be
filed with the Securities and Exchange Commission pursuant to the requirements
of the Securities Act of 1933, as amended, any and all amendments and
post-effective amendments to this Registration Statement, and including any
Registration Statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act, with exhibits thereto and
other documents in connection therewith, and hereby ratifies and confirms all
that said attorney-in-fact or his substitute or substitutes may do or cause to
be done by virtue hereof.

<TABLE>
<CAPTION>
NAME CAPACITY DATE
---- -------- ----
<C> <S> <C>

/s/ ILIA LEKACH Chief Executive Officer June 4, 1999
- --------------------------------------------------- and Chairman of the
Ilia Lekach Board (Principal
Executive Officer)

/s/ RACHMIL LEKACH President and Director June 4, 1999
- ---------------------------------------------------
Rachmil Lekach

/s/ ALBERT FRIEDMAN Chief Operating Officer, June 4, 1999
- --------------------------------------------------- Interim Chief
Albert Friedman Financial Officer and
Director (Principal
Financial and
Accounting Officer)
</TABLE>

II-4

<PAGE> 1
EXHIBIT 3.1

AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
PERFUMANIA.COM, INC.

The undersigned, acting as incorporator of a corporation under and in
accordance with the Florida Business Corporation Act, (Sec.607.0101-et.seq.),
hereby amends and restates the Articles of Incorporation of perfumania.com,
inc., a corporation organized under the laws of the State of Florida on January
7, 1999, Registration No. P9900001576.

ARTICLE I

The name of the corporation is perfumania.com, inc. (the
"Corporation").

ARTICLE II

The purpose for which the Corporation is organized is to engage any
lawful business for which corporations may be incorporated under the Florida
Business Corporation Act.

ARTICLE III

The aggregate number of shares of all classes of capital stock which
this Corporation shall have authority to issue is Twenty-Five Million
(25,000,000), consisting of (i) Twenty Million (20,000,000) shares of common
stock, par value $0.01 per share (the "Common Stock"), and (ii) Five Million
(5,000,000) shares of preferred stock, par value $0.01 per share (the "Preferred
Stock").

The designations and the preferences, limitations and relative rights
of the Preferred Stock and the Common Stock of the Corporation are as follows:

A. Provisions Relating to the Preferred Stock.

The Preferred Stock may be issued from time to time in one or more classes or
series, the shares of each class or series to have such designations and powers,
preferences and rights, and qualifications, limitations and restrictions thereof
as are stated and expressed herein and in the resolution or resolutions
providing for the issue of such class or series adopted by the Board of
Directors (the "Board") as hereinafter prescribed.

Authority is hereby expressly granted to and vested in the Board to authorize
the issuance of the

<PAGE> 2

Preferred Stock from time to time in one or more classes or series, to determine
and take necessary action to effect the issuance and redemption of any such
Preferred Stock, and, with respect to each class or series of the Preferred
Stock, to fix and state by the resolution or resolutions from time to time
adopted providing for the issuance thereof the following:

(a)

whether or not the class or series is to be without voting rights or is to have
voting rights, and, if so, the terms of such voting rights;

(b)

the number of shares to constitute the class or series and the designations
thereof,

(c)

the preferences and relative, participating, optional or other special rights,
if any, and the qualifications, limitations or restrictions thereof, if any,
with respect to any class or series;

(d)

whether or not the shares of any class or series shall be redeemable and, if
redeemable, the redemption price or prices, and the time or times at which, and
the terms and conditions upon which, such shares shall be redeemable and the
manner of redemption;

(e)

whether or not the shares of a class or series shall be subject to the operation
of' retirement or sinking funds to be applied to the purchase or redemption of
such shares for retirement, and if such retirement or sinking fund or funds be
established, the annual amount thereof and the terms and provisions relative to
the operation thereof,

(f)

the dividend rate, whether dividends are payable in cash, stock of the
Corporation, or other property, the conditions upon which and the times when
such dividends are payable, the preference to or relative rights of priority of
payment of the dividends payable on any other class or classes or series of
stock, whether or not such dividend shall be cumulative or noncumulative, and if
cumulative, the date or dates from which such dividends shall accumulate;

<PAGE> 3

(g)

the preferences, if any, and the amounts thereof which the holders of any class
or series thereof shall be entitled to receive upon the voluntary or involuntary
liquidation dissolution of, or upon any winding up or distribution of the assets
of, the Corporation;

(h)

whether or not the shares of any class or series shall be convertible into, or
exchangeable for, the shares of any other class or classes or of any other
series of the same or any other class or classes of stock of the Corporation and
the conversion price or prices or ratio or ratios or the rate or rates at which
such conversion or exchange may be made, with such adjustments, if any, as shall
be stated and expressed or provided for in such resolution or resolutions; and

(i)

such other special rights and protective provisions with respect to any class or
series as the Board may deem advisable.

The shares of each class or series of the Preferred Stock may vary from
the shares of any other series thereof in any or all of the foregoing respects.
The Board may increase the number of shares of the Preferred Stock designated
for any existing class or series by a resolution adding to such class or series
authorized and unissued shares of the Preferred Stock not designated for any
other class or series. The Board may decrease the number of shares of the
Preferred Stock designated for any existing class or series by a resolution,
subtracting from such series unissued shares of the Preferred Stock designated
for such class or series, and the shares so subtracted shall become authorized,
unissued and undesignated shares of the Preferred Stock.

B. Provisions Relating to the Common Stock.

Except as otherwise required by law or as may be provided by the resolutions of
the Board authorizing the issuance of any class or series of Preferred Stock, as
hereinabove provided, all rights to vote and all voting power shall be vested
exclusively in the holders of the Common Stock. Each holder of shares of the
Common Stock shall be entitled to one vote for each share held.

Subject to the rights of the holders of the Preferred Stock, the holders of the
Common Stock shall be entitled to receive when, as and if declared by the Board,
out of funds legally available therefor, dividends payable in cash, stock or
otherwise.

<PAGE> 4

Upon any liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, and after the holders of the Preferred Stock shall
have been paid in full the amounts to which they shall be entitled (if any) or a
sum sufficient for such payment in full shall have been set aside, the remaining
net assets of the Corporation shall be distributed pro rata to the holders of
the Common Stock in accordance with their respective rights and interests to the
exclusion of the holders of the Preferred Stock.

C. General Provisions.

Except as may be provided by the resolutions of the Board authorizing the
issuance of any class or series of Preferred Stock, as hereinabove provided,
cumulative voting by any shareholder is hereby expressly denied.

No shareholder of the Corporation shall have, by reason of its holding shares of
any class or series of stock of the Corporation, any preemptive or preferential
rights to purchase or subscribe for any other shares of any class or series of
the Corporation now or hereafter to be authorized, and any other equity
securities, or any notes, debentures, warrants, bonds, or other securities
convertible into or carrying options or warrants to purchase shares of any
class, now or hereafter to be authorized, whether or not the issuance of any
such shares, or such notes, debentures, bonds or other securities, would
adversely affect the dividend, voting or other rights of such shareholder.

ARTICLE IV

The Corporation shall exist perpetually unless sooner dissolved
according to law.

ARTICLE V

The name of the Incorporator of the Corporation is Albert Friedman, and
the address of the Incorporator is 11701 N.W. 101st Road, Miami, Florida 33178.
The Corporation's mailing address and the address of the Corporation's principal
office is 11701 NW 101st Road, Miami,

<PAGE> 5

Florida 33178. The address of the Corporation's initial registered office in the
State of Florida is 11701 NW 101st Road, Miami, Florida 33178, and the name of
the Corporation's registered agent at such office is Ilia Lekach.

ARTICLE VI

Number and Term of Directors. The Corporation's Board shall consist of not less
than five (5) nor more than eleven (11) members with exact number to be fixed
from time to time by resolution of the Board except a greater number may be
required to give effect to the rights of holders of the Preferred Stock or any
series thereof to elect Directors. No decrease in the number of directors shall
have the effect of shortening the term of any incumbent director. The Board
shall be divided into three classes, Class I, Class II and Class III. The number
of directors elected to each class shall be as nearly equal in number as
possible. The Board shall apportion any increase or decrease in the number of
directorships among the classes so as to make the number of directors in each
class as nearly equal as possible. Each director in Class I shall be elected to
an initial term to expire at the annual meeting next ensuing, each director in
Class II shall be elected to an initial term to expire one year thereafter, and
each director in Class III shall be elected to an initial term to expire two
years thereafter, in each case and until his or her successor is duly elected
and qualified or until his or her earlier resignation, death or removal from
office. The Initial Directors shall be as follows:

Class I:

Albert Friedman

Class II:

Rachmil Lekach

Class III:

Ilia Lekach

Upon the expiration of the initial terms of office for each class of
directors, respectively, the directors of each class shall be elected for a term
of three (3) years to serve until their successors are duly elected and
qualified or until their earlier resignation, death or removal from office.

<PAGE> 6

Director Vacancies; Removal. Whenever any vacancy on the Board shall occur due
to death, resignation, retirement, disqualification, removal, increase in the
number of directors, or otherwise, only a majority of directors in office,
although less than a quorum of the entire Board, may fill the vacancy or
vacancies for the balance of the unexpired term of terms, at which time a
successor or successors shall be duly elected by the shareholders and qualified.
Shareholders shall not, and shall have no power to, fill any vacancy on the
Board. Shareholders may remove a director from office prior to the expiration of
his or her term, but only for "cause" by an affirmative vote of two-thirds of
the outstanding shares of capital stock entitled to vote for the election of
directors.

Shareholder Nominations of Director Candidates. Only persons who are nominated
in accordance with the following procedures shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the Board
at an annual or special meeting of shareholders may be made by or at the
direction of the Board by any nominating committee or person appointed by the
Board or by any shareholder of the Corporation entitled to vote for the election
of directors at the meeting who complies with the procedures set forth in this
paragraph C; provided, however, that nominations of persons for election to the
Board at a special meeting may be made only if the election of directors is one
of the purposes described in the special meeting notice required by Section
607.0705 of the Florida Business Corporation Act. Nominations of persons for
election at annual meetings, other than nominations made by or at the direction
of the Board, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than One Hundred Twenty (120) days nor more than One
Hundred Eighty (180) days prior to the first anniversary of the date of the
Company's notice of annual meeting provided with respect to the previous year's
annual meeting; provided, however, that if no annual meeting was held in the
previous year or the date of the annual meeting has been changed to be more than
thirty (30) calendar days earlier than the date contemplated by the previous
year's proxy statement or sixty (60) calendar days after such date, such notice
by the shareholder to be timely must be so received (i) not more than sixty (60)
days prior to the annual meeting of stockholders, or (ii) not later than the
close of business on the tenth (10th) day following the date on which notice of
the date of the annual meeting is given to shareholders or made public,
whichever first occurs. Such shareholder's notice to the Secretary shall set
forth (a) as to each person whom the shareholder proposes to nominate for
election or re-election as a director at the annual meeting, (i) the name, age,
business address and residence address of the proposed nominee, (ii) the
principal occupation or employment of the proposed nominee, (iii) the class and
number of shares of capital stock of the Corporation which are beneficially
owned by the proposed nominee, and (iv) any other information relating to the
proposed nominee that is required to be disclosed in solicitations for proxies
for election of

<PAGE> 7

directors pursuant to Rule 14a under the Securities Exchange Act of 1934, as
amended; and (b) as to the shareholder giving the notice of nominees for
election at the annual meeting, (i) the name and record address of the
shareholder, and (ii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the shareholder. The Corporation may
require any proposed nominee for election at an annual or special meeting of
shareholders to furnish such other information as may reasonably be required by
the Corporation to determine the eligibility of such proposed nominee to serve
as a director of the Corporation. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the procedures
set forth herein. The Chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the requirements of this paragraph C, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.

ARTICLE VII

The Corporation shall indemnify and may advance expenses to its
officers and directors to the fullest extent permitted by Florida law in
existence either now or hereafter.

ARTICLE VIII

Call of Special Shareholders Meeting. Except as otherwise required by law, the
Corporation shall not be required to hold a special meeting of shareholders of
the Corporation unless (in addition to any other requirements of law) (i) the
Chairman; (ii) the holders of not less than fifty (50) percent of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date and deliver to the Corporation's secretary one or
more written demands for the meeting describing the purpose or purposes for
which it is to be held; or (iii) the meeting is called by the Board pursuant to
a resolution approved by a majority of the entire Board. Only business within
the purpose or purposes described in the special meeting notice required by
Section 607.0705 of the Florida Business Corporation Act may be conducted at a
special shareholders' meeting.

Advance Notice of Shareholder-Proposed Business for Annual Meeting. At an annual
meeting of the shareholders, only such business shall be conducted as shall have
been properly brought before the meeting. To be properly brought before an
annual meeting, business must be either (a) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of the Board, (b)
otherwise properly brought before the meeting by or at the direction of the
Board,

<PAGE> 8

or (c) otherwise properly brought before the meeting by a shareholder. In
addition to any other applicable requirements, for business to be properly
brought before an annual meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation, not less than One Hundred
Twenty (120) days nor more than One Hundred Eighty (180) days prior to the first
anniversary of the date of the Company's notice of annual meeting provided with
respect to the previous year's annual meeting; provided, however, that if no
annual meeting was held in the previous year or the date of the annual meeting
has been changed to be more than thirty (30) calendar days earlier than the date
contemplated by the previous year's proxy statement or sixty (60) calendar days
later than such date, such notice by the shareholder to be timely must be so
received (i) not more than sixty (60) days prior to the annual meeting, or (ii)
not later than the close of business on the tenth (10th) day following the date
on which notice of the date of the annual meeting is given to shareholders or
made public, whichever first occurs. Such shareholder's notice to the Secretary
shall set forth as to each matter the shareholder proposes to bring before the
annual meeting (1) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of the shareholder proposing
such business, (iii) the class and number of shares of capital stock of the
Corporation which are beneficially owned by the shareholder, and (iv) any
material interest of the shareholder in such business. The Chairman of an annual
meeting shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in accordance with the
requirements of this paragraph B, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.

Amendments. Notwithstanding anything contained in these Amended and Restated
Articles of Incorporation to the contrary, Articles II, VI and VIII shall not be
altered, amended or repealed except by an affirmative vote of at least
two-thirds of the outstanding shares of all capital stock entitled to vote for
the election of directors.

IN WITNESS WHEREOF, the undersigned, being the Incorporator named
above, for the purpose of forming a corporation pursuant to the laws of the
State of Florida, has executed these Amended and Restated Articles of
Incorporation this 1st day of June, 1999.

/s/ Ilia Lekach
- --------------------------------
Ilia Lekach, Registered Agent

<PAGE> 9

ACCEPTANCE OF APPOINTMENT OF REGISTERED AGENT
The undersigned, having been named the Registered Agent of
perfumania.com, inc., a Florida corporation, hereby accepts such designation and
is familiar with, and accepts, the obligations of such position, as provided in
Florida Statutes Section 607.0505.

/s/ Ilia Lekach

Date:

June 1, 1999

<PAGE> 1

EXHIBIT 3.2

PERFUMANIA.COM, INC.

BYLAWS

ARTICLE I

OFFICES

Section 1. Registered Office. The registered office of perfumania.com,
inc., a Florida corporation (the "Corporation"), shall be located at 11701 NW
101st Road, Miami, Florida 33178, unless otherwise designated by the Board of
Directors.

Section 2. Other Offices. The Corporation may have offices at such
other places, either within or without the State of Florida, as the Board of
Directors of the Corporation (the "Board of Directors") may from time to time
determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF SHAREHOLDERS

Section 1. Place. All annual meetings of shareholders shall be held at
such place, within or without the State of Florida, as may be designated by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Florida, and at such time as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.

Section 2. Time of Annual Meeting. Annual meetings of shareholders
shall be held on such date and at such time fixed, from time to time, by the
Board of Directors, provided that there shall be an annual meeting held every
year at which the shareholders shall elect the appropriate class of the Board of
Directors and transact such other business as may properly be brought before the
meeting.

Section 3. Call of Special Meetings. Special meetings of the
shareholders shall be held if called in accordance with the procedures set forth
in the Corporation's Amended and Restated Articles of Incorporation (the
"Articles of Incorporation") for the call of a special meeting of shareholders.

Section 4. Conduct of Meetings. The Chairman of the Board (or in his
absence, the President or such other designee of the Chairman of the Board)
shall preside at the annual and special meetings of shareholders and shall be
given full discretion in establishing the rules and

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procedures to be followed in conducting the meetings, except as otherwise
provided by law, the Articles of Incorporation or in these Bylaws.

Section 5. Notice and Waiver of Notice. Except as otherwise provided by
law, written or printed notice stating the place, day and hour of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) and not more than
sixty (60) days before the day of the meeting, either personally or by
first-class mail, by or at the direction of the President, the Secretary, or the
officer or person calling the meeting, to each shareholder of record entitled to
vote at such meeting. If the notice is mailed at least thirty (30) days before
the date of the meeting, it may be done by a class of United States mail other
than first class. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail addressed to the shareholder at his address
as it appears on the stock transfer books of the Corporation, with postage
thereon prepaid. If a meeting is adjourned to another time and/or place, and if
an announcement of the adjourned time and/or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting unless the Board
of Directors, after adjournment, fixes a new record date for the adjourned
meeting. Whenever any notice is required to be given to any shareholder, a
waiver thereof in writing signed by the person or persons entitled to such
notice, whether signed before, during or after the time of the meeting stated
therein, and delivered to the Corporation for inclusion in the minutes or filing
with the corporate records, shall be equivalent to the giving of such notice.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the shareholders need be specified in any written waiver of
notice. Attendance of a person at a meeting shall constitute a waiver of (a)
lack of or defective notice of such meeting, unless the person objects at the
beginning to the holding of the meeting or the transacting of any business at
the meeting, or (b) lack of defective notice of a particular matter at a meeting
that is not within the purpose or purposes described in the meeting notice,
unless the person objects to considering such matter when it is presented.

Section 6. Business and Nominations for Annual and Special Meetings.
Business transacted at any special meeting shall be confined to the purposes
stated in the notice thereof. At any annual meeting of shareholders, only such
business shall be conducted as shall have been properly brought before the
meeting in accordance with the requirements and procedures set forth in the
Articles of Incorporation. Only such persons who are nominated for election as
Directors of the Corporation in accordance with the requirements and procedures
set forth in the Articles of Incorporation shall be eligible for election as
Directors of the Corporation.

Section 7. Quorum. Shares entitled to vote as a separate voting group
may take action on a matter at a meeting only if a quorum of these shares exists
with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or by law, a majority of the shares entitled to vote on the matter
by each voting group, represented in person or by proxy, shall constitute a
quorum at any meeting of shareholders, but in no event shall a quorum consist of
less than one-third (1/3) of the shares of each voting group entitled to vote.
If less than a majority of

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outstanding shares entitled to vote are represented at a meeting, a majority of
the shares so represented may adjourn the meeting from time to time without
further notice. After a quorum has been established at any shareholders'
meeting, the subsequent withdrawal of shareholders, so as to reduce the number
of shares entitled to vote at the meeting below the number required for a
quorum, shall not affect the validity of any action taken at the meeting or any
adjournment thereof. Once a share is represented for any purpose at a meeting,
it is deemed present for quorum purposes for the remainder of the meeting and
for any adjournment of that meeting unless a new record date is or must be set
for that adjourned meeting. When a quorum is present at any meeting, the vote of
the holders of a majority of the shares having voting power, present in person
or represented by proxy, shall decide any question brought before such meeting
except when the question is one upon which an express provision of the Florida
Business Corporation Act, or of the Articles of Incorporation or these Bylaws
requires a different vote; then such express provision shall govern and control
the decision of such question.

Section 8. Voting Per Share. Except as otherwise provided in the
Articles of Incorporation or by law, each shareholder is entitled to one (1)
vote for each outstanding share held by him on each matter voted at a
shareholders' meeting.

Section 9. Voting of Shares. A shareholder may vote at any meeting of
shareholders of the Corporation, either in person or by proxy. Shares standing
in the name of another corporation, domestic or foreign, may be voted by the
officer, agent or proxy designated by the bylaws of such corporate shareholder
or, in the absence of any applicable bylaw, by such person or persons as the
Board of Directors of the corporate shareholder may designate. In the absence of
any such designation, or, in case of conflicting designation by the corporate
shareholder, the Chairman of the Board, the President, the secretary and the
treasurer of the corporate shareholder, in that order, shall be presumed to be
fully authorized to vote such shares. Shares held by an administrator, executor,
guardian, personal representative, or conservator may be voted by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name or the name of his nominee. Shares held by
or under the control of a receiver, a trustee in bankruptcy proceedings, or an
assignee for the benefit of creditors may be voted by such person without the
transfer thereof into his name. If shares stand of record in the names of two or
more persons, whether fiduciaries, members of a partnership, joint tenants,
tenants in common, tenants by the entirety or otherwise, or if two or more
persons have the same fiduciary relationship respecting the same shares, unless
the Secretary of the Corporation is given notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, then acts with respect to voting shall
have the following effect: (a) if only one votes, in person or by proxy, his act
binds all; (b) if more than one vote, in person or by proxy, the act of the
majority so voting binds all; (c) if more than one vote, in person or by proxy,
but the vote is evenly split on any particular matter, each faction is entitled
to vote the share or shares in question proportionally; or (d) if the instrument
or order so filed

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<PAGE> 4

shows that any such tenancy is held in unequal interest, a majority or a vote
evenly split for purposes hereof shall be a majority or a vote evenly split in
interest. The principles of this paragraph shall apply, insofar as possible, to
execution of proxies, waivers, consents, or objections and for the purpose of
ascertaining the presence of a quorum.

Section 10. Proxies. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact
for such persons may vote the shareholder's shares in person or by proxy. Any
shareholder of the Corporation may appoint a proxy to vote or otherwise act for
him by signing an appointment form, either personally or by his
attorney-in-fact. An executed telegram, cablegram or facsimile appearing to have
been transmitted by such person, or a photographic, facsimile, or equivalent
reproduction of an appointment form, shall be deemed a sufficient appointment
form. An appointment of a proxy is effective when received by the Secretary of
the Corporation or such other officer or agent which is authorized to tabulate
votes, and shall be valid for up to 11 months, unless a longer period is
expressly provided in the appointment form. The death or incapacity of the
shareholder appointing a proxy does not affect the right of the Corporation to
accept the proxy's authority unless notice of the death or incapacity is
received by the secretary or other officer or agent authorized to tabulate votes
before the proxy exercises his authority under the appointment. An appointment
of a proxy is revocable by the shareholder unless the appointment is coupled
with an interest.

Section 11. Shareholder List. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare an alphabetical list of the names
of all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders' list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or his agent or attorney is entitled on written demand to inspect
the shareholders' list (subject to the requirements of law), during regular
business hours and at his expense, during the period it is available for
inspection. The Corporation shall make the shareholders' list available at the
meeting of shareholders, and any shareholder or his agent or attorney is
entitled to inspect the list at any time during the meeting or any adjournment.

Section 12. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purposes, the
Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If no record

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date is fixed for the determination of shareholders entitled to notice of or to
vote at a meeting of shareholders, or shareholders entitled to receive payment
of a dividend, the date on which the notice of the meeting is mailed or the date
on which the resolutions of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this Section 12, such
determination shall apply to any adjournment thereof, except where the Board of
Directors fixes a new record date for the adjourned meeting or as required by
law.

Section 13. Inspectors and Judges. The Board of Directors in advance of
any meeting may, but need not, appoint one or more inspectors of election or
judges of the vote, as the case may be, to act at the meeting or any
adjournment(s) thereof. If any inspector or inspectors, or judge or judges, are
not appointed, the person presiding at the meeting may, but need not, appoint
one or more inspectors or judges. In case any person who may be appointed as an
inspector or judge fails to appear or act, the vacancy may be filled by the
Board of Directors in advance of the meeting, or at the meeting by the person
presiding thereat. The inspectors or judges, if any, shall determine the number
of shares of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots and consents, hear and determine
all challenges and questions arising in connection with the right to vote, count
and tabulate votes, ballots and consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all shareholders.
On request of the person presiding at the meeting, the inspector or inspectors
or judge or judges, if any, shall make a report in writing of any challenge,
question or matter determined by him or them, and execute a certificate of any
fact found by him or them.

Section 14. Voting for Directors. Unless otherwise provided in the
Articles of Incorporation, Directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present.

ARTICLE III

DIRECTORS

Section 1. Number; Election and Term; Removal. The number of Directors
of the Corporation shall be fixed from time to time, within the limits specified
by the Articles of Incorporation, by resolution of the Board of Directors;
provided, however, that no Director's term shall be shortened by reason of a
resolution reducing the number of Directors. The Board shall be divided into
three classes, Class I, Class II and Class III. The number of Directors elected
to each class shall be as nearly equal in number as possible. The Board shall
apportion any increase or decrease in the number of directorships among the
classes so as to make the number of Directors in each class as nearly equal as
possible. Each Director in Class I shall be elected to an

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initial term to expire at the annual meeting next ensuing, each Director in
Class III shall be elected to an initial term to expire one year thereafter, and
each Director in Class III shall be elected to an initial term to expire two
years thereafter, in each case and until his or her successor is duly elected
and qualified or until his or her earlier resignation, death or removal from
office. Upon the expiration of the initial terms of office for each class of
Directors, respectively, the Directors of each class shall be elected for a term
of three (3) years to serve until their successors are duly elected and
qualified or until their earlier resignation, death or removal from office.

The appropriate class of the Board of shall be elected at the annual
meeting of the shareholders, except as provided in Section 2 of this Article,
and each Director elected shall hold office for the term for which he is elected
and until his successor is elected and qualified or until his earlier
resignation, removal from office or death. Directors must be natural persons who
are 18 years of age or older but need not be residents of the State of Florida,
shareholders of the Corporation or citizens of the United States. Shareholders
shall have the right to remove Directors only as provided in the Articles of
Incorporation.

Section 2. Vacancies. A Director may resign at any time by giving
written notice to the Corporation, the Board of Directors or the Chairman of the
Board. Such resignation shall take effect when the notice is delivered unless
the notice specifies a later effective date, in which event the Board of
Directors may fill the pending vacancy before the effective date if they provide
that the successor does not take office until the effective date. Any vacancy
occurring in the Board of Directors and any directorship to be filled by reason
of an increase in the size of the Board of Directors shall be filled only by the
affirmative vote of a majority of the current Directors though less than a
quorum of the Board of Directors. Shareholders shall not, and shall have no
power to, fill any vacancy on the Board of Directors. A Director elected to fill
a vacancy shall be elected for the unexpired term of his predecessor in office,
or until the next election of one or more Directors by shareholders if the
vacancy is caused by an increase in the number of Directors.

Section 3. Powers. Except as provided in the Articles of Incorporation
and by law, all corporate powers shall be exercised by or under the authority
of, and the business and affairs of the Corporation shall be managed under the
direction of, its Board of Directors.

Section 4. Place of Meetings. Meetings of the Board of Directors,
regular or special, may be held either within or outside the State of Florida.

Section 5. Annual Meeting. The first meeting of each newly elected
Board of Directors shall be held, without call or notice, immediately following
each annual meeting of shareholders.

Section 6. Regular Meetings. Regular meetings of the Board of Directors
may also be held without notice at such time and at such place as shall from
time to time be determined by the Board of Directors.

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Section 7. Special Meetings and Notice. Special meetings of the Board
of Directors may be called by the Chairman of the Board or by the President and
shall be called by the Secretary on the written request of any two Directors.
Written notice of special meetings of the Board of Directors shall be given to
each Director at least forty-eight (48) hours before the meeting. Except as
required by statute, neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting. Notices to Directors shall be
in writing and delivered personally or mailed to the Directors at their
addresses appearing on the books of the Corporation. Notice by mail shall be
deemed to be given at the time when the same shall be received. Notice to
Directors may also be given by telegram, facsimile or other form of electronic
communication. Notice of a meeting of the Board of Directors need not be given
to any Director who signs a written waiver of notice before, during or after the
meeting. Attendance of a Director at a meeting shall constitute a waiver of
notice of such meeting and a waiver of any and all objections to the place of
the meeting, the time of the meeting and the manner in which it has been called
or convened, except when a Director states, at the beginning of the meeting or
promptly upon arrival at the meeting, any objection to the transaction of
business because the meeting is not lawfully called or convened.

Section 8. Quorum; Required Vote; Presumption of Assent. A majority of
the number of Directors fixed by, or in the manner provided in, the Articles of
Incorporation and these Bylaws shall constitute a quorum for the transaction of
business; provided, however, that whenever, for any reason, a vacancy occurs in
the Board of Directors, a quorum shall consist of a majority of the remaining
Directors until the vacancy has been filled except that in no event may a quorum
consist of fewer than one-third of the number of Directors so fixed. The act of
a majority of the Directors present at a meeting at which a quorum is present
when the vote is taken shall be the act of the Board of Directors. A Director of
the Corporation who is present at a meeting of the Board of Directors or a
committee of the Board of Directors when corporate action is taken shall be
presumed to have assented to the action taken, unless he objects at the
beginning of the meeting, or promptly upon his arrival, to holding the meeting
or transacting specific business at the meeting, or he votes against or abstains
from the action taken.

Section 9. Action Without Meeting. Any action required or permitted to
be taken at a meeting of the Board of Directors or a committee thereof may be
taken without a meeting if a consent in writing, setting forth the action taken,
is signed by all of the members of the Board of Directors or the committee, as
the case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting. Action taken under this section is effective when
the last Director signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section 9 shall have the effect of a
meeting vote and may be described as such in any document.

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Section 10. Conference Telephone or Similar Communications Equipment
Meetings. Members of the Board of Directors may participate in a meeting of the
Board by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation in such a meeting shall constitute presence in
person at the meeting, except where a person participates in the meeting for the
express purpose of objecting to the transaction of any business on the ground
the meeting is not lawfully called or convened.

Section 11. Committees. The Board of Directors, by resolution adopted
by a majority of the full Board of Directors, may designate from among its
members one or more other committees, each of which, to the extent provided in
such resolution, shall have and may exercise all of the authority of the Board
of Directors in the business and affairs of the Corporation except where the
action of the full Board of Directors is required by statute. Each committee
must have two or more members who serve at the pleasure of the Board of
Directors. The Board of Directors, by resolution adopted in accordance with this
Article III, may designate one or more Directors as alternate members of any
committee, who may act in the place and stead of any absent member or members at
any meeting of such committee. Vacancies in the membership of a committee shall
be filled by the Board of Directors at a regular or special meeting of the Board
of Directors. Each committee shall keep minutes and other appropriate records of
its proceedings and report the same to the Board of Directors when required. The
designation of any such committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.

Section 12. Compensation of Directors. The Directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as Director. No such payment shall preclude any Director from
serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings. Directors may receive such other
compensation as may be approved by the Board of Directors.

Section 13. Chairman of the Board. The Board of Directors may, in its
discretion, choose a Chairman of the Board who shall preside at meetings of the
shareholders and of the Directors. The Chairman of the Board shall have such
other powers and shall perform such other duties as shall be designated by the
Board of Directors. The Chairman of the Board shall be a member of the Board of
Directors but no other officers of the Corporation need be a Director. The
Chairman of the Board shall serve until his successor is chosen and qualified,
but he may be removed at any time by the affirmative vote of a majority of the
Board of Directors.

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<PAGE> 9

ARTICLE IV

OFFICERS

Section 1. Positions. The officers of the Corporation shall consist of
a Chairman of the Board, elected by the Board of Directors by resolution, a
President, a Chief Executive Officer, a Chief Operating Officer, a Chief
Technology Officer, a Secretary and a Treasurer. Any two or more offices may be
held by the same person.

Section 2. Election of Specified Officers by Board. The Board of
Directors at its first meeting after each annual meeting of shareholders shall
elect a President, a Chief Executive Officer, a Chief Operating Officer, a Chief
Technology Officer, a Secretary and a Treasurer.

Section 3. Election or Appointment of Other Officers. Such other
officers and assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors, or, unless otherwise specified
herein, appointed by the President of the Corporation. The Board of Directors
shall be advised of appointments by the President at or before the next
scheduled Board of Directors meeting.

Section 4. Salaries. The salaries of all officers of the Corporation to
be elected by the Board of Directors pursuant to Article IV, Section 2 hereof
shall be fixed from time to time by the Board of Directors or pursuant to its
discretion. The salaries of all other elected or appointed officers of the
Corporation shall be fixed from time to time by the President of the Corporation
or pursuant to his direction.

Section 5. Term; Resignation. The officers of the Corporation shall
hold office until their successors are chosen and qualified. Any officer or
agent elected or appointed by the Board of Directors or the President of the
Corporation may be removed, with or without cause, by the Board of Directors.
Any officers or agents appointed by the President of the Corporation pursuant to
Section 3 of this Article IV may also be removed from such officer positions by
the President, with or without cause. Any vacancy occurring in any office of the
Corporation by death, resignation, removal or otherwise shall be filled by the
Board of Directors, or, in the case of an officer appointed by the President of
the Corporation, by the President or the Board of Directors. Any officer of the
Corporation may resign from his respective office or position by delivering
notice to the Corporation. Such resignation is effective when delivered unless
the notice specifies a later effective date. If a resignation is made effective
at a later date and the Corporation accepts the future effective date, the Board
of Directors may fill the pending vacancy before the effective date if the Board
provides that the successor does not take office until the effective date.

Section 6. Chairman. The Chairman of the Board of Directors shall be
the chief executive officer of the Company, shall have general supervision of
the affairs of the Company and general control of all of its business and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. The Chairman of the Board, or in his or her absence, the

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president, shall preside when present at all meetings of the shareholders and
the Board. The Chairman of the Board may execute bonds, mortgages and other
contracts requiring a seal under the seal of the Company, except where required
or permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board to some
other officer or agent of the Company. The Chairman of the Board may delegate
all or any of his or her powers or duties to the president, if and to the extent
deemed by the Chairman of the Board to be desirable or appropriate.

Section 7. President. The President shall be the ranking executive
officer of the Company and shall, subject to the supervision of the Chairman of
the Board and the Board, have general management and control of the day-to-day
business operations of the Company. The President shall put into operation the
business policies of the Company as determined by the Chairman of the Board and
the Board and as communicated to him or her by such officer and bodies. The
President shall make recommendations to the Chairman of the Board on all matters
that would normally be reserved for the final executive responsibility of the
Chairman of the Board. In the absence of the Chairman of the board or in the
event of his or her inability or refusal to act, the President shall perform the
duties and exercise the powers of the Chairman of the Board.

Section 8. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the shareholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the shareholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision he shall be. He shall keep in
safe custody the seal of the Corporation and, when authorized by the Board of
Directors, affix the same to any instrument requiring it.

Section 9. Treasurer. The Treasurer shall have the custody of corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors at its regular meetings or when the
Board of Directors so requires an account of all his transactions as treasurer
and of the financial condition of the Corporation unless otherwise specified by
the Board of Directors, the Treasurer shall be the Corporation's Chief Financial
Officer.

Section 10. Other Officers; Employees and Agents. Each and every other
officer, employee and agent of the Corporation shall possess, and may exercise,
such power and authority, and shall perform such duties, as may from time to
time be assigned to him by the

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Board of Directors, the officer so appointing him and such officer or officers
who may from time to time be designated by the Board of Directors to exercise
such supervisory authority.

ARTICLE V

CERTIFICATES FOR SHARES

Section 1. Issue of Certificates. The Corporation shall deliver
certificates representing all shares to which shareholders are entitled; and
such certificates shall be signed by the Chairman of the Board or President, and
by the Secretary or an Assistant Secretary of the Corporation, and may be sealed
with the seal of the Corporation or a facsimile thereof.

Section 2. Legends for Preferences and Restrictions on Transfer. The
designations, relative rights, preferences and limitations applicable to each
class of shares and the variations in rights, preferences and limitations
determined for each series within a class (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the Corporation will furnish the
shareholder a full statement of this information on request and without charge.
Every certificate representing shares that are restricted as to the sale,
disposition, or transfer of such shares shall also indicate that such shares are
restricted as to transfer and there shall be set forth or fairly summarized upon
the certificate, or the certificate shall indicate that the Corporation will
furnish to any shareholder upon request and without charge, a full statement of
such restrictions. If the Corporation issues any shares that are not registered
under the Securities Act of 1933, as amended, or registered or qualified under
applicable state securities laws, the transfer of any such shares shall be
restricted substantially in accordance with the following legend:

"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE SECURITIES ACT
OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AT HOLDER'S EXPENSE, AN OPINION
(SATISFACTORY TO THE CORPORATION) OF COUNSEL (SATISFACTORY TO THE CORPORATION)
THAT REGISTRATION IS NOT REQUIRED."

Section 3. Facsimile Signatures. The signatures of the Chairman of the
Board, the Chief Executive Officer, the President or Chief Operating Officer and
the Secretary or Assistant Secretary upon a certificate may be facsimiles, if
the certificate is manually signed by a transfer agent, or registered by a
registrar, other than the Corporation itself or an employee of the Corporation.
In case any officer who has signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such officer before such
certificate is issued, it may

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<PAGE> 12

be issued by the Corporation with the same effect as if he were such officer at
the date of the issuance.

Section 4. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate alleged
to have been lost or destroyed.

Section 5. Transfer of Shares. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

Section 6. Registered Shareholders. The Corporation shall be entitled
to recognize the exclusive rights of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of the State
of Florida.

Section 7. Redemption of Control Shares. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the Corporation files an acquiring person statement with the
Corporation, the control shares may be redeemed by the Corporation, at the
discretion of the Board of Directors, only if such shares are not accorded full
voting rights by the shareholders as provided by law.

ARTICLE VI

INDEMNIFICATION

Section 1. Definitions. For purposes of this Article VI:

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<PAGE> 13

(a) "Corporation" includes any domestic or foreign predecessor
entity of the Company in a merger, conversion or other transaction in which some
or all of the liabilities of the predecessor are transferred to the Company by
operation of law and in any other transaction in which the Company assumes the
liabilities of the predecessor but does not specifically exclude liabilities
that are the subject matter of this Article VI;

(b) "Director" means any person who is or was a director of the
Company and any person who, while a Director of the Company, is or was serving
at the request of the Company as a Director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, employee benefit plan, other enterprise or other
entity;

(d) "Official capacity" means:

(i) when used with respect to a Director, the office of
Director in the Company, but does not include service for any other foreign or
domestic corporation or any employee benefit plan, other enterprise or other
entity;

(ii) when used with respect to a person other than a Director,
the elective or appointive office in the Company held by the officer or the
employment or agency relationship undertaken by the employee or agent on behalf
of the Company, but does not include service for any other foreign or domestic
corporation, employee benefit plan, other enterprise or other entity; and

(e) "Proceeding" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, arbitrative
or investigative, any appeal in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or proceeding.

Section 2. Mandatory Indemnification.The Company shall indemnify a
person who was, is or is threatened to be made a named defendant or respondent
in a proceeding because the person is or was a Director only if it is determined
in accordance with Section 6 hereof that the person:

(a) conducted himself or herself in good faith;

(b) reasonably believed:

(i) in the case of conduct in his or her official capacity as
a Director of the Company, that his or her conduct was in the Company's best
interests; and

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<PAGE> 14

(ii) in all other cases, that his or her conduct was at least
not opposed to the Company's best interests; and

Section 3. Prohibited Indemnification. Except to the extent permitted
by Section 5 hereof, a Director may not be indemnified under Section 2 hereof in
respect of a proceeding:

(a) in which the person is found liable on the basis that personal
benefit was improperly received by him or her, whether or not the benefit
resulted from an action taken in the person's official capacity; or

(b) in which the person is found liable to the Company.

Section 4. Termination of Proceedings. The termination of a proceeding
by judgment, order, settlement or conviction, or on a plea of nolo contendere or
its equivalent is not of itself determinative that the person did not meet the
requirements set forth in Section 2 hereof. A person shall be deemed to have
been found liable in respect of any claim, issue or matter only after the person
shall have been so adjudged by a court of competent jurisdiction after
exhaustion of all appeals therefrom.

Section 5. Judgments, Expenses. A person may be indemnified under
Section 2 hereof against judgments, penalties (including excise and similar
taxes), fines, settlements and reasonable expenses actually incurred by the
person in connection with the proceeding; but if the person is found liable to
the Company or is found liable on the basis that personal benefit was improperly
received by the person, the indemnification (a) is limited to reasonable
expenses actually incurred by the person in connection with the proceeding and
(b) shall not be made in respect of any proceeding in which the person shall
have been found liable for willful or intentional misconduct in the performance
of his or her duty to the Company.

Section 6. Determination of Indemnification. A determination of
indemnification under Section 2 hereof must be made:

(a) by a majority vote of a quorum consisting of Directors who at
the time of the vote are not named defendants or respondents in the proceeding;

(b) if such a quorum cannot be obtained, by a majority vote of a
committee of the Board, designated to act in the matter by a majority vote of
all Directors, consisting solely of two or more Directors who at the time of the
vote are not named defendants or respondents in the proceeding;

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(c) by special legal counsel selected by the Board or a committee
thereof by vote as set forth in subsection (a) or (b) of this Section 6, or if
such a quorum cannot be obtained and such a committee cannot be established, by
a majority vote of all Directors; or

(d) by the shareholders of the Company in a vote that excludes the
shares held by Directors who are named defendants or respondents in the
proceeding.

Section 7. Determination of Reasonableness of Expenses. Determination
as to reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if the
determination that indemnification is permissible is made by special legal
counsel, determination as to reasonableness of expenses must be made in the
manner specified by subsection (c) of Section 6 hereof for the selection of
special legal counsel.

Section 8. Indemnification Against Reasonable Expenses. The Company
shall indemnify a Director against reasonable expenses incurred by the Director
in connection with a proceeding in which the Director is a named defendant or
respondent because the Director is or was a Director if the Director has been
wholly successful, on the merits or otherwise, in the defense of the proceeding.

Section 9. Payments in Advance of Disposition. Reasonable expenses
incurred by a Director who was, is or is threatened to be made a named defendant
or respondent in a proceeding shall be paid or reimbursed by the Company, in
advance of the final disposition of the proceeding and without any of the
determinations specified in Section 6 and Section 7 hereof, after the Company
receives a written affirmation by the Director of the Director's good faith
belief that the Director has met the standard of conduct necessary for
indemnification under this Article VI and a written undertaking by or on behalf
of the Director to repay the amount paid or reimbursed if it is ultimately
determined that the Director has not met those requirements.

Section 10. Written Undertaking. The written undertaking required by
Section 9 hereof must be an unlimited general obligation of the Director but
need not be secured. It may be accepted without reference to financial ability
to make repayment.

Section 11. Consistency with Articles of Incorporation. Any provision
for the Company to indemnify or to advance expenses to a Director who was, is or
is threatened to be made a named defendant or respondent in a proceeding,
whether contained in the articles of incorporation, these Bylaws, a resolution
of shareholders or Directors, an agreement or otherwise, except in accordance
with Section 16 hereof, is valid only to the extent it is consistent with this
Article VI as limited by the Articles of Incorporation, if such a limitation
exists.

Section 12. Other Expenses. Notwithstanding any other provision of this
Article VI, the Company may pay or reimburse expenses incurred by a Director in
connection with his or her

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<PAGE> 16

appearance as a witness or other participation in a proceeding at a time when he
or she is not a named defendant or respondent in the proceeding.

Section 13. Officers, Employees and Agents. An officer, employee or
agent of the Company shall be indemnified as, and to the same extent, provided
by Section 8 hereof for a Director and is entitled to seek indemnification under
such section to the same extent as a Director. The Company shall advance
expenses to an officer and may advance expenses to an employee or agent of the
Company to the same extent that it shall advance expenses to Directors under
this Article VI.

Section 14. Other Capacities. A corporation may indemnify and advance
expenses to persons who are not or were not officers, employees or agents of the
Company, but who are or were serving at the request of the Company as a
Director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar Dictionary of another foreign or domestic corporation, employee benefit
plan, other enterprise or other entity to the same extent that it shall
indemnify and advance expenses to Directors under this Article VI.

Section 15. Further Indemnification. The Company may indemnify and
advance expenses to an officer, employee agent or person identified in Section
14 hereof and who is not a Director to such further extent, consistent with
applicable law, as may be provided by the articles of incorporation, these
Bylaws, general or specific action of the Board, or contract or as permitted or
required by common law.

Section 16. Insurance. The Company may purchase and maintain insurance
or another arrangement on behalf of any person who is or was a Director,
officer, employee or agent of the Company or who is or was serving at the
request of the Company as a Director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar Dictionary of another foreign or domestic
corporation, employee benefit plan, other enterprise or other entity against any
liability asserted against him or her and incurred by him or her in such a
capacity or arising out of his or her status as such a person, whether or not
the Company would have the power to indemnify him or her against that liability
under this Article VI. If the insurance or other arrangement is with a person or
entity that is not regularly engaged in the business of providing insurance
coverage, the insurance or arrangement may provide for payment of a liability
with respect to which the Company would not have the power to indemnify the
person only if including coverage for the additional liability has been approved
by the shareholders of the Company. Without limiting the power of the Company to
procure or maintain any kind of insurance or other arrangement, the Company may,
for the benefit of persons indemnified by the Company, (a) create a trust fund;
(b) establish any form of self insurance; (c) secure its indemnity obligation by
grant of a security interest or other lien on the assets of the Company; or (d)
establish a letter of credit, guaranty or surety arrangement. The insurance or
other arrangement may be procured, maintained or established within the Company
or with any insurer or other person deemed appropriate by the Board regardless
of whether all or part of the stock or other securities of the insurer or other

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<PAGE> 17

person are owned in whole or part by the Company. In the absence of fraud, the
judgment of the Board as to the terms and conditions of the insurance or other
arrangement and the identity of the insurer or other person participating in an
arrangement shall be conclusive and the insurance or arrangement shall not be
voidable and shall not subject the Directors approving the insurance or
arrangement to liability, on any ground, regardless of whether Directors
participating in the approval are beneficiaries of the insurance or arrangement.

Section 17. Employee Benefit Plans. For purposes of this Article VI,
the Company is deemed to have requested a Director to serve as a trustee,
employee, agent or similar functionary of an employee benefit plan whenever the
performance by the Director of his or her duties to the Company also imposes
duties on or otherwise involves services by him or her to the plan or
participants or beneficiaries of the plan. Excise taxes assessed on a Director
with respect to an employee benefit plan pursuant to applicable law are deemed
fines. Action taken or omitted by a Director with respect to an employee benefit
plan in the performance of his or her duties for a purpose reasonably believed
by him or her to be in the interest of the participants and beneficiaries of the
plan is deemed to be for a purpose that is not opposed to the best interests of
the Company.

Section 18. Change in Governing Law. In the event of any amendment or
addition to Section 607.0850 of the Florida Business Corporation Act or the
addition of any other section to such law that shall limit indemnification
rights thereunder, the Company shall, to the extent permitted by the Florida
Business Corporation Act, indemnify to the fullest extent authorized or
permitted hereunder, any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (including an action by
or in the right of the Company), by reason of the fact that he or she is or was
a Director, officer, employee or agent of the Company or is or was serving at
the request of the Company as a Director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, against all judgments, penalties
(including excise and similar taxes), fines, settlements and reasonable expenses
(including attorneys' fees and court costs) actually and reasonably incurred by
him or her in connection with such action, suit or proceeding.

ARTICLE VII

INTERESTED DIRECTORS, OFFICERS AND SHAREHOLDERS

Section 1.

Validity, Disclosure, Approval. An otherwise valid contract or transaction
between the Company and one or more of its Directors or officers, or between the
Company and any other

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<PAGE> 18

domestic or foreign corporation, or other entity in which one or more of its
Directors or officers are Directors or officers or have a financial interest,
shall be valid notwithstanding whether the Director or officer is present at or
participates in the meeting of the Board or committee thereof that authorizes
the contract or transaction, or solely because his or her or their votes are
counted for such purpose, if any one of the following is satisfied:

(a)

the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the Board or the
committee, and the Board or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
Directors, even though the disinterested Directors be less than a quorum; or

(b)

the material facts as to his or her relationship or interest and as to the
contract or transaction are disclosed or are known to the shareholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the shareholders; or

(c) the contract or transaction is fair as to the Company as of
the time it is authorized, approved or ratified by the Board, a committee
thereof or the shareholders.

Section 2. Quorum. Common or interested Directors may be counted in
determining the presence of a quorum at a meeting of the Board or by a committee
that authorizes the contract or transaction.

Section 3. Nonexclusive. This Article VII shall not be construed to
invalidate any contract or transaction that would be valid in the absence of
this Article VII.

ARTICLE VIII

GENERAL PROVISIONS

Section 1. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
cash, property, or its own shares pursuant to law and subject to the provisions
of the Articles of Incorporation.

Section 2. Reserves. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.

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Section 3. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.

Section 4. Amendments of Bylaws. Unless otherwise provided by law,
these Bylaws may be altered, amended or repealed in whole or in part, or new
Bylaws may be adopted, by action of the Board of Directors.

Section 5. Fiscal Year. The fiscal year of the Corporation shall end on
the last Saturday in the month of January, unless otherwise fixed by resolution
of the Board of Directors.

Section 6. Seal. The corporate seal shall have inscribed thereon the
name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.

Section 7. Books and Records. The Company shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders, Board and committees and shall keep at its registered
office or principal place of business, or at the office of its transfer agent or
registrar, a record of its shareholders, giving the names and addresses of all
shareholders and the number and class of the shares held by each.

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<PAGE> 1
EXHIBIT 10.1

PERFUMANIA.COM, INC.
1999 INCENTIVE STOCK OPTION PLAN

ARTICLE I
ESTABLISHMENT OF THE PLAN

perfumania.com, inc. (the "Corporation") hereby establishes this 1999
Incentive Stock Option Plan (the "Plan") upon the terms and conditions
hereinafter stated.

ARTICLE II
PURPOSE OF THE PLAN

2.01 This Plan is intended to secure for the Corporation and its
stockholders the benefits arising from ownership of the Corporation's common
stock by those responsible for its future growth. The Plan is designed to help
attract and retain superior Officers, Directors, Employees, and Advisors, to
provide such personnel with an additional incentive to contribute to the success
of the Corporation, and to promote a closer identity of interests between the
Corporation's Shareholders and those responsible for its operations and
management. All Incentive Stock Options issued under the Plan are intended to
comply with the requirements of Section 422 of the Code, and the regulations
thereunder, and all provisions under the Plan relating to Incentive Stock
Options shall be read, interpreted and applied with that purpose in mind.
Capitalized terms are defined in Article III, below.

ARTICLE III
DEFINITIONS

3.01 "Acceleration Price" is the excess over the Option Price of
the highest of the following on the date of a Change in Control: (a) the highest
reported sales price of the Common Stock within the sixty days preceding the
date of the Change in Control, as reported on any securities exchange or
quotation system upon which the Common Stock is traded, (b) the highest tender
offer price paid for the Common Stock, and (c) any cash merger or similar price.
For Incentive Stock Options and Stock Appreciation Rights granted with respect
to Incentive Stock Options, the Acceleration Price is limited to the spread
between the Fair Market Value on the date of the purchase of such awards by the
Company and the Option Price.

3.02 "Acquiring Person" shall mean any Person who is or becomes a
"beneficial owner" (as defined in Rule 13d-3 of the Exchange Act) of securities
of the Company representing twenty-five percent (25%) or more of the combined
voting power of the Company's then outstanding voting securities, unless such
Person has filed Form 13G and all required amendments thereto with respect to
its holdings and continues to hold such securities for

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investment in a manner qualifying such Person to utilize Form 13G for reporting
of ownership.

3.03 "Advisor" means any consultant, agent, or independent
contractor who is neither a Director nor an Employee.

3.04 "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date hereof.

3.05 "Award" means an Option or associated Stock Appreciation Right
granted pursuant to the Article VIII or Article IX of this Plan, respectively.

3.06 "Board" means the Board of Directors of the Corporation.

3.07 "Cause" shall mean termination because of such person's
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure to perform stated duties, willful violation
of any law, rule, or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order.

3.08 "Change in Control" shall mean a change in control of the
Corporation of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act.

In addition, without limitation, a Change in Control shall be
deemed to have occurred if (i) any Person is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing twenty-five percent (25%) or more of
the combined voting power of the Corporation's then outstanding securities, (ii)
during any period of two consecutive years individuals who at the beginning of
such period constitute the Board of the Corporation cease for any reason to
constitute at least a majority thereof or to be Continuing Directors, unless the
election, or the nomination for election by the Corporation's stockholders, of
each director who was not a director at the date of grant has been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period, (iii) the stockholders
of the Corporation approve a merger or consolidation of the Corporation with any
other entity, other than a merger or consolidation that would result in the
voting securities of the Corporation outstanding therefore continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the Corporation outstanding immediately after such
merger or consolidation; or (iv) the stockholders of the Corporation approve a
plan of complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the Corporation's
assets. If any of the events enumerated in clauses (i) through (iv) occur, the
Board shall determine the effective date of the Change in Control resulting
therefrom for purposes of the Plan. Notwithstanding anything herein to the
contrary, the Corporation will not

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be deemed to have experienced a Change in Control following the initial public
offering of its stock.

3.09 "Code" means the Internal Revenue Code of 1986, as amended.

3.10 "Committee" means a committee of two or more directors
appointed by the Board pursuant to Article IV hereof.

3.11 "Common Stock" means shares of stock, $ 0.01 par value per
share, of the Corporation.

3.12 "Continuing Directors" shall mean any member of the Board who
was a member of the Board prior to the date hereof, and any successor of a
Continuing Director while such successor is a member of the Board who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or of any
such Affiliate or Associate and is recommended or elected to succeed the
Continuing Director by a majority of the Continuing Directors.

3.13 "Disability" means any physical or mental impairment which
qualifies an individual for disability benefits under the applicable long-term
disability plan maintained by the Corporation or, if no such plan applies, which
would qualify such individual for disability benefits under the long-term
disability plan maintained by the Corporation, if such individual were covered
by that plan.

3.14 "Effective Date" means the day upon which the Board approves
this Plan.

3.15 "Employee" means any person who is employed by the Corporation
or is an Officer of the Corporation, but not including directors who are not
also Officers of or otherwise employed by the Corporation.

3.16 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

3.17 "Fair Market Value" means, with respect to a share of Common
Stock, the average of the high and low quoted sales price on the date in
question (or, if there is no reported sale on such date, on the last preceding
date on which any reported sale occurred) of a Share on the Composite Tape for
the New York Stock Exchange-Listed Stocks, or, if on such date the Shares are
not quoted on the Composite Tape, on the New York Stock Exchange, or, if the
Shares are not listed or admitted to trading on such Exchange, on the principal
United States securities exchange registered under the Securities Exchange Act
of 1934 on which the Shares are listed or admitted to trading, or, if the Shares
are not listed or admitted to trading on any such exchange, the mean between the
closing high bid and low asked quotations with respect to a Share on such date
on the NASDAQ System, or any similar system then in use, or, if no such
quotations are available, the fair market value on such date of a Share as the
Board shall determine.

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3.18 "Incentive Stock Option" means any Option granted under this
Plan which the Board intends (at the time it is granted) to be an incentive
stock option within the meaning of Section 422 of the Code or any successor
thereto.

3.19 "Non-Employee Director" means a member of the Board of the
Corporation who is not an Officer or Employee of the Corporation.

3.20 "Non-Qualified Option" means any Option granted under this
Plan which is not an Incentive Stock Option.

3.21 "Offering" means the initial public offering of Common Stock
by the Corporation.

3.22 "Officer" means an Employee whose position in the Corporation
is that of a corporate officer, as determined by the Board.

3.23 "Option" means a right granted under this Plan to purchase
Common Stock.

3.24 "Option Price" means the purchase price of each share of
Common Stock subject to an Option.

3.25 "Optionee" means a current or former Employee, Advisor, or
Non-Employee Director to whom an Option is granted under the Plan.

3.26 "Person" shall mean any individual, corporation, partnership,
group, association or other "person", as such term is used in Section 13(d) and
14(d) of the Exchange Act.

3.27 "Retirement" means a termination of employment which
constitutes a "retirement" under any applicable qualified pension benefit plan
maintained by the Corporation, or, if no such plan is applicable, which would
constitute "retirement" under the Corporation's pension benefit plan, if such
individual were a participant in that plan, or under any applicable policy of
the Corporation.

3.28 "Share" means shares of Common Stock.

ARTICLE IV
ADMINISTRATION OF THE PLAN

4.01 DUTIES OF THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee, as may be appointed from time to time by the Board
or, if the Committee has not been appointed, by the full board. The Committee
may adopt, amend and rescind such rules, regulations and procedures as it deems
advisable, including, without limitation, rules, regulations

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and procedures which (i) deal with satisfaction of an Optionee's tax withholding
obligation pursuant to Section 13.02 hereof, (ii) include arrangements to
facilitate the Optionee's ability to borrow funds for payment of the exercise or
purchase price of an Award, if applicable, from securities brokers and dealers,
and (iii) include arrangements which provide for the payment of some or all of
such exercise or purchase price by delivery of previously-owned shares of Common
Stock or other property and/or by withholding some of the shares of Common Stock
which are being acquired. Any decision or action taken or omitted to be taken by
the Committee, arising out of or in connection with the construction,
administration, interpretation and effect of the Plan and of its rules and
regulations, shall, to the extent permitted by law, be within its absolute
discretion (except as otherwise specifically provided herein) and shall be
conclusive and binding upon all Grantees and any person claiming under or
through any Grantee.

4.02 AUTHORITY TO GRANT AWARDS. Without limiting the generality of
Section 4.01, the Committee shall have plenary authority, subject to the
provisions of the Plan, to grant Incentive Stock Options, Nonstatutory Stock
Options and Stock Appreciation Rights and to determine to whom Options and Stock
Appreciation Rights shall be granted and the number of shares subject thereto,
the Term of each Option, and the terms of such awards, and the waiver or
acceleration thereof, including to accelerate the exercisability or vesting of
all or any portion of any Option or to extend the period during which an Option
is exercisable, provided that no Incentive Stock Option shall be granted which
is exercisable after the expiration of ten (10) years from the date it is
granted.

4.03 APPOINTMENT AND OPERATION OF THE COMMITTEE. The members of the
Committee shall consist of not less than two (2) members and shall be appointed
by, and will serve at the pleasure of, the Board. No member of the Committee
shall be employed by the Company or any of its Subsidiaries and each shall
qualify in all respects as a "disinterested person" as defined in Rule 16b-3
under the Exchange Act. The Committee shall act by vote or written consent of a
majority of its members. Subject to the express provisions and limitations of
the Plan, the Committee may adopt such rules, regulations and procedures as it
deems appropriate for the conduct of its affairs. It may appoint one of its
members to be chairman and any person, whether or not a member, to be its
secretary or agent. If no Committee is appointed, then the full Board shall be
the Committee for purposes of Plan administration.

4.04 REVOCATION FOR MISCONDUCT. The Board or the Committee may by
resolution immediately revoke, rescind and terminate any Option, or portion
thereof, to the extent not yet vested, previously granted or awarded under this
Plan to any Officer, Director, Employee or Advisor who is discharged from the
employ of the Corporation for Cause.

4.05 LIMITATION ON LIABILITY. Neither the members of the Board nor
any member of the Committee shall be liable for any action or determination made
in good faith with respect to the Plan, any rule, regulation or procedure
adopted by it pursuant thereto or any Awards granted under it in accordance with
the provisions of the Articles of Incorporation of the Corporation. If a member
of the Board or the Committee is a party or is threatened to be made a party to
any

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<PAGE> 6

threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of anything done or not
done by him in such capacity under or with respect to the Plan, the Corporation
shall, subject to the requirements of the Corporation's Articles of
Incorporation and/or Bylaws and of applicable laws and regulations, indemnify
such member against all liabilities and expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in the best interests of the
Corporation and/or its Subsidiary Companies and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.

4.06 COMPLIANCE WITH LAW AND REGULATIONS. All Awards granted
hereunder shall be subject to all applicable federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required. The Corporation shall not be required to issue or deliver any
certificates for shares of Common Stock prior to the completion of any
registration or qualification of or obtaining of consents or approvals with
respect to such shares under any federal or state law or any rule or regulation
of any government body, which the Corporation shall, in its sole discretion,
determine to be necessary or advisable. Moreover, no Option may be exercised if
such exercise would be contrary to applicable laws and regulations.

4.07 RESTRICTIONS ON TRANSFER. The Corporation may place a legend
upon any certificate representing shares acquired pursuant to an Award granted
hereunder noting that the transfer of such shares may be restricted.

ARTICLE V
ELIGIBILITY

Incentive Stock Options and Stock Appreciation Rights may be granted to
such Employees of the Corporation as may be designated from time to time by the
Board or the Committee. Non-Employee Directors and Advisors to the Corporation
shall be eligible to receive only Non-Qualified Options pursuant to Section 8.02
of the Plan or Stock Appreciation Rights under Section 9.01 of the Plan.

ARTICLE VI
COMMON STOCK COVERED BY THE PLAN

6.01 OPTION SHARES. The aggregate number of shares of Common Stock
which may be issued pursuant to this Plan, subject to adjustment as provided in
Article X, shall be one million (1,000,000) shares of Common Stock. None of such
shares shall be the subject of more than one Award at any time, but if an Option
as to any shares is surrendered before exercise, or expires or terminates for
any reason without having been exercised in full, or for any other reason ceases
to be exercisable, the number of shares covered thereby shall again become
available for

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<PAGE> 7

grant under the Plan as if no Awards had been previously granted with respect to
such shares.

6.02 SOURCE OF SHARES. The shares of Common Stock issued under the
Plan may be authorized but unissued shares, treasury shares or shares purchased
by the Corporation on the open market or from private sources for use under the
Plan.

6.03 SHARES SURRENDERED UPON EXERCISE OF STOCK APPRECIATION RIGHTS.
Shares as to which there is a surrender in whole or in part of an Option upon
the exercise of a Stock Appreciation Right shall not again be available for
grant of Options. Shares of Common Stock delivered upon the exercise of a Stock
Appreciation Right shall be provided from Common Stock held in the Company's
treasury which is not reserved for some other purpose or from authorized and
unissued Common Stock which is not reserved for some other purpose.

ARTICLE VII
DETERMINATION OF AWARDS

7.01 DETERMINATION OF AWARDS. The Board or the Committee shall, in
its discretion, determine from time to time the recipients of Awards under the
Plan, the number of shares of Common Stock subject to each Award, whether each
Option will be an Incentive Stock Option or a Non-Qualified Stock Option and the
exercise price of an Option. In making all such determinations there shall be
taken into account the duties, responsibilities and performance of each
respective recipient, his present and potential contributions to the growth and
success of the Corporation, his salary and such other factors deemed relevant to
accomplishing the purposes of the Plan.

ARTICLE VIII
OPTIONS

Each Option granted hereunder shall be on the following terms and
conditions:

8.01 STOCK OPTION AGREEMENT. The proper Officers on behalf of the
Corporation and each Optionee shall execute a Stock Option Agreement in the form
provided by the Corporation which shall set forth the total number of shares of
Common Stock to which it pertains, the exercise price, whether it is a
Non-Qualified Option or an Incentive Stock Option, and such other terms,
conditions, restrictions and privileges as the Board or the Committee in each
instance shall deem appropriate, provided they are consistent with the terms,
conditions and provisions of this Plan. Each Optionee shall receive a copy of
his executed Stock Option Agreement.

8.02 OPTION EXERCISE PRICE.

(A) INCENTIVE STOCK OPTIONS. The Option Price for an
Incentive Stock Option

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shall be the greater of par value or at least one hundred percent (100%) of the
Fair Market Value of a share of Common Stock at the time such Incentive Stock
Option is granted, except as provided in Section 8.09(b).

(B) NON-QUALIFIED OPTIONS. The Option Price for a
Non-Qualified Option shall be established by the Committee at the time of grant
but in no event shall be less than 50% of the Fair Market Value at the time of
grant.

8.03 VESTING AND EXERCISE OF OPTIONS.

(A) GENERAL RULES. Unless otherwise specified in the
Stock Option Agreement, Incentive Stock Options and Non-Qualified Options
granted to Employees shall become vested and exercisable over a three (3) year
vesting schedule in the following manner: Options shall vest and become
exercisable with respect to one-sixth (1/6) of the total number of shares
subject to the Option on the one year anniversary of the date of the grant of
the Option, with respect to one- third (1/3) of the total number of shares
subject to an Option on the two year anniversary of the date of the grant of the
Option, and with respect to the remaining one-half (1/2) of the shares subject
to the Option on the three year anniversary of the date of the grant of the
Option. Notwithstanding the foregoing, no vesting shall occur after an
Employee's employment or service, or a Non-Employee Director's service, with the
Corporation is terminated for any reason other than his death or Disability. In
determining the number of shares of Common Stock with respect to which Options
are vested and/or exercisable, fractional shares will be rounded up to the
nearest whole number if the fraction is 0.5 or higher, and down if it is less.

(B) ACCELERATED VESTING. Unless the Stock Option
Agreement provides otherwise at the time an Option is granted, all Options and
any associated Stock Appreciation Rights granted under this Plan shall become
vested and exercisable in full on the date an Optionee terminates his employment
with the Corporation, or service as a Non-Employee Director, because of his
death or Disability. All Options hereunder shall become immediately vested and
exercisable in full upon a Change in Control or on the date an Optionee
terminates his employment with the Corporation, or service as a Non-Employee
Director due to Retirement if, as of such date of such Change in Control of the
Corporation or Retirement, such treatment is either authorized or is not
prohibited by applicable laws and regulations.

(C) GRANTEE PURCHASE ELECTION. Upon a Change in Control,
Grantees may elect to have the Company purchase the Options as to which no stock
appreciation rights have been granted for cash for a period of ninety (90) days
following a Change in Control at the Acceleration Price

8.04 DURATION OF OPTIONS.

(A) GENERAL RULE. Except as provided in Sections 8.04(b)
and 8.09, each

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Option or portion thereof or Stock Appreciation Right granted to an Optionee
shall be exercisable at any time on or after it vests and until the earlier of
(i) ten (10) years after its date of grant or (ii) one (1) year after the date
on which the Optionee ceases to be employed by the Corporation or serve as a
Non-Employee Director, unless the Board or the Committee in its discretion
decides at the time of grant or thereafter to extend such period of exercise
upon termination of employment or service from three (3) months to a period not
exceeding five (5) years.

(B) EXCEPTIONS. If an Employee dies while in the employ
of the Corporation or terminates employment with the Corporation as a result of
Disability without having fully exercised his Options, the Optionee or the
executors, administrators, legatees or distributees of his estate shall have the
right, during the twelve-month period following the earlier of his death or
termination due to Disability, to exercise such Options. If a Non-Employee
Director dies while serving as a Non-Employee Director or terminates his service
to the Corporation as a result of Disability without having fully exercised his
Options, the Non-Employee Director or the executors, administrators, legatees or
distributees of his estate shall have the right, during the twelve-month period
following the earlier of his death or termination due to Disability, to exercise
such Options. No Option shall be exercisable more than ten (10) years from the
date it was granted. In the event of Retirement, an Employee or Non-Employee
Director shall be entitled to the same time period set forth above in this
Section 8.04(b) to exercise an Option if, as of the date of such Retirement,
such treatment is either authorized or is not prohibited by applicable laws and
regulations.

8.05 NONASSIGNABILITY. Options shall not be transferable by an
Optionee except by will or the laws of descent or distribution, and during an
Optionee's lifetime shall be exercisable only by such Optionee or the Optionee's
guardian or legal representative. Notwithstanding the foregoing, or any other
provision of this Plan, an Optionee who holds Non-Qualified Options may transfer
such Options to his or her spouse, lineal ascendants, lineal descendants, or to
a duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Optionee who
originally received the grant or to an individual or trust to whom the Optionee
could have initially transferred the Option pursuant to this Section 8.05.
Options which are transferred pursuant to this Section 8.05 shall be exercisable
by the transferee according to the same terms and conditions as applied to the
Optionee.

8.06 MANNER OF EXERCISE. Options may be exercised in part or in
whole and at one time or from time to time. The procedures for exercise shall be
set forth in the written Stock Option Agreement.

8.07 PAYMENT FOR SHARES. Payment in full of the purchase price for
shares of Common Stock purchased pursuant to the exercise of any Option shall be
made to the Corporation upon exercise of the Option. All shares sold under the
Plan shall be fully paid and nonassessable. Payment for shares may be made by
the Optionee, (a) in cash, (b) by delivering

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shares of Common Stock (including shares acquired pursuant to the exercise of an
Option) or other property equal in Fair Market Value to the purchase price of
the shares to be acquired pursuant to the Option, (c) by withholding some of the
shares of Common Stock which are being purchased upon exercise of an Option, or
(d) by any combination of the foregoing.

8.08 VOTING AND DIVIDEND RIGHTS. No Optionee shall have any voting
or dividend rights or other rights of a stockholder in respect of any shares of
Common Stock covered by an Option prior to the time that his name is recorded on
the Corporation's stockholder ledger as the holder of record of such shares
acquired pursuant to an exercise of an Option.

8.09 ADDITIONAL TERMS APPLICABLE TO INCENTIVE STOCK OPTIONS. All
Options issued under the Plan as Incentive Stock Options will be subject, in
addition to the terms detailed in Sections 8.01 to 8.08 above, to those
contained in this Section 8.09.

(A) Notwithstanding any contrary provisions contained
elsewhere in this Plan and as long as required by Section 422 of the Code, the
aggregate Fair Market Value, determined as of the time an Incentive Stock Option
is granted, of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by the Optionee during any calendar year
under this Plan, and stock options that satisfy the requirements of Section 422
of the Code under any other stock option plan or plans maintained by the
Corporation (or any parent or Subsidiary Company), shall not exceed $100,000.

(B) LIMITATION ON TEN PERCENT STOCKHOLDERS. The price at
which shares of Common Stock may be purchased upon exercise of an Incentive
Stock Option granted to an individual who, at the time such Incentive Stock
Option is granted, owns, directly or indirectly, more than ten percent (10%) of
the total combined voting power of all classes of stock issued to stockholders
of the Corporation, shall be no less than one hundred and ten percent (110%) of
the Fair Market Value of a share of the Common Stock of the Corporation at the
time of grant, and such Incentive Stock Option shall by its terms not be
exercisable after the earlier of the date determined under Section 8.03 or the
expiration of five (5) years from the date such Incentive Stock Option is
granted.

(C) NOTICE OF DISPOSITION; WITHHOLDING; ESCROW. An
Optionee shall immediately notify the Corporation in writing of any sale,
transfer, assignment or other disposition (or action constituting a
disqualifying disposition within the meaning of Section 421 of the Code) of any
shares of Common Stock acquired through exercise of an Incentive Stock Option,
within two (2) years after the grant of such Incentive Stock Option or within
one (1) year after the acquisition of such shares, setting forth the date and
manner of disposition, the number of shares disposed of and the price at which
such shares were disposed of. The Corporation shall be entitled to withhold from
any compensation or other payments then or thereafter due to the Optionee such
amounts as may be necessary to satisfy any withholding requirements of federal
or state law or regulation and, further, to collect from the Optionee any
additional amounts which may be required for such purpose. The Committee may, in
its discretion, require shares of

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Common Stock acquired by an Optionee upon exercise of an Incentive Stock Option
to be held in an escrow arrangement for the purpose of enabling compliance with
the provisions of this Section 8.09(c).

8.10 RIGHT OF FIRST REFUSAL. If at the time an Optionee wishes to
sell Common Stock purchased with an Option granted hereunder, and if at such
time the Common Stock is not publicly traded, then the Corporation shall have
the right to purchase such Common Stock from the Optionee at a price equal to
its Fair Market Value. If the Corporation does not choose to purchase the Common
Stock from an Optionee, then the other Common Stock shareholders shall have the
right to purchase such Common Stock at a price equal to its Fair Market Value on
a "first-come, first-serve" basis.

ARTICLE IX
STOCK APPRECIATION RIGHTS

9.01 GRANT OF STOCK APPRECIATION RIGHTS. The Committee may grant a
Stock Appreciation Right to the Grantee of an Option, either at the time the
Option is granted or by amending the Option Agreement at any time thereafter
prior to the end of the Term of the associated Option. A Stock Appreciation
Right shall be exercisable only during the Term of the associated Option, and
only when the Fair Market Value of the shares of Common Stock subject to the
Option exceeds the Option Price of such shares.

9.02 CONDITIONS TO GRANT. The Committee may, at the time of
granting a Stock Appreciation Right, add such conditions and limitations to the
Stock Appreciation Right as it shall deem advisable.

9.03 EXERCISE OF STOCK APPRECIATION RIGHT. A Stock Appreciation
Right may be exercised in whole or in part in accordance with the terms set
forth in the Grantee's Option Agreement. The date of exercise shall be the date
upon which notice thereof is received in the office of the Corporation's
Secretary.

9.04 ACCELERATION OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall become immediately exercisable in full for cash at the Acceleration
Price. Grantees may elect to have the Company make payment on such Stock
Appreciation Rights within a period of thirty (30) days following a Change in
Control

9.05 PAYMENT. Upon the exercise of a Stock Appreciation Right, the
payment to be made to the Grantee may be in cash, or in shares of Common Stock
valued at their Fair Market Value on the date of exercise, or partly in cash and
partly in shares of Common Stock, as determined by the Committee.

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ARTICLE X
ADJUSTMENTS FOR CAPITAL CHANGES

The aggregate number of shares of Common Stock available for issuance
under this Plan, the number of shares to which any outstanding Award relates,
the maximum number of shares that can be covered by Award to each Optionee and
the exercise price per share of Common Stock under any outstanding Option shall
be proportionately adjusted for any increase or decrease in the total number of
outstanding shares of Common Stock issued subsequent to the effective date of
this Plan resulting from a split, subdivision or consolidation of shares or any
other capital adjustment, the payment of a stock dividend, or other increase or
decrease in such shares effected without receipt or payment of consideration by
the Corporation. If, upon a merger, consolidation, reorganization, liquidation
or recapitalization of the Corporation, Common Stock shall be exchanged for
other securities of the Corporation or of another corporation, each recipient of
an Award shall be entitled, subject to the conditions herein stated, to purchase
or acquire such number of shares of Common Stock or amount of other securities
of the Corporation or such other corporation as were exchangeable for the number
of shares of Common Stock of the Corporation which such optionees would have
been entitled to purchase or acquire except for such action, and appropriate
adjustments shall be made to the per share exercise price of outstanding
Options. Notwithstanding any provision to the contrary, the exercise price of
shares subject to outstanding Awards may be proportionately adjusted upon the
payment of a special large and nonrecurring dividend that has the effect of a
return of capital to the stockholders.

ARTICLE XI
AMENDMENT AND TERMINATION OF THE PLAN

The Board may, by resolution, at any time terminate or amend the Plan
with respect to any shares of Common Stock as to which Awards have not been
granted, subject to any required stockholder approval or any stockholder
approval which the Board may deem to be advisable for any reason, such as for
the purpose of obtaining or retaining any statutory or regulatory benefits under
tax, securities or other laws or satisfying any applicable stock exchange
listing requirements. The Board may not, without the consent of the holder of an
Award, alter or impair any Award previously granted or awarded under this Plan
as specifically authorized herein.

ARTICLE XII
EMPLOYMENT AND SERVICE RIGHTS

Neither the Plan nor the grant of any Awards hereunder nor any action
taken by the Committee or the Board in connection with the Plan shall create any
right on the part of any Employee or Non-Employee Director to continue in such
capacity.

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ARTICLE XIII
WITHHOLDING

13.01 TAX WITHHOLDING. The Corporation may withhold from any cash
payment made under this Plan sufficient amounts to cover any applicable
withholding and employment taxes, and if the amount of such cash payment is
insufficient, the Corporation may require the Optionee to pay to the Corporation
the amount required to be withheld as a condition to delivering the shares
acquired pursuant to an Award. The Corporation also may withhold or collect
amounts with respect to a disqualifying disposition of shares of Common Stock
acquired pursuant to exercise of an Incentive Stock Option, as provided in
Section 8.09(c).

13.02 METHODS OF TAX WITHHOLDING. The Board or the Committee is
authorized to adopt rules, regulations or procedures which provide for the
satisfaction of an Optionee's tax withholding obligation by the retention of
shares of Common Stock to which the Employee would otherwise be entitled
pursuant to an Award and/or by the Optionee's delivery of previously-owned
shares of Common Stock or other property.

ARTICLE XIV
EFFECTIVE DATE OF THE PLAN; TERM

14.01 EFFECTIVE DATE OF THE PLAN. This Plan shall become effective
on the Effective Date, and Awards may be granted hereunder no earlier than the
date that this Plan is approved by stockholders of the Corporation and prior to
the termination of the Plan, provided that this Plan is approved by stockholders
of the Corporation pursuant to Article XV hereof.

14.02 TERM OF THE PLAN. Unless sooner terminated, this Plan shall
remain in effect for a period of ten (10) years from the Effective Date.
Termination of the Plan shall not affect any Awards previously granted and such
Awards shall remain valid and in effect until they expire or are earned,
exercised, surrendered, or forfeited.

ARTICLE XV
STOCKHOLDER APPROVAL

The Corporation shall submit this Plan to stockholders for approval at
a meeting of stockholders, or by the unanimous written consent of the
stockholders, of the Corporation held within twelve (12) months following the
Effective Date in order to meet the requirements of (i) Section 422 of the Code
and regulations thereunder, and (ii) Section 162(m) of the Code and regulations
thereunder, and (iii) the National Association of Securities Dealers, Inc. for
quotation of the Common Stock on the NASDAQ Stock Market's National Market or
any other securities market or exchange, if applicable.

13
<PAGE> 14

ARTICLE XVI
MISCELLANEOUS

16.01 GOVERNING LAW. To the extent not governed by federal law, this
Plan shall be construed under the laws of the State of Delaware.

16.02 PRONOUNS. Wherever appropriate, the masculine pronoun shall
include the feminine pronoun, and the singular shall include the plural

<PAGE> 1
EXHIBIT 10.2

INTERCOMPANY SERVICES AGREEMENT

THIS INTERCOMPANY SERVICES AGREEMENT (this "Agreement") is effective as
of the 1st day of May, 1999 and is entered into by and between Perfumania, Inc.,
a Florida corporation ("Perfumania, Inc."), and perfumania.com, inc., a Florida
corporation ("perfumania.com").

RECITALS

A. perfumania.com is currently a wholly-owned subsidiary of
Perfumania, Inc. and obtains various corporate, administrative and other
services from Perfumania, Inc.;

B. perfumania.com is considering an initial public offering of
its common stock ("IPO");

C. After the IPO, perfumania.com desires to continue to obtain
various corporate, administrative and other services ("Services") from
Perfumania, Inc., and Perfumania, Inc. desires to continue to provide such
Services following the closing date of the IPO.

NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

SECTION 1. SERVICES.

Perfumania, Inc. or, at its option, its subsidiaries (other than
perfumania.com and its subsidiaries) shall render to perfumania.com the
following Services in accordance with the terms of this Agreement:

(a) CORPORATE SERVICES. Perfumania, Inc. shall provide, directly
or through its subsidiaries, the services described on Exhibit A hereto, at the
cost specified and on the other terms and conditions set forth on Exhibit A.

(b) FULFILLMENT SERVICES. Perfumania, Inc. shall provide, directly
or through its subsidiaries, the services described on Exhibit B hereto, at the
cost specified and on the other terms and conditions set forth on Exhibit B.

(c) INVENTORY SUPPLY SERVICES. perfumania.com shall have the right
to purchase from Perfumania, Inc., and Perfumania, Inc. shall sell goods to
perfumania.com for resale through perfumania.com's online store subject to the
terms of Exhibit C hereto.

(d) ADVERTISING SERVICES. Perfumania, Inc. shall provide, directly
or through its subsidiaries, the services described on Exhibit D hereto, at the
cost specified and on the other terms and conditions set forth on Exhibit D.

(e) SPACE SHARING. Perfumania, Inc. may make certain warehouse and
office space available to perfumania.com at the cost specified and the other
terms and conditions set forth on Exhibit E.

<PAGE> 2

(f) In the event that perfumania.com requires services that exceed
the scope or extent of the Services provided for herein, and if Perfumania, Inc.
agrees to provide such services, Perfumania, Inc. and perfumania.com shall
negotiate in good faith the terms and conditions, including price, under which
Perfumania, Inc. shall provide such Services; provided, however, that the fee
payable by perfumania.com for such Services shall be no less favorable to
perfumania.com than the charges for comparable services from unaffiliated third
parties.

SECTION 2. COMPENSATION.

perfumania.com shall pay to Perfumania, Inc. when due a fee for each of
the Services equal to the amount described in the appropriate Exhibit hereto
relating to such Service, provided that in the event perfumania.com terminates
any Service in accordance with Section 3 hereof, the fee for such Service shall
no longer be payable following the effective date of such termination. Late
payments shall accrue interest at a rate equal to the prime rate published in
the Wall Street Journal from time to time.

SECTION 3. TERMS.

(a) The term of this Agreement shall begin on the date of the
closing of the IPO (the "Effective Date") and shall continue for an indefinite
period in full force and effect until it is terminated in accordance with this
Section 3.

(b) Perfumania, Inc. shall have the right (but not the obligation)
to terminate immediately this Agreement:

(i) if perfumania.com is in material breach of any of its
obligations or representations hereunder, which breach is not cured
within twenty (20) days of receipt of written notice from Perfumania,
Inc. of such breach;

(ii) if perfumania.com files a voluntary petition in
bankruptcy or is the subject of any voluntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit
of creditors, if such petition or proceeding is not dismissed within
sixty (60) days of filing, or becomes the subject of any involuntary
petition in bankruptcy or any involuntary proceeding relating to
insolvency, receivership, liquidation, or composition for the benefit
of creditors, if such petition or proceeding is not dismissed within
sixty (60) days of filing;

(iii) if the business of perfumania.com is liquidated or
otherwise terminated for insolvency or any other basis, or

(iv) if perfumania.com becomes insolvent or unable to pay its
debts as they mature or makes an assignment for the benefit of its
creditors.

<PAGE> 3

(i) if Perfumania, Inc. is in material breach of
any of its obligations or representations hereunder, which breach is
not cured within twenty (20) days of receipt of written notice from
perfumania.com of such breach;

(ii) Perfumania, Inc. is the subject of a
voluntary petition in bankruptcy or any voluntary proceeding relating
to insolvency, receivership, liquidation, or composition for the
benefit of creditors, if such petition or proceeding is not dismissed
within sixty (60) days of filing, or becomes the subject of any
involuntary petition in bankruptcy or any involuntary proceeding
relating to insolvency, receivership, liquidation, or composition for
the benefit of creditors, if such petition or proceeding is not
dismissed within sixty (60) days of filing;

(iii) if the business of Perfumania, Inc. is
liquidated or otherwise terminated for insolvency or any other basis,
or

(iv) if Perfumania, Inc. becomes insolvent or
unable to pay its debts as they mature or makes an assignment for the
benefit of its creditors.

(d) Perfumania, Inc. shall have the right (but not the obligation)
to terminate this Agreement and the rights granted to perfumania.com hereunder,
upon one hundred twenty (120) days written notice to perfumania.com, following
the acquisition of the direct or beneficial ownership of 75% or more of the
voting power represented by the voting securities of perfumania.com by any
person other than Perfumania, Inc. or its affiliate. For purposes of this
Agreement, (i) the term "beneficial ownership" shall have the meaning set forth
in Section 13(d) of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, and (ii) the term "voting securities" shall
mean the common stock of perfumania.com and any other securities issued by
perfumania.com having the power to vote in the election of directors of
perfumania.com, including without limitation any securities having such power
only upon the occurrence of a default or any other extraordinary contingency.
For purposes of this Section 3, an acquisition shall not include the acquisition
by a person of voting securities of perfumania.com pursuant to an involuntary
disposition by Perfumania, Inc. through foreclosure or similar event, but shall
include a subsequent acquisition of voting securities pursuant to a disposition
by the person that acquired the voting securities in such involuntary
disposition.

(e) A party may exercise its right to terminate pursuant to this
Section 3 by sending ninety (90) days prior written notice to the other party.
No exercise by a party of its rights under this Section 3 will limit its
remedies by reason of the other party's default, the party's rights to exercise
any other rights under this Section 3, or any of that party's other rights.

<PAGE> 4

SECTION 4. RECORDS AND ACCOUNTS.

Perfumania, Inc. shall maintain accurate books, records and accounts of
all transactions relating to the Services performed by it pursuant to this
Agreement. perfumania.com may, at its own expense, examine and copy those books
and records as provided in this Section 4. Such books, records and accounts
shall be maintained separately from Perfumania, Inc. own records and accounts
and shall reflect such information as would normally be examined by an
independent accountant in performing an audit pursuant to United States
generally accepted auditing standards for the purpose of certifying financial
statements, and to permit verification thereof by governmental agencies.
perfumania.com may make those examinations only during Perfumania, Inc. usual
business hours, and at the place where it keeps the books and records.
perfumania.com will be required to notify Perfumania, Inc. at least ten (10)
days before the date of planned examination. If perfumania.com examination is
not completed within two months from commencement, Perfumania, Inc. may require
perfumania.com to terminate it on seven (7) days prior written notice to
perfumania.com at any time, provided that Perfumania, Inc. has cooperated with
perfumania.com in the examination of such books and records.

SECTION 5. DIRECTORS AND OFFICERS OF PERFUMANIA, INC.

Nothing in this Agreement shall limit or restrict the right of any of
Perfumania, Inc. directors, officers or employees to engage in any other
business or devote their time and attention in part to the management or other
aspects of any other business, whether of a similar nature, or to limit or
restrict the right of Perfumania, Inc. to engage in any other business or to
render services of any kind to any corporation, firm, individual, trust or
association.

SECTION 6. INDEPENDENT CONTRACTOR.

Perfumania, Inc. is an independent contractor and when its employees
act under the terms of this Agreement, they shall be deemed at all times to be
under the supervision and responsibility of Perfumania, Inc.; and no person
employed by Perfumania, Inc. and acting under the terms of this Agreement shall
be deemed to be acting as agent or employee of perfumania.com or any customer of
perfumania.com for any purpose whatsoever.

SECTION 7. OTHER AGREEMENTS.

From time to time, perfumania.com may find it necessary or desirable
either to enter into agreements covering services of the type contemplated by
this Agreement to be provided by parties other than Perfumania, Inc. or to enter
into other agreements covering functions to be performed by Perfumania, Inc.
hereunder. Nothing in this Agreement shall be deemed to limit in any way the
right of perfumania.com to acquire such services from others or to enter into
such other agreements.

SECTION 8. CONFIDENTIALITY.

Perfumania, Inc. agrees to hold in strict confidence, and to use
reasonable efforts to cause its employees and representatives to hold in strict
confidence (a) all confidential information concerning perfumania.com furnished
to or obtained by Perfumania, Inc. in the course of

<PAGE> 5

providing the Services except to the extent that such information has been in
the public domain through no fault of Perfumania, Inc. (b) disclosure or release
is compelled by judicial or administrative process, or (c) in the opinion of
counsel to Perfumania, Inc., disclosure or release is necessary pursuant to
requirements of law or the requirements of any governmental entity including,
without limitation, disclosure requirements under the Securities Exchange Act of
1934, as amended.

SECTION 9. MISCELLANEOUS.

(a) Neither party may assign this Agreement, or their respective
rights and obligations hereunder, in whole or in part, without the other party's
prior written consent. Any attempt to assign this Agreement without such consent
shall be void and of no effect ab initio. Notwithstanding the foregoing, either
party may assign this Agreement or any of its rights and obligations hereunder
to any entity controlled by it or to any entity that acquires it by purchase of
stock or by merger or otherwise, or by obtaining substantially all of its assets
(a "Permitted Assignee"), provided that any such Permitted Assignee, or any
division thereof, thereafter succeeds to all of the rights and is subject to all
of the obligations of Perfumania, Inc. under this Agreement.

(b) This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida applicable to
agreements made and to be performed entirely within such State, without regard
to the conflicts of law principles of such State.

(c) All legal proceedings brought in connection with this
Agreement shall be brought only in the state or federal court located within the
State of Florida

(d) If any provision of this Agreement (or any portion thereof) or
the application of any such provision (or any portion thereof) to any person or
circumstance shall be held invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision hereof (or the remaining portion thereof)
or the application of such provision to any other persons or circumstances.

(e) All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:

(i) if to perfumania.com,

perfumania.com, inc.
11701 NW 101st Road
Miami, Florida 33178
Attn: Rachmil Lekach
President

<PAGE> 6

(ii) if to Perfumania, Inc.

Perfumania, Inc.
11701 NW 101st Road
Miami, Florida 33178
Attn: Ilia Lekach
Chief Executive Officer

(f) The provisions of Section 9 hereof shall survive any
termination of this Agreement.

(g) There is no relationship of partnership, joint venture,
employment, franchise, or agency between the parties. Neither party shall have
the power to bind the other or incur obligations on the other's behalf without
the other's prior written consent.

(h) No failure of either party to exercise or enforce any of its
rights under this Agreement shall act as a waiver of such right.

(i) This Agreement, along with the Exhibits hereto, contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein.

(j) This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to each of the other parties.

(k) This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto; provided, however, that
as long as Perfumania, Inc. has direct or beneficial ownership of 25% or more of
the voting power represented by the voting securities of perfumania.com and no
other person directly or beneficially owns a greater percentage of such voting
power, no amendment of a material term or waiver of a material obligation of
this Agreement shall be valid unless it has been approved by a majority of the
members of the board of directors of perfumania.com, who are not directors or
officers of Perfumania, Inc. or the beneficial owners of five percent or more of
the outstanding voting securities of Perfumania, Inc.

(l) This Agreement is for the sole benefit of the parties hereto
and nothing herein expressed or implied shall give or be construed to give to
any person, other than the parties hereto any legal or equitable rights
hereunder.

(m) The headings contained in this Agreement or in any Exhibit
hereto are for reference purposes only and shall not affect in any way the
meaning or interpretation of this

<PAGE> 7

Agreement. All Exhibits annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Exhibit but not otherwise defined
therein, shall have the meaning as defined in this Agreement. When a reference
is made in this Agreement to a Section or an Exhibit, such reference shall be to
a Section of, or an Exhibit to, this Agreement unless otherwise indicated.

[SIGNATURE PAGE FOLLOWS]

<PAGE> 8

SIGNATURE PAGE TO INTERCOMPANY SERVICES AGREEMENT

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.

Perfumania, Inc., a Florida corporation

By: /s/ Ilia Lekach
-----------------------------------------
Ilia Lekach
Chairman and Chief Executive Officer

perfumania.com, inc., a Florida corporation

By: /s/ Rachmil Lekach
-----------------------------------------
Rachmil Lekach
President

<PAGE> 9

EXHIBIT A

CORPORATE SERVICES

Perfumania, Inc. shall provide, by itself or through its subsidiaries,
the services described below.

(a) Scope of Services. All services currently provided by
Perfumania, Inc. and its subsidiaries to perfumania.com (other than the
Fulfillment Services described in Exhibit B), including, without limitation
merchandising, inventory management, creative, marketing, technical, human
resources, finance, accounting, administrative and legal services, as well as
services required by perfumania.com by virtue of its status as an issuer subject
to reporting requirements under the federal securities laws. Notwithstanding the
foregoing, the scope of services provided may not increase from one year to the
next.

(b) Quality of Services. At a level at least equal to the quality
of services being provided by Perfumania, Inc. to perfumania.com prior to the
effectiveness of the agreement.

(i) if perfumania.com's gross sales for the
month are $50,000 or less, perfumania.com shall pay to Perfumania, Inc.
the sum of $10,000; and

(ii) if perfumania.com's gross sales for the
month exceed $50,000, perfumania.com shall pay to Perfumania, Inc. an
amount equal to $10,000 plus 2% of perfumania.com's gross sales.

(d) Payment and Accounting. Perfumania, Inc. shall invoice
perfumania.com within 30 days of the end of each month for services rendered in
such month. perfumania.com shall pay such invoice within 30 days of receipt.

<PAGE> 10

EXHIBIT B

FULFILLMENT SERVICES

Perfumania, Inc. shall provide, by itself or through its subsidiaries
the services described below.

(a) Scope of Services: Receiving, quality control, packing, and
shipping of inventory to customers.

(b) Consideration: perfumania.com shall pay Perfumania, Inc. a
fulfillment fee equal to 3% of all costs of goods sold by perfumania.com and
handled by Perfumania, Inc.

(d) Quality of Services: At a level at least equal to the quality
of services being provided by Perfumania, Inc. to perfumania.com prior to the
effectiveness of the agreement.

(e) Payment and Accounting: Perfumania, Inc. shall invoice
perfumania.com within 30 days of the end of each month for services rendered in
such month. perfumania.com shall pay such invoice within 30 days of receipt.

<PAGE> 11

EXHIBIT C

INVENTORY SUPPLY SERVICES

perfumania.com may purchase inventory from Perfumania, Inc. and its
subsidiaries solely for resale on the following terms.

(a) Price: 105% multiplied by (the cost of goods + in-bound
freight + all other direct costs charged to Perfumania, Inc. by its supplier,
e.g., screening or labeling).

(b) Terms: Net thirty (30) days.

(c) Projections: perfumania.com will provide Perfumania, Inc.
twice-annually with its best projections of sales for the next six months,
broken down monthly by category. perfumania.com will update these projections
each month. Perfumania, Inc. will use best efforts to meet the anticipated
demand for Perfumania, Inc. inventory generated by perfumania.com in accordance
with the projections.

(d) Other: All vendor warranties with respect to inventory
purchased by perfumania.com hereunder are hereby assigned to perfumania.com.

<PAGE> 12

EXHIBIT D

ADVERTISING SERVICES

perfumania.com and Perfumania, Inc. agree as follows.

(a) Advertising: Upon perfumania.com's timely request, Perfumania,
Inc. shall permit perfumania.com to include any advertisement of, or reference
to, perfumania.com or its products, Web site or services in any print or media
advertisement purchased by or obtained by Perfumania, Inc. perfumania.com shall
have the right but not the obligation to jointly advertise with Perfumania, Inc.

(b) Price: perfumania.com shall pay Perfumania, Inc. as follows:

(i) If the joint advertisement or advertising
service only refers to or mentions perfumania.com or perfumania.com's
Web sites, perfumania.com shall pay to Perfumania, Inc. an amount equal
to 20% of the cost of the advertisement(s) or advertising services; and

(ii) If the content advertisement or advertising
services contain more than a mention of or reference to perfumania.com
or its Web sites, perfumania.com shall pay to Perfumania, Inc. an
amount equal to 50% of the cost of the advertisement(s) or advertising
services.

(c) Failure to Meet Minimum Performance Standards: In the event
Perfumania, Inc. delivers less than the Minimum Advertising Space,
perfumania.com shall be relieved of all obligations hereunder in that fiscal
year.

(d) Payment and Accounting: Perfumania, Inc. shall invoice
perfumania.com within 30 days of the end of each month for services rendered in
such month. perfumania.com shall pay such invoice within 30 days of receipt.

(e) Exclusivity: perfumania.com shall be the exclusive e-commerce
and Internet community advertiser in Perfumania, Inc. print and media
advertising.

<PAGE> 13

EXHIBIT E

SPACE SHARING

(a) License to Use Space. During the term of this Agreement,
Perfumania, Inc. shall permit perfumania.com to use a portion of Perfumania,
Inc. (or any of its subsidiaries') warehouse office ("Perfumania, Inc.
Premises") for the purposes permitted under the lease agreements pursuant to
which Perfumania, Inc. leases such space (to the extent such offices are
leased), subject to the terms and conditions set forth in this Agreement. The
space to be used by perfumania.com shall be as mutually agreed by the parties
from time to time. perfumania.com right to use a portion of Perfumania, Inc.
Premises shall terminate on the earlier of (i) 90 days after perfumania.com
notifies Perfumania, Inc. that perfumania.com no longer desires to use any
portion of Perfumania, Inc. Premises, or (ii) 90 days after Perfumania, Inc.
notifies perfumania.com that perfumania.com may no longer use any portion of
Perfumania, Inc. Premises.

(b) Consideration. So long as perfumania.com uses any portion of
Perfumania, Inc. Premises, perfumania.com shall pay to Perfumania, Inc. on the
first day of each calendar month an amount equal to 15% of all expenses related
to Perfumania, Inc. Premises (eg., Rent, CAM, Tax, Utilities). Payments for any
partial calendar month shall be prorated on a per diem basis.

(c) Compliance with Leases. perfumania.com hereby agrees not to
take any action or fail to take any action in connection with its use of any
portion of Perfumania, Inc. Premises, a result of which would be Perfumania,
Inc. violation of any of the terms and conditions of any lease or other
restriction on Perfumania, Inc. use of such Perfumania, Inc. Premises.
perfumania.com agrees to comply with the terms and provisions of any such leases
for Perfumania, Inc. Premises in which it uses.

<PAGE> 1
EXHIBIT 10.3

TECHNOLOGY TRANSFER AND LICENSE AGREEMENT

THIS TECHNOLOGY TRANSFER AND LICENSE AGREEMENT (this "Agreement") is
made as of the 1st day of June, 1999 (the "Effective Date") by and between
Perfumania, Inc., a Florida corporation ("Perfumania") and perfumania.com, inc.,
a Florida corporation ("perfumania.com").

EXPLANATORY STATEMENT

Perfumania has developed, and has all applicable rights in, a site on
the World Wide Web portion of the Internet at the URL http://www.perfumania.com
(the "Perfumania Site") as one component of its method for establishing and
operating stores that distribute brand name and designer fragrances and related
products (the "Products").

Perfumania has formed perfumania.com as a wholly-owned subsidiary of
Perfumania to capitalize on Perfumania's core business on the World Wide Web. To
do so, Perfumania desires to transfer and/or license portions of its rights in
the Perfumania Web site to perfumania.com on the terms and conditions herein.

NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained in this Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:

1. DEFINITIONS.

"Assigned Materials" has the meaning set forth in Section 2.1.

"Change in Control" means any of the following involving
perfumania.com: (i) any merger, consolidation, share exchange, business
combination, or other similar transaction, (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 75% or more of the assets of
the perfumania.com in a single transaction or series of transactions, or (iii)
any person shall have acquired beneficial ownership or the right to acquire
beneficial ownership of, 75% or more of the then outstanding shares of capital
stock of perfumania.com.

"Confidential Information" means any non-public information about a
party, including, without limitation, the party's business , vendors, customers,
products, services, employees, finances, costs, expenses, financial or
competitive condition, policies, and practices, computer software programs and
programming tools and their respective design, architecture, modules,
interfaces, databases and database structures, nonliteral elements, capabilities
and functionality, source code and object code (including, but not necessarily
limited to, the Perfumania Site), research and development efforts, marketing
and distribution efforts, licensing, cross-licensing, marketing and distribution
practices; computer software programs and other information licensed or
otherwise disclosed to a party in confidence by a third party, and any other
non-public information that does or may have economic value by reason of not
being generally known.

<PAGE> 2

"Databases" shall mean the Product database; customer list database and
other databases associated with Perfumania Site an the Assigned Materials.

"Domain Names" shall mean the Internet domain names www.perfumania.com
and www.perfumaniawholesale.com.

"E-Commerce Business" shall mean any transactions or business
activities, now or hereafter conducted by perfumania.com, related to the online
sale or marketing of perfumania.com's products, merchandise, and services now or
hereafter sold or offered for sale.

"Materials" means all memoranda, notes, records, drawings, manuals,
disks, or other documents and media (including all copies, extracts, and
summaries thereof).

"Perfumania Content" shall mean all graphic user interfaces, text,
images, music, designs, products, computer programs, drawings, documentation,
notes, development aids, technical documentation, information and other
materials of Perfumania for use in developing and incorporated into the
Perfumania Site.

"Perfumania Marks" shall mean trademarks, service marks, logos and
trade name of Perfumania but excludes the marks PERFUMANIA.COM and
PERFUMANIAWHOLESALE.COM.

"Domain Name Marks" shall mean trademarks, service marks, logos and
trademarks incorporating the words PERFUMANIA.COM and PERFUMANIAWHOLESALE.COM.

"Software" shall mean all computer software for inventory sourcing,
special order software and other computer software owned by Perfumania, Inc.
from time to time.

2. ASSIGNMENT AND LICENSES.

2.1 Assignment. Perfumania hereby transfers, grants, conveys,
assigns and relinquishes exclusively to perfumania.com in perpetuity (or for the
longest period of time otherwise permitted by law) for any and all use in
electronic commerce including, but not limited to, the World Wide Web portion of
the Internet, all of its right, title and interest in and to the Perfumania
Site, the Databases, the Perfumania Content, the Software, and any Materials,
forms, images and text viewable on the Internet, any HTML elements relating
thereto (collectively, the "Assigned Materials"). Perfumania shall make the
Assigned Materials available to perfumania.com at such times and in such format
as the parties shall mutually agree.

2.2 Perfumania Marks, Domain Names, and Domain Name Marks. Subject
to the terms and conditions herein, Perfumania hereby grants to perfumania.com
an exclusive (even as to Perfumania), worldwide, fully paid-up right and license
to (i) use and reproduce the Perfumania Marks in digital form and combine such
digitized versions with other digitized text, graphics or materials of
perfumania.com that are included within the Perfumania Site, (ii) use,

2
<PAGE> 3

reproduce, transmit, communicate, display, distribute and sublicense the
Perfumania Marks as part of the Perfumania Site and in connection with the
E-Commerce Business, (iii) use, reproduce, transmit, communicate, display,
distribute, and sublicense the Domain Name Marks in connection with the
E-Commerce Business and incorporate the PERFUMANIA.COM mark within
perfumania.com's corporate or other legal name; and (iv) use the Domain Names
and determine the domain name server addressing thereof for website, electronic
mail, and all other present and future Internet and communications functions in
connection with the E-Commerce Business. Except as specifically set forth above,
Perfumania does not transfer to perfumania.com any rights to the Perfumania
Marks, Domain Name, or Domain Name Marks.

2.3 Licenses to Perfumania. Subject to the terms and conditions
herein, perfumania.com hereby grants Perfumania a non-exclusive, worldwide,
fully paid-up right and license to (i) provide materials for posting on the
Perfumania Site in connection with the operation of its retail sale and
distribution of Products through physical stores in the United States, which
materials shall be posted by perfumania.com provided they do not unreasonably
interfere with perfumania.com's business operations and (ii) to sublicense its
rights hereunder to entities or individuals located outside the United States
pursuant to terms and conditions approved by perfumania.com.

2.4 License Restrictions. Except as otherwise expressly permitted
herein, Perfumania may not (a) adapt, alter, modify, translate or create
derivative works of the Perfumania Site; (b) reverse engineer, decompile,
disassemble, or reconstruct the source code for the Perfumania Site; or (c)
reverse engineer, reconstruct, ascertain, adapt, alter or modify, the
proprietary protocols, algorithms, internal instructions and command sets used
in the operation of the Perfumania Site.

2.5 Support. The parties acknowledge that unless otherwise agreed
in writing, Perfumania shall not be responsible for upgrading, supporting or
otherwise maintaining the Assigned Materials in any form or manner whatsoever.

3. QUALITY CONTROL.

3.1 Monitoring by Perfumania. perfumania.com agrees that its
operations of the E-Commerce Business at the Perfumania Site shall be of a first
rate nature. perfumania.com understands and agrees that Perfumania has the right
to and will monitor the quality of perfumania.com's operations under the
Perfumania Marks for compliance with this Agreement.

3.2 Quality Standards. In the course of operating the E-Commerce
Business at the Perfumania Site, perfumania.com shall maintain and adhere to
standards of quality and technical specifications set forth from time to time by
Perfumania with respect to the appearance and manner of use of the Perfumania
Marks. Any form of use of the Perfumania Marks not specifically provided for by
Perfumania shall be adopted by perfumania.com only upon prior written approval
by Perfumania. If any use of the Perfumania Marks on the Perfumania Site
conflicts with, interferes with or is detrimental to Perfumania's reputation or
business, in Perfumania's reasonable discretion, Perfumania will promptly notify
perfumania.com of same and perfumania.com shall immediately discontinue any such
use.

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3.3 Advertising Materials. Prior to using the Perfumania Marks in
connection with any advertising and promotional materials (the "Advertising
Materials"), perfumania.com shall provide to Perfumania for its approval samples
of the Advertising so that Perfumania may monitor use of the Perfumania Marks.
Perfumania reserves the right to disapprove such Advertising Materials if
Perfumania reasonably determines that the Perfumania Marks are improperly used
therein. Perfumania shall have five (5) working days after receipt of such
samples to indicate its disapproval by written notice to perfumania.com. If no
written objection is received by perfumania.com within five working days, the
samples will be deemed to have been approved.

3.4 Samples. perfumania.com agrees to furnish, at no charge, to
Perfumania, from time to time as requested, representative samples of
Advertising Materials and any other articles or materials to which it affixes
the Perfumania Marks.

4. OWNERSHIP; MARKING.

4.1 Perfumania Marks. perfumania.com acknowledges Perfumania's
right, title and interest in and to the Perfumania Marks and acknowledges that
nothing herein shall be construed to accord to perfumania.com any rights in any
of the Perfumania Marks except as expressly provided herein. perfumania.com
acknowledges that its use of the Perfumania Marks will not create in it any
right, title or interest in the Perfumania Marks except as permitted herein.
perfumania.com represents and warrants with respect thereto, as follows: (i)
perfumania.com will not at any time challenge Perfumania's right, title or
interest in the Perfumania Marks or the validity of any of the Perfumania Marks
or any application or registration thereof; (ii) perfumania.com will not do or
cause to be done or omit to do anything, the doing, causing, or omitting of
which would contest or in any way impair or tend to impair the rights of
Perfumania in the Perfumania Marks; (iii) perfumania.com will not represent that
it has any ownership in or rights with respect to the Perfumania Marks other
than rights conferred by this Agreement; and (iv) perfumania.com will not,
either during or subsequent to the Term of this Agreement, use any trademark,
service mark, trade name, insignia or logo that is confusingly similar to or a
colorable imitation of any of the Perfumania Marks except as permitted herein.
If any foreign tribunal of any kind or nature of competent jurisdiction takes
action resulting in Perfumania being defeased of the Perfumania Marks and
perfumania.com is granted the Perfumania Marks or may take action to acquire
such Perfumania Marks, perfumania.com will immediately and without need of
request by Perfumania, take all action necessary to either (a) assign such
Perfumania Marks to Perfumania or Perfumania's designee or (b) acquire such
Perfumania Marks at Perfumania's expense and upon such acquisition, assign such
Perfumania Marks to Perfumania or Perfumania's designee.

4.2 Domain Name Marks. Perfumania will (i) apply for registration
of the PERFUMANIA.COM and PERFUMANIAWHOLESALE.COM marks with the United States
Patent and Trademark Office ("PTO"), (ii) will take all necessary and reasonable
steps to obtain such registrations, (iii) shall keep perfumania.com informed of
the status of such applications, and (iv) shall file Section 8 and 15
declarations, file renewal applications, and take all other

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<PAGE> 5

necessary and reasonable steps to obtain and maintain effective federal
registrations for the Domain Name Marks during the Term of this Agreement.
perfumania.com acknowledges Perfumania's right, title and interest in and to the
Domain Name Marks and acknowledges that nothing herein shall be construed to
accord to perfumania.com any rights in any of the Domain Name Marks except as
expressly provided herein. perfumania.com acknowledges that its use of the
Domain Name Marks will not create in it any right, title or interest in the
Domain Name Marks except as permitted herein. perfumania.com represents and
warrants with respect thereto, as follows: (i) perfumania.com will not at any
time challenge Perfumania's right, title or interest in the Domain Name Marks or
the validity of any of the Domain Name Marks or any application or registration
thereof; (ii) perfumania.com will not do or cause to be done or omit to do
anything, the doing, causing, or omitting of which would contest or in any way
impair or tend to impair the rights of Perfumania in the Domain Name Marks;
(iii) perfumania.com will not represent that it has any ownership in or rights
with respect to the Domain Name Marks other than rights conferred by this
Agreement; and (iv) perfumania.com will not, either during or subsequent to the
Term of this Agreement, use any trademark, service mark, trade name, insignia or
logo that is confusingly similar to or a colorable imitation of any of the
Domain Name Marks except as permitted herein. If any foreign tribunal of any
kind or nature of competent jurisdiction takes action resulting in Perfumania
being defeased of the Domain Name Marks and perfumania.com is granted the Domain
Name Marks or may take action to acquire such Domain Name Marks, perfumania.com
will immediately and without need of request by Perfumania, take all action
necessary to either (a) assign such Domain Name Marks to Perfumania or
Perfumania's designee or (b) acquire such Domain Name Marks at Perfumania's
expense and upon such acquisition, assign such Domain Name Marks to Perfumania
or Perfumania's designee.

4.3 Marking. perfumania.com shall cause the appropriate
designation "TM", "SM" or the registration symbol "(R)" to be placed adjacent to
each of the Perfumania Marks and Domain Name Marks in connection with each use
or display thereof, including, without limitation, the Advertising Materials,
and to indicate such additional information as Perfumania shall reasonably
specify from time to time concerning the license rights under which
perfumania.com uses the Perfumania Marks and Domain Name Marks.

4.4 Warranties by Perfumania. Perfumania hereby warrants that its
business operations under the Perfumania Marks shall be of a first rate nature.
If any use of the Perfumania Marks by Perfumania interferes with or is
detrimental to perfumania.com's reputation or business, perfumania.com shall
promptly notify Perfumania of same and Perfumania shall immediately discontinue
any such use. Perfumania warrants, for itself and its successors and assigns,
that it shall prominently and continuously use the mark PERFUMANIA as a
trademark, in its retail business, in advertising, as the primary and notorious
trade name for its retail stores, and in interstate commerce. Perfumania
warrants, for itself and its successors and assigns, that it will maintain
active federal trademark registration(s) for PERFUMANIA during the Term of this
Agreement and that it will not, through action or inaction, allow its rights
and/or its retail goodwill in the Perfumania Marks to become diminished or
impaired during the Term of this Agreement.

5. NON-COMPETITION. Perfumania covenants that, except as otherwise
provided herein or

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<PAGE> 6

approved in writing by perfumania.com, for a continuous uninterrupted period
commencing upon the Effective Date and continuing for three (3) years after the
termination or expiration of this Agreement, for any reason, Perfumania will
not, either directly or indirectly, or through, on behalf of or in conjunction
with any person, persons, partnership, corporation or other entity, (i) own,
maintain, engage in, be employed by, advise, assist, invest in, franchise, make
loans to, or have any interest in any business which is the same as or
substantially similar to perfumania.com's E-Commerce Business or (ii) sell or
offer for sale Products in any venue other than, through, and at retail stores
not on the World Wide Web or other portion of the Internet.

If the period of time or the area specified above, should be finally
adjudged as unreasonable or unenforceable in any proceeding, then the period of
time shall be reduced by such number of months or the area shall be reduced by
the elimination of such portion thereof or both, so that such restrictions may
be enforced in such area and in such time as is adjudged to be reasonable.

Perfumania acknowledges and agrees that the covenants not to compete
set forth in this Agreement are fair and reasonable and will not impose any
undue hardship on Perfumania, since Perfumania has other considerable experience
which affords it the opportunity to derive income from other endeavors.

6. FEES AND COSTS.

6.1 Royalties. The licenses granted in Article 2 shall be royalty-
free as between Perfumania and perfumania.com, provided, however, that to the
extent that any royalty shall be deemed by applicable tax law to exist by virtue
of this Agreement, perfumania.com will be responsible for any withholding or
value-added taxes associated therewith.

6.2 Costs and Expenses. All costs and expenses incurred by either
party perfumania.com in carrying out its obligations under this Agreement shall
be paid by such party and neither party shall be entitled to any reimbursement
from the other.

7. CONFIDENTIALITY.

7.1 Nondisclosure and Nonuse. Each party receiving Confidential
Information, including, but not limited to, Materials containing Confidential
Information, shall (a) disclose such Confidential Information to only those
directors, officers, employees and agents of such party (i) whose duties justify
their need to know such information and (ii) who have been clearly informed of
their obligation to maintain the confidential, proprietary and/or trade secret
status of such Confidential Information; and (b) use such Confidential
Information only for the purposes set forth in this Agreement. Each party
receiving Confidential Information shall treat such information as strictly
confidential, and shall use the same care to prevent disclosure of such
information as such party uses with respect to its own confidential and
proprietary information, which shall not be less than the care a reasonable
person would use under similar circumstances. Notwithstanding the foregoing,
each party may disclose Confidential Information to the extent necessary
pursuant to applicable federal, state or local law, regulation, court order, or
other legal

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process, provided the receiving party has given the disclosing party prior
written notice of such required disclosure and, to the extent reasonably
possible, has given the disclosing party an opportunity to contest such required
disclosure at the disclosing party's expense.

7.2 Notice. The receiving party will notify the disclosing party
immediately in the event the receiving party learns of any unauthorized
possession, use or knowledge of the Confidential Information and/or Materials
containing Confidential Information, and will cooperate with the disclosing
party in any litigation against any third persons necessary to protect the
disclosing party's rights with respect to the Confidential Information and
Materials.

8. REPRESENTATIONS AND WARRANTIES.

8.1 Authority. Each party represents and warrants that it has
authorized the person who has signed this Agreement on behalf of such party to
execute and deliver this Agreement to the other party.

8.2 Assigned Materials. Perfumania represents and warrants that
(i) it is the sole and exclusive owner of the entire right, title, and interest
in and to the Assigned Materials, free and clear of any liens or claims; (ii) to
the knowledge of Perfumania, the Assigned Materials do not infringe the rights
of any other person or entity; (iii) to the knowledge of Perfumania, no claim of
any such infringement or violation has been threatened or asserted, and no such
claim is pending against Perfumania; (iv) Perfumania has not entered into any
agreement, license, release, or order that restricts the right of Perfumania or
perfumania.com to use the Assigned Materials in any way; and (v) the execution,
delivery, and performance of this Agreement by Perfumania does not and will not
violate any security agreement, indenture, order, or other instrument to which
Perfumania is a party or by which it or any of its assets is bound.

9. DISCLAIMERS AND LIMITATION OF LIABILITY.

9.1 Disclaimer. EXCEPT AS PROVIDED IN ARTICLE 8 ABOVE, NEITHER
PARTY ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
ASSIGNED MATERIALS, THE PROPRIETARY MARKS OR THE PERFUMANIA.COM MARK INCLUDING
BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

9.2 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES SUCH AS LOSS OF PROFITS OR
INABILITY TO USE THE PERFUMANIA SITE OR ASSIGNED MATERIALS.

10. INDEMNIFICATION; INFRINGEMENT.

10.1 Indemnification. Perfumania shall defend, at its own expense
(or in Perfumania's discretion, settle), indemnify, and hold perfumania.com
harmless from and against any loss, injury, demand, cost, expense or claim
(including reasonable attorneys' fees) arising out of any

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allegation that the Assigned Materials infringe any patents, copyrights, trade
secrets or other proprietary rights of any third party, provided that
perfumania.com timely notifies Perfumania in writing of any such claim, provided
that failure to timely notify Perfumania shall not constitute a defense unless
Perfumania is harmed as a result.

10.2 Exceptions. Perfumania shall have no liability pursuant to
Section 10.1 to the extent (i) such claim is based upon the combination,
operation or use of any Assigned Materials with products or content owned by any
person or entity other than Perfumania; (ii) such claim is based upon the
combination by perfumania.com of any Assigned Materials or modifications of any
products or content supplied by any person or entity other than Perfumania; or
(iii) such claim is based upon perfumania.com's use of a Assigned Material in a
manner which is inconsistent with the terms of this Agreement and if such
infringement would not have occurred but for such use.

10.3 Infringement of Marks by Third Parties.

10.3.1 Notice. Perfumania and perfumania.com shall each
provide the other with prompt notice of any apparent infringement of
any of the Perfumania Marks or the Domain Name Marks, any petition to
cancel any registration of any of the Perfumania Marks or the Domain
Name Marks or any attempted use of or any application to register any
mark confusingly similar to, or a colorable imitation of, any of the
Perfumania Marks or the Domain Name Marks of which it becomes aware.

10.3.2 Action by Perfumania. Perfumania, at its sole
discretion, may have sole responsibility to, or may elect to have
perfumania.com, at Perfumania's expense: (i) institute and prosecute
any actions for infringement of the Perfumania Marks and the Domain
Name Marks; (ii) defend any petition to cancel any registration of any
of the Perfumania Marks or the Domain Name Marks; (iii) oppose any
attempted use of or any application to register any mark confusingly
similar to, or a colorable imitation of, any of the Perfumania Marks or
Domain Name Marks; and (iv) defend any claim alleging trademark
infringement. Any damages and costs recovered through such proceedings
shall belong exclusively to Perfumania, and Perfumania shall be solely
responsible for all costs and expenses (including attorney's fees) of
prosecuting such actions. perfumania.com shall provide Perfumania with
any requested assistance in connection with such proceedings, and
Perfumania shall reimburse perfumania.com's reasonable out-of-pocket
costs of providing such assistance.

10.4 Third-Party Infringement Claims.

10.4.1 Notice. Perfumania and perfumania.com shall each
provide the other with prompt notice of any claim alleging trademark
infringement involving the use by perfumania.com of the Perfumania
Marks or the Domain Name Marks

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in connection with conducting the E-Commerce Business at the Perfumania
Site of which it becomes aware.

10.4.2 Action by Perfumania. Perfumania, at its sole
discretion, may have sole responsibility for, or may elect to have
perfumania.com pursue, at Perfumania's expense, defending against any
and all claims charging trademark infringement involving the use by
perfumania.com of the Perfumania Marks or the Domain Name Marks.
perfumania.com shall provide Perfumania with any requested assistance
in connection with such proceedings, and Perfumania shall reimburse
perfumania.com's reasonable out-of-pocket costs of providing such
assistance. Perfumania shall keep perfumania.com informed of the status
of such proceeding and supply perfumania.com with any requested
documents regarding such proceedings. Any expenses, damages, or
judgments (including attorney's fees) in connection with claims
alleging trademark infringement involving the use by perfumania.com of
the Perfumania Marks or the Domain Name Marks in connection with the
E-Commerce Business at the Perfumania Site shall be the responsibility
of Perfumania without any claim against perfumania.com for any portion
thereof, except to the extent that such expenses, damages, or judgments
(including attorney's fees) paid by Perfumania were on account of the
action or inaction of perfumania.com.

11. TERM; TERMINATION.

11.1 Term. Except as otherwise provided below, the term of this
Agreement shall be perpetual commencing on the Effective Date (the "Term").

11.2 Termination for Breach. Should either party commit a material
breach of its obligations hereunder, or should any of Perfumania's
representations and warranties provided to perfumania.com be untrue in any
material respect, the other party may, at its option, terminate this Agreement,
upon thirty (30) days written notice of termination, which notice shall identify
and describe the basis for such termination. If, prior to the expiration of such
period, the defaulting party cures such default, termination shall not take
place.

11.3 Termination for Change in Control. Perfumania may terminate
this Agreement automatically upon written notice to perfumania.com upon a Change
in Control of perfumania.com.

11.4 Post-Termination Obligations. Upon the termination or
expiration of this Agreement for any reason, all rights of perfumania.com shall
immediately cease. perfumania.com shall not operate or conduct business under
any name or in any manner that might tend to give the general public the
impression that this Agreement is still in force, or that perfumania.com has any
right to use any of the Perfumania Marks. Additionally, perfumania.com shall
assign to Perfumania any and all rights it has in the Domain Names and the
Domain Name Marks.

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11.5 Survival. The termination or expiration of this Agreement
shall not relieve either party of any obligation or liability accrued hereunder
prior to or subsequent to such termination or expiration, nor affect or impair
the rights of either party arising under this Agreement prior to or subsequent
to such termination or expiration, except as expressly provided herein.

12. APPLICABLE LAW; ARBITRATION.

12.1 Arbitration. Except with respect to any action for which
Perfumania or perfumania.com may be entitled to injunctive relief under the
federal Lanham Act, 15 U.S.C. ss. 1051 et seq. as may be amended, any dispute,
controversy or claim arising out of or relating to this Agreement or the breach,
termination or validity thereof, shall be finally settled in accordance with the
commercial arbitration rules of the American Arbitration Association (the "AAA")
then obtaining, by a panel of three arbitrators. Each party shall have the right
to appoint one arbitrator from the list of arbitrators supplied to the parties
by the AAA, and the two arbitrators so appointed shall appoint the third.

The place of arbitration shall be Miami, Florida, U.S.A. The language
of the arbitration shall be in English. The arbitrators shall determine the
matters in dispute in accordance with the internal law of the State of Florida,
without reference to the Convention on Contracts for the International Sale of
Goods. Except as precluded by the United Nations Convention on the Recognition
and Enforcements of Foreign Arbitral Awards, the internal procedural and
substantive laws of Florida and the United States Federal Arbitration Act shall
govern all questions of arbitral procedure, arbitral review, scope of arbitral
authority, and arbitral enforcement.

The parties agree that the award of the arbitrators shall be the sole
and exclusive remedy between them regarding any claims, counterclaims, issues or
accountings presented or pled to the arbitrators, that the award shall be made
and shall be promptly payable in U.S. dollars, free of any tax, deduction or
offset, and that any costs, fees or taxes instant to enforcing the award shall,
to the maximum extent permitted buy law, be charged against the party resisting
such enforcement.

The award shall include interest from the date of damages incurred for
breach or other violation of this Agreement, and from the date of the award
until paid in full, at a rate to be fixed by the arbitrators.

12.2 Limitations on Commencement of Arbitration. No claim may be
submitted by a party to arbitration in accordance with this Article 12 unless
notified to the other party within one (1) year of the date on which the
submitting party first knew or should have known of the existence of the facts
indicating the existence of such dispute.

13. MISCELLANEOUS.

13.1 Force Majeure. Neither party will be responsible for any
failure to fulfill its obligations due to causes beyond its reasonable control,
including without limitation, acts or

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omissions of government or military authority, acts of God, materials shortages,
transportation delays, fires, floods, labor disturbances, riots, wars, or
inability to obtain any export or import license or other approval of
authorization of any government authority.

13.2 Compliance with Import/Export Restrictions. Perfumania and
perfumania.com shall comply with all of the then-current applicable laws, rules
and regulations of the United States (and any other countries having
jurisdiction) relating to the use of encryption technology and the import and
export of technology, software and technical data, including, but not limited
to, any regulations of the United States Office of Export Administration, to the
extent permitted by applicable law in the applicable jurisdiction, and of any
other applicable governmental agencies, and shall not export or re-export any
technology, software, technical data or the direct product of such technology,
software and technical data to any proscribed country listed in such applicable
laws, regulations and rules unless properly authorized.

13.3 Changes and Modifications. This Agreement may be modified only
upon the execution of a written consent by Perfumania and perfumania.com.

13.4 No Waiver. No failure of either party to exercise any power
reserved to it by this Agreement, or to insist upon strict compliance with any
obligation or condition hereunder, and no custom or practice of the parties at
variance with the terms hereof, shall constitute a waiver of such party's right
to demand exact compliance with any of the terms herein. Waiver by either party
of any particular default by the other party shall not affect or impair such
party's rights with respect to any subsequent default of the same, similar or
different nature. No delay, forbearance or omission of either party to exercise
any power or right arising out of any breach or default by the other party of
any of the terms, provisions or covenants hereof shall affect or impair such
party's right to exercise the same, and no such delay, forbearance or omission
shall constitute a waiver by such party of any right hereunder or of the right
to declare any subsequent breach or default and to terminate this Agreement
prior to the expiration of its term.

13.5 Notices. Any and all notices required or permitted under this
Agreement shall be in writing and shall be personally delivered or dispatched by
courier or overnight delivery, to the respective parties at the following
addresses unless and until a different address has been designated by written
notice to the other party:

If to Perfumania, to: 11701 N.W. 101st Road
Miami, Florida 33178-1021
Attn: Ilia Lekach, President

If to perfumania.com to: 11701 N.W. 101st Road
Miami, Florida 33178-1021
Attn: Rachmil Lekach, CEO

Any notice sent by overnight delivery shall be deemed to have been
given one day after the date and time of dispatch.

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13.6 Severability. Should any term or provision of this Agreement
be finally determined by a court of competent jurisdiction to be void, invalid,
unenforceable or contrary to law or equity, the offending term shall be modified
and limited (or if strictly necessary, deleted) only to the extent required to
conform to the requirements of law and the remainder of this Agreement (or, as
the case may be, the application of such provisions to other circumstances)
shall not be affected thereby but rather shall be enforced to the greatest
extent permitted by law.

13.7 Captions. All captions in this Agreement are intended solely
for the convenience of the parties, and none of the captions shall be deemed to
affect the meaning, or construction of any provision hereof.

13.8 References. All references herein to the masculine, neuter or
singular shall be construed to include the masculine, feminine, neuter or plural
where applicable.

13.9 Counterparts. This Agreement may be executed in one or more
originals, each of which shall be deemed an original.

13.10 Exhibits. Any appendixes, exhibits and schedules are hereby
incorporated by reference and are part of this Agreement as if expressly set
forth at length herein.

13.11 Entire Agreement. This Agreement and the Exhibits attached
hereto constitutes the entire, full and complete Agreement between the parties
hereto concerning the subject matter hereof, and they supercede all prior
agreements.

IN WITNESS WHEREOF, the parties hereto have duly executed, sealed and
delivered this Agreement on the day and year first above written.

PERFUMANIA, INC., a Florida corporation

By: /s/ Ilia Lekach
---------------------------------------
Ilia Lekach
Its: Chairman of the Board and
Chief Executive Officer

perfumania.com, inc., a Florida corporation

By: /s/ Rachmil Lekach
---------------------------------------
Rachmil Lekach
Chief Executive Officer

<PAGE> 1
S-1

EXHIBIT 23.1

Consent of Independent Certified Public Accountants

We hereby consent to the use in this registration statement on Form S-1
of our report dated May 14, 1999, except for Note 8 as to which the date is June
1, 1999, relating to the financial statements of perfumania.com, inc., which
appear in such Registration Statement. We also consent to the references to us
under the headings "Experts" and "Selected Financial Data" in such Registration
Statement.

/s/ PricewaterhouseCoopers LLP
Miami, Florida
June 4, 1999

<PAGE> 1
EXHIBIT 23.3

CONSENT OF DIRECTOR, DIRECTOR NOMINEE, OR EXECUTIVE OFFICER
PERFUMANIA.COM, INC.

I, DANIEL SAWICKI, am a Director, Director-nominee or Executive
Officer of perfumania.com, inc. (the "Company").

I hereby consent to the inclusion of my name and biographical
information in the Company's Registration Statement to be filed with the
Securities and Exchange Commission on Form S-1 (the "Registration Statement")
and any amendment(s) thereto, in connection with the Company's initial public
offering. I understand that my name and biographical information will be
included for the sole purpose of identifying and describing the directors and
officers of the Company in accordance with the Securities Act of 1933 and the
rules promulgated thereunder. I acknowledge that information about me will be
published, distributed and publicly available and waive any claims that I may
assert against the Company as a result of the inclusion of such information in
the Registration Statement.

IN WITNESS WHEREOF, I have executed this Consent on this the first day
of June, 1999.

/s/ Daniel Sawicki
-------------------------------
Daniel Sawicki

Acknowledged and Accepted
by perfumania.com, inc. on this
the first day of June, 1999.

perfumania.com, inc.

/s/ Ilia Lekach
- -------------------------------
Ilia Lekach
Its President

<PAGE> 1
EXHIBIT 23.4

CONSENT OF DIRECTOR, DIRECTOR NOMINEE, OR EXECUTIVE OFFICER
PERFUMANIA.COM, INC.

I, CAROL TAYLOR, am a Director, Director-nominee or Executive Officer
of perfumania.com, inc. (the "Company").

I hereby consent to the inclusion of my name and biographical
information in the Company's Registration Statement to be filed with the
Securities and Exchange Commission on Form S-1 (the "Registration Statement")
in connection with the Company's initial public offering. I understand that my
name and biographical information will be included for the sole purpose of
identifying and describing the directors and officers of the Company in
accordance with the Securities Act of 1933 and the rules promulgated
thereunder. I acknowledge that information about me will be published,
distributed and publicly available and waive any claims that I may assert
against the Company as a result of the inclusion of such information in the
Registration Statement.

IN WITNESS WHEREOF, I have executed this Consent on this the first day
of June, 1999.

/s/ Carol Taylor
-------------------------------
Carol Taylor

Acknowledged and Accepted
by perfumania.com, inc. on this
the first day of June, 1999.

perfumania.com, inc.

/s/ Ilia Lekach
- -------------------------------
Ilia Lekach
Its President

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-START> JAN-07-1999
<PERIOD-END> JAN-30-1999
<CASH> 100,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 209,655
<CURRENT-ASSETS> 309,655
<PP&E> 14,308
<DEPRECIATION> 95
<TOTAL-ASSETS> 323,868
<CURRENT-LIABILITIES> 597,363
<BONDS> 0
0
0
<COMMON> 10
<OTHER-SE> (273,505)
<TOTAL-LIABILITY-AND-EQUITY> 323,868
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 270,906
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,599
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<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (273,505)
<EPS-BASIC> 0
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<FN>
The period presented above is from January 7, 1999 (date of inception) through
January 30, 1999.
</FN>

</TABLE>

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-START> FEB-01-1999
<PERIOD-END> MAY-01-1999
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<PP&E> 27,712
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0
0
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<NET-INCOME> (764,657)
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</TABLE>