INTERNATIONAL COSMETICS MARKETING CO, 10KSB40, 2000-10-23

INTERNATIONAL COSMETICS MARKETING CO
10KSB40, 2000-10-23
NON-OPERATING ESTABLISHMENTS

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U.S. Securities and Exchange Commission

Washington, D.C. 20549

Form 10-KSB

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission file number 0-27833

International Cosmetics Marketing Co.
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(Name of small business issuer in its charter)

Florida
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(State or other jurisdiction of incorporation or organization)

65-0598868
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(I.R.S. Employer Identification No.)

6501 NW Park of Commerce Boulevard, Suite 205, Boca Raton, Florida 33487
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(Address of principal executive offices)(Zip Code)

Issuer's telephone number 561-999-8878

Securities registered under Section 12(b) of the Exchange Act:

None
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(Title of each class)

Name of each exchange on which registered

Not applicable
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Securities registered under Section 12(g) of the Exchange Act:

Common Stock
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Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [x] No [
]

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [x]

State issuer's revenues for its most recent fiscal year. Issuer had
revenues of $1,955,710 for the year ended June 30, 2000.

State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. The aggregate market value of the voting stock held by
non-affiliates as of September 30, 2000 was approximately $13,466,192.

State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date. As of September 30, 2000,
4,785,630 shares of Common Stock are issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB into which the document
is incorporated: (1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to Rule 424(b) of
the Securities Act of 1933 ("Securities Act"). Not Applicable.

Transitional Small Business Disclosure Form (check one):

Yes No X
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INTERNATIONAL COSMETICS MARKETING CO.
Form 10-KSB for the year ended June 30, 2000

Table of Contents

Part I

Item 1 Description of Business 2
Item 2 Description of Property 15
Item 3 Legal Proceedings 16
Item 4 Submission of Matters to a
Vote of Security Holders 16

Part II

Item 5 Market for Common Equity and
Related Stockholder Matters 16
Item 6 Management's Discussion and
Analysis or Plan of Operations 16
Item 7 Financial Statements 18
Item 8 Changes in and Disagreements
With Accountants on Accounting
And Financial Disclosure 18

Part III

Item 9 Directors, Executive Officers, Promoters
And Control Persons; Compliance with
Section 16(a) of the Exchange Act 19
Item 10 Executive Compensation 20
Item 11 Security Ownership of Certain Beneficial
Owners and Management 22
Item 12 Certain Relationships and Related
Transactions 24
Item 13 Exhibits, Financial Statement Schedules,
And Reports on Form 8-K 25

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PART I

The discussion in this Annual Report on Form 10-KSB regarding the Company and
its business and operations includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1996. Such statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward-looking terminology such as "may," "expect,"
"anticipate," "estimate" or "continue" or the negative thereof or other
variations thereon or comparable terminology. The reader is cautioned that all
forward-looking statements are necessarily speculative and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in such forward-looking statements. The
Company does not have a policy of updating or revising forward-looking
statements and thus it should not be assumed that silence by management of the
Company over time means that actual events are bearing out as estimated in such
forward looking statements.

Item 1. Business

History

The Company was incorporated in Florida on July 14, 1995 under the name
CindyCo, Inc. In August 1999, the Company changed its name to International
Cosmetics Marketing Co. (the "Company") and concurrently entered into an
agreement with Beverly Sassoon International, L.L.C., Beverly Sassoon and Elan
Sassoon which grants the Company various rights related to the manufacturing,
marketing and distribution of products utilizing the "Beverly Sassoon" or "Elan
Sassoon" names.

The Company commenced operations in late 1999 as a direct sales company
which develops and distributes a variety of skin care, cosmetics, nutritional
and human wellness products.

General

As of September 30, 2000, the Company has a network of approximately
4,411 independent business associates ("IBA") located throughout the United
States who have purchased the Company's business builder kit. Approximately 650
of the Company's IBAs are "commission certified," i.e., qualified to earn sales
commissions. Commissions are earned on the sales of IBAs placed in the downline
of an IBA. These sales are named group volume. A commission certified IBA is one
who has (1) activated his or her position in the network by achieving $495 in
commissionable sales (also known as personal volume) which may be the result of
a single order or accumulated during the IBA's first six months being an IBA of
the Company and (2) sponsored two IBAs, one on his or her left side (Team A) and
one on his or her right side (Team B) who have purchased the business builder
kit and who have achieved $495 in personal volume. To remain commission
certified, an IBA must be generating a minimum of $100 in personal volume each
month.

Products

Beverly Sassoon Skin Care Products.

OxiCleanse. OxiCleanse is a gentle, everyday face cleanser.
Natural exfoliates combined with activated stabilized oxygen assists in
revealing the skin's natural tones.

OxiCreme. OxiCreme is a facial and neck therapy cream. A
premium-formulated cream combined with oxygen's healing power. It exclusively
refines delicate skin around the face and neck. OxiCreme contains CoQ10.

OxiSoft. Oxisoft is premium-oxygenated moisture. Added oxygen
deeply penetrates and delivers essential moistures to reduce dryness and
premature aging leaving skin silky. OxiSoft also contains CoQ10 and a vital
sunscreen protection.

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OxiSerum-C. OxiSerum-C is an all-natural oxygen enriched
emollient solution that invigorates the skin and restores its vital pH balances.
This maximum skin nourishment and moisturizing treatment gently works on all
skin types.

OxiTone. OxiTone is a facial and epidermal toner that works
with oxygen to restore the skin's youthful glow.

Elan Sassoon's Men's Body Care Products.

OxiMoist. OxiMoist is a moisturizer designed for all skin
types, especially for men. OxiMoist's synergistic blend of botanical ingredients
encourages the healing of minor nicks and cuts.

OxiScrub. OxiScrub naturally exfoliates and revitalizes, while
BiOxygen stabilized oxygen helps cleanse, disinfect and nourish skin.

Body ARMO2R. Body ARMO2R is specially formulated roll-on
deodorant with natural botanicals for use as an effective defensive weapon
against perspiration and odors caused by bacteria.

M.E.N. M.E.N. is a male energy nutritional containing a herbal
formula combined with the oxygenating power of magnesium dioxide and Vitamin C.
M.E.N. is formulated to help restore healthy male sexual function and energy
normally affected by age, illness, or daily stress.

Nutritional Dietary Supplement Products.

LTSO Calcium. Lyophyllic Third State Oximinerals (LTSO) are minerals
most easily used by a person's body. LTSO Calcium is a proprietary homeopathic
solution of activated oxygen and vital mineral calcium. LTSO Calcium is isolated
in a concentrated liquid form that provides for far greater assimilation and is
completely plant organic-based.

LTSO Selenium. Selenium is primarily an antioxidant that reduces free
radicals, unstable molecules that are produced by the body as a natural part of
the metabolic process.

PhytO2. Phyt02 contains over 90 trace and essential minerals and
vitamins and is a high-grade natural amino acid complex. PhytO2 is an
oxygen-enhanced phyto-nutrient (plant based) supplement store in a VegiCap
capsule.

OxiDetox. Poor diets, lack of exercise, environmental pollution and
stress depletes the body of oxygen and other vital nutritional substances.
OxiDetox is a body cleansing system that helps to deodorize the digestive system
and to help fight off pathogenic bacteria, parasites as well as yeast.

Sports Nutritional Supplements. The Company's sports nutritional
product line combines the benefits of oxygen with training supplements. The
Company's current sports nutritional supplement product line consists of:

SherpaO2. SherpaO2 is a concentrated activated oxygen supplement
developed for both professional and amateur athletes.

OxiQuench. OxiQuench is a blended powder carbohydrate energy drink that
drives the body to burn stored fat rather than depleting the cells of their
glucose fuel. Combined with SherpaO2, this aggressive sports nutritional
supplement can enhance training, exercise and performance.

OxiMSM. Oxi-MSM is a heavy-hitting health promoter, providing
vital oxygen and sulfur to cells in the body providing abundant energy and
vitality and may free a person from a multitude of pains and discomforts.

3
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OxiCramp. OxiCramp is a combination of oxygenators, which may reduce
pain and fatigue and enhance performance.

Other Products.

BiOxygen. BiOxygen is a nutritional supplement for personal health.
While there are similar oxygen products, none is specifically processed to
retain high levels of oxygen. This oxygen concentrated water solution provides
oxygen supplements to aid the body in countless enriching ways. Oxygen is
believed to remove toxins, converts nutrients to energy and enhances a person's
body energy and vitality. The Company sells BiOxygen in liquid form in addition
to including it in its skins care and nutritional products.

Web sites. The Company provides IBAs with the opportunity to have a web
site for managing their business, e. g., viewing the genealogy of their
downline, submitting new associate applications, and placing orders, for a
monthly cost of $19.95.

Preferred Customer Membership Program. The Company has implemented a
preferred customer program whereby non-IBAs can purchase an annual membership
for $29.95 to purchase product at wholesale cost. Preferred customers are not
allowed to resell the product purchased and need to be introduced by an IBA who
will earn group volume on the products purchased by the preferred customer.

Licensing and Endorsement Agreements

Exclusive License Agreement. Under the terms of the Exclusive License
Agreement with Beverly Sassoon International, LLC, Beverly Sassoon, and Elan
Sassoon which was entered into in August 1999, the Company received the
exclusive rights to manufacture, market and distribute the line of skin care
products and cosmetics which Beverly Sassoon International, LLC, had previously
developed. These products, which include a complete line of skin care products
including moisturizers, treatments and masks, will be marketed and distributed
utilizing the name and likeness of Beverly Sassoon.

The Exclusive License Agreement granted the Company the following rights:

* An exclusive license to utilize Ms. Sassoon's name and
likeness in connection with the manufacture, marketing,
promotion and sale of certain of the Company's products.

* An exclusive license to utilize Mr. Sassoon's name and
likeness in connection with the manufacture, marketing,
promotion and sale of certain of the Company's products.

* An exclusive, worldwide license to manufacture, market and
distribute certain skin care products, pet care products and
slimming products developed by Beverly Sassoon International,
LLC.

The term of this Exclusive License Agreement is 99 years, with a
99-year renewal at the Company's option. The Company retains full control over
the manufacturing, development and marketing of its products. Through Beverly
Sassoon International, LLC, Ms. Sassoon and Mr. Sassoon will consult with the
Company in the areas of product development and marketing, and the Company will
utilize their names and/or likenesses in promoting certain of its products and
in the development of certain of its brands. The consideration for the rights
the Company received under this Exclusive License Agreement included:

* Aggregate cash payment to Beverly Sassoon International, LLC of up
to $200,000.

* Issuance of 900,000 shares of the Company's Common Stock to Beverly
Sassoon International, LLC.

* The future payment of royalties to Beverly Sassoon International,
L.C.C. equal to the greater of 2% of gross revenues from the sales
of any of the Company's products which are marketed or distributed
subject to the terms of the Exclusive License Agreement, or $25,000

<PAGE>

per month. These royalty payments will end if either Beverly
Sassoon, Elan Sassoon or Capital IBAs, LLC, which is controlled by
Beverly Sassoon and Elan Sassoon, exercises certain options to
purchase an aggregate of 4,850,000 shares of the Company's Common
Stock.

The Company anticipates that it will also seek to license the use of
the names and likeness of other well-known individuals to assist us in the
development, marketing and establishment of certain of the Company's brands. The
Company has not entered into any discussions with any additional well-known
individuals as of September 30, 2000.

Sales Aids

The Company provides an assortment of sales aids to facilitate the
sales of its products. Sales aids include videotapes, brochures, posters,
audiotapes, promotional clothing, stationery, business cards, and other
miscellaneous items to help create consumer awareness of the Company and its
products. IBAs do not receive commissions on purchases of sales aids.

Refund and Product Return Policy

The Company believes it is a consumer-protective company in the direct
selling industry. An IBA's return of inventory and related refund requests for
any reason, other then shipping discrepancy, customer exchange, or a damage
claim, are treated as a request by the IBA to voluntarily terminate as an IBA
for the Company. When returning product, the IBA is provided with a Return
Merchandise Authorization Number (RMA#) that is used for proper routing of
incoming packages. Products that are returned used or partially used, previously
certified as sold or returned with security seals broken are not eligible for
refund. Return merchandise that is eligible for refund is refunded at 90% of the
price paid by the IBA, exclusive of shipping and handling costs. Returned
inventory on which sales commissions have been paid will be charged back to all
affected parties. The Company's refund and product return policy is modified
from the general policy indicated above due to laws and regulations in a limited
number of states, e. g., Georgia.

Distribution System

Overview. The Company is a direct sales company which presently
distributes its products through a network marketing system. Under its system,
IBAs purchase products from the Company for resale and for personal consumption.

The Company believes network marketing is an effective vehicle to
distribute its products because:

- A consumer can be educated about a product in person by an IBA,
which the Company believes is more effective than traditional
marketing avenues.

- Direct sales allow for actual product testing by a potential
consumer.

- The impact of IBA and consumer testimonials is enhanced; and

- As compared to other distribution methods, IBAs can give customers
higher levels of service and attention, by, among other things,
delivering products directly to a consumer and following up on

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sales to ensure proper product usage and customer satisfaction,
and to encourage repeat purchases.

The Company's network marketing program differs from many other network
marketing programs in several respects. First, currently the Company's
compensation plan allows Company IBAs to develop a seamless national network of
downline IBAs. Second, the Company's order and fulfillment systems eliminate the
need for IBAs to carry significant levels of inventory. Third, the Company's
compensation plan is very financially rewarding. During the first year of
building its network of IBAs, the Company's commissions (including bonuses) have
averaged approximately 31% of revenue from gross product sales for the period
December 1999 through June 2000.

As a distribution channel, direct selling has been enhanced in the past
decade due to advancements in communications, including telecommunications and
Internet connectivity, and the proliferation of the use of videos and fax
machines. Direct selling companies generally rely on communications, the
Internet, and videos to project a desired image for such companies and their
product lines. The Company believes that high quality sales aids play an
important role in the success of IBA efforts. The Company believes that the
Internet will become an increasingly important business factor as more and more
consumers purchase products over the Internet as opposed to traditional retail
and direct sales channels. As a result, the Company expects that direct sellers
will need to adapt their business models to integrate the Internet into their
operations to remain successful. The Company's web site that can be accessed via
the Internet is www.bsassoon.net. Management is committed to fully utilizing
current and future technological advances to continue enhancing the
effectiveness of direct selling. See "Risks Related to Potential Changes in
Business Model."

Sponsoring. The Company relies on its IBAs to sponsor new IBAs. While
the Company provides brochures, magazines, and other sales materials, IBAs are
primarily responsible for educating new IBAs with respect to products, the
Company's compensation plan, and how to build a successful network. See "Risk
Factors - Reliance upon Independent IBAs."

The sponsoring of new IBAs creates multiple levels in the network
marketing structure. Persons whom a IBA sponsors are referred as "downline" or
"sponsored" IBAs. If downline IBAs also sponsor new IBAs, they create additional
levels in the structure, but their downline IBAs remain in the same downline
network as their original sponsoring IBA.

Sponsoring activities are not required of IBAs. However, because of the
financial incentives provided to those who succeed in building a IBA network
that consumes and resells products, the Company believes that most of its IBAs
attempt, with varying degrees of effort and success, to sponsor additional IBAs.
Generally, IBAs invite friends, family members, and acquaintances to sales
meetings, the Company's web site, conference calls, and prerecorded telephone
calls in which Company products are presented and the compensation plan is
explained. People are often attracted to become IBAs after using Company
products and becoming regular retail customers. Once a person becomes a IBA, he
or she is able to purchase products directly from the Company at wholesale
prices for resale to consumers or for personal consumption. The IBA is also
entitled to sponsor other IBAs in order to build a network of IBAs and product
users.

A potential IBA must enter into a standard IBA agreement with the
Company that obligates the IBA to abide by the Company's policies and
procedures. In most of the Company's current markets, IBAs are also required to
purchase a IBA starter kit, which includes the Company's policies and procedures
and are sold for the approximate cost of producing the IBA starter kit.

Compensation Plan. Management believes that one of the Company's key
competitive advantages is the Company's compensation plan. Based upon its
knowledge of network marketing compensation plans, the Company believes that the
Company's compensation plan is very financially rewarding. There are two
fundamental ways in which IBAs can earn money: (i) through retail markups, for
which the Company recommends a range from 8% to 100%; and (ii) through a series
of commissions on product sales, which can result in commissions and bonuses.
Personal volume is essentially based upon a factor (usually 100%) of a product's
wholesale cost, net of any point-of-sale taxes. IBAs receive higher levels of
commissions as they

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advance up the compensation plan. A commission certified IBA is eligible to earn
commissions and is one who has (1) activated his or her position in the network
by achieving $495 in personal volume which may be the result of a single order
or accumulated during the IBA's first six months being a IBA of the Company and
(2) sponsored two IBAs, one on his or her left side (Team A) and one on his or
her right side (Team B) who also have purchased the business builder kit and
achieved $495 in personal volume. To remain commission certified, an IBA must be
generating a minimum of $100 in personal volume each month.

Commissions are calculated daily - Tuesday through Monday - and paid
weekly. Orders placed on Saturday and Sunday count towards Monday's personal
volume. The calculation of daily commissions is based upon the total group
volume that accumulated within the weaker of an IBA's two teams. Commissions are
paid at the rate of 10% of the group volume generated by an IBA's weaker team.
The personal volume must be equal to or exceed $495.00 before a check will be
issued. Total group volume is used for calculating commissions regardless of the
number of levels in an IBA's organization or network. After an IBA is paid on
the group volume of his or her weaker team, an equal corresponding amount of
volume is deducted from the IBA's stronger team with the balance carried forward
to the next day - up to a maximum of $5,000 per day. This process continues
until group volume reaches $5,000 in both teams within the same day and each day
thereafter. This maximum payout of $500 per day can be achieved once per day for
a maximum $2,500 per week, excluding management bonuses.

As part of commissions paid, the Company also pays a $50 quick start
bonus when an IBA's personally sponsored IBA achieves personal volume of $495
and signs up for the Company's Monthly Preferred Product Program in his or her
first order.

The Company's Monthly Preferred Product Program consists of a choice of
eleven packages for which IBAs can sign up for a standing monthly order to
simplify an IBA's order of wholesale product. The wholesale cost of the packages
in this program exceed the $100 cost. This $100 also carries $100 of personal
volume that assists IBAs in satisfying the $100 personal volume monthly
requirement to remain commission certified.

Management bonuses. IBAs who have at least two (2) IBAs who have
purchased the business builder kit and have $495 in personal volume are
qualified to earn a 25% Area Manager bonus paid on the sales commission of all
of his or hers personally-sponsored IBAs.

IBAs who have at least four (4) IBAs who have purchased the business
builder kit and have $495 in personal volume with at least two (2) of these IBAs
qualifying as Area Managers are qualified to earn a 50% Regional Manager bonus
paid on the sales commission of all of his or hers personally-sponsored IBAs.

IBAs who have at least eight (8) IBAs who have purchased the business
builder kit and have $495 in personal volume with at least four (4) of these
IBAs qualifying as Regional Managers are qualified to earn a 100% Regional
Manager bonus paid on the sales commission of all of his or her's
personally-sponsored IBAs.

The Company evaluates requests for exceptions to the Company's
compensation plan. While the general policy is to discourage exceptions,
management believes that the flexibility to grant such exceptions is critical in
retaining IBA loyalty and dedication.

IBA Support. The Company is committed to providing high-level support
services tailored to the needs of its IBAs. The Company meets the needs and
builds the loyalty of its IBAs with personalized IBA service, a support staff
that assists IBAs as they build networks of downline IBAs, and a fair product
return policy. Because many IBAs have only a limited number of hours each week
to concentrate on their component of the Company's business, management believes
that maximizing an IBA's efforts through effective support of each IBA has been
and will continue to be important to the success of the Company.

Through training meetings, regional and annual conventions, IBA focus
groups, regular telephone conference calls, sales aids material, and personal
contacts with IBAs, the Company seeks to understand and satisfy the needs of
each IBA. The Company currently provides Internet and telephonic product
fulfillment and tracking services that result in user-friendly, timely product
distribution.

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Rules Affecting IBAs. The Company's standard IBA agreement, policies
and procedures and compensation plan contained in every IBA starter kit outline
the scope of permissible IBA marketing activities. The Company's IBA rules and
guidelines are designed to provide network marketing and prudent business
policies and procedures. IBAs are independent contractors and are thus
prohibited from representing themselves as agents or employees of the Company.
IBAs are obligated to present the Company's products and business opportunity
ethically and professionally. IBAs agree that the presentation of the Company's
business opportunity must be consistent with, and limited to, the product claims
and representations made in literature distributed by the Company. Under most
regulations governing nutritional supplements, no medical claims may be made
regarding the products, nor may IBAs prescribe any particular product as
suitable for any specific ailment. See "Risk Factors - Reliance upon Independent
IBAs."

IBAs must represent that the receipt of commissions is based on retail
sales and substantial efforts. IBAs are required to meet a retail sales
requirement of at least five retail sales to five different customers per month.

IBAs are also prohibited from the purchase of products or unreasonably
large quantities of inventory solely to qualify for bonuses or advancement. IBAs
may not "inventory load" nor encourage other IBAs to load up on inventory. Any
time an IBA places an order with the Company, he or she is verifying that at
least seventy percent (70%) of his or her previous order has been sold or
otherwise consumed. This requirement is referred to as the 70% rule.

Exhibiting commission statements or checks is prohibited. Sales aids
such as videotapes, promotional clothing, stationery, and other miscellaneous
items must be produced or pre-approved by the Company.

IBAs may not use any form of media advertising to promote products
without the Company's consent. Products may be promoted only by personal contact
or by literature produced or approved by the Company. Generic business
opportunity advertisements (without using the Company name) may be placed in
accordance with certain guidelines in some states. The Company's logos and names
may not be permanently displayed on physical premises. IBAs may not use the
Company's trademarks or other intellectual property without the Company's
consent.

Products generally may not be sold, and the business opportunity may
not be promoted, in traditional retail environments. Additionally, IBAs may not
sell at conventions, trade shows, flea markets, swap meets, and similar events
without the Company's approval and training. IBAs who own or are employed by a
service-related business such as a doctor's office, hair salon, or health club,
may make products available to regular customers as long as products are not
displayed visibly to the general public in such a way as to attract the general
public into the establishment to purchase products.

The Company systematically reviews alleged reports of IBA misbehavior.
If the Company determines that a IBA has violated any of the IBA policies or
procedures, it may either terminate the IBA's rights completely or impose
sanctions such as warnings, probation, withdrawal or denial of any award,
suspension of privileges of a IBAship, fines or penalties, withholding
commissions until specified conditions are satisfied, or other appropriate
injunctive relief. IBA terminations and IBAs who have been suspended based on
violations of policies and procedures have aggregated less than 8% of the
Company's IBA force since inception in late 1999. An IBA may voluntarily
terminate his/her IBAship at any time.

Payment. IBAs generally pay for products prior to shipment.
Accordingly, the Company carries minimal accounts receivable. IBAs typically pay
for products by credit cards, bank drafts, and in limited circumstances payment
for products is in cash. See "Risk Factors - Reliance on Merchant Account."

Product Development

The Company is committed to building its brand name and IBA and
customer loyalty by selling premium quality, innovative personal care products
and nutritional supplements that appeal to broad markets.

<PAGE>

The Company's philosophy is to combine the best of science and nature and to
include in each of its products the highest quality ingredients with the
greatest amount of benefit to the consumer. Independent IBAs need to have
confidence that they are distributing the best products available that are
distinguishable from "off the shelf" products. The Company is committed to
developing and providing quality products that can be sold at attractive retail
prices and allow the Company to maintain reasonable profit margins.

The Company believes that timely and strategic product introductions
are critical to maintaining the growth of independent distribution channels.
IBAs become enthusiastic about new products and are generally excited to share
new products with their customer base. An expanding product line helps to
attract new IBAs and generate additional revenues.

Suppliers and Key Vendors

Sourcing and Production. The Company's skin care and nutritional
products were purchased in the year ended June 30, 2000 from BIO2 International,
Inc. (BIO2) of San Luis Obispo, California. BIO2 purchases the botanical
extracts for the Company's products from Vegekurl and Vege-Tec of Glendale
California and its nutritional supplement products from Creations Garden Natural
Products, Inc. (Creations) of Valencia, California. Vegekurl and Creations are
FDA approved. The Company has experienced various operational disputes with
BIO2, has recently terminated its relationship with BIO2 and has withheld
payments due of approximately $25,000. The Company has established relationships
in principal with other suppliers and expects to be placing orders for inventory
in the fourth quarter of 2000. The effect of The Company's termination of its
relationship with BIO2 may have an adverse effect upon the Company's business.
The Company's profit margins, and its ability to deliver its existing products
on a timely basis, are dependent upon the ability of the Company's primary
suppliers to supply products in a timely and cost-efficient manner. Furthermore,
the Company's ability to enter new markets and sustain satisfactory levels of
sales in each market depends in part upon the ability of the Company's suppliers
and/or other outside manufacturers to reformulate existing products if necessary
to comply with regulations on market environments. Finally, the development of
additional new products in the future will likewise depend in part of the
services of suitable outside manufacturers. The Company believes that, in the
event it is unable to source any products or ingredients from its current supply
sources, the Company could produce such products or replace such products or
substitute ingredients without great difficulty or prohibitive increases in the
cost of goods sold. The Company is actively seeking additional suppliers to have
multiple vendors in 2001. However, there can be no assurance that the loss of a
primary supplier or its suppliers would not have a material adverse effect on
the Company's business and results of operations. See "Risk Factors - Reliance
on Limited Suppliers."

Product Fulfillment. In December 1999, the Company entered into a three
year Order Fulfillment Agreement with Creations (see preceding paragraph).
Creations picks, boxes, ships, re-packing and returns, handles inventory, and
maintains inventory controls. Creations receives orders from the Company's
computer processing services vendor. In the first quarter of 2000, the Company
transferred the customer service function handled by Creations to its corporate
offices in Boca Raton, Florida. In the second quarter of 2000, the Company
transferred order taking handled by Creations to its corporate offices in Boca
Raton, Florida. There is no assurance that Creations has the capacity to handle
the Company's future order fulfillment requirements. See "Risk Factors -
Reliance on Limited Suppliers."

Computer Services. In November 1999, the Company entered into a one
year agreement with 2021 Interactive, L.L.C. (2021) of Plano, Texas to provide
computer processing services for processing orders, billing customers,
calculating commissions, processing commission checks, preparing Form 1099 tax
information to IBAs, inventory reporting, sales and sales tax reporting, and
providing genealogy information to IBAs on their individual downlines, and the
genealogy to the Company of its entire network system. There is no assurance
that 2021 has the capacity to handle the Company's future computer processing
requirements. See "Risk Factors - Reliance on Limited Suppliers."

Competition

Skin Care and Nutritional Products. The markets for skin care and
nutritional products are large and intensely competitive. The Company competes
directly with companies that manufacture and market skin

<PAGE>

care and nutritional products in each of the Company's product categories and
product lines. The Company competes with other companies in the skin care and
nutritional products industry by emphasizing the uniqueness, value and premium
quality of the Company's products and convenience of the Company's distribution
system. Many of the Company's competitors have much greater name recognition and
financial resources than the Company. In addition, skin care and nutritional
products can be purchased in a wide variety of channels of distribution. While
the Company believes that consumers appreciate the convenience of ordering
products from home through a sales person, or through a catalog, the buying
habits of many consumers accustomed to purchasing products through traditional
retail channels are difficult to change. The Company's product offerings in each
product category are also relatively small compared to the wide variety of
products offered by many other skin care and nutritional product companies.
There can be no assurance that the Company's business and results of operations
will not be affected materially by market conditions and competition in the
future. See "Risk Factors - Competition."

Network Marketing Companies. The Company also competes with other
direct selling organizations, some of which have a longer operating history and
higher visibility, name recognition, and financial resources. The leading
network marketing company in the Company's existing markets is Amway Corporation
and its affiliates. The Company competes for new IBAs on the strength of its
multiple business opportunities, product offerings, compensation plan, and
management strength. Management envisions the entry of many more direct selling
organizations into the marketplace as this channel of distribution expands over
the next several years. There can be no assurance that the Company will be able
to successfully meet the challenges posed by this increased competition. See
"Risk Factors - Competition."

Intellectual Property

Under the terms of the Exclusive License Agreement, the Company has the
rights to all trademarks, copyrights, trade names and other intellectual
property related to the use of the names and likeness of Beverly Sassoon or Elan
Sassoon for products marketed and distributed under the terms of that agreement.
The Company has registered certain fictitious name applications with the state
of Florida in order to conduct business under the names "Beverly Sassoon &
Company", Beverly Sassoon & Co." and "Beverly Sassoon." Ms. Sassoon and Mr.
Sassoon have agreed to execute such additional documents, as the Company deems
reasonably necessary to register and protect these intellectual property rights.
As the Company develops other trademarks, trade names, copyrights or other
intellectual property rights, the Company may seek to protect these, as well as
those related to Ms. Sassoon and Mr. Sassoon, by registration in the United
States and other countries where these products may be marketed. Depending upon
the development of the Company's business, the Company may also wish to develop
and market products that incorporate patented or patent-pending formulations, as
well as products covered by design patents or other patent applications. While
the Company may seek to protect its intellectual property, in general, there can
be no assurance that its efforts to protect its intellectual property rights
through copyright, trademark and trade secret laws will be effective to prevent
misappropriation of its products. The Company's failure or inability to protect
its proprietary rights could materially adversely affect its business, financial
condition and results of operations.

Government Regulation

Direct Selling Activities. Direct selling activities are regulated by
various federal, state, and local governmental agencies. These laws and
regulations are generally intended to prevent fraudulent or deceptive schemes,
often referred to as "pyramid," "money games," "business opportunity" or "chain
sales" schemes, that promise quick rewards for little or no effort, require high
entry costs, use high pressure recruiting methods, and/or do not involve
legitimate products. The laws and regulations in the Company's current markets
often (i) impose certain cancellation/product return, inventory buy-backs and
cooling-off rights for consumers and IBAs, (ii) require the Company or its IBAs
to register with the governmental agency, (iii) impose certain reporting
requirements on the Company, and/or (iv) impose various requirements, such as
requiring IBAs to have certain levels of retail sales to qualify to receive
commissions, to ensure that IBAs are being compensated for sales of products and
not for recruitment of new IBAs.

Based on research conducted in opening its existing markets (including
assistance from legal counsel), the nature and scope of inquiries from
government regulatory authorities, and the Company's

<PAGE>

history of operations in such markets to date, the Company believes that its
method of distribution is in compliance in all material respects with the laws
and regulations relating to direct selling activities of the states in which the
Company current operates. See "Risk Factors - Government Regulation of Direct
Selling Activities."

Regulation of Skin Care and Nutritional Supplements. The Company's skin
care and nutritional supplement products and related marketing and advertising
are subject to extensive governmental regulation by numerous governmental
agencies and authorities, including the Food and Drug Administration (the
"FDA"), the Federal Trade Commission (the "FTC"), the Consumer Product Safety
Commission, and U. S. Department of Agriculture.

Nutritional supplements are strictly regulated in the Company's
markets. The Company's markets have varied regulations that apply to and
distinguish dietary health supplements from "drugs" or "pharmaceutical
products." For example, the Company's products are regulated by the FDA under
the Federal Food, Drug and Cosmetic Act (the "FDCA"). The FDCA has been amended
several times with respect to nutritional supplements, most recently by the
Nutrition Labeling and Education Act and the Dietary Supplement Health and
Education Act ("DSHEA"). DSHEA establishes rules for determining whether a
product is a nutritional supplement. Under DSHEA, nutritional supplements are
regulated more like foods than drugs, are not subject to the food additive
provisions of the law, and are generally not required to undergo regulatory
clearance prior to market. None of this infringes, however, upon the FDA's power
to remove an unsafe substance from the market, but the law clearly shifts the
burden of proof to the FDA. In the event a product or ingredient in a product,
is classified as a drug or pharmaceutical product, the Company will generally
not be able to distribute such product in such market through its distribution
channel because of the strict restrictions applicable to drug and pharmaceutical
products.

The Company's existing markets also regulate product claims and
advertising. These laws regulate the types of claims and representations that
can be made regarding the efficacy of products, particularly dietary
supplements. For example, the Company is unable to make any claim that any of
its nutritional supplements will diagnose, cure, mitigate, treat or prevent
disease. DSHEA, however, permits substantiated, truthful, and non-misleading
statements of nutritional support to be made in labeling, such as statements
describing general well-being resulting from consumption of a dietary ingredient
or the role of a nutrient or dietary ingredient in affecting or maintaining a
structure or a function of the body. The FDA recently issued a proposed rule
concerning these issues. The FTC similarly requires that any claims be
substantiated. Accordingly, these regulations can limit the ability of the
Company and its IBAs to inform consumers of the full benefits of the Company's
products. See "Risk Factors - Government Regulation of Products and Marketing."

The Company and its vendors are also subject to laws and regulations
governing the manufacturing of its products. For example, the FDA regulations
establish Good Manufacturing Practices for foods and drugs.

Internet Access. Various laws and regulations regarding copyright,
excise tax, and other requirements were adopted prior to the advent of the
Internet and related technologies and do not address unique issues associated
with the Internet and related technologies. There can be no assurance that the
Company's operation will not be adversely affected by the adoption of such laws
or the application of existing laws to the Internet. See "Risk Factors - Risk of
Changes in Internet Regulation."

Other Regulatory Issues. Based on the Company's experience and research
(including assistance from counsel) and the nature and scope of inquiries from
government regulatory authorities, the Company believes that it is in material
compliance with all regulations applicable to it. Despite this belief, the
Company could be found not to be in material compliance with existing
regulations as a result of, among other things, the considerable interpretative
and enforcement discretion given to regulators or misconduct by independent
IBAs.

Any assertion or determination that the Company or its IBAs are not in
compliance with existing laws or regulations could have a material adverse
effect on the Company's business and results of operations. In addition, the

<PAGE>

adoption of new laws or regulations or changes in the interpretation of existing
laws or regulations could generate negative publicity and/or have a material
adverse effect on the Company's business and results of operations. The Company
can not determine the effect, if any, that future governmental regulations or
administrative orders may have on the Company's business and results of
operations. See "Risk Factors - Risks of Government Inquiry and Investigation."

Employees

As of September 30, 2000, the Company has seven full time employees. As
the Company implements its business plan, it anticipates hiring additional
full-time employees in the areas of sales and marketing and finance and
accounting. None of the employees is represented by union or other collective
bargaining groups. The Company believes its relationship with its employees is
good, and does not currently foresee a shortage of qualified personnel needed to
operate its business.

Risk Factors

There are certain significant risks facing the Company, many of which
are substantial in nature. The following risks and information should be
considered in connection with the other information contained in this filing.

Reliance upon Independent IBAs. The Company distributes its products
exclusively through independent IBAs who have contracted directly with the
Company. IBA agreements are voluntarily terminable by IBAs at any time. The
Company's revenue is directly dependent upon the efforts of these independent
IBAs, and any growth in future sales volume will require an increase in the
productivity of these IBAs and/or growth in the total number of IBAs. As is
typical in the direct selling industry, there is turnover in IBAs, which
requires the sponsoring and training of new IBAs by existing IBAs. The Company
experiences seasonal decreases in IBA sponsoring and product sales because of
holidays and vacation periods. The size of the distribution force can also be
particularly impacted by general economic and business conditions and a number
of intangible factors such as adverse publicity regarding the Company, or the
public's perception of the Company's products, product ingredients, IBAs or
direct selling businesses in general. Because of the number of factors that
impact the sponsoring of new IBAs, and the fact that the Company has little
control over the level of sponsorship of new IBAs, the Company cannot predict
the timing or degree of fluctuations in the size of its distribution force.
There can be no assurance that the number or productivity of the Company's IBAs
will be sustained at current levels or increased in the future. In addition, the
number of IBAs as a percentage of the population in a given market could
theoretically reach levels that become difficult to exceed to the finite number
of persons inclined to pursue a direct selling business opportunity.

Because IBAs are independent contractors, the Company is not in a
position to provide the same level of direction, motivation, and oversight as it
would with respect to its own employees. Although the Company has a compliance
department responsible for the enforcement of the policies and procedures that
govern IBA conduct, it can be difficult to enforce these policies and procedures
because of the number of IBAs and their independent status.

Dependency on License Agreement. The ability of the Company to market
its products is dependent upon the continuation of its Exclusive Licensing
Agreement with Beverly Sassoon, Elan Sassoon and Beverly Sassoon International
LLC, and the sale of such products under the Beverly Sassoon trade name and Elan
Sassoon trade name. The Company's Exclusive Licensing Agreement with the
Sassoons is for a term of 99 years renewable for an additional term of 99 years
at the Company's option. The Company is required to pay certain royalty payments
as a condition to sustaining its License Agreement with the Sassoons during this
time. Although the Company believes that it will be in a position to pay such
royalty payments, there can be no assurances that it will be able to provide
timely payments under the Exclusive Licensing Agreement. If for any reason the
Company were not able to sell its products under the Beverly Sassoon trade name
or Elan Sassoon trade name, a substantial portion of its competitive advantage
would be lost, and it is unlikely the Company would be able to market an
alternative product which would have market identity and acceptance by
consumers. Furthermore, the loss of this License would have a material adverse
effect upon the Company's business.

<PAGE>

The value of the Company's Exclusive License Agreement is also
dependent upon the public perception, image, and reputation of Beverly Sassoon,
Elan Sassoon, and Beverly Sassoon International, LLC. Litigation against the
licensors, improper or illegal conduct, negative publicity, etc., of the
licensors may have a material adverse effect upon the Company's business.

Government Regulation of Direct Selling Activities. Direct selling
activities are regulated by various government agencies. There can be no
assurance that regulatory authorities will not impose new legislation or change
existing legislation that adversely affects the Company's business, or that new
judicial interpretation of existing law may be issued that adversely affect the
Company's business. There can be no assurance that the Company will be allowed
to conduct business in its current market or potential new markets. See
"Government Regulation - Direct Selling Activities."

Government Regulation of Products and Marketing. The Company is subject
to or affected by extensive governmental regulations not specifically related to
network marketing. Such regulations govern, among other things: (i) the
Company's skin care and nutritional products, (ii) product formulation,
manufacturing, labeling, and packaging, (iii) product claims and advertising,
whether made by the Company or its IBAs, and (iv) fair trade and IBA practices.

The Company's skin care and nutrition products and related marketing
and advertising also are subject to extensive governmental regulation. The
Company may also be prohibited from making therapeutic claims regarding such
products even if the Company may have research and independent studies
supporting such claims. Present or future health and safety or food and drug
regulations, or judicial interpretations thereof, could delay or prevent the
introduction of new products or suspend the sale of existing products. See
"Government Regulation - Regulation of Skin Care and Nutrition Products."

Risk of Government Inquiry and Investigation. As is the case with most
direct sales companies, the Company has from time to time, received inquiries
from various government regulatory authorities regarding the nature of its
business and other issues such as compliance with local business opportunity and
securities laws. There is no assurance that the Company will not face additional
inquiries and investigations in the future. Any assertion or determination that
the Company, or any of its IBAs, are not in compliance with existing laws or
regulations, could potentially have a material adverse effect on the Company's
business and results of operations. In addition, the adoption of new laws or
regulations or changes in the interpretation of existing laws or regulations
could generate negative publicity and/or have a material adverse effect on its
business and results of operations. The Company cannot determine the effect, if
any, that future governmental regulations or administrative orders may have on
its business and results of operations. Regulatory action, whether or not it
results in a final determination adverse to the Company, has the potential to
create negative publicity, with detrimental effects on the motivation and
recruitment of IBAs and, consequently, on the Company's results of operations.
See "Government Regulation - Other Regulatory Issues."

The Company may also be subject to the risk of private party challenges
to the legality of the Company's network marketing system. For example, in
Webster v. Omnitrition International, Inc., 79 F.3d 776 (9th Cir. 1996), the
"multi-level marketing" program of Omnitrition International, Inc. was
challenged in a class action by certain Omnitrition IBAs who alleged that
Omnitrition was operating an illegal "pyramid scheme" in violation of federal
and state laws. We believe that the Company's network marketing system satisfies
the standards set forth in the Omnitrition case and other applicable statutes
and case law defining a legal marketing system, in part based upon significant
differences between the Company's marketing system and that described in the
Omnitrition case. However, the regulatory requirements concerning network
marketing systems do not include "bright line" rules, and are inherently
fact-based. A future challenge and subsequent adverse judicial determination
with respect to the Company's network marketing system could have a material
adverse effect on the Company's business and operations. Among other things,
such a determination could require us to make modifications to the Company's
network marketing system and result in negative publicity. In addition, adverse
rulings by courts in any proceedings challenging the legality of multi-level
marketing systems, even in those not involving us, could have a material adverse
effect on the Company's business and operations. The Company may also be subject
to the risk of private party challenges to the legality of the

<PAGE>

Company's network marketing system. For example, in Webster v. Omnitrition
International, Inc., 79 F.3d 776 (9th Cir. 1996), the "multi-level marketing"
program of Omnitrition International, Inc. was challenged in a class action by
certain Omnitrition IBAs who alleged that Omnitrition was operating an illegal
"pyramid scheme" in violation of federal and state laws. The Company believes
that its network marketing system satisfies the standards set forth in the
Omnitrition case and other applicable statutes and case law defining a legal
marketing system, in part based upon significant differences between the
Company's marketing system and that described in the Omnitrition case.

Risk of Internet Changes in Regulation. Various laws and regulations
regarding copyright, excise tax, and other requirements were adopted prior to
the advent of the Internet and related technologies and do not address unique
issues associated with the Internet and related technologies. There can be no
assurance that the Company's operation will not be adversely affected by the
adoption of such laws or the application of existing laws to the Internet.
Various laws and regulations regarding copyright, excise tax, and other
requirements were adopted prior to the advent of the Internet and related
technologies and do not address unique issues associated with the Internet and
related technologies. There can be no assurance that the Company's operation
will not be adversely affected by the adoption of such laws or the application
of existing laws to the Internet. See "Government Regulation."

Reliance on Suppliers and Key Vendors. The Company currently acquires
its skin care and nutrition products from one supplier who currently purchases
the products from two other suppliers. The loss of any of these suppliers could
have a material adverse effect on the Company's business and results of
operations. See "Suppliers and Key Vendors."

The Company is also dependent on a vendor to satisfy its order
fulfillment requirements and on another vendor to provide computer services. The
loss of either of these two vendors or their inability to fulfill the Company's
future requirements could have a material adverse effect on the Company's
business and results of operations. See "Suppliers and Key Vendors."

Reliance on Merchant Account. The Company's business is heavily
dependent on having a merchant account to accept credit cards since
approximately 85% of its business is currently paid for with credit cards. Due
to relative newness of the Company, the general nature of the network marketing
business, and the fact that most of its credit card transactions are of a
non-swipe nature, the Company is classified as high risk by financial
institutions providing merchant accounts. Since beginning operations in late
1999, the Company believes that it has maintained a satisfactory relationship
with its merchant account provider, Cashgate, Inc. of San Francisco, California
and its bank, National State Bank of Metropolis, Illinois. The loss of merchant
account privileges could have a material adverse effect on the Company's
business and results of operations. See "Payment."

Competition. The markets for the Company's skin care and nutrition
products are intensely competitive. The Company also competes with other direct
selling organizations. Many of the Company's competitors have much greater name
recognition and financial resources than the Company, which may give them a
competitive advantage. There can be no assurance that the Company's business and
results of operations will not be affected materially by market conditions and
competition in the future. Although the Company distributes certain products it
considers proprietary, it does not currently have patent protection for its
products. In addition, competitors may also introduce products utilizing the
same ingredients as the Company's products. Because of restrictions under
regulatory requirements concerning claims that can be made with respect to
dietary supplements, the Company may have a difficult time differentiating its
products from those of competitors. See "Competition."

Risks Related to Potential Changes in Business Model. The Company
believes that direct sellers will need to adapt their business models to
integrate the Internet into their operations as more and more consumers purchase
goods and services over the Internet instead of through traditional retail and
direct sales channels. The Company cannot assure that it or its IBAs will be
able to adapt to the use of new technology or sales channels or effectively
integrate the Internet into their respective operations. See "Distribution
System."

<PAGE>

Potential Effects of Adverse Publicity. The size of the Company's
distribution force and the results of the Company's operations can be
particularly impacted by adverse publicity regarding the Company, or its
competitors, including publicity regarding the legality of network marketing,
the quality of the Company's products and product ingredients or those of its
competitors, regulatory investigations of the Company or the Company's
competitors and their products, IBA actions, and the public's perception of the
Company's IBAs and direct selling businesses generally.

Controls by Debenture Holder. The Company issued convertible debentures
payable of $2,000,000 during the period August 25, 1999 through March 20, 2000.
In June 2000, the debenture holder converted $1,895,000 of the debentures to
379,000 shares of the Company's common stock at $5.00 per share. As of June 30,
2000, there was $105,000 outstanding. The debentures held by an individual
require the Company to obtain the debenture holder's prior written consent to
(i) declare, order or pay any dividend (other than dividends payable solely in
shares of stock), (ii) redeem any securities, (iii) adjust the salary and
benefits for employees that are officers of the Company, (iv) sell all or
substantially all of the assets of the Company, (v) restructure the Company,
including a merger, consolidation, liquidation, recapitalization, or such other
actions (vi) increase or decrease the number of directors of the Maker, (vii)
commence any new business venture, new office, or invest or acquire any new
entity which would require an investment of $25,000 in more in a one year
period, (viii) authorize and/or issue new shares of the Company, (ix) enter into
and approve any agreement or contract for the purchase of goods, services or
other items between the Company, a stockholder, or a member of a stockholder's
immediate family, or (x) enter into a contract for employment or for a
consultant.

Controls by Preferred Stock Holder. On September 27, 2000, the Company
entered into a stock purchase agreement with related parties to issue 221,458
shares of Series A Convertible Preferred Stock at a stated value of $2.50 per
share. The preferred stock carries voting rights equal to 75 votes per one (1)
share of preferred stock. The stock purchase agreement also requires the Company
to obtain the written approval of the holders of at least a majority of the
voting power of the outstanding shares of preferred stock for the following: 1)
sell, convey, or otherwise dispose of or encumber all or substantially all of
its property or business or merge into or consolidate with any other corporation
or effect any transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of the Company is transferred or
disposed of, 2) alter or change the rights, preferences or privileges of the
preferred stock, 3) increase or decrease the total number of authorized shares
of the preferred stock, 4) authorize or issue, or obligate itself to issue, any
other equity security, including any other security convertible into or
exercisable for any equity security having rights, preferences or privileges
over, or being on a parity with or similar to, the preferred stock, 5) redeem,
purchase or otherwise acquire (or pay into or set aside for a sinking fund for
such purpose) any security of the Company, 6) amend the Company's Articles of
Incorporation or bylaws, 7) change the authorized number of directors of the
Company's board of directors, 8) declare, order or pay any dividends on any
class of securities, 9) adjust the salary of executive officers, directors,
executive level independent contractors and key employees of the Company, 10)
make any capital expenditures in excess of $15,000, 11) issue new shares of
capital, 12) enter into or approve any agreement or contract for the purchase of
goods, services or other items between the Company, a shareholder or a member of
shareholder's immediate family, or 13) make any commission payment to any
independent business associate in excess of $15,000.

Product Liability. The Company may be subject, under applicable laws
and regulations, to liability for loss or injury caused by its products.
Accordingly, the Company maintains a policy covering product liability claims
with a $1,000,000 per claim and $1,000,000 annual aggregate limit and an excess
liability policy with a $1,000,000 per claim and $1,000,000 annual aggregate
limit. Although the Company has not been the subject of product liability
claims, and, if any such claims were to be filed and were to be successful,
there can be no assurance that the Company will be adequately covered by
insurance or have sufficient resources to pay such claims.

Item 2. Description of Property

The Company's principal offices are located at 6501 N.W. Park of Commerce
Boulevard, Suite 205, Boca Raton, Florida 33487. The Company has entered into a
lease agreement with an unrelated third party for this location of approximately
4,251 square feet of commercial office space. The lease is for a term of five

<PAGE>

(5) years, commencing on November 1, 1999 and expiring on October 31, 2004. The
Company will pay a base rent, ranging from $5,313.75 per month to $5,977.25 per
month over the term of the lease, along with its pro rata share of certain
common area maintenance, operating expenses, taxes and insurance.

Item 3. Legal Proceedings

None.

Item 4. Submission of Matters to a Vote of Security Holders

None

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

The common stock began trading on March 28, 2000 on the OTC bulletin
board market under the symbol "ICMK." The following table sets forth the range
of high and low closing sale price as reported by the OTC bulletin board for the
common stock for the quarters indicated. The OTC bulletin board market
quotations represent quotations between dealers without adjustment for retail
mark-up, markdowns or commissions and may not represent actual transactions.

Low High
Third Quarter - ended March 31, 2000 5.00 6.00
Fourth Quarter - ended June 30, 2000 1.00 6.00

As of September 30, 2000, the Company believes that it has
approximately 34 record holders of its common stock.

The Company has never declared or paid any cash dividends on the
Company's common stock. The Company currently expects to retain future earnings,
if any, to finance the growth and development of the Company's business.

From January 26, 2000 to March 23, 2000, the Company issued 7,330
shares of the Company's common stock to the Company's founding independent
business associates ("IBA") in connection with their becoming associated with
the Company as IBAs. Consideration for the shares was $5.00 per share, which was
expensed by the Company to each of the IBAs. Based on the nature of this
transaction and the associated status of the IBAs with the Company, the Company
believes the issuance of the shares did not constitute sales of unregistered
securities.

Item 6. Management's Discussion and Analysis or Plan of Operation

Plan of operation

The Company commenced its direct sales business in the fall of 1999 and since
that date has focused its distribution by the network marketing method.
Operations to date have been funded by private investment of approximately $2.5
million.

The Company intends to continue its direct sales by the distribution of its
products by the network marketing method. The Company may, in addition to it's
network marketing sales, seek alternative direct sales methods, including
internet, catalog, licensing and retail sales methods.

Year ended June 30, 2000 compared to year ended December 31, 1998 and the six
months ended June 30, 1999 and June 30, 1998 (hereinafter referred to as the
prior periods):

Company sales commenced in the fall of 1999 and net sales for the year ended
June 30, 2000 were $1,955,710.

<PAGE>

Gross profit as a percentage of net sales was 41%, after a provision for
inventory obsolescence of 16% of net sales for the year ended June 30, 2000,
compared to zero for the prior periods. The increase in gross profit resulted
primarily from the Company commencing operations in the fall of 1999.

Commissions earned by distributors of the Company's products as a percentage of
net sales was 30% for the year ended June 30, 2000, compared to zero for the
prior periods. Commissions are earned by the Company's independent business
associates based on group volume. Group volume is a value assigned by the
Company to its products for the purpose of determining commissions to its
independent business associates. Commissions expense was 38% of group volume for
the year ended June 30, 2000.

Royalty expense for the year ended June 30, 2000 was $250,000. No royalties were
paid in prior periods.

Selling, general and administrative expenses as a percentage of net sales was
100% for the year ended June 30, 2000, compared to amounts ranging from $150 to
$170 for the prior periods. The increase in selling, general and administrative
expenses resulted primarily from the Company commencing operations in the fall
of 1999.

Net loss increased by approximately $1,949,000 for the year ended June 30, 2000
compared to losses ranging from $150 to $170 in the prior periods due to the
Company commencing operations in the fall of 1999. Net loss as a percentage of
net sales was 100% for the year ended June 30, 2000 due to the Company
commencing operations in the fall of 1999.

In connection with the Company's modification of the Exclusive License Agreement
with Beverly Sassoon, Elan Sassoon and Beverly Sassoon International, LLC,
including modification of certain terms of options granted to Beverly Sassoon,
Elan Sassoon and Capital Distributors, LLC, on October 13, 2000. The estimated
value of the options using the Black-Schools option-pricing model is
approximately $19,000,000. Accordingly, the Company expects a material non-cash
charge to operations in 2001.

Liquidity and Capital Resources

The Company's principal needs for funds have been for working capital
(principally inventory purchases), commissions, royalty expense, operating
expenses, capital expenditures, and the development of operation s for the U.S.
market. The Company has generally relied on cash flow from issuance of
convertible debentures in the amount of $2 million and cash collected on sales
that commenced in December 1999 to fund operating activities. The Company needs
additional funding during the year ending June 30, 2001, including in the first
six months of the fiscal year to pay liabilities, operating expenses,
restructure operations, purchase inventory, enhance product development and
fulfillment relationships, and to fund expected growth of the Company.
Subsequent to June 30, 2000, the Company received $500,000 from the issuance of
convertible preferred stock and converted certain liabilities for legal fees
aggregating $53,645. The ability of the Company to manage its working capital
and reduce its working capital deficit is dependent upon restructuring
operations, introducing new products, improving gross profit margins, reducing
overhead, and raising additional funding.

The Company is currently generating negative cash flow from operations since it
only had its first sales in December 1999 after commencing operations in August
1999. The Company does not generally extend credit to distributors but requires
payment by credit card or bank draft prior to shipping of products. This process
eliminates the need for significant accounts receivable from distributors. For
the year ended June 30, 2000, the Company had negative cash flow from operations
of $1,781,538. This negative cash flow from operations primarily related to the
Company's net loss, inventory, deposits for services, and receivables from
credit cards and bank drafts.

As of June 30, 2000, working capital deficit was $234,859 compared to $450 of
working capital as of June 30, 1999. Cash at June 30, 2000 and June 30, 1999 was
$4,739 and $450, respectively.

<PAGE>

The Company's independent auditors' report on the financial statements stated as
of June 30, 2000 due to the net loss and a working capital deficit, there is
substantial doubt about the Company's ability to continue as a going concern.
The Company requires additional financing to continue operations of which there
can be no assurance. Management has revised its business plan of marketing and
support for the Company's products and is implementing plans to restructure
operations, introduce new products, improve gross margins, renegotiation of
certain liabilities to suppliers and other vendors, and reduce overhead. The
failure of the Company to secure additional financing would have a material
adverse effect on the Company's business, financial condition, and results of
operations and the Company may have to curtail or cease operations.

Capital expenditures, primarily for office furniture, equipment and software
were $114,590 for the year ended June 30, 2000. In addition, the Company
anticipates additional similar capital expenditures of $250,000 for the next
fiscal year to enhance its infrastructure, including computer systems to
accommodate anticipated future growth. The Company plans to finance these
expenditures from additional debt or equity financing. There is no assurance
that the Company can raise funding for the anticipated capital expenditures.

Expenditures for deposits for services, principally reserve for merchant account
to accept credit cards and office rent, were $126,899 for the year ended June
30, 2000. Except for deposits for inventory purchases and additions to the
reserve for merchant account to accept credit cards, no significant additional
deposits are anticipated for these items for fiscal year 2001.

The Company leases office space under a non-cancelable operating lease expiring
October 31, 2004. Minimum future operating lease obligations at June 30, 2000
were $310,175, including $68,145 for fiscal 2001.

Seasonality and Cyclicality

In addition to general economic factors, the direct selling industry is impacted
by seasonal factors and trends such as major cultural events and vacation
patterns.

Note Regarding Forward-Looking Statements

Certain statements made above, including those in the Liquidity and Capital
Resources section, herein are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements consist of
any statement other than a recitation of historical fact and be identified by
the use of forward-looking terminology such as "may," "expect," "anticipate,"
"estimate," or "continue" or the negative thereof or other variations thereon or
comparable terminology. The reader is cautioned that all forward-looking
statements are necessarily speculative and there are certain risks and
uncertainties that could cause actual events or results to differ materially
from those referred to in such forward looking statements. The Company does not
have a policy of updating or revising forward-looking statements and thus it
should not be assumed that silence by its management over time means that actual
events are bearing out as estimated in such forward looking statements.

Item 7. Financial Statements

The Company's financial statements are contained in pages F-1 through
F-17 as follows.

Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure

At a meeting held on September 26, 2000, the Company approved the
engagement of Daszkal Bolton Manela Devlin & Co. as independent auditors of the
Company for the fiscal year ended June 30, 2000, to replace the firm of London
Witte & Company, P.A. ("London Witte"), who upon mutual agreement with the
Company were replaced as the Company's auditors effective September 26, 2000.

The report of London Witte on the Company's financial statements at
June 30, 1999 did not contain an adverse opinion or disclaimer of opinion, and
were not qualified or modified as to uncertainty, audit scope, or accounting
principles.

<PAGE>

In connection with the audit of the Company's financial statements as
of June 30, 1999, and in the subsequent interim periods, there were no
disagreements with London Witte on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope and procedures
which, if not resolved to the satisfaction of London Witte would have caused
London Witte to make reference to the subject matter in their report.

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act

Management

Executive Officers and Directors

The following table sets forth information concerning the Company's
executive officers and directors. Members of the Company's Board of Directors
are elected at the annual meeting of shareholders, and serve for one year or
until their successors are elected and qualify. The Company's debenture holder
and convertible preferred stock holders have the right to approve any change of
the number of directors of the Company. The Board of Directors elects the
Company's officers, and their terms of office are at the discretion of the Board
of Directors.

Name Age Position
---- --- --------
Stephanie McAnly 57 Director and President

Sonny Spoden 55 Director and Chief Financial Officer

Ms. McAnly has been President and a Director since August 1999. From July 1998
through August 1999, Ms. McAnly held the position of Director of Marketing and
Training for 1-800-PARTYSHop, Inc., a multilevel marketing company offering
theme party supplies, gifts and accessories. She developed and implemented the
1-800-PARTYSHop, Inc. national training program, wrote the policy and training
manuals and served as a seminar instructor nationwide. She was a Master IBA and
Corporate Trainer from April 1998 to July 1998 for Premier Plus, Inc., a
multilevel marketing company promoting telecommunications products, travel
packages and golf equipment. And previously, for the period of October 1995 to
April 1998, Ms. McAnly was the Top Money Earner and Corporate Trainer for
Strategic Telecom Systems, Inc., a multilevel marketing company promoting
telecommunications products. She also served on the Strategic Telecom
President's Advisory Board. From June 1985 through April 1996, Ms. McAnly was
President of the corporation, The Bear Facts, Inc., a childcare center and
preschool educational facility in Desoto County, Florida. Ms. McAnly holds both
a B.A. in English from the University of Florida and a B.A. in education from
the University of South Florida. On August 19, 1999, the Company entered into a
three-year employment contract with Stephanie McAnly.

Mr. Spoden has been Chief Financial Officer and a Director since August 1999.
From January 1996 until May 1999, Mr. Spoden was Chief Financial Officer of Easy
Access International, Inc., a publicly-owned holding company with subsidiaries
engaged in the development, marketing, and distribution of telecommunication
products and services. From 1993 until January 1996, Mr. Spoden was an
independent business and financial advisor in Boca Raton, Florida. From 1969
until 1993, Mr. Spoden was employed by Ernst & Young LLP, and was a general
partner and an accounting and auditing partner for the period 1982 to 1993.
During his career with Ernst & Young LLP, Mr. Spoden was based in the Baltimore,
Maryland office and the National office in New York City (1978 to 1980 and 1988
to 1993). Mr. Spoden received a B. S. with high honors, and a major in finance,
from the University of Maryland in 1969, and has been licensed as a Certified
Public Accountant. For the period 1963 to 1967, Mr. Spoden served in the U. S.
Navy, primarily with the Naval Security Group in Washington, D.C. On August 19,
1999, the Company entered into a three-year employment contract with Sonny
Spoden.

<PAGE>

There are no family relationship between any of the executive officers
and directors. Each director is elected at the Company's annual meeting of
shareholders and holds office until the next annual meeting of shareholders, or
until his successor is elected and qualified.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
(10%) percent of the outstanding Common Stock, to file with the Securities and
Exchange Commission (the "SEC") initial reports of ownership on Form 3 and
reports of changes in ownership of Common Stock on Forms 4 or 5. Such persons
are required by SEC regulation to furnish the Company with copies of all such
reports they file.

Based solely on its review of the copies of such reports furnished to
the Company or written representations that no other reports were required, the
Company believes that all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten (10%) percent beneficial owners were
compiled with during the year ended June 30, 2000.

Item 10. Executive Compensation

Cash Compensation

The following table summarizes all compensation recorded by the Company
in each of the last two fiscal years for the Company's Chief Executive Officer
and each other executive officers serving as such whose annual compensation
exceeded $100,000.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
----------------------------------------------------------------------------------------------------------------------
Long Term Compensation
----------------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
----------------------------------------------------------------------------------------------------------------------
Restricted Securities
Name and Other Annual Stock Underlying
Principle Salary Bonus Compensation Award(s) Options/SARs LTIP All Other
Position Year ($) ($) ($) ($) (#) Payouts Compensation
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Charles B.
Pearlman, (1) 2000 0 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------------
Charles B.
Pearlman, (1) 1999 0 0 0 0 0 0 0
----------------------------------------------------------------------------------------------------------------------
Stephanie
McAnly (2) 2000 88,167 10,000 0 0 200,000 0 0
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Pearlman served as the Company's Chief Executive Officer and a
director of the Company from inception in 1995 until August 1999.

(2) Ms. McAnly serves as the Company's President from August 19, 1999
to present.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
Option/SAR Grants in Last Fiscal Year
----------------------------------------------------------------------------------------------------------------------
Individual Grants
----------------------------------------------------------------------------------------------------------------------
Number of Securities
Underlying % of Total Options/SARs
Options/SARs Granted Granted to Employees in Exercise or Base Price Expiration
Name (#) Fiscal Year ($/Sh) Date
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Charles B. Pearlman (1) 0 0% 0 0
----------------------------------------------------------------------------------------------------------------------
Stephanie McAnly (2) 33,333 7% 2.50 August 19, 2004
----------------------------------------------------------------------------------------------------------------------
Stephanie McAnly (2) 33,333 7% 2.50 August 19, 2005
----------------------------------------------------------------------------------------------------------------------

<PAGE>

----------------------------------------------------------------------------------------------------------------------
Stephanie McAnly (2) 33,334 7% 2.50 August 19, 2006
----------------------------------------------------------------------------------------------------------------------
Stephanie McAnly (2) 50,000 11% 2.50 June 30, 2005
----------------------------------------------------------------------------------------------------------------------
Stephanie McAnly (2) 50,000 11% 2.50 June 30, 2005
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Pearlman served as the Company's Chief Executive Officer and a
director of the Company from inception in 1995 until August 1999.

(2) Ms. McAnly serves as the Company's President from August 19, 1999
to present.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Aggregate Option/SAR Exercises in Fiscal Year 2000 and FY-End Option/SAR Values
------------------------------------------------------------------------------------------------------------------------
Number of Securities Underlying Value of Unexercised
Unexercised Options/SARs at In-the-Money Options/SARs at FY
FY-End End
(#) ($)
----------------------------------------------------------------------------------------------------------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Charles B.
Pearlman (1) 0 N/a N/a N/a N/a N/a
----------------------------------------------------------------------------------------------------------------------
Stephanie McAnly 0 0 33,333 166,667 0 0
----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Mr. Pearlman served as the Company's Chief Executive Officer and a
director of the Company from inception in 1995 until August 1999.

(2) Ms. McAnly serves as the Company's President from August 19, 1999
to present.

1997 Stock Option Plan

The Company's 1997 Stock Option Plan ("Plan") was adopted by the
Company's Board of Directors and the holders of a majority of issued and
outstanding capital stock on October 1, 1997, effective as of that date. Under
the Plan, the Company has reserved an aggregate of 1,000,000 shares of Common
Stock for issuance pursuant to options granted under the Plan ("Plan Options"),
of which options to acquire an aggregate of 275,000 shares have been granted to
Ms. McAnly and Mr. Spoden. The purpose of the Plan is to encourage stock
ownership by the Company's officers, directors and key employees, and to give
such persons a greater personal interest in the Company's success and an added
incentive. The Board of Directors will administer the Plan including, without
limitation, the selection of the persons who will be granted Plan Options under
the Plan, the type of Plan Options to be granted, the number of shares subject
to each Plan Option and the Plan Option price.

Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of Common Stock owned
by the eligible person, and receive a new Plan Option to purchase shares of
Common Stock equal in number to the tendered shares. Any Incentive Option
granted under the Plan must provide for an exercise price of not less than 100%
of the fair market value of the underlying shares on the date of such grant, but
the exercise price of any Incentive Option granted to an eligible employee
owning more than 10% of the outstanding Common Stock must not be less than 110%
of such fair market value as determined on the date of the grant. The term of
each Plan Option and the manner in which it may be exercised is determined by
the Board of Directors. Provided that no Plan Option may be exercisable more
than 10 years after the date of its grant and, in the case of an Incentive
Option granted to an eligible employee owning more than 10% of the Common Stock,
no more than five years after the date of the grant.

<PAGE>

The Plan provides that, if the Company's outstanding shares are
increased, decreased, exchanged or otherwise adjusted due to a share dividend,
forward or reverse share split, recapitalization, reorganization, merger,
consolidation, combination or exchange of shares, an appropriate and
proportionate adjustment shall be made in the number or kind of shares subject
to the Plan or subject to unexercised Plan Options and in the purchase price per
share under such Plan Options. Any adjustment, however, does not change the
total purchase price payable for the shares subject to outstanding Plan Options.
In the event of the Company's proposed dissolution or liquidation, a proposed
sale of all or substantially all of the Company's assets, a merger or tender
offer for the Company's shares of Common Stock, the Board of Directors may
declare that each Option granted under this Plan shall terminate as of a date to
be fixed by the Board of Directors; provided that not less than 30 days written
notice of the date so fixed shall be given to each Eligible Person holding an
Option, and each such Eligible Person shall have the right, during the period of
30 days proceeding such termination, to exercise his Option as to all or any
part of the shares, including shares of stock as to which such Option would not
otherwise be exercisable.

The Plan provides that the Plan Options granted there under shall be
exercisable from time to time in whole or in part, unless otherwise specified in
the agreement representing the Plan Options or by the Board of Directors. Each
Plan Option may be exercised in whole or in part at any time during the period
from the date of the grant until the end of the period covered by the Plan
Option period. The Plan provides that, with respect to Incentive Stock Options,
the aggregate fair market value (determined as of the time the option is
granted) of the shares of Common Stock, with respect to which Incentive Stock
Options are first exercisable by any option holder during any calendar year
(including all of the Company's incentive stock option plans or any parent or
any subsidiary which are qualified under Section 422 of the Internal Revenue
Code of 1986) shall not exceed $100,000.

All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not the Company's employee but is a member of the
Board of Directors and his service as a director is terminated for any reason,
other than death or disability, the Plan Option granted to him shall lapse to
the extent unexercised on the earlier of the expiration date or 30 days
following the date of termination, except options of William Wirch expire the
earlier of the expiration date or one year following the date of termination. If
the optionee dies during the term of his employment, the Plan Option granted to
him shall lapse to the extent unexercised on the earlier of the expiration date
of the Plan Option or the date one year following the date of the optionee's
death. If the optionee is permanently and totally disabled within the meaning of
Section 22(c)(3) of the Internal Revenue Code of 1986, the Plan Option granted
to him lapses to the extent unexercised on the earlier of the expiration date of
the option or one year following the date of such disability.

The Board of Directors may amend, suspend or terminate the Plan at any
time. However, no such action may prejudice the rights of any optionee who has
prior thereto been granted options under this Plan. Further, no amendment to
this Plan which has the effect of (a) increasing the aggregate number of shares
subject to the Plan (except for adjustments due to changes in the Company's
capitalization), or (b) changing the definition of "Eligible Person" under this
Plan, may be effective unless and until approved by the Company's stockholders
in the same manner as approval of the Plan was required. Any such termination of
the Plan shall not affect the validity of any Plan Options previously granted
thereunder. Unless the Plan shall theretofore have been suspended or terminated
by the Board of Directors, the Plan shall terminate on October 1, 2007.

Item 11. Security Ownership of Certain Beneficial Owners and Management

(a) Security ownership of certain beneficial owners and management. As of
October 13, 2000, there were 4,785,630 shares of the Company's Common Stock
issued and outstanding and there were 221,458 shares of Series A Convertible
Preferred Stock issued and outstanding. The following table sets forth, as of
the close of business on October 13, 2000, (a) the name, address and number of
shares of each person known by us to be the beneficial owner of more than five
percent of the Company's Common Stock; and (b) the number of shares of the

<PAGE>

Company's Common Stock owned by each officer and director, and all officers and
directors as a group, together with their respective percentage holdings of such
shares. Unless otherwise indicated, the address for each person is 6501 N.W.
Park of Commerce Boulevard, Suite 205, Boca Raton, Florida 33487.

Name and Amount of Percentage
Address of Beneficial of
Beneficial Owner(1) Ownership of Stock Class
--------------------------------------------------------------------------------

Common Stock
------------

Stephanie McAnly(2) 66,666 1.4%
Sonny Spoden(3) 50,000 1.0%
Nico Pronk, Sr.(4) 400,000 8.4%
Beverly Sassoon
International, LLC(5) 900,000 18.8%
Nico P. Pronk(6) 391,875 8.2%
Noble International
Investments, Inc(7) 250,000 5.2%

All Executive Officers
and Directors as a Group
(two people)(2)(3) 116,666 2.4%

(1) Pursuant to Rule 13-d-3 under the Exchange Act, beneficial ownership of a
security consists of sole or shared voting power (including the power to vote or
direct the voting) and/or sole or shared investment power (including the power
to dispose or direct the disposition) with respect to a security whether through
a contract, arrangement, understanding, relationship or otherwise. Unless
otherwise indicated, each person indicated has sole power to vote, or dispose or
direct the disposition of all shares beneficially owned, subject to applicable
unity property laws.

(2) Includes 66,666 shares issuable upon exercise of options granted under the
Company's 1997 Stock Option Plan exercisable for five (5) years at an exercise
price of $2.50 per share. Does not include 133,334 shares issuable upon exercise
of options which vest at a rate of 50,000 options on June 30, 2001, 33,334
options on August 19, 2001, and 50,000 options on June 30, 2002 under the
Company's 1997 Stock Option Plan which options will be exercisable for five (5)
years at an exercise price equal to $2.50 per share upon vesting.

(3) Includes 50,000 shares issuable upon exercise of options granted under the
Company's 1997 Stock Option Plan exercisable for five (5) years at an exercise
price of $2.50 per share. Does not include 25,000 shares issuable upon exercise
of options which vest at a rate of 25,000 options on August 19, 2001 under the
Company's 1997 Stock Option Plan which options will be exercisable for five (5)
years at an exercise price equal to $2.50 per share upon vesting. Does not
include 60,000 shares under options which may be granted and exercisable for
five years at an exercise price equal to the then fair market value of the stock
at the date of the grant upon vesting 30,000 shares on August 19, 2001 and
30,000 shares on August 19, 2002.

(4) Includes 21,000 shares issuable upon conversion of a convertible debenture
of $105,000. Mr. Pronk's address is Mr. Nico Pronk, Sr., c/o 1801 Clint Moore
Road, Suite 110, Boca Raton, Florida 33487.

(5) Beverly Sassoon International, LLC. is a Florida limited liability company
whose principal place of business is P.O. Box 267145, Weston, FL 33326-7145.
Beverly Sassoon, Elan Sassoon and Paul Lambert are the managing members and
control persons of Beverly Sassoon International, LLC. Does not include options
to purchase 4,850,000 shares of the Company's Common Stock, issued on August 19,
1999 to the following individuals and entity:

<PAGE>

Holder No. of Shares Underlying Option
------ -------------------------------
Beverly Sassoon 2,250,000
Elan Sassoon 2,000,000
Capital Distributors, LLC (a) 600,000

(a) Capital Distributors, LLC is a Florida limited liability company controlled
by Beverly Sassoon and Elan Sassoon

(6) Includes 200,000 shares issuable upon conversion of 200,000 shares of Series
A Convertible Preferred Stock. Mr. Pronk's address is Mr. Nico P. Pronk, c/o
Noble Financial International Investments, Inc., 1801 Clint Moore Road, Suite
110, Boca Raton, Florida 33487.

(7) Includes 250,000 shares issuable upon exercise of warrants. Noble
International Investments, Inc. address is 1801 Clint Moore Road, Suite 110,
Boca Raton, Florida 33487. See Item 12.

(b) Change in control. The Series A Convertible Preferred Stock issued September
27, 2000 entitles each such stockholder to seventy-five (75) votes for each one
vote of Common Stock, and with respect to such vote, shall be entitled,
notwithstanding any provision hereof, to notice of any shareholders' meeting in
accordance with the bylaws of the Company, and shall be entitled to vote
together as a single class with holders of Common Stock, with respect to any
question or matter upon which holders of Common Stock have the right to vote.
The Series A Convertible Preferred Stock also entitles the holders thereof to
vote as a separate class. The issuance of the Series A Convertible Preferred
Stock resulted in a change in control of the Company to Nico P. Pronk, son of
the Company's debenture holder.

Item 12. Certain Relationships and Related Transactions

Exclusive License Agreement - On October 13, 2000, an Exclusive License
Agreement with Beverly Sassoon, Elan Sassoon and Beverly Sassoon International,
LLC, was modified to have the royalty terminate August 19, 2001. The royalty
payment was also modified to equaling the greater of 2% of gross revenues as
defined in the Exclusive License Agreement or $22,750 per month starting October
2000 until such time as the Company reports positive net cash flow from
operating activities for three consecutive months. Subsequent to June 30, 2000,
the options were modified to be cashless exercisable options and to be
exercisable in whole or in part through August 19, 2019. The Company is in
negotiations to further modify the royalty payment formula in the Exclusive
License Agreement.

Indemnification Agreement - On August 16, 2000, the Company entered into an
Indemnification Agreement with Beverly Sassoon, Elan Sassoon, and Capital
Distributors, LLC whereby the Company may at its sole discretion under certain
circumstances elect to cancel options to purchase up to 750,000 shares of the
Company's common stock.

Commissions - Commissions of $95,585 were earned by business associates of the
Company who are immediate family members of the Company's president.

Financial advisory and investment banking services - On October 13 2000, the
Company entered into a consulting agreement for financial advisory and
investment banking services with an NASD broker dealer. Certain principals of
the broker dealer are stockholders of the Company, including the primary
convertible preferred shareholder (see Note 13 in the accompany financial
statement). The agreement provides a monthly consulting fee of $10,000 plus
five-year "cashless exercise" warrants to purchase 250,000 shares of the
Company's common stock at an exercise price of $2.50 (subject to adjustment in
certain events) for which the broker dealer will have registration rights with
respect to the common stock underlying the warrants. Additionally, the agreement
provides for payment of a transaction fee equal to 1) 5% of the consideration up
to $3,000,000, plus 2) 3% of the consideration from and including $3,000,000 up
to $5,000,000, plus 3) 1% of the consideration including and in excess of
$5,000,000 for any merger, acquisition, strategic partner relationship, etc. In
addition to the consulting fee and transaction fee, the agreement provides for

<PAGE>

payment of an alternate transaction fee, subject to a minimum of $25,000, for
any joint venture, marketing agreement, licensing agreement, strategic partner
agreement, etc., and 1) in connection with any equity securities financing in a
public offering, a fee to be agreed upon by the Company and the broker dealer;
2) in connection with any equity securities financing in a private placement, a)
a cash fee equal to 10% of the gross proceeds raised, plus b) a non-accountable
expense fee equal to 3% of the offering price of the securities sold, plus c)
the broker dealer shall have the right to purchase, for $.01 each, "cashless
exercise" warrants to purchase common stock equal to 10% of the number of shares
of common stock sold in equity securities financing. The warrants will have a
term of five years and have an exercise price of 100% of the per share price (or
conversion price of the securities, if applicable) at which the investors
invested in connection with the equity securities financing and will be
transferable to broker dealers' employees and affiliates. The broker dealer
shall also be granted registration rights with respect to the common stock
underlying such warrants which will include at least one demand registration
right at the Company's cost and an unlimited number of piggyback registration
rights; 3) in connection with any debt securities financing, such amount as
shall be agreed upon by the Company and the broker dealer; 4) in connection with
any bank financing that is consummated prior to termination of this agreement in
which the broker dealer acts as arranger, the Company shall pay the broker
dealer aggregate arrangement fees in an amount to be agreed upon, payable on the
date of execution of definitive documentation with respect thereto, which fee
shall be in addition to any fee payable to any affiliate of the broker dealer
that may act as agent or a member of a lending syndicate or otherwise as a
participant in any such bank financing.

The term of this agreement is for the three years ending October 12, 2003 and is
renewable by mutual consent. This agreement may not be terminated by either
party during the first 12 months. If within the first 12 months, the Company
completes a financing as a result of which it receives gross proceeds of
$1,000,000 or more (the "Initial Financing"), the Company may not terminate this
agreement prior to the expiration of the term. If the Company does not complete
the Initial Financing, either party may terminate this agreement by giving the
other party at least thirty (30) days prior written notice of such termination,
at which time the Company shall pay the broker dealer all fees earned and all
reasonable expenses incurred.

The agreement provides that the Company agrees to retain the broker dealer on an
exclusive basis in connection with a possible transaction, alternate transaction
or financing for the term of the agreement.

Item 13. Exhibits and Reports on Form 8-K

The following documents are filed as a part of this report or are
incorporated by reference to previous filings, if so indicated:

(a) Exhibits

EXHIBIT NO. DESCRIPTION

3(i) Articles of Incorporation, as amended**

3(ii) By-Laws**

4(i) Option to Purchase Common Stock held by Beverly Sassoon**

4(ii) Option to Purchase Common Stock held by Elan Sassoon**

4(iii) Option to Purchase Common Stock held by Capital
Distributors, LLC.**

4(iv) Form of Convertible Debenture**

10(i) Exclusive License Agreement dated as of August 19, 1999 by
and between Beverly Sassoon, Elan Sassoon, Beverly Sassoon
International, LLC and International Cosmetics Marketing
Co.**

<PAGE>

10(ii) Employment Agreement dated as of August 19, 1999 by and
between International Cosmetics Marketing Co. and Stephanie
McAnly**

10(iii) Employment Agreement dated as of August 19, 1999 by and
between International Cosmetics Marketing Co. and Sonny
Spoden**

10(iv) 1997 Stock Option Plan**

10(v) Consulting Agreement between the Company and Viking Holding
Company**

10(vi) Consulting Agreement between the Company and Hatteras
Investment Company**

10(vii) Office Lease between International Cosmetics Marketing Co.
and Brookwood Meridian Partners Ltd. dated September 9,
1999**

10(viii) Employment Agreement dated as of February 13, 2000 by and
between International Cosmetics Marketing Co. and William
Wirch**

10(ix) Amendment to Employment Agreement dated as of June 30, 2000
by and between International Cosmetics Marketing Co. and
Stephanie McAnly.*

10(x) Consulting Agreement dated as of October 13, 2000 by and
between International Cosmetics Marketing Co. and Noble
International Investments, Inc.*

27(i) Financial Data Schedule for the year ended June 30, 2000*

**Previously filed
* Filed herewith

(b) Reports on Form 8-K

Current Report on Form 8-K. A Current Report on Form 8-K was filed on
April 13, 2000 regarding the resignation of William Wirch as Chief Operating
Officer and Director as of March 31, 2000.

Current Report on Form 8-K. A current Report on Form 8-K was filed on
October 2, 2000, regarding the changes in registrant's certifying accountant as
of September 26, 2000.

Current Report on Form 8-K. A current report on Form 8-K was filed on
October 6, 2000, regarding the Company entering into a stock purchase agreement
on September 27, 2000.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, International Cosmetics Marketing Co. has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

International Cosmetics Marketing Co.

By: /s/ Stephanie McAnly
-------------------------------------
Stephanie McAnly, President

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ------- ------
<S> <C> <C>
/s/ Stephanie McAnly Director and President October 20, 2000
-------------------------------
Stephanie McAnly

/s/ Sonny Spoden Director, Chief Financial Officer
-------------------------------- and Principal Accounting Officer October 20, 2000
Sonny Spoden
</TABLE>

<PAGE>

DASZKAL BOLTON MANELA DEVLIN & CO.

CERTIFIED PUBLIC ACCOUNTANTS
----------------------------
A PARTNERSHIP OF PROFESSIONAL ASSOCIATIONS

2401 N.W. BOCA RATON BOULEVARD, SUITE 100 BOCA RATON, FLORIDA 33431
TELEPHONE (561) 367-1040 FAX (561) 750-3236

JEFFREY A. BOLTON, CPA, P.A. MEMBER OF THE AMERICAN INSTITUTE
MICHAEL I. DASZKAL, CPA, P.A. OF CERTIFIED PUBLIC ACCOUNTANTS
ROBERT A. MANELA, CPA, P.A.
TIMOTHY R. DEVLIN. CPA, P.A.
MICHAEL S. KRIDEL, CPA, P.A.

INDEPENDENT AUDITOR'S REPORT
----------------------------

To the Board of Directors and Stockholders
International Cosmetics Marketing Co.

We have audited the accompanying balance sheet of International Cosmetics
Marketing Co. as of June 30, 2000, and the related statement of operations,
changes in stockholders' equity and cash flows for the year then ended. 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards 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. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Cosmetics
Marketing Co. as of June 30, 2000, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company experienced a significant loss
from operations for the year ending June 30, 2000. This matter raises
substantial doubt about the Company's ability to continue as a going concern.
Management's plans regarding these matters are described in Note 3. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ DASZKAL BOLTON MANELA DEVLIN & CO.
-------------------------------------

Boca Raton, Florida
October 12, 2000

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders of
INTERNATIONAL COSMETICS MARKETING CO.

We have audited the accompanying balance sheet of International Cosmetics
Marketing Co. (which at the time was a development stage company) as of June 30,
1999 and the related statements of operations, changes in stockholders' equity,
and cash flows for the year ended December 31, 1998 and the six months ended
June 30, 1999 and 1998. 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 audit.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Cosmetics
Marketing Co. as of June 30, 1999 and the results of its operations, changes in
stockholders' equity, and cash flows for the year ended December 31,1998 and the
six months ended June 30, 1999 and 1998 in conformity with generally accepted
accounting principles.

LONDON WITTE & COMPANY, P.A.
Certified Public Accountants

February 22, 2000, except for the year ended December 31,
1998, as to which the date is September 1, 1999.

F-2
<PAGE>

International Cosmetics Marketing Co.

Balance Sheets

<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS

Current Assets:
Cash $ 4,739 $ 450
Receivables - credit cards and bank drafts 58,351
Inventory, net 499,617
Prepaid expenses and other current assets 79,654
Deferred offering cost -- 9,340
----------- -----------

Total current assets 642,361 9,790

Office furniture and equipment, net 96,200 --
License agreement less accumulated amortization of $11,589 210,912 --
Deposits 126,899 --
----------- -----------

Total assets $ 1,076,372 $ 9,790
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 617,116 $ 9,340
Accrued liabilities 117,687
Advances payable to stockholders 100,417 --
Payable to licensors 42,000 --
----------- -----------

Total current liabilities 877,220 9,340

Convertible debentures - stockholder 105,000 --

Stockholders' equity:
Preferred Stock, $.001 par value, 5,000,000
shares authorized; no shares issued -- --
Common stock, $.001 par value, 25,000,000
shares authorized; 5,145,730 and 7,450,000 shares
issued and outstanding 5,146 7,450
Additional paid-in capital 2,046,257 1,116
Accumulated deficit (1,957,251) (8,116)
----------- -----------

Total stockholders' equity 94,152 450
----------- -----------

Total liabilities and stockholders' equity $ 1,076,372 $ 9,790
=========== ===========
</TABLE>

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

F-3

<PAGE>
International Cosmetics Marketing Co.

Statements of Operations
<TABLE>
<CAPTION>
Year Year Six Months Six Months
Ended Ended Ended Ended
June 30, December 31, June 30, June 30,
2000 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 1,955,710 $ -- $ -- $ --

Cost of sales (including provision of -- -- --
$319,974 for inventory obsolescence) 1,155,273 -- -- --
----------- ----------- ----------- -----------

Gross profit 800,437 -- -- --

Operating expenses:
Commissions 590,474 -- -- --
Royalty 250,000 -- -- --
Selling, general and administrative 1,957,959 170 150 150
----------- ----------- ----------- -----------

Total operating expenses 2,798,433 170 150 150
----------- ----------- ----------- -----------

Operating loss (1,997,996) (170) (150) (150)
----------- ----------- ----------- -----------

Other Income

Forgiveness of debt 51,000 -- -- --
Interest expense (4,976)
Other 2,837 -- -- --
----------- ----------- ----------- -----------
48,861 --

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

Net loss $(1,949,135) $ (170) $ (150) $ (150)
=========== =========== =========== ===========

Net loss per share:
Basic $ (0.39) $ (0.00) $ (0.00) $ (0.00)
Diluted $ (0.39) $ (0.00) $ (0.00) $ (0.00)
Weighted average common shares outstanding:

Basic 5,096,822 7,441,600 7,450,000 7,431,200
Diluted 5,096,822 7,441,600 7,450,000 7,431,200

</TABLE>

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

F-4
<PAGE>
International Cosmetics Marketing Co.

Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Additional Total
Common Paid-in Accumulated Stockholders'
Shares Stock Capital Deficit Equity
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balances at December 31, 1997 7,431,200 $ 7,432 $ 364 $ (7,796) $ --

Issuance of stock 10,400 10 250 260

Contribution of capital 150 150

Net Loss (170) (170)
----------- ----------- ----------- ----------- -------------

Balances at June 30, 1998 7,441,600 7,442 764 (7,966) 240

Net Loss
----------- ----------- ----------- ----------- -------------

Balances at December 31, 1998 7,441,600 7,442 764 (7,966) 240

Issuance of stock 8,400 8 202 210

Contribution of capital 150 150

Net Loss (150) (150)
----------- ----------- ----------- ----------- -------------

Balances at June 30, 1999 7,450,000 7,450 1,116 (8,116) 450

Cancellation of shares at par value (4,000,000) (4,000) 4,000 --

Stock issued to licensor 900,000 900 21,600 22,500

Stock issued for legal services 28,200 28 9,972 10,000

Stock issued for consulting services 400,000 400 9,600 10,000

Cancellation of shares at par value (18,800) (19) 19 0

Stock issued for distributor services 7,330 7 36,643 36,650

Options issued for public relations services 26,650 26,650

Conversion of debentures 379,000 379 1,894,621 1,895,000

Options issued to certain licensors 42,037 42,037

Net Loss (1,949,135) (1,949,135)
----------- ----------- ----------- ----------- -------------

Balances at June 30, 2000 5,145,730 $ 5,146 $ 2,046,257 $(1,957,251) $ 94,152
=========== =========== =========== =========== =============
</TABLE>

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

F-5

<PAGE>
International Cosmetics Marketing Co.

Statements of Cash Flows
<TABLE>
<CAPTION>
Year Year Six Months Six Months
Ended Ended Ended Ended
June 30, December 31, June 30, June 30,
2000 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities:
Net loss $(1,949,135) $ (170) $ (150) $ (150)
Adjustments to reconcile net loss to net cash used
in operations:
Depreciation expense 17,143 -- -- --
Loss on disposal of equipment 1,247 -- -- --
License amortization expense 11,589 -- -- --
Consulting expenses 7,916 -- -- --
Provision for inventory obsolescence 319,977 -- -- --
Legal expense - stock issued 10,000 -- -- --
Distributor expenses - stock issued 36,650 -- -- --
Public relations expenses - options issued 26,650 -- -- --
Options issued to certain licensors 42,037 -- -- --
Changes in operating assets and liabilities:
Receivables from credit cards and bank drafts (58,351) -- -- --
Inventory (819,594) -- -- --
Prepaid expenses and other current assets (77,570) -- -- --
Deposits for services (126,899) -- -- --
Deferred offering costs 9,340 -- (9,490) --
Accounts payable 607,775 -- 9,490 --
Accrued liabilities 117,687 -- -- --
Payable to licensors 42,000 -- -- --
----------- ----------- ----------- -----------

Net cash used in operating activities (1,781,538) (170) (150) (150)

Cash Flows From Investing Activities:
Purchase of office furniture and equipment (114,590) -- -- --
Exclusive license agreement (200,000) -- -- --
----------- ----------- ----------- -----------

Net cash used in investing activities (314,590) -- -- --

Cash Flows from Financing Activities:
Proceeds from convertible debentures 2,000,000 -- -- --
Proceeds from advances payable to stockholders 100,417 -- -- --
Contribution of capital -- 150 150 150
Sale of common stock -- 260 210 --
----------- ----------- ----------- -----------

Net cash provided by financing activities 2,100,417 410 360 150

Net increase in cash 4,289 240 210 --

Cash, beginning of period 450 -- 240 --
----------- ----------- ----------- -----------

Cash, end of period $ 4,739 $ 240 $ 450 $ --
=========== =========== =========== ===========

</TABLE>

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

F-6

<PAGE>
International Cosmetics Marketing Co.

Interest paid during the year -- -- -- --
Income taxes paid during the year -- -- -- --
</TABLE>

Supplemental Disclosure of Noncash Investing and Financing Activities for the
year ended June 30, 2000:
4,000,000 shares cancelled at par value
900,000 shares issued of stock issued in acquisition of license agreement
valued at $22,500
28,200 shares of stock issued for legal services valued at $10,000 400,000
shares of stock issued conditionally for consulting services valued at
$10,000
18,800 shares of stock cancelled at par value
7,330 shares of stock issued for distributor services at $5.00 per share
5,000 options issued for public relations services at $5.50 per share
379,000 shares issued for conversion of debentures at $5.00 per share
Options issued to certain licensors valued at $42,037

F-7

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY

International Cosmetics Marketing Co. (the "Company"), d/b/a Beverly Sassoon &
Co., is a direct sales company distributing skin care and nutritional products
through a multi level marketing network in the United States. The Company was in
the development stage from its inception and commenced operations in December
1999.

In August 1999, the Company changed its name from CindyCo, Inc. to International
Cosmetics Marketing Co. On November 29, 1999, the Board of Directors
retroactively approved a change in the Company's fiscal year end from December
31 to June 30.

The Company prepares its financial statements on the accrual basis of
accounting, recognizing income when earned and expenses when incurred.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of 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. Actual results could differ from those estimates. Estimates
that are particularly susceptible to change in the near term include reserves
for excess and obsolete inventory, product returns, and credit card charge
backs.

Revenue Recognition -- The Company recognizes revenue at the time the product is
shipped to the Company's independent business associates.

Product Returns and Credit Card Charge Backs -- Accruals for product returns and
for credit card charge backs are based on industry experience and the Company's
limited experience to date.

Inventories - Inventories are recorded at the lower of cost or market. Cost is
determined by the average method while market is determined by replacement cost
for raw materials and net realizable value for finished goods. Appropriate
consideration is given to deterioration, obsolescence and other factors in
evaluating net realizable value.

Property and Equipment - Property and equipment are recorded on the basis of
historical cost. Depreciation of equipment is computed using the straight-line
method over the assets' estimated useful lives, ranging from 3 years to 5 years.
Gain or loss on disposition of assets is recognized currently. Repairs and
maintenance are charged to expense as incurred. Major replacements and
betterments are capitalized and depreciated over the remaining useful lives of
the assets.

Intangible Assets - Intangible assets include a license agreement that was
acquired with cash and common stock. The license agreement is being amortized on
the straight-line basis over 16 years.

Stock Based Compensation - In October 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 123 (SFAS 123),
"Accounting of Stock Based Compensation," which is effective for the
accompanying financial statements of the Company. SFAS 123 requires extended
disclosures of stock based compensation arrangements with employees and
encourages (but does not require) compensation cost to be measured based on the
fair value of the equity instrument awarded. Companies are permitted, however,
to apply Accounting Principles Board Opinion No. 25 (APB 25), which recognizes
compensation cost based on the intrinsic value of the equity instrument awarded.
The Company accounts for its stock based compensation awards to employees under
the provisions of APB 25, and will disclose the required pro forma effect on net
income and earnings per share at such time as options are granted.

F-8

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting Pronouncements - The Financial Accounting Standards Board has
recently issued Interpretation No. 44, "Accounting for Certain Transactions
Involving Stock Compensation." The Interpretation addresses implementation
practice issues in accounting for compensation costs under existing rules
prescribed by APB 25. The new rules are applied prospectively to all new awards,
modifications to outstanding awards and changes in grantee status after July 1,
2000, with certain exceptions. The Company is considering the effects these
changes make and will implement any changes to its plans as deemed appropriate.

3. GOING CONCERN

The Company commenced operations in December 1999, and had only $1,955,710 of
revenue through June 30, 2000. As reflected in the accompanying financial
statements, the Company has incurred a significant net loss for the year ended
June 30, 2000 and reflects an accumulated deficit of $1,957,251 through June 30,
2000. These factors raise substantial doubt about the Company's ability to
continue as a going concern.

Management's plan with regard to this matter encompasses restructuring
operations, introducing new products, improving gross profit margins, and
reducing overhead. Subsequent to June 30, 2000, the Company issued convertible
preferred stock for cash and settlement of liabilities aggregating $553,645 (see
Note 13). The Company plans to attempt to raise additional funding in the fourth
quarter of 2000.

The eventual outcome of the success of management's plans cannot be ascertained
with any degree of certainty. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

4. CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash, accounts receivable, accounts payable
and accrued expenses.

The Company maintains its cash in demand deposit accounts which, at times may
exceed the Federal Deposit Insurance Corporation limits. These balances are
maintained with a high quality institution and the Company has not experienced
any losses in such accounts.

The Company's accounts receivable are primarily receivables for credit card
collections by financial institutions with which the Company has credit card
merchant accounts. The Company's exposure to losses on receivables is minimal
since the validity of credit card charges is verified when a customer places an
order.

The Company has purchased its skin care and nutritional products from one
supplier. This supplier has purchased the content of these products from two
other suppliers. The Company has experienced various operational disputes with
its primary supplier, has terminated its relationship with the supplier
subsequent to June 30, 2000, and has withheld payments due of approximately
$25,000. The Company has established relationships in principal with other
suppliers and expects to be placing orders for inventory in the fourth quarter
of 2000.

F-9

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

5. INVENTORIES

Inventories consist of the following:

Finished goods, net of reserve of $319,977 for excess
quantities and obsolescence $400,837
Raw material, principally bottles and containers 98,780
--------
$499,617
========
6. PROPERTY AND EQUIPMENT
Estimated
Useful Life
Year Amount
----------- ----------
Office equipment 3 $ 59,599
Office furniture 5 43,103
Leasehold improvements 4 10,400
--------
113,102

Less accumulated depreciation and amortization 16,902
--------
$ 96,200
========
7. COMMITMENTS AND CONTINGENCIES

Exclusive License Agreement - On August 19, 1999, the Company entered into an
Exclusive License Agreement with Beverly Sassoon International, LLC (a Florida
limited liability company), Ms. Beverly Sassoon and Mr. Elan Sassoon. The
agreement granted the Company the following rights: 1) an exclusive license to
utilize Ms. Sassoon's name and likeness with the manufacturing, promotion and
sale of certain products, 2) an exclusive license to utilize Mr. Sassoon's name
and likeness with the manufacturing, promotion and sale of certain products, 3)
an exclusive, worldwide license to manufacture, market and distribute certain
skin care products developed by Beverly Sassoon International, LLC, and 4) upon
the expiration of certain existing licenses granted by Ms. Sassoon to third
parties related to the use of her name and likeness in the marketing and
promotion of pet care and slimming products, the exclusive license to utilize
Ms. Sassoon's name and likeness with regards to these types of products. The
term of this Exclusive License Agreement is 99 years, with a 99-year renewal at
the Company's option.

The Company will retain full control over the manufacturing, development and
marketing of the Company's products. Also, Ms. Sassoon and Mr. Sassoon, through
Beverly Sassoon International, LLC will consult with the Company in connection
with product development and marketing. As consideration for the rights granted
under this agreement, Beverly Sassoon International, LLC was to be paid
$200,000, including $50,000 for certain expenses, over a period of time and was
issued 900,000 shares of the Company's common stock.

The Company pays Beverly Sassoon International, LLC royalty payments equal to
the greater of 2% of gross revenues from sales of any products that are marketed
or distributed under the terms of the Exclusive License Agreement, or $25,000
per month. These royalty payments will end if Beverly Sassoon, Elan Sassoon
and/or Capital Distributors, LLC, a Florida limited liability company controlled
by Beverly Sassoon and Elan Sassoon exercise certain options to purchase
4,850,000 shares of the Company's common stock (see Note 10).

On October 13, 2000, the Exclusive License Agreement was modified to have the
royalty terminate August 19, 2001. The royalty payment was also modified to
equaling the greater of 2% of gross revenues as defined in the Exclusive License
Agreement or $22,750 per month starting October 2000 until such time as the
Company reports positive net cash flow from operating activities for three
consecutive months. Royalties payable of $8,250 and other payables of $16,500
were forgiven by licensors as part of the modification to the Exclusive License
Agreement. On October 13, 2000, the options were modified to be cashless
exercisable options and to be exercisable in whole or in part through August 19,
2019. In connection with the Company's modification of the Exclusive License
Agreement with Beverly Sassoon, Elan Sassoon and Beverly Sassoon International,
LLC, including modification of certain terms of options granted to Beverly
Sassoon, Elan Sassoon and Capital Distributors, LLC, on October 13, 2000, the
estimated value of the options using the Black-Scholes option-pricing model is
approximately $19,000,000. Accordingly, the Company expects a material non-cash
charge to operations in 2001.

F-10

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

7. COMMITMENTS AND CONTINGENCIES (continued)

The Company is in negotiations to further modify the royalty payment formula in
the Exclusive License Agreement.

As of June 30, 2000, $42,000 owed under the Exclusive License Agreement was
payable to the licensors.

Order Fulfillment Agreement - The Company has an Order Fulfillment Agreement
expiring December 9, 2002 that obligates the Company for a minimum monthly
service fee of $5,000.

Leases - The Company has certain non-cancelable operating leases for office
space and office equipment. Rent expense was $56,195 for the year ending June
30, 2000. Future minimum lease commitments under these leases at June 30, 2000
are as follows:

Fiscal years ending June 30,
2001 $ 68,145
2002 70,645
2003 72,357
2004 73,159
2005 25,869
--------
Total minimum lease payment $310,175
========

Employment Contracts - On August 19, 1999, the Company entered into employment
contracts with its President and Chief Financial Officer for three years for
annual base compensation aggregating $192,000.

Contingencies - The Company is subject to governmental regulations pertaining to
product formulation, labeling and packaging, product claims and advertising and
to the Company's direct selling system. Any assertion or determination that
either the Company, or the Company's independent business associates, is not in
compliance with existing statutes, laws, rules, or regulations could potentially
have a material adverse effect on the Company's operations. Additionally, the
adoption of new statutes, laws, rules or regulations or changes in the
interpretation of existing statutes, laws, rules or regulations could have a
material adverse effect on the Company and its operations. Although management
believes that the Company is in compliance, in all material respects with the
statutes, laws, rules and regulations of every jurisdiction in which it
operates, no assurance can be given that the Company's compliance with
applicable statutes, laws, rules and regulations will not be challenged by
authorities or that such challenges will not have a material adverse effect on
the Company's financial position or results of operations or cash flows.

8. RELATED PARTIES

During the year ended June 30, 2000, the Company received advances from three
stockholders or affiliates of the stockholders aggregating $100,417. Subsequent
to June 30, 2000, one of these advances for $45,000 was converted into the
Company's common stock at $2.50 per share. Subsequent to June 30, 2000, an
advance of $40,000 was converted into convertible preferred stock (see Note 13).

Effective June 30, 2000, a verbal consulting agreement with a stockholder and a
related business associate were terminated. Consulting fees of $34,000 and
commissions of $7,433 were paid under these agreements in the year ending June
30, 2000. Subsequent to June 30, 2000, liabilities aggregating $54,749 under
these agreements were converted to 39,900 shares of the Company's common stock
at $2.50 per share and consulting fees payable of $51,000 were forgiven
effective June 30, 2000. In the year ended June 30, 2000, a supplier to the
Company paid a royalty of $47,877 to a company whose president is a stockholder
of the Company.

F-11

<PAGE>
INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

8. RELATED PARTIES (continued)

Subsequent to June 30, 2000, consulting agreements with Hatteras Investment
Company and Viking Holding Company, companies affiliated with a stockholder,
were terminated. The 400,000 shares of the Company's common stock conditionally
issued to these entities in the year ending June 30, 2000 were returned to the
Company and cancelled in September 2000.

Commissions of $95,585 were paid to business associates of the Company who are
immediate family members of the Company's president. Commissions of $10,925 were
paid to Capital Distributors, LLC, an entity controlled by Beverly Sassoon and
Elan Sassoon. Legal fees of $64,564 were incurred with a law firm who is a
stockholder of the Company. Subsequent to June 30, 2000, $13,645 of these fees
were converted to convertible preferred stock (see Note 13).

Subsequent to June 30, 2000, the Company entered into a consulting agreement for
financial advisory and investment-banking services with an NASD broker dealer as
summarized in Note 14. The Company's primary convertible preferred shareholder
(see Note 13) is a stockholder and president of the broker dealer.

9. INCOME TAXES

The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting For Income Taxes."
SFAS No. 109 requires the recognition of deferred tax liabilities and assets for
temporary differences, operating loss carry-forwards, and tax credit
carry-forwards.

A temporary difference is a difference between the tax basis of an asset or
liability and its reported amount in the financial statements that will result
in taxable or deductible amounts in future years when the asset is recovered or
the liability is settled. Deferred taxes represent the future tax return
consequences of these differences.

The Company has not recognized any benefit of such net operating loss
carry-forwards in the accompanying financial statements in accordance with the
provisions of SFAS No. 109 as the realization of this deferred tax benefit is
not more likely than not. A 100% valuation allowance has been recognized to
offset the entire effect of the Company's net deferred tax assets.

The provision (benefit) for federal and state income taxes for the periods prior
to the year ending June 30, 2000 were nil and for the year ended June 30, 2000
was as follows:

Current:
Federal $ --
State --
----------
--

Deferred:
Federal (579,996)
State (102,676)
----------
(682,672)

Valuation allowance 682,672
----------

Total provision (benefit) for income taxes $ --
===========

A reconciliation of the provision (benefit) for income taxes with amounts
determined by applying the statutory U. S. federal income tax rate to income
before income taxes for the year ended June 30, 2000 is as follows:

F-12

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

9. INCOME TAXES (continued)

Federal net operating loss $(430,998)
State net operating loss (76,359)
Inventory valuations (169,292)
Other (6,023)
---------
(682,672)

Valuation allowance 682,672
---------

Provision (benefit) for income taxes $ --
=========

As of June 30, 2000, the Company's net operating loss carry-forward of
$1,267,000 will expire principally in 2015.

10. STOCK OPTIONS

The Company has a stock option entitled the 1997 Stock Option Plan under which
1,000,000 shares of common stock have been reserved for issuance pursuant to
options granted under the plan. The Plan provides for the award of options,
which may be either incentive stock options (ISO's) within the meaning of the
Internal Revenue Code or non-qualified options (NQO's), which are not subject to
special tax treatment. The Plan is administered by the board of directors or a
committee appointed by the board (the Administrator). Subject to certain
restrictions, the Administrator is authorized to designate the number of shares
to be covered by each award, the terms of the award, the dates on which and the
rates at which options or other awards may be exercised, the method of payment
and other terms.

The exercise price for ISO's cannot be less than the fair market value of the
stock subject to the option on the grant date. The exercise price of a NQO shall
be fixed by the Administrator at whatever price the Administrator may determine
in good faith. All options issued under the Plan for the year ended June 30,
2000 are exercisable at $2.50 per share. Options under the Plan generally vest
over 3 years and are generally exercisable over 5 years while the individual is
an employee, or ordinarily within one month following termination of employment.

In addition to options issued under the 1997 Stock Option Plan, the Company has
issued additional options as follows:

On August 19, 1999, Beverly Sassoon, Elan Sassoon and/or Capital
Distributors, LLC, a Florida limited liability company controlled by
Beverly Sassoon and Elan Sassoon were granted options to purchase
4,850,000 shares of the Company's common stock. The options are
exercisable at $.001 per share for a period of two years commencing on
the earlier of August 19, 2001 or the 18th month anniversary of the
date the Company's securities are first traded on the Nasdaq Stock
Market, Inc. or another national exchange in the following quantities:
1) 2,250,000 shares for Beverly Sassoon, 2) 2,000,000 shares for Elan
Sassoon, and 3) 600,000 shares for Capital Distributors, LLC. The
Company recognized expense of $42,037 relating to these options in the
year ended June 30, 2000. Subsequent to June 30, 2000, the options were
modified to be cashless exercisable options and to be exercisable in
whole or in part through August 19, 2019. Subsequent to June 30, 2000,
the Company also entered into an Indemnification Agreement with Beverly
Sassoon, Elan Sassoon, and Capital Distributors, LLC whereby the
Company may at its sole discretion under certain circumstances elect to
cancel options to purchase up to 750,000 shares of the Company's common
stock.

In May 2000, the Company entered into an agreement with its public
relations firm to grant options for 5,000 shares of the Company's
common stock for each placement in a national publication or on
national radio and for 10,000 shares for each placement on national
television. The agreement provides that the options are exercisable at
$5.00 per share for one year from the date of grant. The Company

F-13

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

10. STOCK OPTIONS (continued)

granted options for 5,000 shares under this agreement that were
unexercised as of June 30, 2000. The Company recognized advertising
expense of $26,650 in the year ending June 30, 2000.

A summary of the Company's stock options activity is as follows:

Options outstanding at June 30, 1999
<TABLE>
<CAPTION>

Weighted Average
Number of Shares Exercised Price
---------------- ----------------
<S> <C> <C>
Options granted 5,320,334 $.22
Options exercised -- --
Options forfeited (100,000) 2.50
--------- ----
Options outstanding at June 30, 2000 $5,220,334 $.18
========== ====
</TABLE>

Options outstanding at June 30, 1999
<TABLE>
<CAPTION>
Weighted-Average
Range of Exercise Number Remaining Weighted-Average
Price Outstanding Contractual Life Exercise Price
----------------- ------------- ---------------- ----------------
<S> <C> <C> <C>
$.001 to 2.49 4,850,000 3.0 $.001
2.49 to 5 370,334 5.1 2.53
----------- --------- --- ----
$.001 to 5 5,220,334 3.2 $ .18
======== === =====
</TABLE>

Options Exercisable at June 30, 1999
Number Exercisable at June 30, 1999 Weighted-Average Exercise Price
----------------------------------- -------------------------------
119,443 $2.50
======= =====

Additionally, an officer of the Company may also be granted an additional 60,000
options to purchase, subject to certain restrictions, shares of the Company's
common stock at fair market value at the date of grant.

SFAS 123 requires "as adjusted" information regarding net income (loss) and net
income (loss) per share to be disclosed. The fair value of these options was
determined at the date of grant using the Black-Scholes option-pricing model
with the following weighted average assumptions for the year ended June 30,
2000.

Expected dividend yield 0.0%
Calculated volatility 4.28
Risk-free interest rate 5.85%
Expected life of the options in years 3.00

The estimated fair value of the options is amortized to expense over the
options' vesting period for "as adjusted" disclosure. The net income (loss) per
share "as adjusted" for the effects of SFAS 123 is not indicative of the effects
on reported net income (loss) for future years. The Company's reported "as
adjusted" information for the year ended June 30, 2000 is as follows:

Net loss $1,949,135
As adjusted $1,977,779
Net loss per share as reported - basic $ (.39)
Net loss per share as adjusted - basic $ (.39)

F-14

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

11. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS

The information set forth below provides disclosure of the estimated fair value
of the Company's financial instruments presented in accordance with the
requirements of Statement on Financial Accounting Standards (SFAS) No. 107. Fair
value estimates discussed herein are based upon certain market assumptions and
pertinent information available to management as of June 30, 2000. Since the
reported fair values of financial instruments are based on a variety of factors
that may not represent actual values that could have been realized as of June
30, 2000 or that will be realized in the future.

The respective carrying value of certain on-balance sheet financial instruments
(cash, accounts receivable, accounts payable and accrued expenses) approximated
their fair values. Fair values were assumed to approximate carrying values for
these financial instruments since they are short term in nature and their
carrying amounts approximate fair values or they are receivable or payable on
demand. The fair value of the long-term 0% convertible debentures payable of
$105,000, based on current market interest rates, is estimated to be $118,000.

12. CONVERTIBLE DEBENTURES - STOCKHOLDER

During the year ended June 30, 2000, the Company issued 0% convertible
debentures to an individual aggregating $2,000,000. In June 2000, the debenture
holder converted $1,895,000 of the debentures to 379,000 shares of the Company's
common stock at $5.00 per share. If the outstanding debenture of $105,000 at
June 30, 2000 is not converted by the debenture holder or paid by the Company on
or before October 26, 2002, the debenture shall be automatically converted. The
debenture provides for adjustment of the conversion price for any stock splits,
stock dividends, corporate reorganizations and certain other corporate
transactions and issuance of securities.

Similar to the restrictive provisions of the convertible preferred stock
discussed in Note 13, the debentures contain restrictive provisions that
significantly limit the authority of the officers and the Board of Directors of
the Company.

13. ISSUANCE OF CONVERTIBLE PREFERRED STOCK AND CHANGE IN CONTROL OF THE
COMPANY

On September 27, 2000, the Company entered into a stock purchase agreement with
related parties to issue 221,458 shares of Series A Convertible Preferred Stock
at a stated value of $2.50 per share. The preferred stock has a liquidation
preference of $2.50 per share. For 200,000 of the shares, the Company received
$500,000 ($100,000 of which was received in the period August 16 through
September 1, 2000) from a son of the debenture holder (see Note 12). An advance
payable of $40,000 at June 30, 2000 was converted for 16,000 of the shares and
legal fees payable of $13,645 were converted for 5,458 of the shares. This
preferred stock is convertible into the Company's common stock at $2.50 per
share. The stock purchase agreement provides for adjustment of the conversion
price for any stock splits, stock dividends, corporate reorganizations and
certain other corporate transactions and issuance of securities. The stock
purchase agreement provides the purchasers of the preferred stock certain
registration rights. The preferred stock includes no dividend.

The preferred stock entitles each such stockholder to seventy-five (75) votes
for each one (1) vote of Common Stock, and shall be entitled to vote together as
a single class with holders of Common Stock, with respect to any question or
matter upon which holders of Common Stock have the right to vote. The preferred
stock also entitles the holders thereof to vote as a separate class.

The stock purchase agreement also requires the Company to obtain the written
approval of the holders of at least a majority of the voting power of the
outstanding shares of preferred stock for the following: 1) sell, convey, or
otherwise dispose of or encumber all or substantially all of its

F-15

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

13. ISSUANCE OF CONVERTIBLE PREFERRED STOCK AND CHANGE IN CONTROL OF THE
COMPANY (continued)

property or business or merge into or consolidate with any other corporation or
effect any transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of the Company is transferred or
disposed of, 2) alter or change the rights, preferences or privileges of the
preferred stock, 3) increase or decrease the total number of authorized shares
of the preferred stock, 4) authorize or issue, or obligate itself to issue, any
other equity security, including any other security convertible into or
exercisable for any equity security having rights, preferences or privileges
over, or being on a parity with or similar to, the preferred stock, 5) redeem,
purchase or otherwise acquire (or pay into or set aside for a sinking fund for
such purpose) any security of the Company, 6) amend the Company's Articles of
Incorporation or bylaws, 7) change the authorized number of directors of the
Company's board of directors, 8) declare, order or pay any dividends on any
class of securities, 9) adjust the salary of executive officers, directors,
executive level independent contractors and key employees of the Company, 10)
make any capital expenditures in excess of $15,000, 11) issue new shares of
capital, 12) enter into or approve any agreement or contract for the purchase of
goods, services or other items between the Company, a shareholder or a member of
shareholder's immediate family, or 13) make any commission payment to any
independent business associate in excess of $15,000.

The preferred stock is not redeemable without the prior express written consent
of the holders of a majority of the voting power of all then outstanding shares
of the preferred stock. Notwithstanding the foregoing, in the event the holders
of the preferred stock have not converted with preferred stock into common stock
of the Company by September 30, 2005, the Company shall have the option to
redeem the preferred stock at a price of $7.50 per share.

14. FINANCIAL ADVISORY AND INVESTMENT BANKING SERVICES CONSULTING CONTRACT

On October 13, 2000, the Company entered into a consulting agreement for
financial advisory and investment banking services with an NASD broker dealer.
Certain principals of the broker dealer are stockholders of the Company,
including the primary convertible preferred shareholder (see Note 13). The
agreement provides a monthly consulting fee of $10,000 plus five-year "cashless
exercise" warrants to purchase 250,000 shares of the Company's common stock at
an exercise price of $2.50 (subject to adjustment in certain events) for which
the broker dealer will have registration rights with respect to the common stock
underlying the warrants. Additionally, the agreement provides for payment of a
transaction fee equal to 1) 5% of the consideration up to $3,000,000, plus 2) 3%
of the consideration from and including $3,000,000 up to $5,000,000, plus 3) 1%
of the consideration including and in excess of $5,000,000 for any merger,
acquisition, strategic partner relationship, etc. In addition to the consulting
fee and transaction fee, the agreement provides for payment of an alternate
transaction fee, subject to a minimum of $25,000, for any joint venture,
marketing agreement, licensing agreement , strategic partner agreement, etc.,
and 1) in connection with any equity securities financing in a public offering,
a fee to be agreed upon by the Company and the broker dealer; 2) in connection
with any equity securities financing in a private placement, a) a cash fee equal
to 10% of the gross proceeds raised, plus b) a non-accountable expense fee equal
to 3% of the offering price of the securities sold, plus c) the broker dealer
shall have the right to purchase, for $.01 each, "cashless exercise" warrants to
purchase common stock equal to 10% of the number of shares of common stock sold
in equity securities financing. The warrants will have a term of five years and
have an exercise price of 100% of the per share price (or conversion price of
the securities, if applicable) at which the investors invested in connection
with the equity securities financing and will be transferable to broker dealers'
employees and affiliates. The broker dealer shall also be granted registration
rights with respect to the common stock underlying such warrants which will
include at least one demand registration right at the Company's cost and an
unlimited number of piggyback registration rights; 3) in connection with any
debt securities financing, such amount as shall be agreed upon by the Company
and the broker dealer; 4) in connection with any bank financing that is
consummated prior to termination of this agreement in which the broker dealer

F-16

<PAGE>

INTERNATIONAL COSMETICS MARKETING CO.
NOTES TO FINANCIAL STATEMENTS

14. FINANCIAL ADVISORY AND INVESTMENT BANKING SERVICES CONSULTING CONTRACT
(continued)

acts as arranger, the Company shall pay the broker dealer aggregate arrangement
fees in an amount to be agreed upon, payable on the date of execution of
definitive documentation with respect thereto, which fee shall be in addition to
any fee payable to any affiliate of the broker dealer that may act as agent or a
member of a lending syndicate or otherwise as a participant in any such bank
financing.

F-17