As filed with the Securities and Exchange Commission on October 30, 1996
Registration No. 333-

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

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

AZUREL LTD.
(Name of small business issuer in its charter)

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

Delaware 2844 13-3842844
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction of Classification Code Identification Number)
Incorporation or Number)
Organization)
----------------------------

509 Madison Avenue
New York, New York 10022
(212) 317-0712
(Address and telephone number of principal executive
offices and place of business)

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

Gerard Semhon, Chief Executive Officer
AZUREL LTD.
509 Madison Avenue
New York, New York 10022
(212) 317-0712
(Name, address and telephone number of agent for service)

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

Copies to:
Jay M. Kaplowitz, Esq. Jack Becker, Esq.
Gersten, Savage, Kaplowitz & Curtin, LLP Snow Becker Krauss P.C.
575 Lexington Avenue 605 Third Avenue
New York, New York 10022 New York, New York 10158-0125
(212) 752-9700 (212) 687-3860
(212) 752-9713 (FAX) (212) 949-7052 (FAX)

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

Approximate date of proposed sale to the public: As soon as practicable
after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

CALCULATION OF REGISTRATION FEE

Proposed
Title of Each Maximum Proposed
Class of Offering Price Maximum Aggregate Amount of
securities To Amount To Be Per Offering Registration
Be Registered Registered(1) security(2) Price(2) Fee

Common Stock, $.001
par value (3) 1,150,000 $5.00 $5,750,000 $1,742.42

Redeemable Common
Stock Purchase
Warrants (4) 1,150,000 $.10 $ 115,000 $34.85

Common Stock (5) 1,150,000 $6.00 $6,900,000 $2,090.91

Underwriter's
Warrants (6) 100,000 $.001 $ 100 -- (7)

Common Stock (8) 100,000 $5.00 $500,000 $151.51

Redeemable Common
Stock Purchase
Warrants (9) 100,000 $.001 $100 $.03

Common Stock (10) 100,000 $6.00 $600,000 $181.81

Common Stock (11) 1,868,747 $5.00 $9,343,735 $2,831.43

Redeemable Common
Stock Purchase
Warrants (12) 300,000 $.10 $30,000 $9.09

TOTAL
REGISTRATION FEE $7,042.05

<FN>
(1) Pursuant to Rule 416, the Registration Statement also relates to an
indeterminate number of additional shares of Common Stock issuable upon
the exercise of Redeemable Warrants pursuant to anti-dilution provisions
contained therein, which shares of Common Stock are registered hereunder.
(2) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457.
(3) Includes 150,000 shares of Common Stock subject to the Underwriter's over-
allotment option.
(4) Includes 150,000 Redeemable Common Stock Purchase Warrants subject to the
Underwriter's over-allotment option.
(5) Issuable upon exercise of the Redeemable Common Stock Purchase Warrants.
Includes shares of Common Stock issuable upon exercise of the Underwriter's
over-allotment option.
(6) To be issued to the Underwriter, entitling the Underwriter to purchase up
to 100,000 Shares of Common Stock and/or 100,000 Redeemable Common Stock
Purchase Warrants.
(7) No fee due pursuant to Rule 457(g).
(8) Issuable upon the exercise of the Underwriter's Warrants.
(9) Issuable upon exercise of the Underwriter's Warrants.
(10) Issuable upon the exercise of the Redeemable Common Stock Purchase Warrants
included in the Underwriter's Warrants.
(11) Includes (i) 1,568,747 shares of Common Stock owned by Selling
Securityholders; and (ii) 300,000 shares of Common Stock underlying
Redeemable Common Stock Purchase Warrants owned by Selling
Securityholders.
(12) Consists of Redeemable Common Stock Purchase Warrants registered on behalf
of Selling Securityholders.
</FN>

EXPLANATORY NOTE

This Registration Statement contains two forms of prospectus: (i) one
to be used in connection with an offering by the Company of shares of Common
Stock and Redeemable Common Stock Purchase Warrants (the "Prospectus") and (ii)
one to be used in connection with the sale of shares of Common Stock by certain
selling securityholders (the "Selling Securityholder Prospectus"). The
Prospectus and the Selling Securityholder Prospectus will be identical in all
respects except for the alternate pages for the Selling Securityholder
Prospectus included herein which are labeled "Alternate Page for Selling
Securityholder Prospectus."

iii

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there by any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities law of any such state.

PROSPECTUS PRELIMINARY PROSPECTUS DATED _____, 1996
- ---------- SUBJECT TO COMPLETION

AZUREL LTD.

1,000,000 Shares of Common Stock, $.001 par value
1,000,000 Redeemable Common Stock Purchase Warrants

Azurel Ltd. (the "Company") hereby offers 1,000,000 shares of common
stock, par value $.001 per share (the "Common Stock"), and 1,000,000 redeemable
common stock purchase warrants (the "Redeemable Warrants" and together with the
Common Stock the "Securities") to the general public (hereinafter referred to as
the "Offering"). The Securities must be purchased on the basis of one Redeemable
Warrant for each share of Common Stock purchased and will be separately
transferable immediately upon issuance. Each Redeemable Warrant expires on
________, 2001, five years after the date of this Prospectus (the "Expiration
Date") and entitles the holder thereof, commencing one year from the date of
this Prospectus, to purchase one share of Common Stock at an exercise price of
$______ [120% of initial public offering price of Common Stock] (the "Exercise
Price"), subject to adjustment in certain events. The Redeemable Warrants are
redeemable by the Company, at a price of $.10 per Redeemable Warrant, at any
time commencing one year after the date of this Prospectus and prior to the
Expiration Date, on 30 days prior written notice to the registered holders of
the Redeemable Warrants (the "Warrantholders"), provided that the closing bid
price per share of the Common Stock if traded on the NASDAQ SmallCap Market
("NASDAQ"), or the last sales price per share if listed on a national exchange,
exceeds 150% of the Exercise Price for a period not less than 20 trading days in
any 30 day trading period ending not more than 15 days prior to the date of any
redemption notice. The Redeemable Warrants shall be exercisable until the close
of the business day preceding the date fixed for redemption. See "Underwriting"
and "Description of Securities-Redeemable Warrants."

Prior to this Offering, no public market for the Securities has
existed, and no assurance can be given that any market for such Securities will
develop or be sustained on completion of the Offering. The offering price for
the shares of Common Stock and Redeemable Warrants, and the Exercise Price of
the Redeemable Warrants, have been determined by negotiations between the
Company and Network 1 Financial Securities, Inc., the underwriter of this
Offering (the "Underwriter"), and are not necessarily related to the Company's
asset value, earnings, net worth or any established criteria of value. The
anticipated offering price of the Common Stock and Redeemable Warrants is
expected to be between $4.00 and $5.00 and $.10, respectively. The Company
intends to apply to NASDAQ for inclusion of the Securities for trading. The
proposed trading symbols for the Common Stock and Redeemable Warrants are AZUR
and AZURW, respectively. See "Underwriting."

THESE SECURITIES ARE SPECULATIVE SECURITIES INVOLVING A HIGH
DEGREE OF RISK AND IMMEDIATE SUBSTANTIAL DILUTION AND SHOULD BE
PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT IN THE COMPANY. PURCHASERS SHOULD CAREFULLY
CONSIDER THE MATTERS DISCUSSED UNDER "RISK FACTORS" AND

"DILUTION" COMMENCING ON PAGES 11 AND 21, RESPECTIVELY, OF THIS PROSPECTUS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

Underwriting
Discounts and
Commissions Proceeds to Company
Price to Public (1) and (3) (2) and (3)
--------------- ----------- -----------
Per Share... ----- ----- -----
Per Redeemable Warrant ----- ----- -----
Total (3) ----- ----- -----

- ----------------
<FN>
(1) Does not include additional compensation to the Underwriter consisting
of (i) a non-accountable expense allowance of $153,000 ($175,950 if the
Over-Allotment Option (as hereinafter defined) is exercised in full);
(ii) a 24-month financial advisory and investment banking agreement
providing for an aggregate payment of $48,000, payable in full at the
closing of the Offering ("Closing"); and (iii) warrants (the
"Underwriter's Warrants") exercisable for a period of four years
commencing one year from the date of this Prospectus to purchase an
aggregate of 100,000 shares of Common Stock and/or 100,000 Redeemable
Warrants at a price of $____ per share and $___ per Redeemable Warrant
[150% of initial public offering price of Common Stock and Redeemable
Warrants]. In addition, the Company has agreed to indemnify the
Underwriter against certain liabilities, including those arising under
the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."

(2) After deducting discounts and commissions payable to the Underwriter, but before payment
the Underwriter's non-accountable expense allowance or other expenses of this Offering
(estimated at $350,000) payable by the Company. See "Underwriting."

(3) The Company has granted the Underwriter an option, exercisable within
30 calendar days after the Closing to purchase up to 150,000 additional
shares of Common Stock and/or 150,000 Redeemable Warrants upon the same
terms and conditions set forth above, solely for the purpose of
covering over-allotments, if any (the "Over-Allotment Option"). If the
Over-Allotment Option is exercised in full, the total Price to Public,
Underwriting Discounts and Commissions and Proceeds to Company would be
$_________, $________ and $_________, respectively.
</FN>

The Securities are being offered by the Underwriter on a "firm
commitment" basis, subject to prior receipt and acceptance, the approval of
certain legal matters by counsel and prior sale, if and when issued. The
Underwriter reserves the right to withdraw, cancel or modify the Offering and to
reject any order in whole or in part. Delivery of the certificates representing
the Securities is expected to be made against payment therefor at the offices of
the Underwriter, One Financial Galleria, 2 Bridge Avenue, Red Bank, New Jersey
07701 on or about ___________, 1996.

NETWORK 1 FINANCIAL SECURITIES, INC.

The date of this Prospectus is ,1996

INSIDE FRONT COVER

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON
STOCK AND/OR THE REDEEMABLE WARRANTS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE NASDAQ
SMALLCAP MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY
TIME.

A SIGNIFICANT AMOUNT OF THE SECURITIES IN THIS OFFERING MAY BE SOLD TO
CUSTOMERS OF THE UNDERWRITER WHICH MAY AFFECT THE MARKET FOR AND LIQUIDITY OF
THE COMPANY'S SECURITIES IN THE EVENT THAT ADDITIONAL BROKER-DEALERS DO NOT MAKE
A MARKET IN THE COMPANY'S SECURITIES, OF WHICH THERE CAN BE NO ASSURANCE. SUCH
CUSTOMERS SUBSEQUENTLY MAY ENGAGE IN TRANSACTIONS FOR THE SALE OR PURCHASE OF
THE SECURITIES THROUGH AND/OR WITH THE UNDERWRITER.

ALTHOUGH IT HAS NO OBLIGATION TO DO SO, THE UNDERWRITER MAY FROM TIME
TO TIME ACT AS A MARKET MAKER AND OTHERWISE EFFECT TRANSACTIONS IN THE COMPANY'S
SECURITIES. THE UNDERWRITER, IF IT PARTICIPATES IN THE MARKET, MAY BECOME A
DOMINATING INFLUENCE IN THE MARKET FOR THE SECURITIES. HOWEVER, THERE IS NO
ASSURANCE THAT THE UNDERWRITER WILL OR WILL NOT CONTINUE TO BE A DOMINATING
INFLUENCE. THE PRICES AND LIQUIDITY OF THE SECURITIES OFFERED HEREUNDER MAY BE
SIGNIFICANTLY AFFECTED BY THE DEGREE, IF ANY, OF THE UNDERWRITER'S PARTICIPATION
IN SUCH MARKET. THE UNDERWRITER MAY DISCONTINUE SUCH ACTIVITIES AT ANY TIME OR
FROM TIME TO TIME. SEE "RISK FACTORS - NO ASSURANCE OF PUBLIC MARKET; VOLATILITY
OF STOCK PRICE."

THE COMPANY INTENDS TO FURNISH TO ITS STOCKHOLDERS ANNUAL REPORTS
CONTAINING AUDITED FINANCIAL STATEMENTS EXAMINED BY ITS INDEPENDENT AUDITORS.
IN ADDITION, THE COMPANY MAY FURNISH TO ITS STOCKHOLDERS QUARTERLY OR SEMI-
ANNUAL REPORTS CONTAINING UNAUDITED FINANCIAL INFORMATION AND SUCH OTHER
INTERIM REPORTS AS THE COMPANY MAY DETERMINE.

PROSPECTUS SUMMARY

The following summary does not purport to be complete and is qualified
in its entirety, and should be read in conjunction with the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. As used in this Prospectus, except as otherwise
indicated or the context otherwise requires, the "Company" or "Azurel" refers to
Azurel Ltd., a Delaware corporation, and its wholly-owned subsidiaries, Private
Label Cosmetics, Inc., a New Jersey corporation ("Private Label"), P.L.C.
Specialties Inc., a New Jersey corporation ("PLC"), Fashion Laboratories, Inc.,
a Delaware corporation ("Fashion Labs"), International Cosmetic Group, Inc., a
New Jersey corporation ("International"), and Scent 123, Inc., a Delaware
corporation ("Scent 123").

THE COMPANY

Azurel Ltd. (the "Company" or "Azurel"), directly and through
wholly-owned subsidiaries, manufactures, markets and sells cosmetics, fragrances
and skin care products. Through four wholly-owned subsidiaries comprising its
Private Label Group, acquired by the Company in August 1996, the Company
operates a manufacturing and filling facility which sells cosmetics principally
to major cosmetic companies for sale by each customer under the customer's own
brand name. In order to take advantage of the Company's manufacturing
capabilities and product development expertise, the Company currently is
developing cosmetic, skin care and fragrance lines which it intends to market
under brand names created internally or owned by others and licensed to the
Company. These products are sometimes referred to as "Branded Products". In
addition, the Company intends, through its Scent 123 subsidiary, to sell
well-recognized men's cologne and women's fragrances directly to the consumer by
overnight delivery through toll-free telephone numbers. These products are
sometimes referred to as "Distributed Fragrances."

Virtually all of the Company's present business is conducted through
the Private Label Group which manufactures, fills and packages a broad range of
cosmetics, including lipsticks, powders, eye shadows and eye liners. The
Company's manufacturing plant (the "Facility") includes a laboratory which
develops cosmetic products formulae for customers according to their specific
requirements. The laboratory also develops and maintains a library of cosmetic
product formulae for use by customers who have not developed their own formulae
for a specific product. See "Business - Products and Services."

The first Branded Product the Company has developed and commenced
marketing is an original unisex fragrance and related grooming products under
the Sports Extreme USA(TM) trade name. Presently, the Sports Extreme USA(TM)
line consists of a unisex fragrance, bath and shower gel, muscle and body
relaxer and face moisturizer containing sunscreen and alphahydroxy fruit acids.
The marketing of the Sports Extreme USA(TM) line will feature "extreme" sports
such as ice climbing, bungee jumping, sky surfing and mountain biking. The
Company anticipates retail sales of this line to commence in the spring of 1997.
See "Business - Products and Services."

The Company is also in the process of developing cosmetics, fragrances
and related products for sale under the Members Only trade name in the United
States and certain other countries pursuant to a license agreement with the
owner of the Members Only trade name. The Members Only trade name is presently
used on clothing and a wide variety of other goods and has been successfully
marketed in the United States. The Company anticipates that retail sales of the
Members Only line will commence in the spring of 1997. See "Business - Products
and Services."

The Company expects that it will sell Branded Products directly to
retail outlets in the United States, and to international distribution
companies. As a complement to its marketing of Branded Products, the Company,
through its Scent 123 subsidiary, intends to sell Distributed Fragrances
directly to the consumer, initially by overnight delivery, through toll-free
telephone numbers. The Company has commenced locating sources of supply,
developing concepts, logos, designs and advertising campaigns, and engaging in
other activities preliminary to the commencement of the sale of Distributed
Fragrances. See "Business - Products and Services" and "Certain Transactions."

The Company was incorporated in Delaware on June 26, 1995, Private
Label was incorporated in New Jersey on July 5, 1967, PLC was incorporated in
New Jersey on July 5, 1967, Fashion Labs was incorporated in Delaware on May 1,
1978, International was incorporated in New Jersey on May 30, 1979 and Scent 123
was incorporated in Delaware on September 6, 1996. The Company's offices are
located at 509 Madison Avenue, New York, New York, 10022, and its telephone
number is (212) 317-0712.

THE OFFERING

Securities Offered by the Company (1) 1,000,000 shares of Common Stock and
1,000,000 Redeemable Warrants

Common Stock Outstanding Before 3,878,747
the Offering (2)

Common Stock Outstanding After the 5,058,747
Offering (2)(3)

Redeemable Warrants Outstanding 1,000,000
After the Offering (4)

Terms of the Redeemable Warrants Each Redeemable Warrant is exercisabl
from one year of the date of this
Prospectus to five years of the date
of this Prospectus and entitles the
holder thereof to purchase one share
of Common Stock at an exercise price
of $___, [120% of the initial public
offering price per share of Common
Stock] subject to adjustment in
certain circumstances (the "Exercise
Price"). The Redeemable Warrants are
redeemable by the Company, at any time
commencing one year after the date of
this Prospectus, at a price of $.10
per Redeemable Warrant, provided that
the closing bid price of the Common
Stock on NASDAQ exceeds 150% of the
Exercise Price for a period not less
than 20 trading days in any 30 trading
day period ending not more than 15
days prior to the day on which the
Company gives notice of redemption.
See "Description of Securities-
Redeemable Warrants."

Use of Proceeds The Company intends to use the net
proceeds of this Offering for
repayment of indebtedness incurred in
connection with acquisitions and
bridge financings, marketing, to
purchase inventory, to pay accrued
expenses and for working capital.

Risk Factors The Securities involve a high degree
of risk and immediate substantial
dilution and should not be purchased
by investors who cannot afford to
lose their entire investment.
Prospective investors should consider
carefully the factors set forth under
"Risk Factors" and "Dilution."

Proposed NASDAQ Common Stock - AZUR
Symbols(5) Redeemable Warrants - AZURW

(1) Does not include (i) 1,478,747 shares of Common Stock, and (ii) 300,000
shares of Common stock issuable upon exercise of Redeemable Warrants being
offered concurrently with this Offering by selling securityholders pursuant
to the Selling Securityholders' Prospectus. See "Concurrent Registration
of Securities."

(2) Does not include (i) up to 750,000 shares of Common Stock reserved for
issuance pursuant to stock options which may be granted pursuant to the
Company's 1996 Stock Option Plan, (ii) 270,000 shares of Common Stock
reserved for issuance pursuant to options and warrants issued in
connection with financing and consulting agreements or (iii) 300,000
shares of Common Stock reserved for issuance pursuant to Redeemable
Warrants being offered concurrently with this Offering by selling
securityholders pursuant to the Selling Securityholders' Prospectus.
See "Management - Stock Option Plan," "Certain Transactions" and
"Concurrent Registration of Securities."

(3) Does not include (i) up to an additional 150,000 shares of Common Stock
and 150,000 Redeemable Warrants issuable upon exercise of the
Underwriter's Over-Allotment Option; (ii) 150,000 shares of Common
Stock issuable upon exercise of the Redeemable Warrants included in the
Underwriter's Over-Allotment Option; (iii) 1,000,000 shares of Common
Stock reserved for issuance upon the exercise of the Redeemable
Warrants; (iv) up to 100,000 shares of Common Stock issuable upon
exercise of the Underwriter's Warrants or (v) up to 100,000 shares of
Common Stock issuable upon exercise of the Redeemable Warrants included
in the Underwriter's Warrants. Includes (i) 1,000,000 shares of Common
Stock offered hereby and (ii) 180,000 shares of Common Stock issuable
upon the closing of

this Offering in connection with the acquisition of the companies
comprising the Private Label Group. See "Description of Securities,"
"Underwriting" and "Certain Transactions."

(4) Does not include (i) 150,000 Redeemable Warrants issuable upon exercise
of the Underwriter's Over-Allotment Option, (ii) 100,000 Redeemable
Warrants issuable upon exercise of the Underwriter's Warrants or (iii)
300,000 Redeemable Warrants being offered concurrently with this
Offering by selling securityholders pursuant to a Selling
Securityholders' Prospectus. See "Underwriting" and "Concurrent
Registration of Securities."

(5) The proposed trading symbols do not imply that an active trading market
will develop for the Common Stock or Redeemable Warrants upon the
completion of this Offering.

SUMMARY OF FINANCIAL INFORMATION

The following sets forth summary financial information regarding Azurel
and the four companies comprising the Private Label Group. The pro forma summary
financial information includes adjustments to reflect the acquisition of the
Private Label Group and Scent Overnight, Inc.

AZUREL

The summary financial information as of December 31, 1995 and June 30,
1996 and for the period June 26, 1995 (inception) to December 31, 1995 and the
six months ended June 30, 1996, has been abstracted from the financial
statements of the Company included elsewhere herein (audited, with the exception
of the six months ended June 30, 1996 and all of the pro forma information).

Historical Pro forma (1)
For the Period
June 26, 1995 Six Months
(inception) Through Six Months Ended Year Ended Ended
December 31, 1995 June 30, 1996 December 31, 1995 June 30, 1996
----------------- ----------------- ----------------- -------------

Statement of Operation Data: (Dollars in thousands)

Net Sales . . . . . . . . . . $ - $ - $ 8,413 $ 4,964

Cost of goods sold . . . . . - - 6,628 4,018

Net Income (Loss) . . . . . (277) (733) (1,143) (833)

Balance Sheet Data:

Current Assets . . . . . . $ 276 $1,198 $ 6,569

Total Assets . . . . . . . 351 1,393 11,462

Current Liabilities . . . . 403 961 2,137

Long term debt . . . . . . 450 200 3,587

Stockholders' Equity
(Deficiency) . . . . . . (502) 232 5,739

<FN>
(1) See "Notes to Unaudited Pro Forma Financial Statements" for description
of pro forma adjustments.
</FN>

PRIVATE LABEL GROUP

The summary financial information as of December 31, 1995 and June 30,
1996 and for the years ended December 31, 1995 and 1994 and the six months ended
June 30, 1996 and 1995, has been abstracted from the financial statements of the
Private Label Group included elsewhere herein (audited, with the exception of
the six months ended June 30, 1996 and 1995).

Historical

Years ended December 31, Six months ended June 30,
1995 1994 1996 1995

Statement of Operations: (Dollars in thousands)

Net Sales . . . . . . . . . . . $8,413 $9,745 $4,964 $3,739

Cost of goods sold . . . . . . . 6,628 7,650 4,018 2,935

Net Income (Loss) . . . . . . . (516) (290) (136) (188)

Number of shares used in
computation . . . . . . . . .

Balance Sheet Data:

Current Assets . . . . . . . . . $2,598 $2,825

Total Assets . . . . . . . . . . 3,157 3,651

Current Liabilities . . . . . . . 2,519 2,729

Long term debt . . . . . . . . . . 1,566 1,986

Stockholder's Equity (Deficiency). (927) (1,064)

RISK FACTORS

THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND SHOULD BE
PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT IN THE
COMPANY. EACH PROSPECTIVE INVESTOR SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, AS WELL AS ALL OTHER INFORMATION SET FORTH ELSEWHERE IN THIS
PROSPECTUS.

Lack of History Upon Which to Evaluate the Company. Although the
Company was organized in June 1995, it only recently (i) has commenced marketing
certain of its proposed products, (ii) acquired the companies comprising its
Private Label Group and (iii) acquired certain assets related to the Scent 123's
operations. The financial statements of the Private Label Group for the years
ended December 31, 1995 and 1994 and for the six months ended June 30, 1996 and
1995 (unaudited) included elsewhere in this Prospectus reflect the results of
operations under prior management and not under the management of the Company.
Therefore, the financial statements cannot be used by prospective investors to
evaluate the ability of the Company's management to operate the Company's
business. Accordingly, the Company's prospects must be considered in light of
the risks, expenses, problems and difficulties frequently encountered in the
establishment of a new business in an industry characterized by intense
competition and changing consumer preferences, as well as in the
commercialization and marketing of new products. See "Business" and Azurel's
financial statements and related notes thereto included elsewhere in this
Prospectus.

Dependency Upon Integration of Acquired Operations; History of Losses;
No Assurance of Profitability. The business of the Private Label Group, acquired
in August 1996, currently represents a substantial portion of the assets and
revenue of the Company. The success of the Company substantially depends upon
the successful integration of the Private Label Group into the Company's
operations. Moreover, while the Private Label Group has been in business for
more than 49 years, and its current management is remaining with the Company, it
has operated at a loss for the years ended December 31, 1995 and 1994 and for
the six months ended June 30, 1996. There can be no assurance that the Company
will be able to integrate successfully the business of the Private Label Group
into the Company, or operate the remainder of the Company's business profitably.
See "Business - The Company" and Private Label Group financial statements and
the related notes thereto included elsewhere in this Prospectus.

Going Concern Qualification in Certified Public Accountant's Report.
Both Azurel and the Private Label Group incurred significant net losses for each
of the fiscal periods included in this Prospectus. In addition, the Private
Label Group, as of June 30, 1996, had a deficit in stockholders equity of
$1,063,594 and the Company, as at such date on a pro forma basis prior to pro
forma adjustments, had a stockholders equity of $232,489. In connection with the
audit of Azurel's and Private Label Group's respective financial statements
as of December 31, 1995, the Company has received a report from its independent
certified public accountants, Feldman Radin & Co., P.C., which includes a going
concern qualification in its opinion. See

"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Azurel's and the Private Label Group's financial statements
and the related notes thereto included elsewhere in this Prospectus.

Possible Need for Additional Financing. The Company expects that cash
flow from operations, together with the net proceeds of this Offering, will fund
its cash requirements for at least 12 months following the consummation of the
Offering. However, additional financing may be required in the event that the
Company incurs operating losses in the future or operations do not generate
sufficient funds. Because there can be no assurance that adequate additional
financing will be available on terms acceptable to the Company, if at all, the
Company may be forced to limit or discontinue its existing or planned
operations. Any future financings that involve the sale of the Company's equity
securities may result in dilution to the then current stockholders. See "Use of
Proceeds."

Possible Inability to Meet Substantial Debt Service. The principal
amount of the Private Label Group's indebtedness as of June 30, 1996 is
approximately $4,715,000. Consequently, a significant portion of the Company's
cash flow will be used to pay the principal and interest on such indebtedness.
It is unlikely that the Company can meet its debt service and other cash
requirements if the Private Label Group's operations are not profitable, in
which case the Company may require alternative financing. There can be no
assurance that alternative financing will be available to the Company on
acceptable terms, if at all. See "Certain Transactions."

Secured Loans - Existence of Liens on All of Private Label Group's
Assets. All of the Private Label Group's assets have been pledged to secure
certain indebtedness. In the event that the Private Label Group defaults on
payment of its obligations, including the making of required payments of
principal and interest, the Private Label Group's indebtedness could be
accelerated and, in certain cases, the Private Label Group's assets could be
subject to foreclosure. Moreover, to the extent that the Private Label Group's
assets continue to be pledged to secure outstanding indebtedness, such assets
will remain unavailable to secure additional debt financing. Such unavailability
may adversely affect the Company's ability to borrow in the future. See "Certain
Transactions."

Uncertainty of Market Acceptance of Branded Products; Dependence on
Marketing Efforts. The Company has not yet commenced significant marketing
activities for its Branded Products and has limited financial, personnel and
other resources to undertake marketing such activities. Moreover, the market for
fragrances, cosmetics and beauty products is sensitive to changing consumer
preferences and demand. Achieving successful market acceptance for Branded
Products will require substantial marketing efforts and expenditure of
significant funds to create consumer awareness and demand. Considering the
Company's limited financial resources, it will not be able to utilize various
promotional techniques used by competitors but will be able only to engage in
limited promotional and marketing efforts. There can be no assurance that the
Company will have sufficient funds or other resources to achieve successful

market acceptance of its Branded Products or make sufficient sales to achieve
profitability. See "Business - Products and Services."

Dependency Upon License Agreements for Branded Products. The Company's
ability to develop cosmetic, skin care and fragrance lines for other companies
under brand names licensed to the Company is dependent upon the Company's
ability to obtain new licenses and retain its existing license of the Members
Only trade name. The Company's current license of the Members Only trade name
expires on September 30, 2001, subject to certain conditions, including the
requirement that the Company achieve certain minimum sales of the Members Only
fragrances, grooming products and cosmetics. There can be no assurance that the
Company will have the ability to satisfy all of its obligations under the
Members Only license agreement, that such license agreement will be renewed or
result in profitable operations or that the Company will be able to obtain
additional license agreements on favorable terms, if at all. The failure to
retain the Members Only license agreement or to obtain new license agreements
could have a material adverse effect on the Company's business related to the
Branded Products. See "Business - Products and Services."

Marketing Uncertainties Related to Distributed Fragrances. The
Company's ability to market the Distributed Fragrances will depend upon various
factors, many of which are not within the control of the Company. These factors
include, but are not limited to, (i) consumer acceptance of the Company's
marketing concept for the Distributed Fragrances, (ii) the economic climate,
(iii) government regulations concerning the shipment of fragrances, (iv) the
availability of sources of supply of the fragrances and (v) the successful
performance of the Company's advertising and fulfillment firms engaged to assist
the Company in selling the Distributed Fragrances. See "Business - Products and
Services."

Dependence Upon Obtaining Sources of Supply for Distributed Fragrances.
The Company's success in selling the Distributed Fragrances depends upon
obtaining an adequate supply of fragrances in order to maintain an appropriate
inventory, and to ensure that such inventory is readily available to its
customers. The Company does not expect to enter into supply agreements with
fragrance manufacturers; but rather, it expects to purchase fragrances from
manufacturers and others on an "as-needed" basis. There can be no assurance that
the Company will be able to acquire such inventory, in which case the Company's
expansion into this market would be adversely affected. See "Business - Products
and Services."

Competition. All aspects of the cosmetic, fragrance and skin care
industry are subject to intense competition throughout the world. In all
aspects of its business, the Company will compete with numerous companies, many
of which are better known in the industry and have established channels of
distribution and substantially all of which have greater financial and other
resources than the Company.

In selling the Branded Products, the Company will compete against
numerous companies, many of which have international reputations and broad
distribution channels in place. To date,

the Company has (i) not sold any Branded Products, (ii) developed only one line
of Branded Products using a trade name developed by it and (iii) entered into
only one formal agreement with a third party regarding the marketing of
cosmetics and fragrances under a brand name owned by such third party. There can
be no assurance that the Company will successfully develop or market any Branded
Product.

The Company expects to compete in the sale of the Distributed
Fragrances based on the implementation of its marketing concept, which includes
convenient, overnight order fulfillment. The Company's method of selling the
Distributed Fragrances is not proprietary in nature and may be replicated by
others. In addition, the Company's possible lack of exclusivity with suppliers
may allow such suppliers or other third parties to engage in the direct
marketing of fragrance brands including, but not limited to, the fragrance
brands offered by the Company. There can be no assurance that the Company will
be successful in selling the Distributed Fragrances. See "Business -
Competition."

Government Regulation. The Company's manufacturing activities and the
Facility are subject to extensive and rigorous governmental regulation
concerning the protection of the environment and the quality of manufacturing.
Federal, state and local regulatory agencies actively enforce these regulations
and conduct periodic inspections to determine compliance with such government
regulations. The Food and Drug Administration (the "FDA") enforces regulations
regarding the quality of manufacturing ("Good Manufacturing Practices" or "GMP")
through periodic surveillances and audits. Failure to comply with applicable
regulatory requirements may result in fines, suspension of approvals, cessation
of distribution, product recalls and criminal prosecution, any of which would
have a material adverse effect on the Company. Changes in existing regulations,
the interpretation thereof, or adoption of new regulations could impose costly
new procedures for compliance, or prevent the Company from obtaining, or affect
the timing of, additional regulatory approvals.

The Company's proposed method of distributing the Distributed
Fragrances may include shipment by air transportation. The shipment of
fragrances by air is subject to federal regulation and the rules and regulations
promulgated by the Department of Transportation's (the "DOT") Research & Special
Programs Administration. The DOT considers the shipment of alcohol, a component
in fragrances, to be the transportation of hazardous material. Scent 123
obtained a DOT exemption to transport hazardous material by overnight air
transportation. As long as Scent 123 has the DOT exemption, which is in effect
until November 30, 1997, and may thereafter be renewed upon application and
approval thereof, Scent 123 believes that its shipment of products will be in
compliance with current DOT regulations. Scent 123's loss of the DOT exemption
would have a material adverse effect on these business operations. There can be
no assurance that Scent 123 will retain the DOT exemption or that Scent 123 will
be able to comply with any future DOT regulations.

The Company's sale of Distributed Fragrances is intended to utilize
toll-free telephone services. Toll-free telephone service is provided to users
by federally regulated common carrier

telephone companies. The rates, terms and technical quality of this service are
subject to regulations promulgated by the Federal Communications Commission (the
"FCC") and tariffs published by the telecommunications service provider. Except
for the sending of indecent, harassing or obscene messages or material, the
interstate sale of services or products by users of a toll-free telephone number
is not subject to direct federal regulation under the Communications Act of
1934. Fraudulent telephone messages are subject to criminal penalties under
federal and state laws. The Company does not believe that FCC regulations will
affect the proposed sale of Distributed Fragrances, but such regulations could
affect the price, terms, quality and availability of the toll-free telephone
services and may have a material adverse effect on the Company's sale of
Distributed Fragrances.

Conflict of Interest in Acquisition of Assets of Scent Overnight, Inc.;
No Independent Appraisal of Value. The Company's Scent 123 subsidiary acquired
certain intangible assets from a company controlled by Gerard Semhon, the
Company's Chief Executive Officer and Chairman of the Board. The purchase price
was arbitrarily determined between affiliates and was not determined by an
independent appraisal of the assets. The purchase price was not based upon any
recognized criteria of value and may have exceeded the fair market value of the
assets acquired. See "Certain Transactions."

Dependence on Key Employees. The Company is dependent upon the
experience and abilities of its management, particularly, Gerard Semhon, Chief
Executive Officer and Chairman of the Board, Constantine Bezas, President, and
Michael J. Assante, President of the Private Label Group. While the Company has
entered into employment agreements only with Messrs. Semhon and Assante, the
loss of the services of any of these or other key employees would have a
material adverse effect on the business, operations, and prospects of the
Company. The Company currently has no key-person life insurance on any of these
individuals. See "Business - Management."

Lack of Control by Management. The management of the Company does not
hold a majority of the voting power in the Company. Therefore, the Company's
current management neither has control of any issue subject to a stockholder
vote nor the ability to control the election of the Board of Directors. As a
result, there can be no assurance that the Company's current management will be
retained by the Board of Directors. See "Principal Stockholders."

Immediate Substantial Dilution. The Company's present stockholders
acquired their shares of Common Stock at costs substantially below the
anticipated offering price of the Common Stock to be sold in this Offering.
Therefore, upon the completion of this Offering, investors will incur immediate
and substantial dilution in the per share net tangible book value of their
Common Stock, estimated to be approximately $4.66 per share or approximately 93%
of the public offering price per share (allocating no value to the Redeemable
Warrants). See "Dilution."

No Dividends and None Anticipated. The Company has neither declared nor
paid any cash dividends on its Common Stock since its incorporation in June
1995, and the Board of Directors does not contemplate the payment of such
dividends in the foreseeable future. Any decisions regarding the payment of
dividends will depend on the Company's earnings, financial position and such
other factors as the Board of Directors deems relevant. In addition, certain
financing agreements and other documents executed in connection with the
acquisition of the Private Label Group prohibit the payment of dividends so long
as certain indebtedness is outstanding. See "Dividend Policy" and "Description
of Securities - Common Stock."

Limitation on Directors' Liabilities under Delaware Law and Broad
Indemnification. Pursuant to Delaware Law and the Company's Certificate of
Incorporation, directors of the Company are not liable for monetary damages for
breach of fiduciary duty, except in connection with the following: (i) a breach
of duty of loyalty, (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) dividend payment or
stock repurchases illegal under Delaware law or (iv) any transaction from which
a director has derived an improper personal benefit. In addition, the Company's
By-laws require the Company to indemnify its officers, directors, employees and
agents under certain circumstances, including those under which indemnification
would otherwise be discretionary, and to advance expenses in proceedings in
which they could be indemnified. See "Management - Limitation on Directors' or
Officers' Liabilities and Indemnifications."

Offering Price Arbitrarily Determined. The offering price of the
Securities has been determined by negotiation between the Company and the
Underwriter and is not necessarily related to the Company's assets, earnings,
book value or any other objective standard of value.

Shares Eligible for Future Sale. The Company currently has 2,580,000
shares of Common Stock outstanding that are "restricted securities," as that
term is defined under Rule 144 promulgated under the Securities Act. In general,
under Rule 144, a person who has satisfied a two-year holding period may, under
certain circumstances, sell within any three month period a number of shares of
Common Stock that does not exceed the greater of 1% of the then outstanding
shares of Common Stock or the average weekly trading volume in such shares
during the four calendar weeks prior to such sale. Rule 144 also permits, under
certain circumstances, the sale of shares without any quantity or other
limitation by a person who is not an affiliate of the Company and who has
satisfied a three-year holding period. All stockholders of the Company have
agreed not to publicly sell shares of the Company's Common Stock for a period of
between six months and two years from the date of this Prospectus without the
prior written consent of the Underwriter. Any substantial sale of restricted
securities under Rule 144 could have a significant adverse effect on the market
price of the Company's securities. See "Shares Eligible for Future Sale."

No Assurance of Public Market; Volatility of Stock Price. Prior to this
Offering there has been no market for any of the Securities. There can be no
assurance that a trading market will develop after this Offering for the
Securities or that, if developed, it will be sustained.

The stock market has, from time to time, experienced significant price
and volume fluctuations that may be unrelated to the operating performance of
any particular company. Various factors and events, including future
announcements of new products by the Company or its competitors, developments or
disputes concerning, among other things, government regulations in the United
States, and economic and other external factors, as well as fluctuations in the
Company's financial results, could have a significant impact on the market price
of the Securities.

NASDAQ Eligibility and Maintenance Requirements; Possible Delisting of
Securities. The Company has applied for listing of the Securities on NASDAQ. The
Securities and Exchange Commission (the "Commission") has approved rules
imposing listing criteria for securities on NASDAQ, including maintenance
standards. In order to qualify for initial quotation of securities on NASDAQ, a
company, among other things, must have at least $4,000,000 in total assets,
$2,000,000 in stockholders' equity, $1,000,000 in market value of the public
float and minimum bid price of $3.00 per share. To maintain NASDAQ listing, a
company, among other things, must have at least $2,000,000 in assets and
$1,000,000 in capital and surplus and its stock must have a minimum bid price of
$1.00; provided, however, that a company shall not be required to maintain the
$1.00 per share minimum bid price if it maintains a public float of $1,000,000
and $2,000,000 in capital and surplus. If the Company is unable to satisfy the
NASDAQ maintenance criteria for listing, its Securities may be delisted from
NASDAQ. In such event, trading, if any, of the Securities would thereafter be
conducted in the over-the-counter market, the so-called "pink sheets," or the
National Association of Securities Dealers, Inc.'s (the "NASD") "Electronic
Bulletin Board." As a consequence of such delisting, an investor would likely
find it more difficult to dispose of, or to obtain quotations as to, the price
of the Securities.

Penny Stock Regulation. In the event that the Company is unable to
satisfy NASDAQ's maintenance criteria requirements, or its Common Stock falls
below the minimum bid price of $3.00 per share for the initial quotation,
trading of the Securities would be conducted in the "pink sheets" or the NASD's
Electronic Bulletin Board. In the absence of the Common Stock being quoted on
NASDAQ or the Company's having $2,000,000 in stockholders' equity, trading of
the Common Stock would be covered by Rule 15g-9 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), for non-NASDAQ and
non-exchange listed securities. Under such rule, broker-dealers who recommend
such securities to persons other than established customers and accredited
investors must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to a transaction prior
to sale. Securities are exempt from this rule if the market price is at least
$5.00 per share.

The Commission has adopted regulations that generally define a "penny
stock" to be an equity security that has a market price of less than $5.00 per
share or an exercise price of less than $5.00 per share subject to certain
exceptions. Such exceptions include equity securities listed on NASDAQ and
equity securities issued by an issuer that has (i) net tangible assets of at
least $2,000,000, if such issuer has been in continuous operation for less than
three years, or

(ii) net tangible assets of at least $5,000,000, if such issuer has been in
continuous operation for less than three years, or (iii) average revenue of at
least $6,000,000 for the preceding three years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a risk disclosure schedule explaining the penny
stock market and the risks associated therewith.

If the Securities were to become subject to the regulations applicable
to penny stocks, the market liquidity for the Securities would be severely
affected, limiting the ability of broker-dealers to sell the securities and the
ability of purchasers in this Offering to sell their Securities in the secondary
market. There is no assurance that trading in the Securities will not be subject
to these or other regulations that would adversely affect the market for such
securities.

Potential Adverse Effect of Redemption of Redeemable Warrants. The
Redeemable Warrants offered hereby are redeemable, in whole or in part, at a
price of $.10 per Redeemable Warrant (the "Redemption Price"), commencing one
year after the date of this Prospectus and prior to their expiration on the
fifth anniversary of this Prospectus provided that (i) prior notice of not less
than 30 days is given to the Warrantholders, (ii) the closing bid price of the
Company's Common Stock shall have exceeded $ per share [150% of Exercise Price]
for a period not less than 20 trading days in any 30 day trading period ending
not more than 15 days prior to the date on which the notice of redemption is
given, Warrantholders shall have exercise rights until the close of the business
day preceding the date fixed for redemption. Notice of redemption of the
Redeemable Warrants could force the holders to exercise the Redeemable Warrants
and pay the Exercise Price at a time when it may be disadvantageous for them to
do so, or to sell the Redeemable Warrants at the current market price when they
might otherwise wish to hold them, or to accept the Redemption Price, which may
be substantially less than the market value of the Redeemable Warrants at the
time of redemption. The Redeemable Warrants may not be exercised unless the
registration statement pursuant to the Securities Act, covering the underlying
shares of Common Stock is current and such shares have been qualified for sale,
or there is an exemption from applicable qualification requirements, under the
securities laws of the state of residence of the Warrantholder. Although the
Company does not presently intend to do so, the Company reserves the right to
call the Redeemable Warrants for redemption whether or not a current prospectus
is in effect or such underlying shares are not, or cannot be, registered in the
applicable states. Such restrictions could have the effect of preventing certain
Warrantholders from liquidating their Redeemable Warrants. See "Description of
Securities Warrants."

Current Prospectus and State Blue Sky Registration Required to Exercise
Redeemable Warrants. Warrantholders have the right to exercise the Redeemable
Warrants for the purchase of shares of Common Stock only if a current prospectus
which will permit the purchase and sale of the Common Stock underlying the
Redeemable Warrants is then effective, but there can be no assurance that the
Company will be able to do so. Although the Company intends to seek to qualify
for sale the shares of Common Stock underlying the Redeemable Warrants in those
states in which the Securities are to be offered, no assurance can be given that

such qualification will occur. In addition, purchasers may buy Redeemable
Warrants in the aftermarket or may move to jurisdictions in which the shares of
Common Stock issuable upon exercise of the Redeemable Warrants are not so
registered or qualified during the period that the Redeemable Warrants are
exercisable. In such event, the Company would be unable to issue shares of
Common Stock to those persons desiring to exercise their Redeemable Warrants
unless and until the shares of Common Stock could be registered or qualified for
sale in the jurisdictions in which such purchasers reside, or an exemption to
such qualification exists or is granted in such jurisdiction. The Redeemable
Warrants may lose or be of no value if a prospectus covering the shares of
Common Stock issuable upon the exercise thereof is not kept current or if such
underlying shares of Common Stock are not, or cannot be, registered in the
applicable states. See "Description of Securities - Redeemable Warrants."

Relationship of Underwriter to Trading. The Underwriter may act as a
broker or dealer with respect to the purchase or sale of the Securities in the
over-the-counter market where they are expected to trade. The Underwriter also
has the right to act as the Company's exclusive agent in connection with any
future solicitation of Warrantholders to exercise their Redeemable Warrants.
Unless granted an exemption by the Commission from Rule 10b-6 under the Exchange
Act, the Underwriter will be prohibited from engaging in any market-making
activity or solicited brokerage activities with regard to the Securities during
the period beginning nine business days prior to the commencement of any such
solicitation and ending on the later of the termination of such solicitation
activity or the termination (by waiver or otherwise) of any right the
Underwriter may have to receive a fee for the exercise of the Redeemable
Warrants following such solicitation. As a result, the Underwriter and
solicitation broker/dealers may be unable to continue to make a market in the
Securities during certain periods while the exercise of Redeemable Warrants is
being solicited. Such a limitation, while in effect, could impair the liquidity
and market price of the Securities.

Underwriter's Warrants and Registration Rights. In connection with this
Offering, the Company has agreed to sell to the Underwriter, for nominal
consideration, the Underwriter's Warrants which entitle the Underwriter to
purchase up to 100,000 shares of Common Stock and/or 100,000 Redeemable
Warrants. The securities issuable upon exercise of the Underwriter's Warrants
are identical to those offered pursuant to this Prospectus. The Underwriter's
Warrants are exercisable at a price of $___ per share and $___ per Redeemable
Warrant [150% of initial public offering price of Common Stock and Redeemable
Warrants] for a period of four years commencing one year from the date of this
Prospectus. The exercise of the Underwriter's Warrants and the Redeemable
Warrants contained in the Underwriter's Warrants may (i) dilute the value of the
shares of Common Stock to be acquired by holders of the Redeemable Warrants,
(ii) adversely affect the Company's ability to obtain equity capital and (iii)
adversely affect the market price of the Common Stock if the Common Stock
issuable upon the exercise of the Underwriter's Warrants and the Redeemable
Warrants contained in the Underwriter's Warrants are sold in the public market.
The Underwriter has been granted certain "piggyback" and demand registration
rights for a period of five years from the date of this Prospectus with respect
to the registration under the Securities Act of the securities directly

or indirectly issuable upon exercise of the Underwriter's Warrants. The
exercise of such rights could result in substantial expense to the Company.
See "Underwriting."

DILUTION

At June 30, 1996 the Company had a pro forma net tangible book value
(deficit) of approximately ($2,407,000) or ($.59) per share which includes
adjustments to reflect the transactions post June 30, 1996 as described in Note
4 of the "Notes to Unaudited Pro Forma Financial Statements."

The net tangible book value subsequent to June 30, 1996 which gives
effect to the Common Stock and Redeemable Warrants offered hereby, and the
receipt of the net proceeds therefrom and assuming no value is allocated to the
Redeemable Warrants, the pro forma net tangible book value at June 30, 1996
would have been $1,697,000 or $.34 per share. This represents an immediate
increase in tangible book value of $.93 per share to existing stockholders,
which is due solely to the purchase of Common Stock by investors in this
Offering, and an immediate dilution of $4.66 per share to new investors (based
on an assumed offering price of $5.00 per share of Common Stock and $.10 per
Redeemable Warrant). "Dilution" is the difference between the initial public
offering price and the proforma net tangible book value per share.

The following table illustrates the per share dilution to the new
investors as of June 30, 1996:

Public offering price per share of Common Stock................... $5.00

Deficit net tangible book value per share before the
Offering.................................................($.59)

Increase attributable to new investors................... .93
-----

Net tangible book value per share after the
Offering.......................................................... .34
-----

Dilution to new investors.......................................... $4.66
=====

The following table summarizes the differences between the existing
stockholders and new investors with respect to the number of shares of Common
Stock purchased from the Company, and the total consideration and the average
price per share paid:

Percentage
of Average
Outstanding Percent of Price per
Shares of Shares of Total Total Share of
Common Common Consideration Consideration Common
Stock Stock Paid Paid Stock

Existing
Stockholders 4,058,747 80.2% $2,973,099 37.3% $.73

New
Investors 1,000,000 19.8% 5,000,000 62.7% $5.00
--------- ----- --------- -----

5,058,747 100.0% $7,973,099 100.0%
========= ====== ========= ======

CAPITALIZATION

The following table sets forth the capitalization of the Company at
June 30, 1996 and such capitalization "As Adjusted" to reflect the issuance and
sale of the Common Stock and Redeemable Warrants offered hereby, the receipt of
the net proceeds of the Offering, approximately $4,100,000, and transactions
subsequent to June 30, 1996 that have a material impact on the financial
statements. See "Notes to Unaudited Pro Forma Financial Statements" and "Use of
Proceeds."

Historical As Adjusted (1)(2)
(In thousands) (In thousands)

Current maturities of long term
debt................................ $ 671 $ 181
------- -------

Long-term debt, less current
portion............................. 200 3,565
------- -------

Stockholder's Equity:

Common Stock, $.001 par value,
authorized 10,000,000 shares;
3,310,000 issued and outstanding;
4,842,247 shares issued and
outstanding as adjusted............. 3 5

Additional paid-in capital............ 1,430 7,313

Accumulated
deficit............................. (1,198) (1,577)
-------- --------

235 5,741

Less; stock subscriptions
receivable.......................... (2) (2)
-------- --------

Total Stockholders' Equity
(deficiency)........................ 233 5,739
-------- --------

Total Capitalization...................... $ 1,104 $ 9,485
======== =======

- ------------------
<FN>
(1) Does not include: (i) 1,000,000 shares of Common Stock issuable upon
exercise of the Redeemable Warrants offered hereby; (ii) 200,000 shares
of Common Stock issuable upon exercise of the Representative's Warrants
and Redeemable Warrants included therein; (iii) 750,000 shares of
Common Stock issuable upon exercise of options available for grant
under the 1996 Option Plan, of which no shares have been granted as of
June 30, 1996; and (iv) 270,000 shares of Common Stock reserved for
issuance pursuant to options and warrants issued in connection with
financing and consulting agreements.

(2) Includes all adjustments described in the "Notes to Unaudited Pro Forma
Financial Statements."

</FN>

USE OF PROCEEDS

Assuming the sale of the securities offered hereby (based on an assumed
offering price of $5.00 per share of Common Stock and $.10 per share Redeemable
Warrant), the net proceeds to the Company, after deducting estimated
underwriting discounts and commissions and expenses payable by the Company in
connection with the Offering) are estimated to be approximately $4,240,000
($4,928,500 if the Underwriter's Over-Allotment Option is exercised in full).
The Company expects to use the net proceeds as follows:

Percentage of
Purpose Amount Net Proceeds

Repayment of outstanding accrued
expenses and indebtedness(1) $1,067,500 25.2%
Marketing (2) $ 800,000 18.8%
Inventory (3) $1,800,000 42.5%
Equipment (4) $ 450,000 10.6%
Working Capital and General Corporate Purposes $ 122,500 2.9%

Total . . . . . . . . . . . . . $4,240,000 100%

<FN>
(1) Represents (i) the installment of principal and interest (estimated at
$215,000) due, on the earlier of the date on which this Offering is
consummated or January 1, 1997, under purchase money promissory notes
payable to Michael J. Assante and Louis DiVita, respectively, for the
purchase of the companies comprising the Private Label Group. The notes
bear interest at 9% per annum and are due in installments through
October 2000; (ii) principal and interest (estimated at $228,500) due
under a purchase money promissory note given as part of the purchase
price for the assets of Scent Overnight a company of which Gerard
Semhon is a principal shareholder. The note bears interest at 9% per
annum and is due ten days after the date of this Prospectus; (iii) the
payment of interest due on a promissory note assumed by the Company in
connection with the acquisition of Scent Overnight (estimated at
$40,000); (iv) the payment of principal and interest (estimated at
$309,000) due under promissory notes aggregating $300,000 which were
issued in a private placement; The notes are due upon the earlier of
twelve months after the date of issuance or the date on which this
Offering is consummated and bear interest at the rate of 10% per annum;
and (v) approximately $275,000 of accrued expenses, which includes
accrued consulting fees totalling approximately $187,000 as of June 30,
1996, for consulting services rendered by Messrs. Semhon, Bezas, Bell
and Christakos in the amounts of approximately $47,000, $37,000,
$45,000, and $30,000, respectively. See "Certain Transactions" and
"Management."

(2) Represents anticipated costs associated with marketing and selling the
Branded Products and the Distributed Fragrances.

(3) Includes purchase of inventory for the sale of the Branded Products
and Distributed Fragrances.

(4) Includes purchase of equipment for the Facility.
</FN>

The foregoing represents the Company's current estimate of the
allocation of the net proceeds of the Offering based upon certain assumptions
relating to the costs associated with the implementation of the Company's
proposed business operations. Future events, including problems, delays,
expenses and complications frequently encountered by companies which seek to
introduce new products to existing or new markets as well as changes in economic
conditions, regulatory or competitive conditions, and the success of the
Company's marketing activities, may make shifts in the allocation of funds
necessary or desirable. There can be no assurance that the Company's estimates
will prove to be accurate or that unforeseen expenses will not be incurred.

The Company believes that the net proceeds of this Offering will
satisfy the Company's capital requirements for at least twelve months. During
this period, the Company's efforts will be directed at developing and
implementing its proposed business operations.

Prior to expenditure, the net proceeds of this Offering will be
invested in principally high grade short-term interest-bearing investments. Any
proceeds received upon exercise of the Over-Allotment Option will be used for
working capital.

DIVIDEND POLICY

The Company has neither declared nor paid any dividends to its
stockholders since its inception and has no intention of declaring or paying any
dividends to its stockholders in the foreseeable future. The Company intends to
reinvest earnings, if any, in the development and expansion of its business. In
addition, certain financing agreements and other documents executed in
connection with the acquisition of the Private Label Group prohibit the payment
of dividends so long as certain indebtedness is outstanding. See "Certain
Transactions" and "Risk Factors - No Dividends and None Anticipated."

SUMMARY OF FINANCIAL INFORMATION

AZUREL

Statement of Operation Data: (Dollars in thousands)

Net Sales . . . . . . . . . . $ - $ - $ 8,413 $ 4,964

Cost of goods sold . . . . . - - 6,628 4,018

Net Income (Loss) . . . . . . (277) (733) (1,143) (833)

Balance Sheet Data:

Current Assets . . . . . . . $ 276 $1,198 $ 6,569

Total Assets . . . . . . . . 351 1,393 11,462

Current Liabilities . . . . . 403 961 2,137

Long term debt . . . . . . . 450 200 3,587

Stockholders' Equity
(Deficiency) . . . . . . . (502) 232 5,739

<FN>
(1) See "Notes to Unaudited Pro Forma Financial Statements" for description
of pro forma adjustments.

</FN>

PRIVATE LABEL GROUP

Historical

Years ended December 31, Six months ended June 30,
1995 1994 1996 1995

Statement of Operations: (Dollars in thousands)

Net Sales . . . . . . . . . . $8,413 $9,745 $4,964 $3,739

Cost of goods sold . . . . . . 6,628 7,650 4,018 2,935

Net Income (Loss). . . . . . . (516) (290) (136) (188)

Number of shares used in
computation . . . . . . . .

Balance Sheet Data:

Current Assets . . . . . . . . $2,598 $2,825

Total Assets . . . . . . . . . 3,157 3,651

Current Liabilities. . . . . . 2,519 2,729

Long term debt . . . . . . . . . . 1,566 1,986

Stockholder's Equity (Deficiency). (927) (1,064)

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

AZUREL

General

Azurel, through its wholly-owned subsidiaries, manufactures,
markets and sells private label cosmetics, fragrances and skincare products.
Prior to the completion of the acquisitions of the subsidiaries, Azurel focused
its operations on negotiating and consummating such acquisitions and developing
and implementing marketing strategies for its Branded Products. The following
discussion relates to Azurel's operations prior to any acquisitions.

The discussion below for Azurel compares the 1996 Interim
Period to the 1995 Interim Period, as such terms are defined below. Because
Azurel was formed approximately one year ago, full year comparisons are not
possible. Considering Azurel's developmental stage, the comparison of Interim
Periods was deemed the most meaningful disclosure available.

Results of Operations

Six months ended June 30, 1996 (the "1996 Interim Period")
compared to the period of June 26, 1995 (inception) to December 31, 1995 (the
"1995 Interim Period")

There were no revenues in both the 1996 and the 1995 Interim
Periods, as Azurel's principal operating activities consisted of (i) performing
due diligence procedures regarding the planned acquisition of the Private Label
Group, (ii) developing various new product lines and (iii) refining the Scent
123 test market and national roll-out planned for the fall of 1997.

Although there were no revenues in the 1996 Interim Period,
Azurel solicited approximately $250,000 in sales orders, which Azurel
anticipates will be filled in the quarter ending December 31, 1996.

General and administrative expenses were $259,637 in the 1995
Interim Period, as compared to $415,651 in the 1996 Interim Period. This
represents an increase of $156,014 or approximately 60%, due partially to
increased consulting and professional fees. Consulting fees increased from
$183,038 in the 1995 Interim Period to $242,462 in the 1996 Interim Period, an
increase of $59,424 or approximately 32%. Consulting fees relate to services
provided to the Company regarding the development of its product lines. Such
expenses increased in the relevant time periods as a result of increased
activity in the development of product and marketing strategies. Professional
fees (including legal fees) increased from $1,750

in the 1995 Interim Period to $34,546 in the 1996 Interim Period due services in
connection with the Company's expanded activities in the 1996 Interim Period.

Interest expense increased from $17,559 in the 1995 Interim Period to
$317,584 in the 1996 Interim Period. This increase of $300,025 relates to
increased borrowings outstanding for a greater portion of the 1996 Interim
Period as compared to the 1995 Interim Period and to the amortization in the
1996 Interim Period of debt discounts in the aggregate amount of $163,162.
No such amortization existed for the 1995 Interim Period.

Liquidity and Capital Resources

From inception to date, the Azurel's operations have been
funded by a combination of debt and equity financing.

Debt Financing

Azurel borrowed an aggregate amount of $528,750 in the 1995
Interim Period and repaid an aggregate amount of $28,750 of such borrowings in
that period. (The various obligations are more fully described in the notes to
the financial statements). In the 1996 Interim Period, the Company borrowed an
additional aggregate amount of $460,000 from various lenders. Azurel offered
certain holders of outstanding promissory notes the right to convert their debt
into shares of common stock at $2.00 per share. In July and October 1996,
lenders with obligations totaling $667,494 (including principal and interest)
elected to convert such loans into 438,747 shares of Common Stock.

Azurel repaid loans aggregating $310,000 in the 1996 Interim
Period.

Equity Financing

Azurel sold 750,000 shares of Common Stock at $2.00 per share
from February through July 1996. In the 1996 Interim Period, the Company had net
proceeds of $1,097,450 from the sale.

Utilization of Proceeds

Proceeds of the aforementioned financing were utilized to (i)
finance operations from inception to date (approximately $551,000), (ii) advance
funds to the Private Label Group ($680,000), (iii) fund increases to other
assets, furniture and equipment and deferred registration costs ($143,238), (iv)
fund advances to certain stockholders ($184,480), (v) fund deferred finance
costs ($70,208) and (vi) enhance working capital at June 30, 1996 ($236,895).

Going Concern

Azurel's financial statements have been presented on a basis
that it is a going concern. Due to significant losses incurred in the 1995 and
the 1996 Interim Periods, the accountants report has an explanatory paragraph
stating that the Azurel's continued existence is dependent upon its ability to
become profitable and obtain additional equity and/or debt financing of which no
assurance can be given.

THE PRIVATE LABEL GROUP

General

The Private Label Group develops, manufactures, packages and
sells cosmetics principally to major cosmetic companies for sale by each
customer under the customer's own brand name.

The following discussion and analysis should be read together
with the combined financial statements and notes thereto included herein.

Results of Operations

The following table sets forth, for the periods indicated, the
percentage of net sales represented by certain items included in the combined
statements of operations.

Six months ended June 30, Year ended December 31,
------------------------- -----------------------
1996 1995 1995 1994
---------- --------- --------- ------

Net sales.................. 100.0% 100.0% 100.0% 100.0%

Cost of Sales.............. 80.9 78.5 78.8 78.5
----- ----- ----- -----

Gross profit............... 19.1 21.5 21.2 21.5

Selling, general and
administrative expenses.. 19.5 24.1 25.0 19.9
----- ----- ----- ----

Operating income........... (.4) (2.6) (3.8) 1.6

Other expense.............. 2.3 2.4 2.3 4.6
---- ---- ---- ----

Net income (loss).......... (2.7)% (5.0)% (6.1)% (3.0)%
====== ====== ====== ======

Six months ended June 30, 1996 (the "1996 Interim Period")
compared to the six months ended June 30, 1995 (the "1995 Interim Period")

Net sales for the six months ended June 30, 1996 increased by
$1,225,269, or approximately 33%, from the comparable period of the 1995 Interim
Period. The increase is attributable primarily to an expansion of the Private
Label Group's customer base. In addition, a significant new customer provided
sales of approximately $339,000 in the 1996 Interim Period. Sales to the Private
Label Group's two largest customers in the six months ended June 30, 1996
accounted for 35.1% of net sales, as compared to 33% attributable to these same
two customers in the six months ended June 30, 1995. The largest customer in the
1996 Interim Period accounted for 22.6% of net sales in that period as compared
to 20% in the 1995 Interim Period.

Although the Private Label Group successfully obtained new
customers and increased sales to existing customers in the 1996 Interim Period,
there can be no assurance that the Private Label Group will continue to increase
its sales to such customers or obtain significant new customers in future
periods.

Cost of sales for the 1996 Interim Period were $4,018,000, or
80.9% of net sales, as compared to $2,935,000, or 78.5% of net sales for the
1995 Interim Period. The increase in cost of sales as a percentage of net sales
is primarily attributable to changes in the Private Label Group's customer and
product mix, resulting in increased sales of products with slightly lower gross
profit margins.

Selling, general and administrative expenses for the 1996
Interim Period were $969,000 as compared to $902,000 for the comparable 1995
Interim Period, representing an increase of $67,000, or approximately 7.4%. As a
percentage of net sales, these expenses decreased from 24.1% in the 1995 Interim
Period to 19.5% in the current period. The decrease in this ratio is primarily
attributable to the increase in net sales discussed in the first paragraph
herein, resulting in an increased base to absorb these costs. Officers' salaries
increased by approximately $77,000 in the 1996 Interim Period as compared to the
1995 Interim Period. Commissions increased in the 1996 Interim Period by
approximately $25,000 as compared to the 1995 Interim Period. These increases
were offset somewhat by reduced professional fees in the 1996 Interim Period as
compared to the 1995 Interim Period in the amount of approximately $40,000.

Interest expenses increased from $89,973 in the 1995 Interim
Period to $113,320 in the 1996 Interim Period. This increase is attributable to
higher rates on increased borrowings under the Private Label Group's revolving
credit facility.

The Private Label Group recognized no income tax benefit in
either year as a result of the uncertainty regarding the realization of net
operating loss carryforward benefits.

1995 Compared to 1994

Net sales for 1995 decreased by $1,331,353, or 13.7%, as
compared to 1994. The decrease is attributable primarily to restrictions imposed
by the Private Label Group's previous asset based lender, which reduced the
availability of inventory and adversely effected the Private Label Group's
ability to supply finished products to its customers. As a result of the Private
Label Group's refinancing its revolving credit facility in 1996 (see Note 8 to
the Private Label Group's financial statements), management believes that the
restrictions imposed under the previous agreement have been significantly
alleviated and product financing will not be a hindrance to order fulfillment in
subsequent periods.

Cost of sales for 1995 decreased by $1,022,263, or 13.4% from
1994. As a percentage of net sales, cost of sales increased from 78.5% in 1994
to 78.8% in 1995. The increase in cost of sales as a percentage of net sales is
attributable primarily to the allocation of the fixed costs associated with the
Private Label Group's manufacturing operations over a smaller revenue base.

Selling, general and administrative expenses for 1995
increased by $168,725, or 8.7%, from 1994. As a percentage of net sales, these
expenses increased from 19.9% in 1994 to 25.0% in 1995, because of the decrease
in sales discussed above. The increase in the dollar amount of these expenses is
attributable primarily to an increase in management personnel, selling and
promotional expenses and professional and consulting fees.

The Private Label Group recognized no income tax benefit in
either year as a result of the uncertainty regarding the realization of net
operating loss carryforward benefits.

Liquidity and Capital Resources

In the 1996 Interim Period, the Private Label Group expended
$528,129 on operating activities. This is attributable to the loss from
operations in such period of $136,424, the payment of accrued litigation
settlement costs in the amount of $257,000, an increase in receivables in the
period amounting to $245,237, as well as a decline in payroll taxes payable,
offset by depreciation charges of $91,866. Cash utilized for the purchase of
equipment was $107,946.

The Private Label Group financed its operating and capital
expenditure requirements through additional borrowings from Azurel in the 1996
Interim Period ($500,000), as well as increased borrowings on its revolving
credit facility, which was renegotiated with a new lender during the 1996
Interim Period. The new credit facility provides for aggregate borrowings up to
$2,000,000, collateralized by substantially all of the Private Label Group's
assets and guaranteed by Azurel. Monthly installments of $10,150 are required
under this agreement and the remaining amount is due in February 1998. See
Azurel's Management's Discussion and Analysis for additional information.

Going Concern

The Private Label Group's financial statements have been
presented on a basis that it is a going concern. Due to significant losses
incurred in 1995 and 1994, the accountants have an explanatory paragraph stating
that the Private Label Group's continued existence depends upon its ability to
become profitable and obtain additional equity and/or debt financing of which no
assurance can be given. Since the preparation of the financial statements, the
Private Label Group was acquired by Azurel.

BUSINESS

This discussion contains forward-looking statements that involve risks
and uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include those discussed in "Risk Factors."

General

Azurel Ltd. (the "Company" or "Azurel"), directly and through
wholly-owned subsidiaries, manufactures, markets and sells cosmetics, fragrances
and skin care products. The Company operates a manufacturing and filling
facility which sells cosmetics principally to major cosmetic companies for sale
by each customer under the customer's own brand name (commonly known as "private
label" sales). In order to take advantage of the Company's manufacturing
capabilities and product development expertise, the Company currently is
developing cosmetic, skin care and fragrance lines which it intends to market
under brand names created internally or owned by others and licensed to the
Company. In addition, the Company intends to sell well-recognized men's cologne
and women's fragrances directly to the consumer by overnight delivery through
toll-free telephone numbers.

Products and Services

Virtually all of the Company's present business is conducted through
the Private Label Group. The Company's Private Label Group consists of four
subsidiaries acquired in August 1996 from Michael J. Assante ("Assante"). These
subsidiaries operate a cosmetic facility (the "Facility") which manufactures,
fills and packages a broad range of cosmetics. The Facility also includes a
laboratory which develops cosmetic products formulae for customers according to
their specific requirements. The laboratory also develops and maintains a
library of cosmetic product formulae for use by customers who have not developed
their own formulae for a specific product. The laboratory also performs quality
control functions for the Facility and is responsible for assuring compliance
with governmental regulations regarding the manufacture and packaging of
cosmetics including compliance with GMP. See "Certain Transactions" and
"Government Regulation."

The Facility manufactures and fills a wide variety of cosmetics,
including body lotions and powders, lipsticks, mascara, eye shadows, eye liners,
skin care products and hair care products. Depending upon the customer's
requirements, the Company either provides some or all of the raw ingredients and
packaging for the customer's product or uses material provided directly by the
customer. A quantity of raw ingredients and packaging material is maintained in
inventory, but generally such materials are purchased by the Company to fill
specific orders. Presently, the Facility does not manufacture or fill fragrances
which require additional

machinery nor does the Facility manufacture or fill nail products or liquid
soaps.

Generally, a customer places an order for a quantity of merchandise to
be produced and shipped over a period of time, typically one to three months.
While the raw ingredients and packaging materials to produce an order are
generally readily available, for cash management purposes, the necessary raw
materials and packaging are ordered by the Company for receipt by it in stages
to coincide with the manufacturing/packaging cycle and the customer's delivery
requirements. In this way, the Company minimizes the need to maintain an
inventory of finished goods, and in effect, produces product only against the
order.

Except for nail products, liquid soaps and fragrances, which it does
not manufacture or fill, the Facility does not limit its services to a
particular market niche within the cosmetic industry. It manufactures a wide
variety of high and low priced products sold in department, specialty and
discount stores. The Company believes that this diversity minimizes its exposure
to business cycles and changes in customer preferences over time.

Since the manufacturing operation has been in business for over 49
years, the laboratory maintains a large library of formulae for a wide variety
of products. Moreover, the laboratory continuously develops new formulae based
on the Company's assessment of future product demand, changing consumer
preferences and the availability of new ingredients. The Company believes that
it can quickly and efficiently develop formulations for a customer's product by
using or adapting a formula from its library. When the Company develops a
formula for a customer's product, the Company, and not the customer, owns the
formula; however, since it is the Company's policy not to use the same formula
for different customers, customers generally continue purchasing from the
Company so long as they sell the product, do not change the formula or have
another laboratory replicate the product formula.

In order to take advantage of the Company's manufacturing capabilities
and product development expertise, the Company currently is developing cosmetic,
skin care and fragrance lines which it intends to market under brand names
created internally or owned by others and licensed to the Company ("Branded
Products").

The Company anticipates selling Branded Products in the United States
and internationally. In the United States, the Company expects to sell directly
to retail outlets that sell similar products, such as chain drug stores, mass
merchandisers and discount stores through its own sales personnel. Initially,
the Company's personnel, independent sales representatives or a combination of
the two will sell the Branded Products in the United States. Internationally,
the Company expects to sell to distribution companies having a major presence in
each major market.

The first Branded Product the Company has developed, which it has
recently commenced marketing, is an original unisex fragrance line and related
grooming products under the Sports Extreme USA(TM) trade name. Presently, the
Sports Extreme USA(TM) line consists of a unisex

fragrance, bath and shower gel ("Clean Up"), muscle and body relaxer ("Soothe")
and face moisturizer containing sunscreen and alphahydroxy fruit acids
("Protect"). The marketing of the Sports Extreme USA(TM) line will feature
"extreme" sports such as mountain climbing, ice climbing, bungee jumping, sky
surfing, in-line skating, snowboarding, snow bicycling and mountain biking. The
fragrance for the Sports Extreme USA(TM) line was developed for the Company by
Firmenich, a major developer of fragrances for the cosmetic industry. The
Company anticipates retail sales of this line to commence in the spring of 1997.

The Company is also in the process of developing cosmetics, fragrances
and related products for sale under the Members Only trade name pursuant to a
license agreement with the owner of the Members Only trade name (the
"Licensor"). The Members Only trade name is a brand name used on men's outer
wear, active wear and a wide variety of other merchandise which has been
successfully marketed on television, radio and print media in the United States.

The license agreement relating to the Members Only trade name grants
the Company the exclusive right in the United States, Canada, Great Britain,
Japan, Korea, Chile, Uruguay, Venezuela and Argentina to manufacture and
distribute fragrances, grooming products and cosmetics under the Members Only
trade name (the "License"). Under certain circumstances, the Company may sell
Members Only cosmetics and fragrances in other countries except China and
Taiwan. The License expires on September 30, 2001, subject to the Company's
right to renew for an additional five year term subject to certain conditions,
including the requirement that the Company achieve certain minimum sales of the
licensed products. Under the License, the Company is to pay a royalty of five
percent of net sales, subject to minimum annual royalties which begin at
$100,000 for the period ending September 30, 1997 (16.5 months) and increase to
$375,000 for the last year of the initial term. The minimum royalty is payable
in installments during the applicable year. The Company's manufacture, sale and
promotion of Members Only fragrances, grooming products and cosmetics is subject
to the prior review and approval of the Licensor as is typical in similar
licenses.

The fragrance for the Company's Members Only line was created for it by
International Flavors and Fragrances, Inc., a major fragrance manufacturer. The
Company anticipates that retail sales of the Members Only line will commence in
the spring of 1997.

While the Company has had discussions with other companies, it has not
entered into any other formal agreements for the development of cosmetic and
fragrance lines under brand names owned by other companies. There can be no
assurance that the Company will market successfully any original cosmetic or
fragrance line, or that the Company will enter into any additional formal
agreements for the development of cosmetic and fragrance lines for other
companies either under brand names created internally or owned by others and
licensed to the Company.

As a complement to, and in expansion of, its marketing activities
relating to Branded Products, the Company, through its Scent 123 subsidiary,
intends to sell well-recognized men's cologne and women's fragrances directly to
the consumer, initially by overnight delivery. These products are sometimes
referred to as Distributed Fragrances. A customer will be able place an order
for the delivery of a Distributed Fragrance through toll-free telephone numbers.
The Company has secured "1-800-SCENT-123" and "1-888-SCENT-123" as its toll-free
telephone numbers.

The Company has not yet secured any sources of supply for the
Distributed Fragrances. The Company believes it will be able to purchase a
majority of the Distributed Fragrances directly from fragrance manufacturers but
if it cannot do so, it believes other sources of supply are available. The
Company contemplates selling only a limited selection of sizes of the most
popular perfumes and colognes. From a fragrance manufacturer's perspective, the
Company believes that by not selling the full selection of fragrances, sizes and
related grooming products, it will offer a distribution channel complementing,
rather than competing with, the manufacturer's traditional distribution
channels.

The Company plans to use independent order taking, order fulfillment,
warehousing and shipping services for the sale of the Distributed Fragrances.
Although the Company has not yet engaged any such firms, the Company believes
that there are many firms available that can provide these requisite services. A
portion of the assets acquired by the Company in the acquisition of Scent
Overnight included the results of the investigation, pricing and proposals of
such firms. The Company intends to use the results of this research to expedite
the commencement of the sale of the Distributed Fragrances. See "Certain
Transactions."

The Company has engaged, and is working with, a communications and
marketing firm to assist it in concept development and creation of a logotype
and advertising materials. In the future, the Company may add other gift
products to its product offerings and may offer other forms of delivery.

Competition

All aspects of the cosmetic, fragrance and skin care industry are
subject to intense competition throughout the world. In all aspects of its
business, the Company will compete with numerous companies, many of which are
better known in the industry and have established channels of distribution and
substantially all of which have greater financial and other resources than the
Company.

The Company competes against approximately thirty companies in the
United States which manufacture and/or package cosmetic products for
third-parties. To a lesser degree, the Company competes with cosmetic companies
which have their own manufacturing facilities that can produce all, or a part,
of their own products. The Company believes that the primary elements of
competition in the private label manufacture of cosmetics are dependent upon the

retail price point of the particular product. With respect to high priced
cosmetics and fragrances, the principal methods of competition are quality,
including consistency of the work performed, and reliability of meeting delivery
dates. With respect to low-priced products, the principal method of competition
is price. The Company believes that the Facility has a reputation in the
cosmetic industry as high quality, reliable source of manufacturing and
packaging cosmetics. It is the Company's belief that the availability of its
laboratory gives it a competitive advantage over those firms not having
laboratories to assist customers in the formulation of their products. The
Company also believes that its ability to produce a broad range of products for
sale at varying retail price points is beneficial in attracting and retaining
customers who would prefer all of their products to be produced by the same
manufacturer.

In selling the Branded Products, the Company will compete against
numerous companies some of which are customers of the Private Label Group and
many of which have international reputations and broad distribution channels in
place. To date, the Company has not sold any Branded Products, and the Company
entered into only one formal agreement with a third party regarding the
marketing of cosmetics and fragrances under a brand name owned by such third
party.

One of the primary methods of competition in the sale of Branded
Products is product awareness and consumer acceptance of the competing brands.
Achieving market acceptance may require substantial marketing efforts and
expenditure of significant funds. Since the Company has limited financial
resources, it will not be able to utilize various promotional techniques used by
its competitors. The Company, in order to compete successfully, intends to
market its Branded Products to niche markets such as chain drug stores, discount
stores and mass merchandisers and to develop Branded Products which it believes
will appeal to the customers of these retailers. The Company does not expect to
sell its Branded Products to prestige department stores and specialty retailers
where it believes its limited financial resources will put it at the greatest
competitive disadvantage. There can be no assurance that the Company will
successfully develop or market any Branded Product.

The Company expects to compete successfully in the sale of the
Distributed Fragrances based on the implementation of its marketing concept,
including convenient overnight order fulfillment. However, the Company's method
of selling the Distributed Fragrances is not proprietary in nature and may be
replicated by others. In addition, the Company's possible lack of exclusivity
with suppliers may allow such suppliers or other third parties to engage in the
direct marketing of fragrance brands including, but not limited to, the
fragrance brands offered by the Company. Management knows of other companies
that currently market a fragrance line for direct delivery. In selling the
Distributed Fragrances, the Company also will compete directly with
well-established and widely-used companies in the flower-by-wire business, such
as Florist Transworld Delivery Association, as well as companies in the
gift-by-wire business. The Company's sale of the Distributed Fragrances also
expects to compete indirectly with retail stores and catalogues selling similar
fragrances. There can be no assurance that the Company will be successful in
selling the Distributed Fragrances. See "Risk Factors - Competition."

Government Regulation

The Company's manufacturing activities and the Facility are subject to
extensive and rigorous governmental regulation relating to the protection of the
environment and the quality of manufacturing. Federal, state and local
regulatory agencies actively enforce these regulations and conduct periodic
inspections to determine compliance with such government regulations. The FDA
enforces regulations regarding GMP through periodic surveillances and audits.
Failure to comply with applicable regulatory requirements may result in fines,
suspension of approvals, cessation of distribution, product recalls and criminal
prosecution, any of which would have a material adverse effect on the Company.
The Company believes that the Private Label Group has obtained all material
approvals, permits and licenses for its manufacturing activities. In the event
that the Company seeks to expand its operations to manufacture and fill
fragrances, the Company would have to obtain new or expanded governmental
permits. However, changes in existing regulations, the interpretation thereof,
or adoption of new regulations could impose costly new procedures for
compliance, or prevent the Company from obtaining, or affect the timing of,
additional regulatory approvals. There can be no assurance that the Private
Label Group, if audited, will be found in compliance with GMP or environmental
regulations. The failure to comply with GMP or environmental regulations would
have a material adverse effect on the Company.

The Company's proposed method of distributing the Distributed
Fragrances may include shipment by air transportation. The shipment of
fragrances by air is subject to federal regulation and the rules and regulations
promulgated by the DOT's Research & Special Programs Administration. The DOT
considers the shipment of alcohol, a component in fragrances, to be the
transportation of hazardous material. Scent 123 obtained a DOT exemption to
transport hazardous material by overnight air transportation. As long as Scent
123 has the DOT exemption, which is in effect until November 30, 1997, and may
thereafter be renewed upon application and approval thereof, Scent 123 believes
that its shipment of products will be in compliance with current DOT
regulations. Scent 123's loss of the DOT exemption would have a material
adverse effect on its business operations. There can be no assurance that Scent
123 will retain the DOT exemption or that Scent 123 will be able to comply with
any future DOT regulations.

The Company's sale of Distributed Fragrances is intended to utilize
toll-free telephone services. Toll-free telephone service is provided to users
by federally regulated common carrier telephone companies. The rates, terms and
technical quality of this service are subject to regulations promulgated by the
FCC and tariffs published by the telecommunications service provider. Except for
the sending of indecent, harassing or obscene messages or material, the
interstate sale of services or products by users of a toll-free telephone number
is not subject to direct federal regulation under the Communications Act of
1934. Fraudulent telephone messages are subject to criminal penalties under
federal and state laws. The Company does not believe that FCC regulations will
affect the proposed sale of Distributed Fragrances, but such regulations could
affect the price, terms, quality and availability of the toll-free telephone
services and may

have a material adverse effect on the Company.

Various laws and regulations relating to safe working conditions, and
other employment matters, including the Occupational Safety and Health Act, are
also applicable to the Company. The Company believes it is in substantial
compliance with all material federal, state and local laws and regulations
regarding safe working conditions, and other employment matters.

Trademarks

The Company has one United States registered trademark, Scent
Overnight(R), expiring on August 10, 2003, which was acquired in the acquisition
of Scent Overnight. The Company has filed applications for the registration of
trademarks for the "Scent 123" and Sports Extreme USA(TM) names, but no
registrations have yet been issued. See "Business" and "Certain Transactions."

The right to use trademarks and trade names in connection with the sale
of the Branded Products is material to the Company's business. In cases where
the Company is the licensee of the trademark or trade name, the trademark or
trade name will be retained by the licensor. In such cases, the Company may be
subject to material claims of infringement by third-parties and may or may not
be indemnified by the licensor.

The Company will be the owner of brand names developed by it and will
seek to establish protection of names. Notwithstanding such ownership,
third-parties may claim that such names infringe such third party's rights. Such
claims may seek to require the Company to cease use of the names as well as pay
monetary damages. At the time any such claim is brought, the Company may not
have the financial resources to defend against such claim. The cessation of the
use of any brand name used by the Company might have a material adverse effect
on it.

Major Customers

Approximately 21% and 14% of the Company's revenues derived from
manufacturing activities was derived from two major customers for the year ended
December 31, 1995. For the year ended December 31, 1994, approximately 17% and
12% of the Company's revenue was derived from the same two major customers.

Employees

The Company presently employs approximately 258 employees of which 253
are located at the Facility. Of the 253 employees located at the Facility, 43
are employed on a full-time basis and approximately 210 are employed on an
as-needed basis. The Company has regularly employed between 175 and 225
individuals on an as-needed basis for approximately 12 months and anticipates a
continued need for a minimum of 210 employees in order to maintain its

current level of operations. Of the 253 employees located at the Facility, 224
are manufacturing personnel, 14 are laboratory personnel, three are executive
and administrative personnel and 12 are engaged in sales, marketing and customer
service. Certain employees located at the Facility are covered by a collective
bargaining agreement with Local #300-S, Affiliated with the Production Service
and Sales Distribution Council, Industrial Union Council which expires on
February 28, 1998.

Of the five employees that are not located at the Facility, four are
executive officers that, prior to this Offering, were retained by the Company as
consultants. Prior to this Offering, the Company utilized the services of
independent contractors, on consulting basis, to perform certain functions and
may continue to do so in the future. The Company believes that there is an
available pool of persons and firms who could be hired or retained by the
Company when needed. The Company considers its relationships with both union and
non-union employees to be satisfactory.

Seasonality and Backlog

The cosmetic and fragrance business in general is subject to seasonal
fluctuations, with net sales in the second half of the year substantially higher
than those in the first half as a result of increased demand by retailers in the
United States in anticipation of and during for the back-to-school, Thanksgiving
and Holiday seasons. The Company anticipates that the sales of Branded Products
and Distributed Fragrances will follow the general industry trend.

Although the Company's manufacturing business, as a whole, is not
seasonal, its product mix is subject to seasonal variations. Since the gross
profit margins on various products differ, the backlog and results of operations
in any period are not necessarily indicative of the result for the fiscal year.
At June 30, 1996 the Private Label Group's backlog of orders believed by the
Company to be firm was approximately $3,500,000 and as at June 30, 1995 the
amount of such orders was approximately $3,200,000. The Company expects that
substantially all of the current backlog will be filled during the current
fiscal year. Since the Company's orders for manufacturing and filling are
generally for the delivery of merchandise over a period of time, backlog is
viewed as an important indication of future performance.

Properties

The Company leases 2,400 square feet of space at 509 Madison Avenue,
New York, New York, which is used as its executive offices. The lease expires in
April 2001 and provides for an annual base rent of $74,000, including utilities.
These facilities are adequate for the Company's current needs and substitute
space is readily available.

The Company's manufacturing and packaging plant and laboratory and the
Private Label Group's general and executive offices are located at a leased
155,000 square foot building in Fairlawn, New Jersey. The lease, expiring in
August 2002 provides for annual rent of

approximately $500,000, including common charges and real estate taxes and is
subject to increase based on increases in the Consumer Price Index. In addition,
the Company is responsible for substantially all repairs to the building. The
Facility is presently operating at less than full capacity and is physically
adequate for the Company's present and foreseeable purposes. The Company expects
to continue to update the manufacturing and packaging equipment at the Facility
with more modern and automated equipment. See "Use of Proceeds."

Legal Proceedings

The Company is not a party to any material legal proceeding, nor is it
aware of any pending or threatened claim of a material nature. The Company
anticipates that it will be subject to claims and suits in the ordinary course
of its business in the future. The Company believes that it will maintain
adequate insurance to cover such anticipated claims.

MANAGEMENT

Directors, Officers and Significant Employees

The members of the Board of Directors, executive officers of the
Company, significant employees of the Company and their ages and positions with
the Company are as follows:

Name Age Position

Gerard Semhon 60 Chairman of the Board, Chief Executive Officer and
Director

Constantine Bezas 49 President and Director

Joseph Truitt Bell 39 Executive Vice President and Director

Van Christakos 48 Vice President-Operations, Secretary, Treasurer and
Director

Michael J. Assante 58 President, Private Label Group

All of the Company's executive officers and directors intend to devote
their full business time to the affairs of the Company effective on the date of
this Prospectus. Prior to this Offering Messrs. Semhon, Bezas, Bell and
Christakos were retained by the Company as consultants at a consulting fee of
$95,000, $85,000, $75,000 and $55,000, respectively, which fees are inclusive of
expenses incurred by each in the performance of their duties. Directors are
elected to serve until the next meeting of stockholders and until their
successors are duly elected and qualified. Meetings of stockholders of the
Company will be held on an annual basis upon the completion of this Offering.
However, if at any time an annual meeting is not held for the election of
directors, the then current directors will continue to serve until their
successors are elected and qualified. Vacancies and newly created directorships
resulting from any increase in the number of directors may be filled by a
majority vote of Directors then in office. Officers are appointed by, and serve
at the discretion of, the Board of Directors. Non-employee directors will
receive $1,500 for each Board meeting attended in person or by conference
telephone call. See "Use of Proceeds" and "Certain Transactions."

The Board of Directors has not established any committees, however,
upon the completion of this Offering, it intends to establish an Audit Committee
and a Compensation Committee both of which are expected to be comprised of two
independent directors.

The following is a brief summary of the background of each director and
executive officer of the Company:

Gerard Semhon has served as Chairman of the Board and Chief Executive
Officer of the Company since its inception. Mr. Semhon has over 30 years of
management experience in consumer products. From 1993 to 1995, Mr. Semhon
served as chairman of the board and chief executive officer of Dominion
Associates, Inc. ("Dominion"), a company he helped found. In May 1995, Dominion
ceased operations due to a lack of financial resources. From 1990 to 1993,
Mr. Semhon served as an international consultant for several cosmetic companies,
including Boots Ltd. and Cambridge Development Corp. In 1983, Mr. Semhon
founded Parlux Fragrances, Inc. ("Parlux"), where he was employed until 1990.
Parlux operated as the United States and Canadian distributor of the Giorgio
Armani Women's Fragrance line. From 1981 to 1983 Mr. Semhon served as Helena
Rubinstein, Inc.'s president of North American Operations. In 1976, Mr. Semhon
became president of ITT Corp. Cosmetics Division. From 1972 to 1976, Mr. Semhon
served as Director of International Marketing for Revlon International, Inc.
Mr. Semhon received a bachelor's degree from the American University in Cairo,
Egypt, and a master's degree in business administration in 1960 from New York
University.

Constantine Bezas has served as President and Director of the Company
since its inception. From 1993 to 1995, he served as president of Dominion. From
1991 to 1993, he served as chairman of the board of Bezas, Tore, Jacobson &
Lawrence, Ltd., an advertising firm he co-founded. From 1974 to 1991, Mr. Bezas
was the principal owner/operator of Aspasia, Inc., a chain of specialty jewelry
stores with locations in Connecticut and New York. During this same period Mr.
Bezas also founded Video Cinema, a four store chain of video rental stores, and
Just Delicious, a specialty gourmet food store chain. From 1971 to 1973, Mr.
Bezas was employed by the Aramis Division of Estee Lauder Cosmetics in various
marketing and sales capacities.

Mr. Bezas and his wife filed a petition under Chapter 11 of the Federal
Bankruptcy Act in December 1992. The case was converted to a proceeding under
Chapter 7 of such Act in August 1994 and Mr. Bezas received a discharge from the
proceeding in January 1995.

Joseph Truitt Bell has served as Executive Vice President and Director
of the Company since its inception. From 1992 to 1995, Mr. Bell served as an
independent consultant for several retail establishments. In 1983, Mr. Bell
co-founded Rosenthal-Truitt, Inc., an upscale men's furnishings and accessories
store in Los Angeles, where he worked until October 1992. The company eventually
expanded its business to four stores throughout California and Texas.

Van Christakos served as Secretary, Treasurer and Director of the
Company since its inception. From 1993 to 1995, he was employed at Dominion.
From 1991 to 1993, Mr. Christakos served as president of Hamilton Group, a
marketing and consulting firm he founded. In 1984, Mr. Christakos was employed
at Just Delicious, a specialty gourmet food store chain, where he remained until
1986. From 1982 to 1984, he served as the director of operations for Video
Cinema, a four store video rental chain in the New York Tri-State area. From
1975 to 1991, Mr. Christakos served as Director of Operations for Aspasia, Inc.,
a six store specialty chain of jewelry stores located in Connecticut and New
York. From 1971 to 1974, Mr.

Christakos was employed as a buyer of women's sportswear for J.W. May's. In
his four years with May's, Mr. Christakos was responsible for the overall
operations of the women's sportswear departments in all eight May's stores.

Michael J. Assante joined the Company in August 1996 as part of the
acquisition of the Private Label Group of which he had been the principal owner
and senior executive for more than 40 years. He presently serves as President of
the Private Label Group.

Executive Compensation

The following sets forth the compensation paid or accrued by the
Company to the Company's Chief Executive Officer and the Company's other
executive officers whose compensation exceeded $100,000 for the year ended
December 31, 1995:

Summary Compensation Table

Annual Compensation Long-Term Compensation

Awards Payouts
Securities
Other Restricted Underly- LTIP
Name and Annual Stock ing Pay- All Other
Principal Bonus Compen- Award(s) Options/ outs Compen-
Position Year Salary ($) ($) sation ($) ($) SARs (#) ($) sation ($)

Gerard Semhon 1995 0 (1) 0 0 0 0 0 0
Chairman and
Chief Executive
Officer

Michael J. 1995 $250,000 (2) 0 0 0 0 0 0
Assante
President, Private
Label Group

<FN>
(1) Prior to this Offering, Mr. Semhon served as a consultant to the
Company during which time consulting fees totalling approximately
$47,000 were accrued as of June 30, 1996.

(2) Represents Mr. Assante's salary as President of the Private Label
Group prior to its acquisition by the Company.
</FN>

The Company did not grant any options in the last fiscal year to any of
its executive officers. The Company does not have any long-term incentive plans
for compensating its executive officers.

Employment Agreements

The Company entered into a three year employment agreement, to become
effective on the date of this Prospectus, with Gerard Semhon, the Company's
Chief Executive Officer and Chairman of the Board, under which Mr. Semhon will
serve as a full-time employee and officer and receive an annual salary of
$95,000. The employment agreement entitles Mr. Semhon to participate in welfare
plans adopted by the Company and to enjoy medical, dental and disability
insurance benefits under policies obtained by the Company for such purposes. To
date, the Company has not instituted any employee welfare plans, nor has the
Company obtained any dental or disability insurance coverage for its employees.
Prior to the effectiveness of the employment agreement, Mr. Semhon served as a
consultant to the Company, receiving compensation of the rate of approximately
$95,000 per annum, plus expenses.

In August 1996, the Company entered into a three year employment
agreement with Michael J. Assante under which he will serve as President of each
of the four companies that comprise the Private Label Group. Mr. Assante will
receive a base annual salary of $195,000 and his employment agreement is
renewable at his option for an additional two year period. Mr. Assante will
receive a bonus equal to 10% of the amount by which the Private Label Group's
annual profit, before interest and taxes but after depreciation and
amortization, exceeds $500,000 for each of the years ending December 31, 1997,
1998, and 1999.

Stock Option Plan

Prior to the effective date of this Prospectus, the Board of Directors
adopted, and stockholders approved, the Company's 1996 Stock Option Plan (the
"1996 Plan"). The 1996 Plan provides for grants to officers and other employees
of the Company, non-employee directors, consultants and advisors and other
persons who may perform significant services on behalf of the Company and will
be administered by the Board of Directors if each member is a "Non-Employee
Director" within the meeting of Rule 16b-3 under the Exchange Act, or a
committee (the "Committee") of two or more directors, each of whom is
a Non-Employee Director. Pursuant to the 1996 Plan, options to acquire an
aggregate of 750,000 shares of Common Stock may be granted subject to adjustment
as provided in the Plan. As of the date of this Prospectus, no options have been
granted pursuant to the 1996 Plan.

The 1996 Plan authorizes the issuance of incentive stock options
("ISOs"), as defined in Section 422A of the Internal Revenue Code of 1986 (the
"Code"), as amended, as well as non-qualified stock options ("NQSOs"). Only
"employees" (within the meaning of Section 3401(c) of the Code) of the Company
shall be eligible for the grant of Incentive Stock Options. The exercise price
of each ISO may not be less than 100% of the fair market value of the Common
Stock at the time of grant, except that in the case of a grant to an employee
who owns 10% or more of the then outstanding stock of the Company or a
subsidiary or parent of the Company (a "10% Stockholder"), the exercise price
shall be at least 110% of the fair market value of the Common Stock on the date
of grant. The exercise price of each NQSO is determined by the

Committee, but shall not be less than 85% of the fair market value of the Common
Stock on the date of grant. Notwithstanding the foregoing, the exercise price of
any option granted on or after the effective date of the registration of any
class of equity security of the Company pursuant to Section 12 of the Exchange
Act, and prior to six months after the termination of such registration, may be
no less than 100% of the fair market value per share on the date of the grant.
The Committee shall provide, in the terms of each stock option agreement, when
the option subject to such agreement expires and becomes exercisable, but in no
event will an ISO granted under the 1996 Plan be exercisable after the
expiration of ten years from the date it is granted. Options may not be
transferred during the lifetime of an option holder and is only exercisable
during the optionee's lifetime only by the optionee or by his or her guardian or
legal representative. The 1996 Plan shall terminate automatically as of the
close of business on the day preceding the 10th anniversary date of its
adoption, subject to earlier termination.

To the extent Fair Market Value of Common Stock with respect to which
Incentive Stock Options granted hereunder are exercisable for the first time by
an optionee in any calendar year exceeds $100,000, such options granted shall be
treated as NQSO's to the extent required by Section 422 of the Code.

If the outstanding shares of Common Stock are changed by reason of an
adjustment to the capitalization of the Company or as a result of a merger or
consolidation, an appropriate adjustment shall be made by the Committee in the
number and kind of shares as to which options may be granted.

Subject to the provisions of the 1996 Plan, the Board of Directors or
the Committee has the authority to determine the individuals to whom stock
options are to be granted, the number of shares to be covered by each option,
the exercise price, the type of option, the option period, the restrictions, if
any, on the exercise of the option, the terms for payment of the option price
and all other terms and provisions of such options (which need not be
identical). Payments by holders of options, upon exercise of an option, may be
made (as determined by the Committee) in cash or such other form of payment as
may be permitted under the 1996 Plan, including without limitation, by
promissory note or by delivery of shares of Common Stock.

Limitation on Directors' or Officers' Liabilities and Indemnifications

Under Delaware law, and pursuant to the Company's Certificate of
Incorporation, Directors of the Company are not liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty, except for
liability in connection with (i) a breach of duty of loyalty, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) dividend payments or stock repurchased in violation of
Delaware law or (iv) any transaction in which a director has derived an improper
personal benefit.

In addition, the Company's By-laws include provisions indemnifying its
officers, directors and other persons against expenses, judgments, fines and
amounts paid in settlement in connection with having served as officers,
directors or in other capacities, excluding matters in which such persons shall
be determined not to have acted in good faith, lawfully or in the best interests
of the Company. With respect to matters as to which the Company's officers and
directors and others are determined to be liable for misconduct or negligence in
the performance of their duties, the Company's By-laws provide for
indemnification only to the extent that the Company determines that such person
acted in good faith and in a manner not opposed to the best interests of the
Company.

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of the date of this Prospectus,
certain information concerning the shares of Common Stock beneficially owned by
each director and officer of the Company, by all officers and directors of the
Company as a group, and by each stockholder known by the Company to be a
beneficial owner of more than 5% of the outstanding shares of Common Stock.

Number of Shares Percentage of
Beneficially Owned (2) Common Stock (2)
Name and Address Before After Before After
of Beneficial Owner (1) Offering Offering Offering Offering (3)

Gerard Semhon (4) 230,600 230,600 5.9% 4.6%

Constantine Bezas 195,634 195,634 5% 3.9%

Joseph Truitt Bell 146,233 146,233 3.8% 2.9%

Van Christakos 110,933 110,933 2.9% 2.2%

Tusany Investment &
Trade S.A.(5) 1,609,355 1,250,000 41% 24.7%

Michael J. Assante 0 0 0 0

Fred Kassner (6) 250,000 0 6.4% 0

Robert E. Lee (7) 225,000 150,000 5.5% 2.8%

All officers and directors
as a group (5 persons) 683,400 683,400 17.6% 13.5%

<FN>
(1) The address of each stockholder listed is c/o Azurel Ltd., 509 Madison
Avenue, New York, New York 10022.

(2) Pursuant to the rules and regulations of the Securities and Exchange
Commission, shares of Common Stock that an individual or group has a
right to acquire within 60 days pursuant to the exercise of options or
warrants are deemed to be outstanding for the purposes of computing the
percentage ownership of such individual or group, but are not deemed to
be outstanding for the purposes of computing the percentage ownership
of any

other person shown in the table.

(3) Includes (i) 180,000 shares of Common Stock issued on the date of this
Prospectus in connection with the acquisition of the Private Label Group
and (ii) 1,000,000 shares of Common Stock offered hereby. Does not include
(i) up to 100,000 shares of Common Stock issuable upon exercise of the
Underwriter's Warrants, (ii) up to 100,000 shares of Common Stock issuable
upon exercise of the Redeemable Warrants included in the Underwriter's
Warrants or (iii) 1,000,000 Redeemable Warrants offered hereby. Assumes the
sale of each Selling Securityholder's securities owned by it. See "Certain
Transactions," "Underwriting" and "Concurrent Registration of Securities."

(4) Does not include 107,600 shares of Common Stock owned by Diane Papas, who
is the wife of Gerard Semhon. Mr. Semhon disclaims beneficial ownership
of the shares held by his spouse.

(5) Includes 50,000 Redeemable Warrants being registered pursuant to a Selling
Securityholders' Prospectus included within the Registration Statement of
which this Prospectus forms a part. See "Concurrent Registration of
Securities."

(6) Represents shares of Common Stock being registered pursuant to a Selling
Securityholders' Prospectus included within the Registration Statement of
which this Prospectus forms a part. See "Concurrent Registration of
Securities."

(7) Includes (i) 25,000 shares of Common Stock and 150,000 options to purchase
Common Stock beneficially owned by ETR & Associates, Inc., of which Mr. Lee
is President and (ii) 50,000 shares of Common Stock beneficially owned by
Woodward Partners, of which Mr. Lee is General Partner. See "Certain
Transactions."
</FN>

CERTAIN TRANSACTIONS

In June and September 1995, the Company issued an aggregate of
2,175,000 shares of Common Stock to twelve founders of the Company for aggregate
consideration of $2,175.

In June 1995, the Company entered into a consulting agreement with ETR
& Associates, Inc. ("ETR") pursuant to which ETR provides general management
advisory services to the Company ("Consulting Agreement"). ETR is affiliated
with another company, Woodward Partners, which are sometimes referred to as the
"Consulting Group." The Consulting Group advises the Company's Board of
Directors on key policy decisions as requested by the Company. Pursuant to the
Consulting Agreement, in 1995 the Company issued an aggregate of 75,000 shares
of Common Stock to the Consulting Group which have demand and "piggy-back"
registration rights.

In 1995 and 1996, the Company issued 100,000 shares of Common Stock to
Metco Investors, LLC ("Metco") for consulting services rendered to the Company
which have demand and "piggy-back" registration rights.

In July 1995, the Company, as an accommodation maker for Messrs. Semhon
and Bezas, issued a promissory note of $28,750 to ETR. The proceeds of this loan
were paid to Messrs. Semhon and Bezas. The note plus accrued interest was repaid
by the Company in September and October 1995, and the repayment was treated as
an advance to stockholders. As additional consideration for this loan, ETR was
granted an option to purchase 150,000 shares of Common Stock at $1.00 per share,
which expires in July 2000.

In September 1995, the Company issued a promissory note of $50,000 to
Bola Business Ltd. ("Bola"). The note accrued interest at 10% per annum and was
secured by an aggregate of 200,000 shares of Common Stock owned by Messrs.
Semhon and Bezas, officers and directors of the Company. The proceeds of this
loan were utilized for working capital. As additional consideration for
the loan, the Company issued Bola 25,000 shares of Common Stock and granted Bola
the option to purchase 50,000 shares of Common Stock at $1.00 per share, which
expires in September 2002. The note and accrued interest were repaid in April
1996.

In October 1995, the Company issued a promissory note of $200,000 to
Tusany Investment and Trade, S.A., a founder and principal stockholder of the
Company ("Tusany"), which accrued interest at 10% per annum. The proceeds of
this loan were advanced to the Private Label Group as part of the Company's
obligation in connection with the acquisition of the Private Label Group. In
July 1996, Tusany converted the principal plus accrued interest due under the
note into 106,972 shares of Common Stock as part of a private placement
completed by the Company in July 1996 ("July 1996 Private Placement"). See
"Principal Stockholders."

In December 1995, the Company completed a $250,000 private placement of
units, each unit consisting of (i) the Company's 18 month 12% promissory note in
the original principal amount of $50,000 and (ii) 25,000 shares of the Company's
Common Stock to eleven unaffiliated, accredited investors (the "1995 Private
Placement"). The Company received net proceeds of $210,000 (after deducting
expenses of $7,500 and commissions of $32,500 to the Underwriter for acting as
placement agent), which were used for working capital and to repay indebtedness.

In January 1996, the Company issued a promissory note of $50,000 to a
principal of the Underwriter. The note and accrued interest, at 8% per annum,
was repaid in April and May 1996. The Company used the proceeds of this loan as
security for its non-recourse guarantee under an agreement ("Finova Agreement")
with the Private Label Group's lender, Finova Capital Corporation ("Finova").

In January 1996, the Company issued a promissory note of $160,000 to
Metco. The note accrued interest at 10% per annum and was due, as to $100,000,
in February 1996, and, as to the remaining principal plus accrued interest, in
March 1996. In consideration for this loan, the Company issued Metco 25,000
shares of Common Stock and an option to purchase 50,000 shares of Common Stock
at $1.25 per share, which expires in January 1999. Additionally, the Company
issued 25,000 shares of Common Stock to Metco as a penalty for the Company's
late repayment of a portion of the loan. The note was repaid in February and May
1996. The Company used $10,000 of the proceeds of this loan for working capital
and $150,000 as security for its non-recourse guarantee under the
Finova Agreement.

In February 1996, the Company completed a $250,000 private placement of
units, each unit consisting of (i) the Company's two month 12% promissory note
in the original principal amount of $50,000, and (ii) 25,000 shares of the
Company's Common Stock to three accredited investors, including Tusany
("February 1996 Private Placement"). The Company received net proceeds of
$210,000 (after deducting expenses of $7,500 and commissions of $32,500 to the
Underwriter for acting as placement agent). As part of the Company's obligation
in connection with the acquisition of the Private Label Group, the net proceeds
of the February 1996 Private Placement were advanced to the Private Label Group
to pay a portion of a jury award rendered in a legal proceeding against the
Private Label Group.

In connection with the 1995 and February 1996 Private Placement, Gerard
Semhon, the Company's Chief Executive Officer and Chairman of the Board, agreed
to indemnify the Company against any claims that may be asserted against the
Company by creditors of Dominion Associates, Inc. ("Dominion"), a company that
ceased operations in May 1995. Gerard Semhon, the Chief Executive Officer and a
Director of the Company, and Constantine Bezas, the President and a Director of
the Company, served as executive officers of Dominion.

In February 1996, the Company issued 10,000 shares of Common Stock for
legal services rendered to the Company.

In July 1996, the Company completed the July 1996 Private Placement of
978,747 shares of Common Stock at $2.00 per share to seven accredited investors,
including Metco, Tusany and Michalaur International, a founder of the Company.
The Company received $1,314,950 of net proceeds (after deducting expenses of
$11,050 and commissions of $174,000 to the Underwriter for acting as the
placement agent). As part of the July 1996 Private Placement, certain
noteholders of the Company, including holders of notes issued in the 1995 and
February 1996 Private Placements converted an aggregate of $457,494 principal
amount and interest into Common Stock. The Company used the net proceeds of the
July 1996 Private Placement (i) to repay noteholders that did not convert their
indebtedness, (ii) to repay other indebtedness, (iii) for the purchase price of
and other fees related to the Private Label Group acquisition and (iv) for
working capital.

In July 1996, the Company entered into a brokerage and consulting
agreement with V.A.N. Marketing Ltd. ("VAN"). Under the agreement, VAN is
entitled to a finder's fee of 2 1/2 percent of the purchase price of the Private
Label Group, 5,000 shares of the Company's Common Stock and options to purchase
20,000 shares of the Company's Common Stock at $ $4.80 per share, expiring in
July 1999. The finder's fee is payable as follows: $22,500 of the cash fee was
paid upon closing of the acquisition and the remaining balance is due one year
thereafter. Additionally, VAN will receive a monthly consulting fee of $3,000
for each of the first 12 months following the closing of the acquisition and
$5,000 for each of the next 12 months.

On August 22, 1996, the Company purchased all of the issued and
outstanding capital stock of the four companies that comprise the Private Label
Group from Assante. The purchase price was $2,782,500, of which $125,000 was
paid in cash at the closing, $1,675,000 (which bears interest at 9% per annum)
was paid by the delivery of the Company's promissory note (the "Assante Note"),
and $850,000 will be paid promptly after the date of this Prospectus by the
issuance of Common Stock of the Company valued at the public offering price.
$150,000 of principal of the Assante Note plus interest, will be paid at the
earlier of January 1, 1997 or upon the date of this Offering and the balance
will be paid in approximately nine equal installments commencing 90 days after
the first payment and each six months thereafter. The Assante Note may be
prepaid without penalty at any time and is secured by a pledge of the purchased
stock. One half of the stock will be released from the pledge when one half of
the Assante Note is paid and the balance of the stock thereafter will be
released pro rata upon payments of the Assante Note. In addition to the purchase
price, the Company is obligated to pay Louis DiVita ("DiVita"), a former
shareholder of companies comprising the Private Label Group, an amount equal to
5% of the consideration Assante receives on the sale of the Private Label Group
stock. Therefore, at the closing, the Company paid DiVita $6,250, in cash,
issued a promissory note to DiVita in the original principal amount of $83,750
(the "DiVita Note") and upon completion of this Offering is to issue DiVita such
number of shares of the Company's Common Stock as is valued at $42,500. The
terms of the DiVita Note are substantially identical to the terms of the Assante
Note. $7,500 of principal of the DiVita Note, plus interest, will be paid at the
earlier of January 1, 1997, or upon the closing of the Offering. In addition,
upon

completion of this Offering, the Company is to issue Private Label Group's
counsel such number of shares of the Company's Common Stock as is valued at
$7,500 as payment for legal services rendered to the Private Label Group in
connection with the acquisition. See "Use of Proceeds."

As part of the redemption of the stock of the companies which comprise
the Private Label Group from DiVita (i) the companies owe the balance of the
redemption price ($390,830 as of June 30, 1996) which is payable in monthly
installments of $5,551.02 (inclusive of interest at 6% per annum) through
September 2003 and (ii) DiVita serves as a consultant to the Private Label Group
pursuant to a consulting agreement dated August 17, 1993. Mr. Divita provides
services relating to the computer system of the Private Label Group. The
agreement provides for a monthly consulting fee through August 2003.

In connection with the acquisition of the Private Label Group, in
February 1996 the Company (i) secured a line of credit with Finova to replace
the Private Label Group's previous line of credit, (ii) pledged a $250,000
certificate of deposit as security for its non-recourse guarantee under the
Finova Agreement, and (iii) paid $250,000 of a jury award of approximately
$260,000 rendered in a legal proceeding against the Private Label Group. The
Finova Agreement prohibits the payment of dividends so long as certain
indebtedness is outstanding.

As a condition, and on the closing, of the acquisition of the Private
Label Group, the Company entered into an employment agreement with Assante under
which he serves as President of each of the Private Label Group companies.
Assante receives a base annual salary of $195,000. Assante will receive a bonus
equal to 10% of the amount by which the Private Label Group's annual profit,
before interest and taxes but after depreciation and amortization, exceeds
$500,000 for each of the years ending December 31, 1997, 1998, and 1999. The
employment agreement is for three years and is renewable at his option for an
additional two year period. See "Management - Employment Agreements."

Mr. Assante is the sole officer, director and shareholder of The
Contemporary Cosmetic Group, Inc. ("Contemporary"), a company that leases space
at the Facility from the Company. Mr. Assante is also the sole officer, director
and shareholder of Rubigo Cosmetics, Inc. ("Rubigo"). Both contemporary and
Rubigo are customers of The Private Label Group. Transactions between the
Company and Contemporary and Rubigo are on terms no less favorable than
transactions involving unaffiliated third parties.

In October 1996, the Company acquired all of the assets of Scent
Overnight, a company of which Gerard Semhon, the Company's Chief Executive
Officer and Chairman of the Board, is a majority stockholder for (i) $225,000
and (ii) the assumption of certain indebtedness totalling approximately
$210,000. The $225,000 plus interest at 9% per annum is due upon the
consummation of this Offering and is evidenced by the Company's promissory note
("Scent Note"). The assumed obligation is due to Liam Development Ltd. ("Liam")
pursuant to a promissory note made by Scent Overnight ("Liam Note"). In October
1995, the Company granted the right to convert the principal due under the Liam
Note into shares of the Company's

Common Stock at $1.00 per share. Liam converted the principal due under the Liam
Note in October 1996. The Company intends to apply $268,500 of the proceeds of
this Offering to repay the Scent Note and the accrued interest due under the
Liam Note. Scent Overnight was formed by Mr. Semhon to engage in the Distributed
Fragrances business, however, in July 1994, it suspended its operations due to
lack of capital. Prior to the suspension of operations, Scent Overnight had
conducted research into the availability of the resources necessary for the
proposed business, such as locating order taking, order fulfillment, delivery
and advertising services and sources of supply and developed a plan for the
operation of the business. This information was among the assets acquired by the
Company in the acquisition. See "Use of Proceeds" and "Business - Trademarks."

Between June 1995 and June 1996, the Company advanced an aggregate of
$184,480 to Messrs. Semhon and Bezas, officers and directors of the Company. Of
the $184,480, $48,130 is jointly and severally owed by Messrs. Semhon and Bezas,
$120,750 is owed by Mr. Semhon and $15,750 is owed by Mr. Bezas. The advances do
not bear interest and will be repaid immediately following the Offering.

In October 1996, the Company completed a $300,000 private placement of
12 units, each unit consisting of (i) the Company's 12 month 10% promissory note
(each a "Bridge Note") and (ii) a warrant to purchase up to 25,000 shares of
Common Stock (each a "Bridge Warrant") ("October 1996 Private Placement"). The
Company intends to repay the Bridge Notes out of the proceeds of this Offering.
The terms and conditions of the Bridge Warrants automatically convert to the
terms and conditions of the Redeemable Warrants offered in this Offering. The
Company received net proceeds of $270,000, after deducting commissions of
$30,000 to the Underwriter for acting as placement agent. The net proceeds of
the October 1996 Private Placement were used for expenses related to the
Offering and working capital. Three affiliated, and four unaffiliated,
accredited investors participated in the October 1996 Private Placement. See
"Selling Securityholders," "Description of Securities - Redeemable Warrants" and
"Use of Proceeds."

DESCRIPTION OF SECURITIES

The following summary description of the Securities is qualified in its
entirety by reference to the Company's Certificate of Incorporation, as amended,
and its By-laws, copies of which have been filed as Exhibits to the Registration
Statement of which this Prospectus is a part.

Common Stock

The Company's authorized capital consists of 10,000,000 shares of
Common Stock, $.001 par value per share. Holders of shares are entitled to one
vote per share of Common Stock on all matters submitted to a vote of
stockholders of the Company and to receive dividends when declared by the Board
of Directors from funds legally available therefor. Upon the liquidation,
dissolution or winding up of the Company, holders of shares of Common Stock are
entitled to share ratably in any assets available for distribution to
stockholders after payment of all obligations of the Company and after provision
has been made with respect to each class of stock, if any, having preference
over the Common Stock. Holders of shares of Common Stock do not have cumulative
voting rights or preemptive, subscription or conversion rights. See "Risk
Factors - Dividend Policy."

Redeemable Warrants

Each Redeemable Warrant entitles its holder to purchase one share of
Common Stock at an exercise price of _________ per share [120% of the initial
public offering price] (the "Exercise Price"). The Redeemable Warrants are
exercisable commencing one year from the date of this Prospectus and expire five
years after the date of this Prospectus.

The Redeemable Warrants will be issued pursuant to a warrant agreement
(the "Redeemable Warrant Agreement") among the Company, the Underwriter and the
warrant agent (the "Warrant Agent"), and will be evidenced by warrant
certificates in registered form.

The Exercise Price of the Redeemable Warrants and the number and kind
of shares of Common Stock or other securities and property issuable upon
exercise of the Redeemable Warrants are subject to adjustment in certain
circumstances, including stock splits, dividends, or subdivisions, combinations
or recapitalizations of the Common Stock. Additionally, an adjustment will be
made upon the sale of all or substantially all of the assets of the Company in
order to enable Warrantholders to purchase the kind and number of shares of
stock or other securities or property (including cash) receivable in such event
by a holder or the number of shares of Common Stock that might otherwise have
been purchased upon exercise of the Redeemable Warrant.

The Redeemable Warrants do not confer upon the holder any voting or
any other rights of a stockholder of the Company. Upon notice to the
Warrantholders, the Company has the

right to reduce the exercise price or extend the expiration date of the
Redeemable Warrants.

Redeemable Warrants may be exercised upon surrender of the Redeemable
Warrant certificate evidencing those Redeemable Warrants on or prior to the
respective expiration date (or earlier redemption date) of the Redeemable
Warrants at the offices of the Warrant Agent, with the form of "Election to
Purchase" on the reverse side of the warrant certificate completed and executed
as indicated accompanied by payment of the full exercise price (by certified
check payable to the order of the warrant agent) for the number of Redeemable
Warrants being exercised.

No Redeemable Warrant will be exercisable unless at the time of
exercise the Company has filed with the Commission a current prospectus covering
the issuance of shares of Common Stock issuable upon exercise of the Redeemable
Warrant and the issuance of shares has been registered or qualified or is deemed
to be exempt from registration or qualification under the securities laws of the
state of residence of the Warrantholder. The Company has undertaken to use its
best efforts to maintain a current prospectus relating to the issuance of shares
of Common Stock upon the exercise of the Redeemable Warrant Agreement. While it
is the Company's intention to maintain a current prospectus, there can be no
assurance that it will be able to do so. See "Risk Factors - Current
Prospectus and State Blue Sky Registration Required to Exercise Redeemable
Warrants."

No fractional shares will be issued upon exercise of the Redeemable
Warrants. However, the Company will pay to that Warrantholder, in lieu of the
issuance of any fractional share which would otherwise be issuable, an amount in
cash based on the market value of the Common Stock on the last trading day prior
to the exercise date.

The Redeemable Warrants are redeemable by the Company at a price of
$.10 per Redeemable Warrant, commencing one year after the date of this
Prospectus and prior to their expiration, on 30 days prior written notice to the
registered holders of the Redeemable Warrants, provided the average closing bid
price per share of the Common Stock (if the Common Stock is then traded on a
national securities exchange or NASDAQ) for a period not less than 20 trading
days in any 30 day trading period, ending not more than 15 days prior to the
date of any redemption notice, exceeds at least 150% of the then Exercise Price.
The Redeemable Warrants shall be exercisable until the close of the business day
preceding the date fixed for redemption.
See "Underwriting."

Underwriter's Warrants

See "Underwriting" for a description of the material terms of the
Underwriter's Warrants to be issued by the Company to the Underwriter upon
completion of the Offering.

Reports to Stockholders

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and to make available such other
periodic reports as the Company may determine to be appropriate or as may be
required by law.

Application for Listing

The Company has applied for listing of the Common Stock and Redeemable
Warrants on NASDAQ under the symbols "AZUR" and "AZURW," respectively. No
assurance can be given that such applications will be approved or that a trading
market for the Securities will develop.

Transfer Agent and Redeemable Warrant Agent

The Company has appointed North American Transfer Co. as Transfer Agent
and Registrar for its Common Stock and Warrant Agent for its Redeemable
Warrants.

SHARES ELIGIBLE FOR FUTURE SALE

Upon sale of the Securities, the Company will have outstanding
5,058,747 shares of Common Stock and 1,000,000 Redeemable Warrants (5,208,747
shares of Common Stock, and 1,450,000 Redeemable Warrants if the Underwriter's
Over-Allotment Option is exercised in full). The Securities to be sold in this
Offering (assuming no exercise of the Underwriter's Over-Allotment Option) and
the 1,478,747 shares of Common Stock and 300,000 Redeemable Warrants registered
concurrently with this Prospectus being offered pursuant to the Selling
Securityholder Prospectus included in the Registration Statement of which this
Prospectus forms a part, will be freely tradable subject to "lock-up" agreements
described below without restriction under the Securities Act, except for any
shares purchased by an "affiliate" of the Company (in general, a person who has
a control relationship with the Company), which shares will be subject to the
resale limitations of Rule 144 adopted under the Securities Act ("Rule 144").
The remaining 2,580,000 shares are deemed to be "restricted securities," as that
term is defined under Rule 144, in that such shares were issued and sold by the
Company in private transactions not involving a public offering and are not
currently part of an effective registration. Except for the "lock-up" agreements
described below, such shares are eligible for sale under Rule 144, or will
become so eligible at various times through October, 1998. In addition, the
Company has granted the Underwriter demand and piggyback registration rights
with respect to the securities issuable upon exercise of the Underwriter's
Warrants. No prediction can be made as to the effect, if any, that sales of
shares of Common Stock or even the availability of such shares for sale will
have on the market prices prevailing from time to time. If the holders of the
shares eligible for registration so choose they could require the Company to
register all of said shares at any time.

In general, under Rule 144, subject to the satisfaction of certain
other conditions, a person, including an affiliate of the Company, who has
beneficially owned restricted shares of Common Stock for at least two years is
entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of 1% of the total number of outstanding shares of the
same class, or if the Common Stock is quoted on NASDAQ or a stock exchange, the
average weekly trading volume during the four calendar weeks preceding the sale.
A person who presently is not and who has not been an affiliate of the Company
for at least three months immediately preceding the sale and who has
beneficially owned the shares of Common Stock for at least three years is
entitled to sell such shares under Rule 144 without regard to any of the volume
limitations described above.

All of the Company's current stockholders have agreed not to sell or
otherwise dispose of their shares of Common Stock (the "Lock-Up") for a period
ranging from six months to two years following completion of the Offering
without the prior written consent of the Underwriter. Following expiration of
the Lock-Up, 2,580,000 shares of Common Stock outstanding prior to the Offering
will be available for immediate resale pursuant to Rule 144, subject to
compliance with affiliates of the Company with the volume limitations of Rule
144. Affiliates of the Company currently own an aggregate of 2,041,000 shares
Common Stock. See "Underwriting."

Prior to this Offering, no market for the Securities existed. The
effect, if any, of public sales of the restricted shares of Common Stock or the
availability of such shares for future sale on prevailing market prices cannot
be predicted. Nevertheless, the possibility that substantial amounts of
restricted shares may be resold in the public market may adversely affect
prevailing market prices for the shares and could impair the Company's ability
to raise capital through the sale of its equity securities.

UNDERWRITING

Subject to the terms and conditions set forth in an underwriting
agreement (the "Underwriting Agreement") between the Company and the
Underwriter, the Underwriter has agreed to purchase from the Company, on a "firm
commitment" basis, all of the Securities.

The Underwriter has advised the Company that it proposes initially to
offer the Securities to the public at the initial public offering price set
forth on the cover page of this Prospectus and to certain dealers at such
prices, less concessions not in excess of $___ per share of Common Stock and
$___ per Redeemable Warrant.

The Company has granted the Underwriter an option, exercisable during
the 30 calendar day period after the closing of the Offering, to purchase from
the Company at the initial public offering price less underwriting discounts and
the non-accountable expense allowance, up to an aggregate of 150,000 shares of
Common Stock and/or 150,000 Redeemable Warrants for the sole purpose of covering
over allotments, if any.

The Company has agreed to pay the Underwriter a non-accountable expense
allowance of 3% of the gross proceeds of the Offering, none of which has been
paid to date. Further, the Company has agreed to reimburse the Underwriter for
certain accountable expenses relating to the Offering.

All of the Company's current stockholders have agreed not to sell or
otherwise dispose of any of their shares of Common Stock or shares of Common
Stock issuable upon conversion or exercise of securities convertible into Common
Stock for a period ranging from six months to two years from the date of this
Prospectus without the prior written consent of the Underwriter. Notwithstanding
these lock-up agreements, such persons may make intra-family transfers. An
appropriate restrictive legend will be marked on the face of certificates
representing all such shares of Common Stock and Redeemable Warrants. See
"Principal Stockholders."

The Company has agreed, if requested by the Underwriter at any time
within three years after the date of closing of the Offering, to nominate and
use its best efforts to elect a designee of the Underwriter as a director of the
Company or, at the Underwriter's option, as a non-voting advisor to the
Company's Board of Directors. Such designee may be an officer, director,
partner, employee, affiliate of or consultant to the Underwriter. The person to
be designated by the Underwriter has not been identified to date.

The Company has also agreed to retain the Underwriter, pursuant to a
financial advisory and investment banking agreement (the "Advisory Agreement"),
as the Company's financial consultant at a monthly rate of $2,000 for 24 months
commencing on the date of this Prospectus, all of which is payable at the
closing of the Offering. Pursuant to the Advisory Agreement, the

Underwriter will render certain financial advisory and investment banking
services to the Company, including advice as to the Company's financial public
relations, internal operations, corporate finance matters and other related
matters.

In connection with this Offering, the Company has agreed to sell to the
Underwriter, for nominal consideration, warrants to purchase from the Company
100,000 shares of Common Stock and/or 100,000 Redeemable Warrants (the
"Underwriter's Warrants"). The shares of Common Stock and Redeemable Warrants
contained in the Underwriter's Warrants will be identical to the Securities
being offered hereby. The Underwriter's Warrants contain anti-dilution
provisions identical to the Redeemable Warrants that provide for adjustment of
the exercise price upon the occurrence of certain events. The Underwriter's
Warrants grant the holder certain registration rights applicable to the
securities issuable upon exercise of the Underwriter's Warrants.

During the term of the Underwriter's Warrants, the holders of the
Underwriter's Warrants are given the opportunity to profit from a rise in the
market price of the Securities. To the extent that the Underwriter's Warrants
are exercised, dilution of the interests of the Company's then stockholders will
occur. Furthermore, the terms upon which the Company will be able to obtain
additional equity capital may be adversely affected since the holder of the
Underwriter's Warrants can be expected to exercise them at a time when the
Company would, in all likelihood, be able to obtain any needed capital on terms
more favorable to the Company than to those provided in the Underwriter's
Warrants.

The Underwriting Agreement provides for reciprocal indemnification
between the Company and the Underwriter against certain liabilities in
connection with the Registration Statement of which this Prospectus constitutes
a part, including liabilities under the Securities Act. To the extent this
section may purport to provide exculpation from possible liabilities arising
under the federal securities laws, the Company has been advised that it is the
opinion of the Commission that such indemnification is against public policy and
is therefore unenforceable.

In addition, the Underwriting Agreement provides that for a period of
two years from the date of the Offering, the Company will not issue any shares
of Common Stock or Preferred Stock, or securities convertible into or
exercisable for Common Stock or Preferred Stock, without the prior written
consent of the Underwriter. However, the Company may issue securities (A) upon
(i) the exercise of any warrants or options outstanding as of the completion of
this Offering, and (ii) the exercise of the Underwriter's Warrants, (B) pursuant
to the Company's 1996 Plan, or (C) in connection with any merger or acquisition
of another entity by the Company.

The foregoing is a summary of the principal terms of the Underwriting
Agreement, the Underwriter's Warrants, and the Advisory Agreement and does not
purport to be complete. Reference is made to the copies of the Underwriting
Agreement, the Underwriter's Warrant Agreement and the Advisory Agreement that
are filed as exhibits to the Registration Statement

of which this Prospectus constitutes a part.

Prior to the Offering, there has been no public market for the
Securities offered hereby. Consequently, the initial public offering price of
the Securities and the exercise price and other terms of the Redeemable Warrants
have been determined by the Company and the Underwriter and are not necessarily
related to the Company's asset value, earnings, book value or other such
criteria of value. Factors considered in determining the initial public offering
price of the Securities and the exercise price of the Redeemable Warrants
include primarily the prospects for the industry in which the Company operates,
the Company's management, the general condition of the securities markets and
the demand for securities in similar industries.

CONCURRENT REGISTRATION OF SECURITIES

Concurrently with this Offering, 1,478,747 shares of Common Stock (the
"Selling Securityholders' Shares"), 300,000 Warrants (the "Selling
Securityholders' Warrants") and 300,000 shares underlying the Selling
Securityholders' Warrants have been registered by the Company under the
Securities Act on behalf of certain of its securityholders (the "Selling
Securityholders"), pursuant to a Selling Securityholders' Prospectus included
within the Registration Statement of which this Prospectus forms a part. The
Selling Securityholders' Shares, the Selling Securityholders Warrants, and the
shares underlying the Selling Securityholders Warrants are not part of this
underwritten offering. All of the Selling Securityholders have agreed not to
sell or otherwise dispose of the Selling Securityholders' Shares and/or the
Selling Securityholders' Warrants for a period ranging from three months to two
years following completion of the Offering without the prior written consent of
the Underwriter. The Company will not receive any of the proceeds from the sale
of the Selling Securityholders' Shares, the Selling Securityholders' Warrants,
or the shares underlying the Selling Securityholders' Warrants, but will receive
proceeds from the exercise of the Selling Securityholders' Warrants.

LEGAL MATTERS

The validity of the Securities offered hereby and certain other legal
matters will be passed upon for the Company by Gersten, Savage, Kaplowitz &
Curtin, LLP, New York, N.Y. Certain legal matters will be passed upon for the
Underwriter by Snow Becker Kraus P.C., New York, N.Y. Gersten, Savage, Kaplowitz
& Curtin, LLP has acted as counsel to the Underwriter in other transactions, and
may so act in the future.

EXPERTS

The audited financial statements for the years ended December 31, 1994,
and 1995, included in the Prospectus have been audited by Feldman Radin & Co.,
P.C., independent certified public accountants, to the extent and for the
periods set forth in their report appearing elsewhere herein, and are included
in reliance upon such report and upon the authority of said firm as experts in
accounting and auditing. The information for the interim periods ended June 30,
1995 and 1996 is unaudited but in the opinion of management, includes all
adjustments considered necessary for the fair presentation of the results. All
adjustments made in the interim financial statements are of a normal recurring
nature. The unaudited results for the six months ended June 30, 1996 are not
necessarily indicative of the results to be expected for the entire fiscal year.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on
Form SB-2 in accordance with the provisions of the Securities Act, with respect
to the securities offered hereby. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits thereto.
For further information, reference is made to the Registration Statement and to
the exhibit filed therewith. Statements herein contained concerning the
provisions of any document are not necessarily complete and, in each instance,
reference is made to the copy of such document filed as an exhibit to the
Registration Statement. The Registration Statement and the exhibits may be
inspected without charge at the offices of the Commission and, upon payment to
the Commission of prescribed fees and rates, copies of all or any part thereof
may be obtained from the Commission's principal office at the Public Reference
Section, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C.
20549.

Except for material contracts or portions thereof accorded confidential
treatment, all registration statements are available for public inspection,
during business hours, at the principal office of the Commission in Washington,
D.C. Electronic registration statements made through the Electronic Data
Gathering, Analysis, and Retrieval System are publicly available through the
Commission's Website (http://www.sec.gov).

INDEPENDENT AUDITOR'S REPORT

To the Shareholders and Board of Directors
Private Label Cosmetics, Inc. and affiliates

We have audited the accompanying combined balance sheet of Private Label
Cosmetics, Inc. and affiliates as of December 31, 1995 and the related combined
statements of operations, changes in stockholders deficit and cash flows for
the years ended December 31, 1995 and 1994. These financial statements are the
responsibility of the Private Label Group's management. Our responsibility is
to express an opinion on these financial statements based on our audits.

We conducted our audits 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 audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of Private Label
Cosmetics, Inc. and affiliates as of December 31, 1995 and the results of its
combined operations and its combined cash flows for the years ended December 31,
1995 and 1994 in conformity with generally accepted accounting principles.

The accompanying combined financial statements have been prepared assuming
that Private Label Cosmetics, Inc. and affiliates will continue as a going
concern. As discussed in Note 3 to the combined financial statements, the
Private Label Group incurred significant net losses for the years ended
December 31, 1995 and 1994 which raises substantial doubt about its ability to
continue as a going concern. Management s plans in regard to these matters are
also described in Note 3. The financial statements do not include any
adjustments relating to the recoverability and classification of reported asset
amounts or the amounts and classification of liabilities that might result from
the outcome of this uncertainty.

FELDMAN RADIN & CO., P.C.
Certified Public Accountants

October 10, 1996
New York, New York

PRIVATE LABEL COSMETICS, INC. AND AFFILIATES
COMBINED BALANCE SHEETS

June 30, December 31,
1996 1995
(Unaudited)
ASSETS

CURRENT ASSETS:
Accounts receivable, net of allowance for doubtful
account of $15,000 and $15,000, respectively $ 1,373,157 $ 1,127,920
Inventories 1,102,645 1,108,696
Prepaid insurance and taxes 33,652 33,452
Due from related parties 315,606 327,512
TOTAL CURRENT ASSETS 2,825,060 2,597,580

MACHINERY AND EQUIPMENT 537,457 521,375

RESTRICTED CASH 250,000 -

OTHER ASSETS 38,303 38,303

$ 3,650,820 $ 3,157,258

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Cash overdraft $ 65,107 $ 30,711
Accounts payable 1,006,944 958,255
Accrued expenses 304,347 297,533
Accrued payroll taxes and penalties 335,843 420,045
Accrued lawsuit settlement - 257,000
Customer advances 155,142 113,628
Advances by Azurel Ltd. 680,000 180,000
Current portion of long-term debt 169,989 168,786
Current portion of capital lease obligations 11,243 92,651
TOTAL CURRENT LIABILITIES 2,728,615 2,518,609

LONG-TERM LIABILITIES:
Long-term debt 1,963,335 1,462,574
Capital lease obligations 22,464 103,245
TOTAL LONG-TERM LIABILITIES 1,985,799 1,565,819
STOCKHOLDERS' DEFICIT:
Common stock 59,223 59,223
Accumulated deficit (367,067) (230,643)
Treasury stock (755,750) (755,750)
TOTAL STOCKHOLDERS' DEFICIT (1,063,594) (927,170)

$ 3,650,820 $ 3,157,258

See notes to combined financial statements.

PRIVATE LABEL COSMETICS, INC. AND AFFILIATES
COMBINED STATEMENTS OF OPERATIONS

Six Months Ended
June 30, Year Ended December 31,
1996 1995 1995 1994
(Unaudited)

NET SALES $ 4,964,430 $ 3,739,161 $ 8,413,225 $ 9,744,578

COST OF GOODS SOLD 4,018,303 2,934,956 6,627,898 7,650,161

GROSS PROFIT 946,127 804,205 1,785,327 2,094,417

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 969,231 902,252 2,103,320 1,934,595

INCOME (LOSS) FROM OPERATIONS (23,104) (98,047) (317,993) 159,822

OTHER EXPENSES
Lawsuit settlement - - - (257,000)
Interest expense (113,320) (89,973) (197,663) (192,607)

(113,320) (89,973) (197,663) (449,607)

NET (LOSS) $ (136,424) $ (188,020) $ (515,656) $ (289,785)

See notes to combined financial statements.

PRIVATE LABEL COSMETICS, INC. AND AFFILIATES

COMBINED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT

International
Private Label Fashion P.L.C. Cosmetics
Cosmetics, Inc. Laboratories, Inc. Specialties, Inc Group, Inc.
Shares Amount Shares Amount Shares Amount Shares Amount
Balance - December 31, 1993 50 $ 46,623 49 $ 10,100 500 $500 500 $2,000

Net loss - - - - - - - -

Balance - December 31, 1994 50 46,623 49 10,100 500 500 500 2,000

Net loss - - - - - - - -

Balance - December 31, 1995 50 46,623 49 10,100 500 500 500 2,000
Net loss, six months ended
June 30, 1996 (unaudited) - - - - - - - -

Balance - June 30, 1996 (unaudited) 50 $ 46,623 49 $ 10,100 500 $500 500 2,000

Shares authorized, no par value 2,500 1,000 2,500 1,000

Retained Retained
Total Earnings Total
Common (Accumulated Treasury Stockholders
Stock Deficit) Stock (Deficit)
Balance - December 31, 1993 $59,223 $ 574,798 $ (755,750) $ (121,729)

Net loss - (289,785) - (289,785)

Balance - December 31, 1994 59,223 285,013 (755,750) (411,514)

Net loss - (515,656) - (515,656)

Balance - December 31, 1995 59,223 (230,643) (755,750) (927,170)

Net loss, six months ended
June 30, 1996 (unaudited) - (136,424) - (136,424)

Balance - June 30, 1996 (unaudited) $ 59,223 $ (367,067) $ (755,750) $(1,063,594)

See notes to combined financial statements.

PRIVATE LABEL COSMETICS, INC. AND AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS

Six Months Ended
June 30, Year Ended December 31,
1996 1995 1995 1994
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (136,424) $ (188,020) $ (515,656) $ (289,785)
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Depreciation 91,866 88,011 160,677 161,975

Changes in assets and liabilities:
(Increase) decrease in accounts receivable (245,237) 90,822 232,042 229,573
(Increase) decrease in inventories 6,051 (186,212) (212,552) 242,021
(Increase) decrease in prepaid insurance and taxes (200) 1,834 2,085 (2,258)
(Increase) decrease in other assets - 675 (7,670) 22
Increase (decrease) in accounts payable 48,689 (12,151) 76,779 (227,795)
Increase (decrease) in accrued expenses 6,814 70,571 110,939 35,390
Increase (decrease) in accrued payroll taxes (84,202) 187,378 384,696 (15,354)
Increase (decrease) in accrued lawsuit settlements (257,000) - - 257,000
Increase (decrease) in customer advances 41,514 (32,469) (9,254) (217,264)

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (528,129) 20,439 222,086 173,525

CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (107,946) (27,430) (28,129) (119,728)

NET CASH USED IN INVESTING ACTIVITIES (107,946) (27,430) (28,129) (119,728)

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash (250,000) (29,300) - -
Payment of long-term debt (1,259,703) (50,000) (340,284) (195,394)
Proceeds from long-term debt 1,793,242 87,972 - 240,000
Payment of capital lease obligations (193,766) (54,014) (81,823) (59,233)
Decrease in due from related parties 11,906 37,954 64,411 17,846
Proceeds from advances by Azurel Ltd. 500,000 - 180,000 -

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 601,679 (7,388) (177,696) 3,219

NET INCREASE (DECREASE) IN CASH (34,396) (14,379) 16,261 57,016

CASH OVERDRAFT AT BEGINNING OF PERIOD (30,711) (46,972) (46,972) (103,988)

CASH OVERDRAFT AT END OF PERIOD $ (65,107) $ (61,351) $ (30,711)$ (46,972)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Interest $ 113,320 $ 89,973 $ 207,789 $ 198,375
Taxes $ - $ - $ 1,679 $ 8,198
Noncash activity:
Purchase of machinery through capital lease
obligations $ - $ 64,000 $ 64,000 $ -

See notes to combined financial statements

PRIVATE LABEL COSMETICS, INC. AND AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS

The combined financial statements and the related footnotes for the six
months ended June 30, 1996 and 1995 are unaudited. In the opinion of
management, these financial statements include all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of
the financial statements. The results of operations for the six months
ended June 30, 1996 are not necessarily indicative of results that may be
expected for the full year.

1. BUSINESS

Private Label Cosmetics, Inc. and affiliates (the "Private Label Group")
are located in Fairlawn, New Jersey and manufacture cosmetics for sale to
major cosmetic companies. In August 1996, Azurel Ltd. (the "Company")
purchased all of the issued and outstanding capital stock of the Private
Label Group for a purchase price of $2,782,500 of which $131,250 in cash
was paid at closing, $1,758,750 was paid by the delivery of the Company's
promissory notes (which bear interest at the rate of 9% per annum) and
$892,500 will be paid promptly after the closing of the initial public
offering by the issuance of common stock valued at the public offering
price. In addition, upon completion of the closing of the initial public
offering, the Company is to issue to Private Label Group's counsel such
number of shares of common stock as is valued at $7,500.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Combination - The combined financial statements include
the accounts of Private Label Cosmetics, Inc., P.L.C. Specialties,
Inc., Fashion Laboratories, Inc. and International Cosmetic Group,
Inc. The accompanying financial statements of the Private Label
Group are combined as all entities are under common control. Material
intercompany accounts and transactions are eliminated in the
combination.

b. Accounting estimates - The preparation of financial statements in
accordance with generally accepted accounting principles requires
management to make significant estimates and assumptions that effect
the reporting amount of assets and liabilities at the date of the
financial statements and the reported amount of revenues and expenses
during the reported period. Actual results could differ from those
estimates.

c. Inventories - Inventories are recorded at the lower of cost or market.
Cost was determined using the average cost method.

d. Property and equipment - Property and equipment is stated at cost and
is depreciated using the straight line method over their estimated
useful lives. Capitalized leases are stated at cost and are
depreciated using the straight line method over the lower of the life
of the lease or its estimated useful life.

e. Income taxes - The Private Label Group accounts for income taxes
under the provisions of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes ("SFAS No. 109"). SFAS No.109
requires the recognition of deferred tax assets and liabilities for
both the expected impact of differences between the financial
statement and tax basis of assets and liabilities, and for the
expected future tax benefit to be derived from tax loss and tax
credit carryforwards. SFAS No. 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of
realization of deferred tax assets.

f. Fair value of financial instruments - The carrying amounts reported in
the balance sheet for cash, trade receivables, accounts payable and
accrued expenses approximate fair value based on the short-term
maturity of these instruments.

3. BASIS OF PRESENTATION

The Private Label Group's financial statements have been presented on a
basis that it is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business. The Private Label Group intends to seek additional equity capital
through an initial public offering to adequately fund operations, working
capital needs and growth plans.

The Private Label Group had incurred significant net losses for the years
ended December 31, 1995 and 1994 which raises substantial doubt about its
ability to continue as a going concern. Accordingly, continued existence is
dependent upon the Private Label Group's ability to become profitable and
to obtain additional equity capital, neither of which can be assured.

4. INVENTORIES

Inventories consist of the following:

December 31,
1995

Raw Materials $ 362,500

Work In Process 642,422

Finished Goods 103,774

$1,108,696

5. TRANSACTIONS WITH RELATED PARTIES

Receipts from allocated
general and
Due from Trade accounts Consulting fee administrative expenses
affiliates receivable Sales to affiliates Year Ended Year Ended
December 31, December 31, Year Ended December 31, December 31, December 31, (c)

1995 (a) 1995 1995 1994 1995 1995 1994

D & A $ 2,833 $ - $ - $ - $ 10,000 $ - $ -
Advertising
Corp.

The
Contemporary
Cosmetic
Group, Inc. (b) 324,679 146,678 355,000 288,000 - 200,000 102,000

Rubigo
Cosmetics, Inc. - 22,562 166,000 441,000 - - -

$ 327,512 $ 169,240 $ 521,000 $ 729,000 $ 10,000 $ 200,000 $102,000

<FN>

(a) These amounts are due on demand and are non-interest bearing.

(b) The most recent unaudited financial statement at May 31, 1995 states a
negative net worth of $223,226 for The Contemporary Cosmetic Group,
Inc.

</FN>

6. MACHINERY AND EQUIPMENT

Machinery and equipment consist of the following at December 31, 1995:

Estimated
useful lives

Machinery and equipment held under
capital lease obligations 5-7 $ 351,927

Machinery and equipment 5-7 2,057,563

Leasehold improvements 15 211,498
2,620,988

Less accumulated depreciation 2,099,613

$ 521,375

7. ACCRUED PAYROLL TAXES AND PENALTIES

At December 31, 1995, the Private Label Group owed $420,045 in accrued
payroll taxes and penalties for the period September 30, 1995 through
December 31, 1995.

8. LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1995:

Note payable to bank, bears interest at the rate of
prime plus 1 1/4% per annum, monthly payments consist of
principal and interest are approximately $20,429
through July 1997, collateralized by machinery and
equipment. $358,333

Revolving bank loan, bears interest at the rate of
prime plus 1 1/4%, matures in March 1996, interest
payable monthly, collateralized by accounts
receivable, inventory and machinery. 850,620

Note payable to former majority stockholder,
bears interest at the rate of 6% per annum.
Monthly payments consisting of principal
and interest are approximately $5,551 through
August 2003. 422,407

1,631,360
Less current portion 168,786

$1,462,574

In February 1996, the Private Label Group repaid the note payable to bank
and the revolving bank loan and entered into a two year loan agreement with
Finova Financial Corporation ("Finova"). Pursuant to the agreement, the
line of credit is $2,000,000, bears interest at the rate of prime plus 3%
per annum, is secured by the Private Label Group's accounts receivable,
inventory and equipment and is guaranteed by the Private Label Group's sole
stockholder and the Company. Monthly installments of $10,150 are due on the
last day of each month with the remaining balance due in February 1998.
Additionally, the Company on behalf of the Private Label Group deposited
$250,000 with Finova as collateral for the agreement. The financial
statements reflect the terms of the Finova agreement.

Long-term debt maturities based on the Finova debt for the next five years
are as follows:

1996 $168,786

1997 167,746

1998 1,024,283

1999 51,788

2000 54,983

9. CAPITAL LEASE OBLIGATIONS

The Private Label Group leases machinery and equipment under non-cancelable
lease agreements which expire at various times through December 1998.

Principal portion of capital lease payments $195,896

Less: current portion 92,651

$103,245

The future minimum principal payments under capital leases are as follows:

1996 $92,651

1997 70,082

1998 33,163

10. ADVANCES BY AZUREL LTD.

In October 1995, the Company advanced the Private Label Group $180,000 for
working capital. In February 1996, the Company advanced the Private Label
Group $250,000 for a lawsuit settlement and $250,000 as security for a loan
(see Notes 8 and 14).

11. INCOME TAXES

The Private Label Group accounts for income taxes under Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS
No. 109"). SFAS No. 109 requires the recognition of deferred tax assets and
liabilities for both the expected impact of differences between the
financial statements and tax basis of assets and liabilities, and for the
expected future tax benefit to be derived from tax loss and tax credit
carryforwards. SFAS No. 109 additionally requires the establishment of a
valuation allowance to reflect

the likelihood of realization of deferred tax assets. At December 31,
1995, the Private Label Group had net deferred tax assets of $620,000.
The Private Label Group has recorded a valuation allowance for the full
amount of the net deferred tax assets.

The following table illustrates the source and status of the Private Label
Group's major deferred tax assets and (liabilities):

Net operating loss carryforwar $495,000

Litigation accruals 90,000

Inventory allowance 35,000

Valuation allowance (620,000)

Net deferred tax asset recorded $ -

The provision for income taxes differs from the amount computed applying
the statutory federal income tax rate to income before income taxes as
follows:

December 31,
1995 1994
Income tax benefit computed at statutory rate $(180,000) $(101,000)

Tax benefit not recognized 180,000 101,000

Provision for income taxes (benefit) $ - $ -

The Private Label Group has net operating loss carryforwards for tax
purposes totaling $1,413,000 at December 31, 1995 expiring in the years
2008 to 2010. Substantially all of the carryforwards are subject to
limitations on annual utilization because there are equity structure shifts
or owner shifts involving 5% stockholders (as these terms are defined in
Section 382 of the Internal Revenue Code), which have resulted in a more
than 50% change in ownership. The annual limitation is based on the value
of the Private Label Group as of the date of the ownership change
multiplied by the applicable Federal Long Term Tax Exempt Bond Rate.

12. COMMITMENTS AND CONTINGENCIES

a. The Private Label Group leases office and warehouse space under a
non-cancelable operating lease. Rent expense under this lease was
approximately $482,000 and $470,000 for the years ended December 31,
1995 and 1994, respectively. The lease expires in August 2002. Minimum
rental commitments for the next five years are as follows:

1996 $ 453,000

1997 466,000

1998 480,000

1999 493,000

2000 506,000

b. The Private Label Group is paying a monthly consulting fee of $11,117
to a former stockholder through August 2003.

c. The Private Label Group does not have insurance coverage for product
withdrawal / recall.

13. SIGNIFICANT CUSTOMERS

Approximately 21% and 14% of the Private Label Group's revenue was derived
from two major customers for the year ended December 31, 1995. For the year
ended December 31, 1994, approximately 17% and 12% of the Private Label
Group's revenue was derived from the same two major customers.

14. ACCRUED LAWSUIT SETTLEMENT

A jury verdict against the Private Label Group was entered on December 22,
1995 in the net amount of $223,095, together with prejudgment interest and
costs of suit. Judgment subsequently entered on such verdict in the amount
of $257,000 including costs and interest, was satisfied on behalf of the
Private Label Group in full in February 1996 with an advance by the Company
of $250,000. The judgment of $257,000 was accrued at December 31, 1995.

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
Azurel Ltd.

We have audited the accompanying balance sheet of Azurel Ltd. as of
December 31, 1995 and the related statements of operations, changes in
stockholders deficit and cash flows from June 26, 1995 (inception) through
December 31, 1995. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits 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 Azurel Ltd. as of December
31, 1995 and the results of its operations and its cash flows from June 26, 1995
(inception) through December 31, 1995 in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that
Azurel Ltd. will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company has incurred significant net losses which
raises substantial doubt about its ability to continue as a going concern.
Management s plans in regard to these matters are also described in Note 3. The
financial statements do not include any adjustments relating to the
recoverability and classification of reported asset amounts or the amounts and
classification of liabilities that might result from the outcome of this
uncertainty.

FELDMAN RADIN & CO., P.C.
Certified Public Accountants

October 10, 1996
New York, New York

AZUREL LTD.
BALANCE SHEET

June 30, December 31,
1996 1995
(Unaudited)
ASSETS

CURRENT ASSETS:
Cash $ 317,126 $ 3,581
Due from stockholders 184,480 92,380
Due from the Private Label Group 680,000 180,000
Prepaid royalties 15,909 -
TOTAL CURRENT ASSETS 1,197,515 275,961

FURNITURE AND EQUIPMENT 31,582 -

DEFERRED FINANCING COSTS 41,250 70,208

DEFERRED REGISTRATION COSTS 85,047 4,000

OTHER ASSETS 37,715 490

$ 1,393,109 $ 350,659

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accrued expenses $ 289,399 $ 143,130
Current portion of long-term debt 671,221 259,975
TOTAL CURRENT LIABILITIES 960,620 403,105

LONG-TERM DEBT 200,000 449,875

STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, par value $.001 per share,
10,000,000 shares authorized 3,310 2,450
Additional paid-in capital 1,467,185 -
Accumulated deficit (1,235,831) (502,596)
234,664 (500,146)
Less stock subscriptions receivable (2,175) (2,175)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 232,489 (502,321)

$ 1,393,109 $ 350,659

See notes to financial statements.

AZUREL LTD.
STATEMENTS OF OPERATIONS

Six months June 26, 1995
Ended (Inception) to
June 30, December 31,
1996 1995
(Unaudited)

REVENUES $ - $ -

GENERAL AND ADMINISTRATIVE EXPENSES 415,651 259,637

(LOSS) BEFORE INTEREST EXPENSE (415,651) 259,637)

INTEREST EXPENSE 317,584 17,559

NET (LOSS) $ (733,235) $ (277,196)

See notes to financial statements.

AZUREL LTD.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

Total
Common Stock Additional Stock Stockholders'
Number of Paid-in Accumulated Subscriptions Equity
Shares Amount Capital Deficit Receivable (Deficit)

Balance - June 26, 1995 (Inception)........ - $ - $ - $ - $ - $ -

Issuance of common stock 2,175,000 2,175 - - (2,175) -
Stock issued in connection with
bridge financing 125,000 125 - - - 125
Stock issued for services 125,000 125 - - - 125
Stock issued in connection with a loan 25,000 25 - - - 25
Distribution - - - (225,400) - (225,400)
Net (loss) - - - (277,196) - (277,196)

Balance - December 31, 1995................ 2,450,000 2,450 - (502,596) (2,175) (502,321)

Stock issued in connection with
bridge financing 125,000 125 124,875 - - 125,000
Sale of common stock 625,000 625 1,096,825 - - 1,097,450
Stock issued for services 60,000 60 119,940 - - 120,000
Stock issued in connection with a loan 50,000 50 88,045 - - 88,095
Stock options issued for services - - 37,500 - - 37,500
Net (loss), six months ended
June 30, 1996 (unaudited) - - - (733,235) - (733,235)

Balance - June 30, 1996 (unaudited)........ 3,310,000 $ 3,310 $ 1,467,185 $ (1,235,831) $ (2,175) $ 232,489

See notes to financial statements.

AZUREL LTD.
STATEMENTS OF CASH FLOWS

Six months June 26, 1995
Ended (Inception) to
June 30, December 31,
1996 1995
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) $ (733,235) $ (277,196)
Adjustments to reconcile net (loss) to net cash
provided by operating activities:
Depreciation 198 -
Amortization of discount 163,162 -
Stock options issued for services 37,500 -

Changes in assets and liabilities:
Increase in prepaid royalties (15,909) -
Increase in accrued expenses 146,269 127,730

NET CASH USED IN OPERATING ACTIVITIES (402,015) (149,466)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment (20,476) -
Increase in other assets (37,225) (490)

NET CASH USED IN INVESTING ACTIVITIES (57,701) (490)

CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in due from stockholders (92,100) (92,380)
Increase in due from the Private Label Group (500,000) (180,000)
(Increase) decrease in deferred financing costs 28,958 (70,208)
Increase in deferred registration costs (81,047) (4,000)
Proceeds from long-term debt 460,000 528,750
Payment of long-term debt (310,000) (28,750)
Issuance of common stock 1,267,450 125

NET CASH PROVIDED BY FINANCING ACTIVITIES 773,261 153,537

NET INCREASE IN CASH 313,545 3,581

CASH AT BEGINNING OF PERIOD 3,581 -

CASH AT END OF PERIOD $ 317,126 $ 3,581

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the year for:
Interest $ 6,520 $ -
Taxes $ - $ -
Non cash activities:
Issuance of common stock through long-term debt $ 163,095 $ 125
Issuance of common stock through stock subscriptions
receivable $ - $ 2,175
Distribution through assumption of long term-debt $ - $ 225,400
Purchase of equipment through capital lease
obligations $ 11,304 $ -

See notes to financial statements.

AZUREL LTD.
NOTES TO FINANCIAL STATEMENTS

The financial statements and footnotes for the six months ended June 30,
1996 are unaudited. In the opinion of management, these financial
statements include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the financial statements.
The results of operations for the six months ended June 30, 1996 are not
necessarily indicative of results that may be expected for the full year.

1. BUSINESS

Azurel Ltd. (the Company ) was incorporated in Delaware on June 26, 1995.
The Company acquired a cosmetic manufacturing plant, Private Label
Cosmetics, Inc. and affiliates (the Private Label Group ) in August 1996.
In July 1996, the Company formed a subsidiary, Scent 123, Inc. (Scent
123"). In October 1996, Scent 123 acquired the assets of Scent Overnight,
Inc. ( Scent ) an overnight delivery service of men s cologne and women's
fragrances. The Company will also market and develop original cosmetic
and fragrance lines.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

a. Accounting estimates - The preparation of financial statements in
accordance with generally accepted accounting principles requires
management to make significant estimates and assumptions that effect
the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.

b. Furniture and equipment - Furniture and equipment are stated at cost
and depreciated using the straight-line method over the estimated
useful lives of the assets.

c. Deferred registration costs - Deferred registration costs will be
charged against additional paid-in capital upon the successful
completion of the Company's proposed public offering. In the event the
offering is not completed, such costs will be charged to expense.

d. Deferred financing costs - Deferred financing costs will be charged to
interest expense over the term of the respective loans.

e. Fair value of financial instruments - The carrying amounts reported in
the balance sheet for cash, receivables, and accrued expenses
approximate fair value based on the short-term maturity of these
instruments.

f. Income taxes - The Company accounts for income taxes under the
provisions of Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes (SFAS No. 109). SFAS No. 109 requires
the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and
tax basis of assets and liabilities, and for the expected future tax
benefit to be derived from tax loss and tax credit carryforwards.
SFAS No. 109 additionally requires the establishment of a valuation
allowance to reflect the likelihood of realization of deferred tax
assets.

g. Stock based compensation - The Company accounts for stock transactions
in accordance with APB Opinion No. 25, Accounting For Stock Issued To
Employees. In accordance with Statement of Financial Accounting
Standards No.123, Accounting For Stock-Based Compensation, the
Company intends to adopt the pro forma disclosure requirements of
Statement No. 123 in fiscal 1997.

3. BASIS OF PRESENTATION

The Company's financial statements have been presented on a basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
intends to seek additional equity capital through an initial public
offering to adequately fund operations, working capital needs and growth
plans.

The Company had incurred significant net losses from June 26, 1995
(inception) through December 31, 1995 which raises substantial doubt about
its ability to continue as a going concern. Accordingly, continued
existence is dependent upon the Company's ability to become profitable and
to obtain additional equity capital, neither of which can be assured.

4. DUE FROM STOCKHOLDERS

As of December 31, 1995, the Company is owed $92,380 from stockholders
representing short term non-interest bearing advances.

5. DUE FROM THE PRIVATE LABEL GROUP

6. LONG-TERM DEBT

The following is a summary of long-term debt:

December 31,
1995

Notes payable to bridge lenders, bearing interest at
12%, payable through June 1997 (a) $249,875

Note payable, bearing interest at 10%, due in June
1996, secured by a pledge of 200,000 shares of common
stock (a) 49,975

Note payable, bearing interest at 8%, due at the
earlier of a public offering or December 31, 1996 210,000

Note payable, bearing interest at 10%, due October
1997 200,000

709,850

Less current portion 259,975

$449,875

<FN>

(a) In accordance with Accounting Principles Board Opinion No. 14 the price
paid for the note payable and bridge financing has been allocated between
the equity and debt securities included in such units based upon their
relative estimated fair values. The difference between the face amount
and the allocated value of the debt has been recorded as a discount on the
notes payable. Such discount, totaling $150 at December 31, 1995, is
being amortized as additional interest expense over the terms of the notes.
In April and July 1996, the notes were repaid from the proceeds of the
sale of the Company's common stock ( common stock ) or converted into
common stock. At that time, the remaining unamortized discount was
immediately charged to expense.
</FN>

7. PRIVATE PLACEMENTS AND OTHER FINANCING

a. In July 1995, the Company issued a promissory note in the principal
amount of $28,750 bearing interest at the rate of 10% per annum. The
loan was repaid in September and October 1995. Additionally, the
Company granted the lender the option to purchase 150,000 shares of
common stock at $1.00 per share which expires in five years.

b. In September through December 1995, the Company obtained bridge loans
totaling $250,000. The promissory notes bear interest at the rate of
12% per annum and are payable at the earlier of (i) 18 months from
the date of issuance or (ii) upon the receipt by the Company of gross
proceeds of a minimum of $1,000,000 through any public or private
offering. Additionally, as consideration for the bridge loans, the
Company issued an aggregate of 125,000 shares of common stock to the
lenders. These shares were valued at $125. In July 1996, the notes
were repaid or converted into common stock.

c. In September 1995, the Company issued a promissory note in the
principal amount of $50,000 bearing interest at the rate of 10% per
annum and secured by an aggregate of 200,000 shares of common stock
owned by two officers/directors of the Company. As additional
consideration for the loan, the Company issued 25,000 shares of common
stock valued at $25 and granted the lender the option to purchase
50,000 shares of common stock at $1.00 per share, which expires in
September 2002. The note and accrued interest were repaid in April
1996.

d. In September 1995, the Company was negotiating the purchase of Scent
and assumed a promissory note from Scent in the principal amount of
$210,000 plus accrued interest of $15,400 which was recorded as a
stockholder distribution. The note bears interest at the rate of 8%
per annum and is due at the earlier of December 31, 1996 or upon the
closing of the Company's initial public offering. In October 1996, the
lender converted the principal due under the note into 210,000 shares
of common stock.

e. In October 1995, the Company issued a promissory note in the principal
amount of $200,000. The note bears interest at the rate of 10% per
annum and is due in October 1997. In July 1996, the lender converted
the principal plus accrued interest due under the note into 106,972
shares of common stock.

f. In January 1996, the Company issued a promissory note in the principal
amount of $16,000 bearing interest at the rate of 10% per annum and
due, as to $100,000, in February 1996, and, as to, the remaining
principal plus accrued interest, in March 1996. In consideration for
this loan, the Company issued the lender 25,000 shares of common stock
valued at $38,095 and an option to purchase 50,000 shares of

common stock at $1.25 per share which was valued at $37,500 and
expires in January 1999. Additionally, the Company issued 25,000
shares of common stock to the lender valued at $50,000 as a penalty
for the Company's late repayment of a portion of the loan. The note
was repaid in February and May 1996.

g. In January 1996, the Company issued a demand promissory note to an
individual in the principal amount of $50,000 bearing interest at the
rate of 8% per annum. The note was repaid in April and May 1996.

h. In February 1996, the Company obtained bridge loans totaling $250,000.
The promissory notes bear interest at the rate of 12% per annum and
are payable at the earlier of (i) two months from the date of
issuance, or (ii) upon the receipt by the Company of gross proceeds
of a minimum of $1,000,000 through any public or private offering.
Additionally, as consideration for the bridge loans, the Company
issued an aggregate of 125,000 shares of common stock to the lenders.
These shares were valued at $125,000. In April and July 1996, the
notes were repaid or converted into common stock.

i. In July 1996, the Company completed a private placement of 978,747
shares of common stock at $2.00 per share. The Company issued 750,000
shares of common stock at $2.00 per share and converted various notes
into 228,747 shares of common stock at $2.00 per share.

j. In August through October 1996, the Company completed a $300,000
private placement of 12 units, each consisting of (i) the Company's
10% promissory note due at the earlier of 12 months or at the closing
of the Company s initial public offering and (ii) a warrant to
purchase up to 25,000 shares of common stock.

8. STOCKHOLDERS' DEFICIT

a. The Company is authorized to issue an aggregate of 10,000,000 shares
of common stock, $.001 par value per share.

b. In July and September 1995, the Company issued 2,175,000 shares of
common stock to the founders of the Company.

c. In July 1995, the Company granted a financial consultant the option to
purchase 150,000 shares of common stock at an exercise price of $1.00
per share, which expires in July 2000.

d. In September 1995, the Company issued 25,000 shares of common stock in
consideration for a $50,000 loan. The shares were valued at $25.
Additionally, the Company granted the lender the option to purchase
50,000 shares of common stock for an exercise price of $1.00 per
share, which expires in September 2002.

e. In September 1995 through December 1995, the Company issued an
aggregate of 125,000 shares of common stock to eleven bridge lenders
which shares were valued at $125.

f. In September 1995, the Company issued 125,000 shares of common stock
for consulting services which were valued at $125.

g. In January 1996, the Company, in consideration for a $160,000 loan,
issued the lender 25,000 shares of common stock valued at $38,095 and
an option to purchase 50,000 shares of common stock at $1.25 per
share, which was valued at $37,500 and expires in January 1999.
Additionally, the Company issued 25,000 shares of common stock valued
at $50,000 to the lender as a penalty for the Company's late repayment
of a portion of the loan.

h. In February 1996, the Company issued an aggregate of 125,000 shares of
common stock to three bridge lenders which were valued at $125,000.

i. In February and March 1996, the Company issued 60,000 shares of common
stock for professional services which was valued at $120,000.

j. In February through July 1996, the Company issued 750,000 shares of
common stock at $2.00 per share in a private placement.

k. In July 1996, the Company granted a consultant the option to purchase
20,000 shares of common stock at an exercise price of $4.80 per share,
which expire in July 1999. Additionally, the Company issued 5,000
shares of common stock to the consultant for services rendered.

l. In July 1996, the Company converted various notes into 228,747 shares
of common stock at $2.00 per share.

m. In October 1996, the lender of a $210,000 note converted the principal
of the note into 210,000 shares of common stock.

n. In August through October 1996, the Company granted lenders of a
$300,000 private placement warrants to purchase up to 300,000 shares
of common stock at $4.80 per share.

9. INCOME TAXES

The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes ( SFAS No. 109").
SFAS No. 109 requires the recognition of deferred tax assets and
liabilities for both the expected impact of differences between the
financial statements and tax basis of assets and liabilities, and for the
expected future tax benefit to be derived from tax loss and tax credit
carryforwards. SFAS No. 109 additionally requires the establishment of a
valuation allowance to reflect the likelihood of realization of deferred
tax assets. At December 31, 1995, the Company had net deferred tax assets
of $100,000. The Company has recorded a valuation allowance for the full
amount of the net deferred tax assets.

The following table illustrates the source and status of the Company's
major deferred tax assets and (liabilities):

Net operating loss carryforward $ 100,000

Valuation allowance (100,000)

Net deferred tax asset recorded $ -

The provision for income taxes differs from the amount computed applying
the statutory federal income tax rate to income before income taxes as
follows:

December 31,
1995

Income tax computed at statutory rate $100,000

Tax benefit not recognized (100,000)

Provision for income taxes (benefit) $ -

The Company has net operating loss carryforwards for tax purposes totaling
$272,000 at December 31, 1995 expiring in the year 2010. Substantially all
of the carryforwards are subject to limitations on annual utilization
because there are "equity structure shifts" or "owner shifts" involving
5% stockholders (as these terms are defined in Section 382 of the Internal
Revenue Code), which have resulted in a more than 50% change in
ownership.

10. COMMITMENTS

a. In June 1995, the Company entered into a consulting agreement where
the consultant is to receive shares of the Company's common stock over
a 12 month period.

b. In February 1996, the Company entered into a guarantee agreement with
Finova Financial Corporation ("Finova") for a $2,000,000 line of
credit for Private Label. Additionally, the Company, on behalf of
Private Label, deposited $250,000 with Finova as security for its
guarantee.

c. In February 1996, the Company advanced Private Label $250,000 to pay a
portion of a jury award rendered in a legal proceeding.

d. The Company had a month to month lease for office space through April
1996. In April 1996, the Company signed a non-cancelable lease for new
office space which expires in April 2001 and requires annual minimum
lease payments of $74,511 plus rent escalations.

e. In May 1996, the Company entered into a license agreement with the
owner of the "Members Only" trademark. The agreement grants the
Company the exclusive right to manufacture and distribute cosmetics
and other items under the "Members Only" mark. The agreement expires
in September 2001, with the Company's option to renew the license
agreement for an additional five year term. Under this agreement,
the Company is to required to pay minimum royalties of $1,225,000
through September 2001.

f. In August 1996, the Company purchased all of the issued and
outstanding capital stock of the Private Label Group for a purchase
price of $2,782,500 of which $131,250 in cash was paid at closing,
$1,758,750 was paid by the delivery of the Company's promissory notes
(which bear interest at the rate of 9% per annum) and $892,500 will
be paid promptly after the closing of the initial public offering by
the issuance of common stock valued at the public offering price.
In addition, upon completion of the closing of the initial public
offering, the Company is to issue to Private Label Group's counsel
such number of shares of common stock as is valued at $7,500.

g. In July 1996, the Company entered into a three year employment
agreement with the sole stockholder ( Stockholder ) of Private Label
which becomes effective upon the closing of the stock purchase and
sale agreement between Private Label and the Company. The Stockholder
will receive a base annual salary of $195,000 with the Stockholder's
option to renew the agreement for an additional two years.
Additionally, the Stockholder will receive a bonus equal to 10% of
Private Label's net profits in excess of $500,000 for the years
ending December 31, 1997 through December 31, 1999.

h. In July 1996, the Company entered into a brokerage and consulting
agreement with V.A.N. Marketing Ltd. ("VAN"). Under the agreement,
VAN will receive a finder's fee of two and one half percent of the
purchase price of the Private Label Group, 5,000 shares of the
Company's common stock and 20,000 stock options at an exercise price
of $4.80 per share, which expire in July 1999. The finder's fee is
payable as follows: $22,500 upon signing of the contract and the
remaining balance due one year later. Additionally, VAN will
receive for the two years commencing at the close of the contract a
monthly consulting fee of $3,000 for the first twelve months and
$5,000 for the remaining twelve months.

i. In October 1996, the Company acquired all of the assets of Scent
Overnight for (i) a $225,000 promissory note bearing interest at the
rate of 9% per annum and due upon the closing of the Company's initial
public offering, and (ii) the assumption of a promissory note of
$210,000 plus accrued interest of $15,400 (see Note 7 d.).

PRO FORMA BALANCE SHEET (UNAUDITED)

June 30, 1996
Azurel Private Label Combined Dr Cr As adjusted
ASSETS (Historical)

Cash $ 317,126 $ - $ 317,126 c 216,640 a 237,626 $ 3,543,812
l 4,185,047 b 24,355
j 270,000 d 203,750
m 186,770
n 792,500
Accounts receivable - 1,373,157 1,373,157 1,373,157
Due from stockholders
and related parties 184,480 315,606 500,086 500,086
Due from the Private Label Group 680,000 - 680,000 e 680,000 -
Inventories - 1,102,645 1,102,645 1,102,645
Prepaid expenses 15,909 33,652 49,561 49,561
Total current assets 1,197,515 2,825,060 4,022,575 6,569,261

Property and equipment 31,582 537,457 569,039 569,039

Restricted cash - 250,000 250,000 250,000

Deferred costs 126,297 - 126,297 j 30,000 a 27,917 -
b 13,333
l 85,047
n 30,000
Goodwill - - - d 4,029,654 4,029,654

Other assets 37,715 38,303 76,018 d 31,497 44,521

$ 1,393,109 $ 3,650,820 $ 5,043,929 $ 11,462,475

LIABILITIES AND
STOCKHOLDERS' EQUITY

Cash overdraft $ - $ 65,107 $ 65,107 $ 65,107
Accounts payable - 1,006,944 1,006,944 1,006,944
Accrued expenses 289,399 640,190 929,589 a 29,746 d 47,063 717,146
b 13,964
m 186,770
n 29,026
Customer advances - 155,142 155,142 155,142
Advances by Azurel Ltd. - 680,000 680,000 e 680,000 -
Current portion of long-term debt 671,221 169,989 841,210 a 449,917 k 225,000 181,293
f 210,000 j 300,000
n 525,000
Current portion of capital lease
obligations - 11,243 11,243 11,243
Total current liabilities 960,620 2,728,615 3,689,235 2,136,875

Long-term debt 200,000 1,963,335 2,163,335 b 200,000 d 1,758,750 3,564,585
n 157,500
Capital lease obligations - 22,464 22,464 22,464
200,000 1,985,799 2,185,799 3,587,049

Stockholders' equity (deficit) 232,489 (1,063,594) (831,105) k 225,000 a 214,120 5,738,551
n 110,974 b 176,276
c 216,640
d 1,988,594
f 210,000
l 4,100,000

$ 1,393,109 $ 3,650,820 $ 5,043,929 $ 11,549,238 $ 11,549,238 $ 11,462,475
=========== =========== =========== ============ ============ ============

PRO FORMA FINANCIAL STATEMENTS

The following pro forma financial statements at June 30, 1996 and for the six
months ended of the Company and Private Label are based on historical
financial data of the aforementioned companies, and giving effect to the
acquisition of Private Label as if the acquisition had occurred on January 1,
1996 for the pro forma statement of operations and as of June 30, 1996 for the
pro forma balance sheet. These pro forma financial statements are not
necessarily indicative of the results that will be achieved for future periods.
These pro forma financial statements should be read in conjunction with the
Company's financial statements and the financial statements of Private Label
and included elsewhere in this Prospectus.

Pro forma Statement of Operations (Unaudited)

Six Months Ended June 30, 1996
Azurel Private Label Combined Adjustments As adjusted
Dr Cr
(Historical)

Net Sales $ - $ 4,964,430 $ 4,964,430 $ 4,964,430

Cost of Sales - 4,018,303 4,018,303 4,018,303

Gross Profit - 946,127 946,127 946,127

Selling, General and
Administrative Expenses 415,651 969,231 1,384,882 1,384,882

Amortization expense - - - g 100,742 100,742

Income (Loss) From
Operation (415,651) (23,104) (438,755) (539,497)

Other Expenses:

Interest Expense 317,584 113,320 430,904 h 79,144 i 216,728 293,320

317,584 113,320 430,904 293,320

Net (Loss) $ (733,235) $ (136,424) $ (869,659) $ (832,817)

PRO FORMA FINANCIAL STATEMENTS

The following pro forma financial statements for the year ended
December 31, 1995 of the Company and Private Label are based
on historical financial data of the aforementioned companies, as if
the acquisition of Private Label had occurred at the beginning of
the fiscal year ended December 31, 1995 for the statement of
operations. These pro forma financial statements are not necessarily
indicative of the results that will be achieved for future periods.
These pro forma financial statements and the notes thereto should
be read in conjunction with the Company's financial statements and
the financial statements of Private Label included elsewhere in
this Prospectus.

Pro forma Statement of Operations (Unaudited)

Year Ended December 31, 1995
Azurel Private Label Combined Adjustments As adjusted
Dr Cr
(Historical)

Net Sales $ - $ 8,413,225 $ 8,413,225 $ 8,413,225

Cost of Sales - 6,627,898 6,627,898 6,627,898

Gross Profit - 1,785,327 1,785,327 1,785,327

Selling, General and
Administrative Expenses 259,637 2,103,320 2,362,957 2,362,957

Amortization expense - - - g 201,483 201,483

Income (Loss) From
Operation (259,637) (317,993) (577,630) (779,113)

Other Expenses:

Interest Expense 17,559 197,663 215,222 h 158,288 i 9,249 364,261

17,559 197,663 215,222 364,261

Net (Loss) $ (277,196) $ (515,656) $ (792,852) $ (1,143,374)

NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS

(1) The unaudited pro forma balance sheet at June 30, 1996 and statement of
operations for the six months ended June 30, 1996 and year ended
December 31, 1995 presents pro forma results of operations of the Company
and the Private Label Group as if the acquisition of the Private Label
Group had occurred at the beginning of the period. It should not be
considered indicative of the results that would have been achieved had the
acquisition actually occurred on such date.

(2) The acquisition of the Private Label Group has been accounted for under the
purchase method of accounting. The excess of the purchase price over net
assets acquired has been allocated to goodwill and amortized over 20 years.

(3) The acquisition of Scent has been accounted for as a distribution from
stockholders' equity.

(4) The following adjustments to the pro forma financial statements described
in (a) through (k) below reflect transactions post June 30, 1996 that have
a material impact on the financial statements:

(a) The payment of bridge loans plus interest totaling $237,626 and the
conversion of the remaining bridges plus interest totaling $243,550
to common stock, less commissions of $24,355.

(b) The conversion of a note plus interest of $213,964 to common stock for
$2.00 per share.

(d) Purchase of the Private Label Group for (i) $131,250 payable in cash,
(ii) issuance of the Company's 9% note in the principal amount for
$1,758,750, payable in nine installments of principal and interest,
(iii) payment of finders fee totaling $79,563 payable in cash of
$22,500 and the remaining balance due within one year of $47,063 plus
the issuance of 5,000 shares of common stock at $2.00 per share and
(iv) the issuance of 180,000 shares of common stock at $5.00 per share
totaling $900,000.

(e) Elimination of advances from the Company to the Private Label Group.

(f) The conversion of a $210,000 note to common stock at $1.00 per share.

(g) The amortization of goodwill arising from the acquisition of the
Private Label Group over 20 years.

(h) To record the interest on notes totaling $1,758,750 from the Private
Label Group acquisition at 9% per annum.

(i) Elimination of interest expense on long term debt due to payment or
conversion of notes.

(j) Proceeds of $300,000 from financing net of commissions and fees of
$30,000.

(k) Purchase of Scent with a $225,000 promissory note bearing interest
at 9%.

(5) The following adjustments to the pro forma financial statements described
in (l) through (n) below reflect gross proceeds and applications of the
net proceeds of the Offering:

(l) The receipt of the gross proceeds of the Offering, $5,000,000, less
estimated costs of the Offering, including the Underwriters' discounts
and commissions and the Representative's non-accountable expense
allowance, $900,000.

(m) Payment of consulting fees $186,770 from the proceeds of the offering.

(n) Payment of the following notes and interest: (i) first installment of
$157,500 on notes from the Private Label Group acquisition plus
interest (ii) principal and interest due under promissory note of
$225,000 (iii) principal and interest due under promissory notes of
$300,000 (iv) interest due under note assumption of $210,000 (see (f)
above).

No underwriter, dealer, salesman or
other person has been authorized to
give any information or to make any
representations other than those
contained in this Prospectus, and,
if given or made, such information
or representation must not be relied
upon as having been authorized by the
Company or the Underwriter. This
Prospectus does not constitute an AZUREL LTD.
offer or solicitation to any person 1,000,000 Shares of Common Stock and
in any jurisdiction where such offer 1,000,000 Redeemable Common Stock
or solicitation would be unlawful. Purchase Warrants
Neither delivery of this Prospectus
nor any sale hereunder shall, under
any circumstances, create any implication
that there has been no change in the
affairs of the Company since the date
hereof.

TABLE OF CONTENTS
Page
Prospectus Summary.....................
Risk Factors...........................
Dilution...............................
Capitalization.........................
Use of Proceeds........................
Dividend Policy........................
Summary of Financial
Information...........................
Management's Discussion and
Analysis of Financial
Condition and Results
of Operations......................... PROSPECTUS
Business................................
Management..............................
Principal Stockholders..................
Certain Transactions....................
Description of Securities...............
Underwriting............................
Concurrent Registration of
Securities.............................
Legal Matters...........................
Experts.................................
Additional Information.................. __________ , 1996
Financial Statements....................

Until _______, 1996 (25 days after the
date of this Prospectus), all dealers
effecting transactions in the Company's
securities, whether or not participating
in this distribution, may be required to
deliver a Prospectus. This is in addition
to the obligation of dealers to deliver a
Prospectus with respect to their unsold
allotments or subscriptions.

[Alternate Page for Selling Securityholder Prospectus]

SUBJECT TO COMPLETION, DATED _________, 1996

PROSPECTUS

AZUREL LTD.
1,478,747 Shares of Common Stock, $.0001 par value
300,000 Redeemable Common Stock Purchase Warrants

This prospectus relates to 1,478,747 shares (the "Selling
Securityholders' Shares") of Common Stock, $.0001 par value per share (the
"Common Stock") of Azurel Ltd. (the "Company"), which are being offered for sale
by certain selling securityholders (the "Selling Shareholders"). This prospectus
also relates to 300,000 Redeemable Warrants (the "Selling Securityholders'
Warrants") and the 300,000 shares of Common Stock issuable upon exercise thereof
which are being offered for sale by certain Selling Warrantholders (the "Selling
Warrantholders"); the Selling Shareholders and Selling Warrantholders are
referred to collectively as the "Selling Securityholders." Each Redeemable
Warrant entitles the holder to purchase one share of Common Stock at $___ per
share for a period of _____ years commencing ____ years from the date of this
Prospectus. (The Selling Shareholders' Shares and Selling Warrantholders
Warrants are collectively referred to as the Securityholders' Securities). The
Selling Shareholders may not sell or otherwise dispose of any of the Selling
Securityholders' Shares for a period of between six (6) months and twenty-four
(24) months after the Effective Date without the prior written consent of the
Underwriter. The Selling Shareholders may not sell or otherwise dispose of any
such Securityholders' Shares. The Selling Warrantholders may not sell or
otherwise dispose of any of the Selling Securityholders' Warrants for a period
of between three (3) months and twenty-four (24) months after the Effective Date
without the prior written consent of the Underwriter. See "Selling
Securityholders and Plan of Distribution."

The Company will not receive any of the proceeds from the sales of the
Selling Securityholders' Securities by the Selling Securityholders. The Company
is paying the expenses incurred in connection with the registration for sale of
the Selling Securityholders' Securities. The Selling Securityholders' Securities
may be offered from time to time by the Selling Securityholders, their pledges
and/or their donees (who will be identified in a prospectus supplement as
appropriate), through ordinary brokerage transactions in the over-the-counter
market, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale at negotiated prices.

The Selling Securityholders, their pledges and/or their donees, may be
deemed to be "Underwriters" as defined in the Securities Act of 1933, as amended
(the "Securities Act"). If any broker-dealers are used by the Selling
Securityholders, their pledgees and/or their donees, any commissions paid to
broker-dealers and, if broker-dealers purchase any Selling Securityholders'
Securities as principals, any profits received by such broker-dealers on the
resale of the Selling Securityholders' Securities may be deemed to be
underwriting discounts or commissions under the Securities Act. In addition, any
profits realized by the Selling Securityholders, their pledgees and/or their
donees, may be deemed to be underwriting commissions. All costs, expenses and
fees in connection with the registration of the Selling Securityholders'
Securities will be borne by the Company except for any commission paid to

broker-dealers.

The Selling Securityholders' Securities offered by the Prospectus may
be sold from time to time by the Selling Securityholders, their pledgees and/or
their donees. No underwriting arrangements have been entered into by the Selling
Securityholders. The distribution of the Selling Securityholders' Securities by
the Selling Securityholders, their pledgees and/or their donees, may be effected
in one or more transactions that may take place on the over-the-counter market,
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more dealers for resale of such shares as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the Selling
Securityholders, their pledgees and/or their donees, in connections with sales
of the Selling Securityholders' Securities.

On the date of this Prospectus, a registration statement under the
Securities Act with respect to an underwritten public offering of 1,000,000
shares of Common Stock and 1,000,000 Redeemable Warrants (without giving effect
to the Underwriters' over-allotment option to purchase an additional 150,000
shares of Common Stock and/or 150,000 Redeemable Warrants (the "Over-Allotment
Option") was declared effective by the Securities and Exchange Commission. In
connection with the Offering of the Common stock and Redeemable Warrants, the
Company granted the Underwriter warrants to purchase 100,000 shares of Common
Stock and/or 100,000 Redeemable Warrants (the "Underwriter's Warrant").

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

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OR RISK.
SEE "RISK FACTORS" AND "DILUTION" COMMENCING ON PAGES 11 AND 21, RESPECTIVELY,
OF THIS PROSPECTUS.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSIONER ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

[Alternate Page for Selling Securityholder Prospectus]

THE OFFERING

Securities Offered (1) 1,478,747 shares of Common Stock and 300,000
Redeemable Warrants

Common Stock Outstanding Before 3,878,747
the Offering(2)

Common Stock Outstanding After the 5,058,747
Offering(2)(3)

Redeemable Warrants Outstanding 1,300,000
After the Offering(4)

Terms of the Redeemable Warrants Each Redeemable Warrant is exercisable from
one year of the date of this Prospectus to
five years of the date of this Prospectus
and entitles the holder thereof to purchase
one share of Common Stock at an exercise
price of $___, [120% of the initial public
offering price per share of Common Stock]
subject to adjustment in certain
circumstances (the "Exercise Price"). The
Redeemable Warrants are redeemable by the
Company, at any time commencing one year
after the date of this Prospectus, at a
price of $.10 per Redeemable Warrant,
provided that the closing bid price of the
Common Stock on NASDAQ exceeds 150% of the
Exercise Price for a period not less than 20
trading days in any 30 trading day period
ending not more than 15 days prior to the
day on which the Company gives notice of
redemption. See "Description of
Securities-Redeemable Warrants."

Use of Proceeds The Company intends to use the net proceeds
of this Offering for repayment of
indebtedness incurred in connection with
acquisitions and bridge financings,
marketing, to purchase inventory, to pay
accrued expenses and for working capital.

Risk Factors The Securities involve a __________ , 1996
and immediate substantial dilution and should
not be purchased by investors who cannot
afford to lose their entire investment.
Prospective investors should consider
carefully the factors set forth under
"Risk Factors" and "Dilution."

Proposed NASDAQ Common Stock - AZUR
Symbols (5) Redeemable Warrants - AZURW

(1) Does not include (i) 1,000,000 shares of Common Stock, and (ii)
1,000,000 shares of Common stock issuable upon exercise of Redeemable
Warrants being offered by the Company.

(2) Does not include (i) up to 750,000 shares of Common Stock reserved for
issuance pursuant to stock options which may be granted pursuant to the
Company's 1996 Stock Option Plan, (ii) 270,000 shares of Common Stock
reserved for issuance pursuant to options and warrants issued in
connection with financing and consulting agreements or (iii) 300,000
shares of Common Stock reserved for issuance pursuant to Redeemable
Warrants being offered hereby. See "Management - Stock Option Plan" and
"Certain Transactions."

(3) Does not include (i) up to an additional 150,000 shares of Common Stock
and 150,000 Redeemable Warrants issuable upon exercise of the
Underwriter's Over-Allotment Option; (ii) 150,000 shares of Common
Stock issuable upon exercise of the Redeemable Warrants included in the
Underwriter's Over-Allotment Option; (iii) 1,000,000 shares of Common
Stock reserved for issuance upon the exercise of the Redeemable
Warrants offered by the Company; (iv) up to 100,000 shares of Common
Stock issuable upon exercise of the Underwriter's Warrants or (v) up to
100,000 shares of Common Stock issuable upon exercise of the Redeemable
Warrants included in the Underwriter's Warrants. Includes (i) 1,000,000
shares of Common Stock offered by the Company and (ii) 180,000 shares
of Common Stock issuable upon the closing of this Offering in
connection with the acquisition of the companies comprising the Private
Label Group. See "Description of Securities," "Underwriting,"
"Concurrent Registration of Securities" and "Certain Transactions."

(4) Does not include (i) 150,000 Redeemable Warrants issuable upon exercise
of the Underwriter's Over-Allotment Option or (ii) 100,000 Redeemable
Warrants issuable upon exercise of the Underwriter's Warrants. Includes
1,000,000 Redeemable Warrants offered by the Company. See
"Underwriting."

(5) The proposed trading symbols do not imply that an active trading market
will develop for the Common Stock or Redeemable Warrants upon the
completion of this Offering.

[Alternate Page for Selling Securityholder Prospectus]

SELLING SECURITYHOLDERS AND PLAN OF DISTRIBUTION

The Company has issued an aggregate of 1,478,747 shares of Common Stock
to the Selling Securityholders and 300,000 Redeemable Warrants that are being
offered pursuant to this Prospectus. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources." The Selling Securityholders have advised the Company that sales of
the shares of Common Stock and Redeemable Warrants may be effected form
time-to-time by themselves, their pledgees and/or their donees, in transactions
(which may include block transactions) in the over-the-counter market, in
negotiated transactions, through the writing of options on the Common Stock and
Redeemable Warrants, or a combination of such methods of sale, at fixed prices
that may be changed, at market prices prevailing at the time of sale, or at
negotiated prices. The Selling Securityholders, their pledgees and/or their
donees, may effect such transactions by selling Common Stock and Redeemable
Warrants directly to purchasers or through broker-dealers that may act as agents
or principals. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Securityholder and/or the
purchasers of shares of Common Stock for whom such broker-dealers may act as
agents or to whom they sell as principals, or both.

The Selling Securityholders, their pledgees and/or their donees, any
broker-dealers that act in connection with the sale of the shares of Common
Stock and Redeemable Warrants as principals may be deemed to be "Underwriters"
within the meaning of Section 2(11) of the Securities Act and any commissions
received by them and any profit on the resale of the shares of Common Stock and
Redeemable Warrants as principals might be deemed to be underwriting discounts
and commissions under the Securities Act. The Selling Securityholders'
Securities being registered on behalf of the Selling Securityholders are
restricted securities while held by the Selling Securityholders and the resale
of such securities by the Selling Securityholders is subject to prospectus
delivery and other requirements of the Act. The Selling Securityholders, their
pledgees and/or their donees, may agree to indemnify any agent, dealer or
broker-dealer who participates in transactions involving sale of the shares of
Common Stock and Redeemable Warrants against certain liabilities, including
liabilities arising under the Securities Act. The Company will not receive any
proceed from the sales of the Selling Securityholders' Shares by the Selling
Securityholders. Sales of the Selling Securityholders' Securities by the Selling
Securityholders, or even the potential of such sales, would likely have an
adverse effect on the market price of the Company's Securities.

At the time a particular offer of the securities is made by or on
behalf of the Selling Securityholders, to the extent required, a prospectus
supplement will be distributed which will set forth the number of shares being
offered and the terms of the Offering, including the name or names of any
Underwriters, dealers or agents, the purchase price paid by any Underwriters for
shares purchased from the selling stockholders and any discounts, commissions or
concessions allowed or reallowed or paid to dealers, and the proposed selling
price to the public.

Under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the regulations thereto, any person engaged in distribution of
Company securities offered by this

prospectus may not simultaneously engage in market-making activities with
respect to Company securities during the applicable "cooling off" period prior
to the commencement of such distribution. In addition, and without limiting the
foregoing, the Selling Securityholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including without
limitation, Rules 10b-6 and 10b-7, in connection with transactions in the
shares, which provisions may limit the timing of purchases and sales of the
Company's securities by the Selling Securityholders.

The following table sets forth certain information with respect to
persons for whom the Company is registering the Selling Securityholders' Shares
for resale to the public. The Company will not receive any of the proceeds from
the sale of the Selling Securityholders' Securities. Beneficial ownership of the
Selling Securityholders' Securities by such Selling Securityholders after the
Offering will depend on the number of Selling Securityholders' Securities sold
by each Selling Securityholder. The securities held by the Selling
Securityholders are restricted securities while held by such Selling
Securityholders and the resale of such securities by the Selling Securityholders
is subject to prospectus delivery and other requirements of the Act. The Selling
Securityholders' Securities offered by the Selling Securityholders are not being
underwritten by the Underwriter.

[Alternate Page for Selling Securityholder Prospectus]

Beneficial Beneficial
Ownership Ownership
Prior to Selling After Selling
Securityholder's Amount Securityholder's
Offering Being Registered Offering
------------------------------- ------------------------- ------------------------
Redeem- Redeem-
Redeemable able able
Securityholder Shares Warrants (1) Shares Warrants (1) Shares Warrants (1)
- -------------- ------ -------- ------ -------- ------ --------
Margaret Amarante 0 50,000 0 50,000 0 0
Vahik Babaian 50,000 0 50,000 0 0 0
David Edward Blockstein 12,500 0 12,500 0 0 0
Bola Business Ltd. 25,000 50,000 25,000 0 0 50,000
Richard J. Brown 12,500 0 12,500 0 0 0
Larry Bucsek 25,000 0 25,000 0 0 0
Anthony Cirillo IRA 7,500 0 7,500 0 0 0
Anthony Cirillo 5,000 0 5,000 0 0 0
David's Art, Inc. 25,000 0 25,000 0 0 0
Drew Dellinger 26,220 0 26,220 0 0 0
ETR & Associates, Inc. 25,000 150,000 25,000 0 0 150,000
Derek Ferguson 25,000 0 25,000 0 0 0
Jeffrey P. & Jacalyn K. Flack 25,000 0 25,000 0 0 0
Mark Frankel 25,000 0 25,000 0 0 0
Steven M. Frankel 25,000 0 25,000 0 0 0
Shelby Goldring 10,358 0 10,358 0 0 0
Ronald I. Harris 10,358 0 10,358 0 0 0
Angela James 0 50,000 0 50,000 0 0
Fred Kassner 250,000 0 250,000 0 0 0
William Kennedy 62,500 0 62,500 0 0 0
Leona Financial Ventures, Inc. 25,000 0 25,000 0 0 0
Bruce Levenbrook 10,358 0 10,358 0 0 0
Leventhal, Paget LLC 25,000 0 25,000 0 0 0
Ronald S. Mack IRA 10,321 0 10,321 0 0 0
Metco Investors LLC 150,000 75,000 150,000 25,000 0 50,000
Michalaur International 18,750 50,000 0 50,000 18,7500 0
Robert Molfetta 0 25,000 0 25,000 0 0
Robert E. Murello 0 50,000 0 50,000 0 0
Betty Presley 26,216 0 26,216 0 0 0
Wayne Robbins 26,220 0 26,220 0 0 0
Robert J. Roehrich 25,000 0 25,000 0 0 0
Alan J. Rubin 25,000 0 25,000 0 0 0
David E. Ruggieri 50,000 0 50,000 0 0 0

Robert J. Stein 12,500 0 12,500 0 0 0
Tusany Investment &
Trade S.A. 1,559,355 50,000 309,355 50,000 1,250,000 0
Woodward Partners 50,000 0 50,000 0 0 0
Wolfe Financial Group, Inc. DIP 73,750 0 73,750 0 0 0
Louis D. Zachau 13,091 0 13,091 0 0 0

- ------------
<FN>
(1) Represent Redeemable Warrants acquired by the Selling Securityholders
in exchange for warrants containing substantially identical terms
pursuant to an exchange exempt from registration under Section 3(a)(9) of
the Securities Act.
</FN>

II-16

[Alternate Page for Selling Securityholder Prospectus]

LEGAL MATTERS

EXPERTS

ADDITIONAL INFORMATION

No underwriter, dealer, salesman or
other person has been authorized to
give any information or to make any
representations other than those
contained in this Prospectus, and,
if given or made, such information or
representation must not be relied upon
as having been authorized by the
Company or the Underwriter. This AZUREL LTD.
Prospectus does not constitute an 1,478,747 Shares of Common Stock and
offer or solicitation to any person 300,000 Redeemable Common Stock
in any jurisdiction where such offer Purchase Warrants
or solicitation would be unlawful.
Neither delivery of this Prospectus
nor any sale hereunder shall, under
any circumstances, create any implication
that there has been no change in the
affairs of the Company since the date
hereof.

TABLE OF CONTENTS
Page
Prospectus Summary.....................
Risk Factors...........................
Dilution...............................
Capitalization.........................
Use of Proceeds........................
Dividend Policy........................
Summary of Financial
Information...........................
Management's Discussion and
Analysis of Financial
Condition and Results
of Operations........................ PROSPECTUS
Business...............................
Management.............................
Principal Stockholders.................
Certain Transactions...................
Description of Securities..............
Underwriting...........................
Concurrent Registration of
Securities............................
Legal Matters..........................
Experts................................ _____________ , 1996
Additional Information.................
Financial Statements...................

Until _____, 1996, (25 days after
the date of this Prospectus, all dealers
effecting transactions in the Company's
securities, whether or not participating
in this distribution, may be required to
deliver a Prospectus. This is in
addition to the obligation of dealers
to deliver a Prospectus with respect to
their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law, among other
things, and subject to certain conditions, authorizes the Company to indemnify
its officers and directors against certain liabilities and expenses incurred by
such persons in connection with claims made by reason of their being such an
officer or director. The Certificate of Incorporation and By-Laws of the Company
provide for indemnification of its officers and directors to the full extent
authorized by law.

Reference is made to the Underwriting Agreement, the proposed form of
which is filed as Exhibit 1.1, pursuant to which the Underwriter agrees to
indemnify the directors and certain officers of the Registrant and certain other
persons against certain civil liabilities.

Item 25. Other Expenses of Issuance and Distribution

The following is a statement of the estimated expenses to be paid by
the Company, after payment of commissions and expenses to the Underwriter, in
connection with the issuance and distribution of the securities being
registered:

SEC Registration Fee...................................................$7,500*
NASD Filing Fee.........................................................3,000*
NASDAQ Filing Fee......................................................10,000*
Printing and Engraving Expenses........................................50,000*
Legal Fees and Expenses (other than blue sky).........................120,000*
Accounting Fees and Expenses..........................................110,000*
Blue Sky Fees and Expenses.............................................35,000*
Transfer Agent and Registrar Fees and Expenses..........................4,500*
Miscellaneous..........................................................10,000*
TOTAL.......................................................$350,000*
*Estimated

Item 26. Recent Sales of Unregistered Securities

During the past three years, the Company has issued securities to a
limited number of persons, without registering the securities under the
Securities Act. There were no underwriting discounts or commissions paid in
connection with the issuance of any of said securities, except as noted.

In reliance upon Section 4(2) of the Securities Act, which provides an
exemption for a

II-1

transaction not involving a public offering, in June and September 1995, the
Company issued an aggregate of 2,175,000 shares of Common Stock to the twelve
founders of the Company: Gerard Semhon, Constantine Bezas, Joseph Truitt Bell,
Van Christakos, Diane Papas, Tusany Investment & Trade, S.A., Edward Pedersen,
Kenneth Lee, James G. Cooley, Michalaur International, Valerie A. Profitt and
Leslie Bines.

The Company issued an aggregate of 75,000 shares of Common Stock to the
Consulting Group in 1995 in exchange for consulting services. The issuance was
made in reliance upon Section 4(2) of the Securities Act, which provides an
exemption for a transaction not involving a public offering.

In 1995 and 1996, the Company issued 100,000 shares of Common Stock to
Metco in exchange for consulting services. The issuance was made in reliance
upon Section 4(2) of the Securities Act, which provides an exemption for a
transaction not involving a public offering.

In July 1995, the Company granted ETR an option to purchase 150,000
shares of Common stock at $1.00 per share, which expires in July 2000, as
additional consideration for a loan. The issuance was made in reliance upon
Section 4(2) of the Securities Act, which provides an exemption for a
transaction not involving a public offering.

In September 1995, the Company issued Bola 25,000 shares of Common
Stock and granted Bola the option to purchase 50,000 shares of Common Stock at
$1.00 per share, which expires in September 2002, as additional consideration
for a loan. The issuance was made in reliance upon Section 4(2) of the
Securities Act, which provides an exemption for a transaction not involving a
public offering.

In December 1995, the Company completed a $250,000 private placement of
units in reliance upon Rule 506 of Regulation D of the Securities Act, which
provides an exemption for a transaction not involving a public offering. Each
unit consisted of (i) the Company's 18 month 12% promissory note in the original
principal amount of $50,000, and (ii) 25,000 shares of Common Stock. The Company
received $210,000 of net proceeds after deducting expenses of $7,500 and
commissions of $32,500 to the Underwriter for acting as placement agent. In
connection with this private placement, the Company issued the securities
described in the following table to 11 unaffiliated investors, each an
"accredited investor" within the meaning of Regulation D of the Securities Act:

Dollar Amount of Number of
Name Note Purchased Shares Issued

Drew Dellinger $25,000 12,500
Wayne Robbins $25,000 12,500
Betty Presley $25,000 12,500
William Kennedy $25,000 12,500

II-2

Louis D. Zachau $12,500 6,250
Larry Bucsek $50,000 25,000
Ronald I. Harris $10,000 5,000
Shelby Goldring $10,000 5,000
Bruce Levenbrook $10,000 5,000
Wolf Financial Group Inc., DIP $47,500 23,750
Ronald S. Mack - IRA $10,000 5,000

In February 1996, the Company completed a $250,000 private placement of
units in reliance upon Rule 506 of Regulation D of the Securities Act, which
provides an exemption for a transaction not involving a public offering. Each
unit consisted of (i) the Company's 18 month 12% promissory note in the original
principal amount of $50,000, and (ii) 25,000 shares of Common Stock. The Company
received $210,000 of net proceeds (after deducting expenses of $7,500 and
commissions of $32,500 to the Underwriter for acting as the placement agent. In
connection with this private placement, the Company issued the securities
described in the following table to two affiliated and one unaffiliated
investors, each an "accredited investor" within the meaning of Regulation D of
the Securities Act:

Dollar Amount Number of
of Note Shares
Name Purchased Issued

Wolf Financial Group Inc., DIP $100,000 50,000
Bola Business Ltd. $ 50,000 25,000
Tusany Investment & Trade, S.A. $100,000 50,000

In February 1996, the Company issued 10,000 shares of Common Stock in
exchange for legal services rendered to the Company. The issuance was made in
reliance upon Section 4(2) of the Securities Act, which provides exemptions for
transactions not involving a public offering.

In March 1996, the Company issued Metco 25,000 shares of Common Stock
and an option to purchase 50,000 shares of Common Stock at $1.25 per share,
which expires in January 1999, in consideration for a loan. In March 1996, the
Company issued an additional 25,000 shares of Common Stock to Metco as a penalty
for the Company's late payment of a portion of this loan. These issuances were
made in reliance upon Section 4(2) of the Securities Act, which provides an
exemption for a transaction not involving a public offering.

In July 1996, the Company completed a private placement of 978,747
shares of Common Stock at $2.00 per share in reliance upon Rule 506 of
Regulation D of the Securities Act, which provides an exemption for a
transaction not involving a public offering. The Company received $1,314,950 of
net proceeds after deducting expenses of $11,050 and commissions of $174,000 to
the Underwriter for acting as placement agent. As part of this private
placement, certain

II-3

noteholders of the Company converted $457,494 principal amount and interest into
Common Stock. In connection with this private placement, the Company issued the
securities described in the following table to 24 unaffiliated and one
affiliated investor, each an "accredited investor" within the meaning of
Regulation D of the Securities Act:

Number
of Shares
Name Purchase Price of Common Stock

Alan J. Rubin $50,000 25,000
Vahik Babaian $100,000 50,000
William M. Kennedy $100,000 50,000
David's Art, Inc. d/b/a Art Connection $50,000 25,000
Derek C. Ferguson $50,000 25,000
Mark Frankel $50,000 25,000
Steven M. Frankel $50,000 25,000
Levanthal, Paget LLC $50,000 25,000
Fred Kassner $500,000 250,000
David E. Ruggieri $100,000 50,000
Jeffrey P. & Jacalyn K. Flack $50,000 25,000
David Edward Blockstein $25,000 12,500
Robert J. Roehrich $50,000 25,000
Richard J. Brown $25,000 12,500
Robert J. Stein $25,000 12,500
Anthony and Maya Cirillo $25,000 12,500
Tusany Investment & Trade, S.A. $518,710 259,355
Drew Dellinger $27,440 13,720
Wayne Robbins $27,440 13,720
Betty Presley $27,432 13,716
Louis Zachau $13,682 6,841
Ronald Harris $10,716 5,358
Shelby Goldring $10,716 5,358
Bruce Levenbrook $10,716 5,358
Ronald Mack-IRA $10,642 5,321

In October 1996, the Company completed a $300,000 private placement of
units in reliance upon Rule 506 of Regulation D of the Securities Act, which
provides an exemption for a transaction not involving a public offering. Each
unit consisted of (i) the Company's 12 month 10% promissory note in the original
principal amount of $25,000, and (ii) a warrant to purchase up to 25,000 shares
of Common Stock. The Company received net proceeds of $270,000 after deducting
commissions of $30,000 to the Underwriter for acting as placement agent. In
connection with this private placement, the Company issued the securities
described

II-4

in the following table to three affiliated and four unaffiliated investors, each
an "accredited investor" within the meaning of Regulation D of the Securities
Act:

Dollar Amount Number of
Name of Note Purchased Warrants Issued

Michalaur International $50,000 50,000
Robert E. Murello $50,000 50,000
Margaret Amarante $50,000 50,000
Angela James $50,000 50,000
Metco Investors LLC $25,000 25,000
Robert Molfetta $25,000 25,000
Tusany Investment & Trade,
S.A. $50,000 50,000

Item 27. List of Exhibits

Exhibit Number Description of Exhibit

1.1* Form of Underwriting Agreement

1.2* Form of Financial Advisory and Investment Banking Agreement.

3.1 Certificate of Incorporation of the Registrant.

3.2 By-Laws of the Registrant.

4.1* Specimen Common Stock Certificate.

4.2* Specimen Redeemable Common Stock Purchase Warrant.

4.3* Form of Public Warrant Agreement.

4.4* Form of Warrant Agreement between the Registrant and Network
1, including Form of Underwriter's Warrant Certificate.

5.1 Opinion of Gersten, Savage, Kaplowitz & Curtin, LLP.

10.1 Employment Agreement between the Registrant and Gerard
Semhon dated October 28, 1996.

10.2 Employment Agreement between the Registrant and Michael J.
Assante dated August 22, 1996.

II-5

10.3* Lease for 509 Madison Avenue, New York, New York 10022 dated
April 29, 1996.

10.4* Lease for 20-10 Maple Avenue, Fair Lawn, New Jersey dated
April 11, 1991.

10.5* License Agreement between the Registrant and Europe Craft
Imports, Inc. dated May 15, 1996.

10.6 Stock Purchase and Sale Agreement dated July 17, 1996 by and
among Michael J. Assante, Azurel Ltd., Private Label
Cosmetics, Inc., P.L.C. Specialties, Inc., International
Cosmetic Group, Inc. and Fashion Laboratories, Inc.

10.7 Agreement by and between Scent Overnight, Inc. and Scent 123,
Inc. dated September 9, 1996.

10.8* Registrant's 1996 Stock Option Plan.

21.1* Subsidiaries of the Registrant.

23.1 Consent of Independent Certified Public Accountants for the
Registrant.

23.2* Consent of Gersten, Savage, Kaplowitz & Curtin, LLP counsel
for Registrant (included in Exhibit 5.1).

24.1 Power of Attorney (Included with signature page).

* To be filed by amendment.

Item 28. Undertakings

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a) of the Securities
Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material changes to such information in the registration statement:

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

The undersigned Registrant hereby undertakes to provide to the underwriter at
the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to any charter provision, by-law contract
arrangements statute, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

For purposes of determining any liability under the Securities Act, treat the
information omitted from the from of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h), under the Securities Act as part of this registration statement as of
the time the Commission declared it effective.

For purposes of determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement at that time as the initial bona fide offering of those
securities.

II-7

SIGNATURES

In accordance with the requirements to the Securities Act of 1933, the
Registrant hereby certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form SB-2 and has authorized this
Registration Statement to be signed on its behalf by the undersigned, in the
City of New York, State of New York on ____________, 1996.

AZUREL LTD.

By:/s/ Gerard Semhon
Gerard Semhon, Chief Executive
Officer and Chairman of the Board
(Principal Executive Officer,
Principal Financial and Accounting
Officer)

KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Gerard Semhon, Chief Executive Officer,
his or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, and
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and to
file the same and all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting said
attorney-in-fact and agent, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or her substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

Signature Title Date

/s/ Gerard Semhon Chief Executive Officer and _______, 1996
Gerard Semhon Chairman of the Board (Principal
Executive Officer, Principal
Financial and Accounting Officer)

/s/ Constantine Bezas President and Director _______, 1996
Constantine Bezas

/s/ Joseph Truitt Bell Executive Vice President and Director _______, 1996
Joseph Truitt Bell

/s/ Van Christakos Secretary, Treasurer and Director _______, 1996
Van Christakos