# UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

# FORM 10-QSB

|[X] | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
|--- | --------------------------------------------------------------------------------

| | For the quarterly period ended April 30, 2003
| | ---------------------------------------------

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

| | For the transition period from ___________ to __________
| | --------------------------------------------------------

Commission File
Number: 000-26439

Stealth MediaLabs, Inc.

(Exact name of small business issuer as specified in its charter)


|                                                              |  | 
|------------------------------------------------------------- |  | 
|NEVADA                                                        |  | 
|(State or other jurisdiction ofincorporation or organization) |  | 

11475 Commercial
Ave., Suite 11, Richmond, IL                
        60071(Address
of principal executive offices)              
              
          (Zip Code)

Issuers
telephone number: (847) 356-0799

APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCYPROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check
whether the registrant filed all documents and reports required to be filed by Section
12, 13 or 15(d) of the Exchange Act after the distribution of securities under a
plan confirmed by a court. Yes [  ] No [X]

APPLICABLE
ONLY TO CORPORATE ISSUERS

State
the number of shares outstanding of each of the issuers classes of common equity,
as of the last practicable date: 21,602,184 shares at April 30, 2003.

Transitional
Small Business Disclosure Format (check one): Yes [  ] No [X]

---

# Stealth MediaLabs,
Inc.

# TABLE OF CONTENTS

PART I. FINANCIAL
INFORMATION

Stealth MediaLabs,
Inc.

THE COMPANY DID
NOT OBTAIN A REVIEW OF THESE INTERIM FINANCIAL STATEMENTS BY AN INDEPENDENT ACCOUNTANT
USING PROFESSIONAL REVIEW STANDARDS AND PROCEDURES, ALTHOUGH THAT REVIEW IS REQUIRED
BY PARAGRAPH (b) OF ITEM 310 OF REGULATION S-B.

|                                                                   | 
|------------------------------------------------------------------ | 
|                                                                   | 
|Item 1. Condensed Consolidated Financial Statements:               | 
|Condensed Consolidated Balance Sheet
     as of                    | 
|April 30, 2003 (unaudited) and October
     31, 2002               | 
|Condensed Consolidated Statements of
     Operations               | 
|for the three months ended April 30, 2003                          | 
|and the cumulative period from                                     | 
|September 25, 2000 to January 31, 2003
     (unaudited)            | 
|Condensed Consolidated Statements of
     Cash Flows               | 
|for the three months ended April 30, 2003                          | 
|and the cumulative period from                                     | 
|September 25, 2000 to January 31, 2003
     (unaudited)            | 
|Notes to Condensed Consolidated Financial
     Statements          | 
|Item 2. Management's Discussion and Analysis or Plan of Operations | 
|Item 3. Controls and Procedures                                    | 
|PART II. OTHER INFORMATION                                         | 
|Item 1. Legal Proceedings                                          | 
|Item 2. Changes in Securities                                      | 
|Item 3. Defaults on Senior Securities                              | 
|Item 4. Submission of Matters to a Vote of Security Holders        | 
|Item 5. Other Information                                          | 
|Item 6. Exhibits and Reports on Form 8-K                           | 
|Signatures                                                         | 
|Certifications                                                     | 

2

---

# PART I. FINANCIAL
INFORMATION

ITEM 1. FINANCIAL
STATEMENTS

Stealth MediaLabs,
Inc.

THE COMPANY DID
NOT OBTAIN A REVIEW OF THESE INTERIM FINANCIAL STATEMENTS BY AN INDEPENDENT ACCOUNTANT
USING PROFESSIONAL REVIEW STANDARDS AND PROCEDURES, ALTHOUGH THAT REVIEW IS REQUIRED
BY PARAGRAPH (b) OF ITEM 310 OF REGULATION S-B.

Stealth MediaLabs,
Inc. and Subsidiary(A Development Stage Entity) Condensed Consolidated
Balance SheetApril 30, 2003 (Unaudited) and October 31, 2002

|                                              |          |               |          |              
|--------------------------------------------- | -------- | ------------- | -------- | -------------
|ASSETS                                        |          | 30-Apr-03     |          |              
|                                              |          | Unaudited     |          | 31-Oct-02    
|Current Assets                                |          |               |          |              
|Cash and cash equivalents                     |          | $ 47,991      |          | $ 172,596    
|Inventory                                     |          | $ 85,672      |          | $ -          
|Prepaid Expenses                              |          | $ 3,667       |          | $ -          
|Total Current Assets                          |          | $ 137,330     |          | $ 172,596    
|Property & Equipment, net                     |          | $ 127,890     |          | $ 46,592     
|Intangible Assets, net                        |          | $ 157,665     |          | $ 140,400    
|Total Assets                                  |          | $ 422,885     |          | $ 359,588    
|LIABILITIES & STOCKHOLDERS EQUITY            |          |               |          |              
|                                              |          |               |          |              
|Current Liabilities                           |          |               |          |              
|Loans from an officer and director            |          | $ 200         |          | $ 200        
|Notes Payable                                 |          | $ 67,332      |          | $ -          
|Accounts Payable                              |          | $ 71,933      |          | $ 6,437      
|Accrued Liabilities                           |          | $ 242,391     |          | $ 242,391    
|Total Current Liabilities                     |          | $ 381,856     |          | $ 249,028    
|Commitments and Contingencies                 |          |               |          |              
|Stockholders Equity                          |          |               |          |              
|Common Stock; $.001par value;                 |          |               |          |              
|authorized - 50,000,000 shares;               |          |               |          |              
|issuued and outstanding - 21,602,184 at       |          |               |          |              
|Apr. 30, 2003 and 21,786,799 at Oct. 31, 2002 | $ 21,602 |               | $ 21,187
|Additional Paid In Capital                    |          | $ 3,176,500   |          | $ 2,810,923  
|Deferred Compensation                         |          | $ (678,607)   |          | $ (279,342)  
|Subscription Receivable                       |          | $ -           |          | $ (200,000)  
|Deficit accumulated in the development stage  |          | $ (2,478,466) |          | $ (2,242,208)
|Total Stockholders' Equity                    |          | $ 41,029      |          | $ 110,560    
|                                              |          |               |          |              
|Total Liabilities and Stockholders' Equity    |          | $ 422,885     |          | $ 359,588    
|                                              |          |               |          |              

See accompanying
notes to these condensed consolidated financial statements

3

---

Stealth MediaLabs,
Inc. and Subsidiary(A Development Stage Entity) Condensed Consolidated
Statement of OperationsFor the three months ended April 30, 2003 and for
the Period from September 30, 2000 (Commencement of Operations) to January 31,
2003(Unaudited)

|                                     |  |            |            |                 |               | 25-Sep-00     
|------------------------------------ |  | ---------- | ---------- | --------------- | ------------- | --------------
|                                     |  |            |            | Three Months    |               | (Commencement)
|                                     |  |            |            | ended 30-Apr-03 |               | to 31-Jan-03  
|                                     |  |            |            |                 |               |               
|Revenue                              |  |            |            | $ 105,816       |               | $ 11,000      
|Cost of Goods Sold                   |  |            | $ 80,420   |                 | $ 16,217     
|                                     |  |            |            |                 |               |               
|Gross Profit                         |  |            |            | $ 25,396        |               | $ (5,217)     
|Expense                              |  |            |            |                 |               |               
|Business Promotion Expense           |  | $ 21,057   |            | $ 222,751      
|Depreciation and Amortization        |  | $ 9,107    |            | $ 73,860       
|General & Administrative Expense     |  | $ 54,721   |            | $ 1,508,701    
|Research & Development               |  | $ 18,908   |            | $ 412,976      
|                                     |  |            |            |                 |               |               
|Total Expense                        |  |            | $ 103,793  |                 | $ 2,218,288  
|                                     |  |            |            |                 |               |               
|Operating Loss                       |  |            | $ (78,397) |                 | $ (2,223,505)
|                                     |  |            |            |                 |               |               
|Other (Income) Expense               |  |            |            |                 |              
|Interest Income                      |  |            | $ 25       |                 | $ 3,833      
|Interest Expense                     |  |            | $ 338      |                 | $ 178,301    
|                                     |  |            |            |                 |               |               
|Net Other Income (Expense)           |  | $ (313)    |            | $ (174,468)    
|                                     |  |            |            |                 |               |               
|Net Loss to Common Stockholders      |  | $ (78,710) |            | $ (2,397,973)  
|                                     |  |            |            |                 |               |               
|Basic and Diluted Loss Per Share     |  | $ (0.0036) |            |                
|                                     |  |            |            |                 |               |               
|Weighted Average Number of Shares of |  |            |            |                
|Common Stock Outstanding             |  | 21,602,184 |            |                
|                                     |  |            |            |                 |               |               
|                                     |  |            |            |                 |               |               

See accompanying
notes to these condensed consolidated financial statements

4

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Stealth MediaLabs,
Inc. and Subsidiary(A Development Stage Entity) Condensed Consolidated
Statement of Cash FlowsThree months ended April 30, 2003 and for the Periodfrom
September 30, 2000 (Commencement of Operations) to January 31, 2003(Unaudited)

|                                                                       |                                       |          |            |            |               |                 | 25-Sep-00 
|---------------------------------------------------------------------- | ------------------------------------- | -------- | ---------- | ---------- | ------------- | --------------- | ----------
|                                                                       |                                       |          |            |            |               | Three months    |           
|                                                                       |                                       |          |            |            |               | ended 30-Apr-03 |           
|                                                                       |                                       |          |            |            |               |                 |           
|Cash Flows from Operating Activities                                   |                                       |          |            |            |              
|Net Loss                                                               |                                       |          |            |            |               | $ (78,710)      |           
|Adjustments to reconcile Net Income to net cash provided by operations |                                       |          |           
|Consuting fees paid by issuance of warrants                            |                                       |          | $ -        |            | $ 245,791    
|Amortization of Loan Discount                                          |                                       |          |            | $ -        |               | $ 169,781      
|Non-cash interest expense                                              |                                       |          |            | $ -        |               | $ 5,250        
|Amortization of Deferred Compensation                                  |                                       |          | $ 12,000   |            | $ 364,750    
|Inventory purchases                                                    |                                       |          |            |            | $ (80,420)    |                 | $ (28,468)
|Prepaid Expenses                                                       |                                       |          |            |            | $ (3,667)     |                 | $ (3,667) 
|Depreciation and amortization                                          |                                       |          |            | $ 11,707   |               | $ 92,061       
|                                                                       |                                       |          |            |            |               |                 |           
|Changes in liabilites                                                  |                                       |          |            |            |               |                 |           
|Accounts Payable                                                       |                                       |          |            |            | $ 65,933      |                 | $ 6,000   
|Accrued Payroll - related party                                        |                                       |          |            | $ -        |               | $ 168,696      
|Accrued Expenses                                                       |                                       |          |            |            | $ 1,967       |                 | $ 47,502  
|                                                                       | Net cash used in Operating Activities |          | $ (71,190) |            | $ (1,332,062)
|                                                                       |                                       |          |            |            |               |                 |           
|Cash Flows from Investing Activities                                   |                                       |          |            |            |               |                
|Purchase of fixed assets                                               |                                       |          |            | $ 81,298   |               | $ (3,846)      
|Net Cash used in Investing Activities                                  |                                       |          | $ (81,298) |            | $ (3,846)    
|                                                                       |                                       |          |            |            |               |                 |           
|Cash Flows from Financing Activities                                   |                                       |          |            |            |               |                
|Net proceeds from convertible debt                                     |                                       |          |            | $ -        |               | $ 272,000      
|Loans from director and officers                                       |                                       |          |            | $ -        |               | $ 76,550       
|Repayment of loans from directors and officers                         |                                       |          | $ -        |            | $ (76,350)   
|Net proceeds from exercise of warrants                                 |                                       |          | $ -        |            | $ 161,000    
|Net proceeds from issuance of common stock                             |                                       |          | $ -        |            | $ 784,355    
|Collection of subscription receivable                                  |                                       |          | $ -        |            | $ 251,500    
|Proceeds of borrowings from banks & finance companies                  |                                       | $ 67,332 |            | $ 40,000  
|Repayment of bank loan                                                 |                                       |          |            | $ -        |               | $ (40,000)     
|                                                                       |                                       |          |            |            |               |                 |           
|Net cash provided by Financing Activities                              |                                       |          | $ 67,332   |            | $ 1,469,055  
|                                                                       |                                       |          |            |            |               |                 |           
|Net cash (decrease) increase for period                                |                                       |          |            | $ (85,156) |               | $ 133,147      
|Cash and Cash Equivalents, Beginning of period                         |                                       |          | $ 133,147  |            |              
|                                                                       |                                       |          |            |            |               |                 |           
|Cash and Cash Equivalents, end of period                               |                                       |          |            | $ 47,991   |               | $ 133,147      

See accompanying
notes to the condensed consolidated financial statements for additional information
relating to non-cash investing and financing activities concerning prepaid consulting
fees, issuance of common stock related to convertible debt and warrants and related
party payables during the periods.

5

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Stealth MediaLabs,
Inc. and Subsidiary(A Development Stage Entity) Notes to Condensed Financial
Statements (Unaudited)April 30, 2003

SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

THE
COMPANY DID NOT OBTAIN A REVIEW OF THESE INTERIM FINANCIAL STATEMENTS BY AN INDEPENDENT
ACCOUNTANT USING PROFESSIONAL REVIEW STANDARDS AND PROCEDURES, ALTHOUGH THAT REVIEW
IS REQUIRED BY PARAGRAPH (b) OF ITEM 310 OF REGULATION S-B.

Note 1 
Basis of Presentation

The
accompanying unaudited condensed financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America for
interim financial information and with the instructions of Form 10-QSB and Article
310 of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United States
of America for complete financial statements. The preparation requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenues and expenses during
the reporting period. Actual results may differ from these estimates. In the opinion
of management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the three
month period ended April
30, 2003are not necessarily
indicative of the results that may be expected for the year ending October 31, 2003.

The
combination of the Company and BitzMart, Inc. has been treated as a recapitalization
of the Company. The Company was the legal acquirer in the merger. BitzMart, Inc.
was the accounting acquirer since its stockholders acquired a majority ownership
interest in the Company. Consequently, the historical financial information included
in the financial statements of the Company prior to October 30, 2002 is that of BitzMart,
Inc. All historical share and per share data presented for transactions occurring
prior to the October 30, 2002 merger have been restated to reflect the share exchange
ratio of 1 for 6.4226.

Development
Stage Enterprise

The
Company is a Development Stage Enterprise, as defined in Statement of Financial Accounting
Standards ("SFAS") No. 7 "Accounting and Reporting for Development
Stage Enterprises". Under SFAS No. 7, certain additional financial information
is required to be included in the financial statements for the period from inception
of the Company to the current balance sheet date.

Since
the inception of the Company, management has focused on the process of raising capital
through private placement of common stock and warrants, effecting its business merger,
and performing research and development activities.

Principles
of Consolidation

These
consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries, Watermark Technology, Inc. (WTI), a Florida corporation,
incorporated in 2000 and RollingDream, Inc., an Illinois corporation incorporated
in 2003, and BitzMart, Inc., a Colorado corporation incorporated in 2000. All intercompany
transactions have been eliminated on consolidation.

Research and
Development Costs

The cost of research, development and product improvement expenditures are charged
to expense as they are incurred. For further information, refer to the financial
statements and footnotes thereto included in the Companys annual report on
Form 10-KSB for the year ended October 31, 2002 as filed with the Securities and
Exchange Commission.

6

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Note 2 
Going Concern

The
Company is in the development stage. The Company currently is pursuing additional
financing to fund product development and marketing efforts during the coming year.
Existing funds are insufficient to execute the marketing alliance plan for revenue
development and make programming modifications to the software application required
for successful commercialization. There are no assurances the Company will receive
funding necessary to continue the execution of its distribution plans.

Note 3 
Accrued Liabiliites

Accrued
liabilities consist of the following at January 31:

|                                                | 2003 | 2002    
|----------------------------------------------- | ---- | --------
|Accrued employee compensation and benefit costs |      | $156,788
|Accrued professional fees and insurance         |      | 87,569  
|                                                |      |         
|                                                |      | $244,357
|                                                |      |         
|                                                |      |         

The
Company does not have any liability or asset protection insurance policies, and is
not aware of any contingencies which would require an accrual for potential loss.

Note 4 
Leases

On
December 1, 2002, the Company entered into a lease agreement and moved into a new
facility. The lease period is for three years and rent is $1,243 per month.

Future
lease obligations are as follows:

|                                       | 
|-------------------------------------- | 
|February
     through October 31, 2003 | 
|2004                                   | 
|2005                                   | 
|                                       | 
|                                       | 
|                                       | 
|                                       | 

7

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Note 5 
Supplemental Disclosures of Cash Flow Information

None.

Note 6 
Capital Stock Activity in the Three Months Ended April
30, 2003

None.
See "Subsequent Events" further below in this report for capital stock
activity which took place after the end of the three month period ended April 30,
2003.

8

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Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion and analysis explains our results of operations for our last
Quarter ending April
30, 2003, our financial
condition and liquidity and our plan of operations for the balance of this fiscal
year. You should review our discussion and analysis of financial condition and results
of operation in conjunction with our financial statements and the related notes.

General Overview

Stealth
MediaLabs was organized and incorporated under the laws of Nevada on February 4,
1999 as Kidstoysplus.com, Inc. BitzMart, Inc. was incorporated in Colorado on October
31, 2000. On October 30, 2002, an acquisition transaction was completed in which
we acquired all outstanding stock of BitzMart in exchange for an amount of our common
stock equal to approximately 88% of our issued and outstanding shares following the
transaction. Our corporate name was changed to Stealth MediaLabs and BitzMarts
officers and certain of its directors became our officers and directors and we changed
our fiscal year end from January 31 to October 31. The transaction was considered
a recapitalization of BitzMart for financial reporting purposes and accordingly our
financial statements and this discussion and analysis pertain to BitzMart and its
business and operations, as the previous business and assets of Kidstoysplus were
transferred to certain of its stockholders prior to the transaction.

We
develop and market our proprietary software and services for professional media content
developers, distributors, owners and users. StealthChannel permits embedding large
amount of indelible, hidden, highly compressed data within analog or digital audio
and audio/video streams. Our target markets include movie and video studios and developers,
television networks, record labels, terrestrial and satellite radio networks, advertisers,
post-productions studios and distributors of most forms of digitizable and analog
media. We believe that our StealthChannel technology enables additional profitability
for distributors of digitized media. We believe we have, during our first two fiscal
years of operation, advanced the strategic and tactical planning and development
of the StealthChannel software and technology. We are pursing strategic alliances
with other technology vendors to join in their efforts to distribute the StealthChannel
software to third party users with the software products of the other vendors.

Beginning
late in the fiscal year ended October 31, 2002, and continuing through the present
we have also developed and test marketed sales of pre-owned motor vehicles which
we purchase, and retrofit with satellite TV and radio systems, a laptop PC with wireless
Internet access, DVD, and video game entertainment systems. Generally, we have purchased
family SUV and minivan-type vehicles at the end of lease contracts, retrofitted them
with these technology enhancements and resold the vehicle using the eBay Internet
auction system. We have designated this project as RollingDream and we believe
that if successful we may be able to generate cash flow to support our administrative
and development costs.

Our
ability to focus on and execute our business plan has been severely hampered since
our inception by our limited financial resources. As a result, much of our effort
since inception have been devoted to the pursuant of financing. Financial advisers
and placement agents selected by us did not materially assist us in the capital raising
process and we believe we were deterred by poor advice and assistance we received.
We pursued and completed the acquisition transactions described above, pursuant to
which we became a public-reporting corporation subject to the reporting obligations
of the Securities Exchange Act of 1934 at the advice of some of the advisers and
consultants. We expected that becoming a public reporting entity would assist us
to raise additional capital. However, a majority of the $525,000 which we raised
in anticipation of becoming public were consumed by charges and expenses in connection
with the offering, transaction costs and expenses incurred in complying with public
reporting obligations. In short, had BitzMart foregone the advice to be acquired
by a public entity, it would likely have been in a better position to obtain required
financing and to commercialize the StealthChannel technology. Notwithstanding these
developments, we are now in a position going forward to provide liquidity to the
stockholders, make available to the investing public the results of our operations
and development of our business and proceed with our business plans as the capital
resources become available.

9

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Results of
Operations

Quarter
ended April 30, 2003

Revenue.
During the second quarter of 2003, we produced sales of RollingDream vehicles
in a gross amount of $105,816with approximately 24% gross margins. Cumulatively for our fiscal year to the date
of publication of this report (July 15, 2003), RollingDream produced gross sales
of approximately $348,000. We had no revenue in connection with our attempts to complete
and commercialize the StealthChannel technology.

Research
and Development. In the
second quarter of 2003we had $18,908 of research and development expense compared to $412,976in the cumulative period of Commencement (September 2000) to January 31, 2003. The
decrease in spending rate was due to our lack of operating capital.

Business
Promotion Expenses. In the second quarter of
2003we had $ 21,057 of
business promotion and marketing expense compared to $ 222,751in the cumulative period of Commencement (September 2000) to January 31, 2003.

Depreciation
Expense. Depreciation and amortization expense remained constant at $9,107 in
the second quarter 2003 as compared to the previous quarter.

General
and administrative expenses. General and administrative expenses decreased to
$54,721 in in the second
quarter 2003 as compared to $83,009 in the previous quarter. The decrease is attributable
to our paring back of expenses during a cash shortage.

Net
cash used in operating activitiessince inception was approximately $1.4 million.
All expenditures are the result of research and development expenses, general and
administrative expenses and business promotion expenses and marketing expenses.

Interest
Income/Expense. Interest expense increased to $338 in the second quarter vs.
$0 in the previous quarter. The increase is attributed to bank borrowings to fund
RollingDream inventory.

Income
Tax expense.Due to operating losses, there was no income tax provision to date
in 2003 or in 2002.

10

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In
2001 and 2002 we engaged several entities to assist us in raising capital, for financial
advice, for investment banking and other assistance. In 2001, we completed a private
placement of our common stock in which we sold 1,084,039 shares and received total
gross proceeds of $503,453. After payment of placement fees and expenses, and other
offering costs, we had net proceeds of approximately $420,000. In December 2001,
we completed an additional placement to three investors from the first placement.
In this second placement we sold 1,023,518 shares (including shares issued upon exercise
of warrants issued to the investors) for total gross proceeds of $210,527. After
payment of placement agent fees and other cash expenses the Company had net proceeds
of approximately $153,000.

In
the fourth quarter of 2002, two investors (who had also been participants in the
December 2002 placement) purchased $325,000 of our 12% Convertible Notes, convertible
at $0.50 per share, and also received warrants to purchase up to 1,750,000 additional
shares of common stock, also at $0.50 per share. At the time of completion of our
acquisition transaction described above, one of the warrant holders exercised 400,000
warrants for $200,000, and the convertible notes and accrued interest were converted
into 660,500 shares of our common stock. We expected that when the acquisition transaction
was completed, the remaining 1,350,000 warrants would also be exercised for proceeds
of around $675,000 which would have been sufficient capital to enable us to implement
our business plan through 2003. After payment of placement fees, and a required loan
to an affiliate of the placement agent, placement agent expenses and related offering
expenses, the Company received net cash proceeds of only approximately $235,000.

In
addition, in connection with completing the acquisition transaction, we issued warrants
and stock, valued at $301,750 for financial reporting purposes, to a consultant who
assisted in completing the acquisition transaction. The issuance of these securities,
and the subsequent cancellation of the placement agents obligation to repay
our loan of a portion of the offering proceeds to an affiliate of the placement agent,
and the offering costs and compensation expenses to the consultant together totaled
approximately $551,000 which substantially exceeded the net cash we received in connection
with the second placement and the reverse merger transaction.

In
summary, the 2002 acquisition transaction diluted the ownership interest of the original
BitzMart shareholders, resulted in only minimal net cash proceeds, substantially
increased our general and administrative expenses by requiring us to become subject
to the reporting obligations of the Securities Exchange Act of 1934 and diverted
the time of our management and directors away from implementing our business plan
and conducting our business as we had anticipated. In early December 2002, we terminated
all relationships with the placement agent and financial advisers who had recommended
the acquisition transaction. Subsequently, we retained Westminster Securities to
assist us with future marketing and development of our business and handling of our
investor relationships. We issued 350,000 shares of our common stock and warrants
to purchase up to an additional 175,000 shares at $.50 to Westminster Securities
for services to be rendered over the next five years.

11

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Liquidity
and Capital Resources

As
of April 30, 2003, we had cash or cash equivalents of $47,991.
We had accounts payable and accrued liabilities in the amount of $314,324. Our auditors
have expressed substantial doubt as to our ability to continue as a going concern
without additional financing. We do not anticipate that our cash on hand will be
sufficient to enable us to meet our anticipated expenditures.

Since
our inception through the end of the second quarter 2003, we have received approximately
$1.83 million in cash investments from our Founders and from private investors. Due
to capital raising and legal compliance expenses that were higher than we anticipated,
approximately $1,025,000 of these investments were available to implement our business
plans. When BitzMart was formed in October 2000, we estimated that $1.5 Million to
$3.0 million - net to the Company - would be required to fund our business plans
We have been able to raise only a fraction the of capital required. As of January
31, 2003, we had a working capital deficiency of approximately $596,000. We have
used the net proceeds we received from these investments for research and development
associated with the StealthChannel technology, for business development activities
to establish marketing alliances and for additional fund raising activities. This
result occurred in general due to the general downturn in equity markets, specific
concern by potential investors over technology companies and because we lacked sufficient
initial capitalization to promptly demonstrate the potential and efficacy of the
StealthChannel technology to potential investors and joint venture participants.

We
are also seeking secured financing of up to $1,000,000 to implement our RollingDream
line of business for the next 12 months. We would expect that if we succeed achieving
significant additional financing for RollingDream, that resulting cash flow retained
from sales will fund a substantial portion of the StealthChannel research and development
that we can foresee over the next year. We do not plan to seek equity investments
for this purpose, although certain types of equity incentives may be offered to secured
lenders in exchange for favorable terms. As of the publication date of this report,
we have received $595,000 in RollingDream inventory financing cumulatively in Calendar
year 2003 (see "Subsequent Events"). This $595,000 includes $125,000 made
available by our CEO and his spouse; $150,000 made available by a director of BitzMart,
Inc. and $320,000 invested by a major founding shareholder. We intend to make satisfactory
compensation arrangements with these lenders for this lending facility and for any
future similar arrangements, including additional shares.

12

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We
have authorized in the corporate charter to issue up to 50,000,000 shares of common
stock. Issuance of common stock described above would exhaust our authorized common
stock, before any warrants are exercised. Accordingly, we expect to request that
our stockholders approve amendments to our Articles of Incorporation of to increase
the number of authorized shares of Common Stock to at least 150,000,000 shares. The
Founders of the Company hold sufficient Common Stock to assure that such an amendment
will ultimately be approved.

In
addition to the adverse effect our limited financial resources is having on our business,
we are unable to pay or make other financial arrangements with our independent auditors
to have that firm review this Quarterly Report on Form 10-QSB for the quarter ended
April 30, 2003. We are therefore filing our Form 10-QSB for the second quarter, unaudited,
without benefit from such a review by the auditors, which is required by Regulation
SB.

We
expect net losses to continue through at least the present fiscal year, as we will
have significant expenses in connection with completing the development of our technology,
our efforts to market the technology to third parties and co-venturers and related
expenses.

Subsequent
Events

University
of Miami License Agreement

We have had a series of disagreements with the University of Miami relating to the
University's demands for payments of patent prosecution legal fees and other fees
from us, while the University has failed to make deliveries of software code that
we are rightfully due under our contract with the University. The University claims
that we have therefore breached our contract, and issued a notice to us to that effect.
We have received an opinion of competent legal counsel that the University's notice
of breach is specious,  for a variety of reasons. Nonetheless, if we fail to
resolve this matter, it is possible that we may ultimately lose our rights to certain
current components of the StealthChannel technology. It may become necessary for
us to initiate legal action against the University of Miami in order to resolve this
matter in a fair and equitable fashion.

Founder-Provided Financing Summary

Despite exhaustive efforts, it has not been possible for us to raise operating capital
from external sources, beyond the previously reported capital raised to facilitate
our transformation into a reporting public company. It has therefore fallen to certain
founding shareholders to provide funding for operations, principally secured inventory
financing for our RollingDream subsidiary, in order to generate operating capital
as a result of RollingDream gross margins. Subsequent to the close of the second
quarter of 2003, we completed $595,000 in such financing. This financing will result
in significant dilution to other shareholders; however without it, our Company would
by now have ceased operations, resulting in near total or total losses to all of
our shareholders. The
issuance of these securities will be materially dilutive to existing stockholders
and warrant-holders of the Company, but we have concluded that no other financing
on any better terms is available to the Company. We intend to permit other stockholders
who have made material cash investments in the Company or its predecessor, BitzMart,
Inc. during the past two years to invest in equity and debt of the Company on the
same or similar terms that have been offered to the Founders, and have proposed that
such investors match the proposed investment of the Founders.

We have sold two securities
under this plan in two units. Each full unit was sold for a gross amount of $320,000
and includes: 4,000,000 shares of Company Common Stock; a Secured Promissory Note
for $250,000 and 8,000,000 common stock purchase warrants each exercisable at $0.10
per warrant. Our shareholder Colorocs Information Technologies, Inc. purchased one
full unit and paid a net amount of $320,000 for same. Our CEO Howard E. Leventhal,
his spouse Mary A. Handeland and BitzMart, Inc. director Burton Slotky together purchased
one unit for a gross amount of $320,000, less $45,000 in deferred salary forgiven
by Leventhal, for a net amount of $275,000 in financing to the Company. No investment
bankers or financing intermediaries were involved in these transactions and no commissions
are due to any party under these investments.

As a result of these
financings, we plan to increase our authorized shares from 50 million to 150 million,
in order to make sufficient provision for new and prior warrant obligations, and
to allow for future financings. Such an increase in authorized shares requires a
shareholder vote. We plan to hold a shareholder's meeting for this purpose prior
to the end of calendar 2003, however we know that we already have sufficient votes
to assure such a change.



ITEM 3. CONTROLS
AND PROCEDURES

(a)
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer
who is our only employee and also serves as the principal financial officer evaluated
the effectiveness of our disclosure controls and procedures (as such term is defined
in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended
(the Exchange Act)) as of a date within 90 days prior to the filing date
of this annual report (the Evaluation Date). Based on such evaluation,
he concluded that, as of the Evaluation Date, our disclosure controls and procedures
were reasonably effective in alerting him on a timely basis to material information
relating to our company (including our consolidated subsidiaries) required to be
included in our reports filed or submitted under the Exchange Act. However, because
of our limited staff and other resources and our relative inexperience in filing
reports under the Exchange Act, he concluded that our disclosure controls and procedures
should be improved as our resources permit.

13

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(b)Changes
in Internal Controls. Since the Evaluation Date, there have not been any significant
changes in our internal controls or in other factors that could significantly affect
such controls. We have taken steps to formalize our regular and recurring transaction
recording procedures, and we have retained a consultant on a temporary basis to assist
us to properly record and report our financial condition. However, we had insufficient
cash resources available to have our independent auditor review this report prior
to filing.

# PART II

# OTHER INFORMATION

ITEM 1. LEGAL
PROCEEDINGS

None

ITEM 2. CHANGES
IN SECURITIES

None

ITEM 3. DEFAULTS
UPON SENIOR SECURITIES

None

ITEM 4. SUBMISSION
OF MATTERS TO A VOTE OF SHAREHOLDERS

None

ITEM 5. OTHER
INFORMATION

None

14

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ITEM 6. EXHIBITS
AND REPORTS ON FORM 8-K

(1)
Reports on Form 8-K:

We filed the
following Current Reports on Form 8-K during the first quarter of 2003 and through
the date of this report:

|Date of Report           | Date Filed        | Items Reported                                                                                    
|------------------------ | ----------------- | --------------------------------------------------------------------------------------------------
|October 30, 2002         | November 8, 2002  | Item 1. Changes in Control, Item 2. Acquisition or Disposition of Assets, Item 5. Other Events.   
|December 13, 2002        | December 20, 2002 | Item 5. Other Events.                                                                             
|January 15, 2003         | January 30, 2003  | Item 4. Changes in Registrants Certifying Accountant, Item 7. Financial Statements and Exhibits. 
|March 18, 2003           | March 18, 2003    | Item 5. Other Events, Item 7. Financial Statements and Exhibits, Item 9. Regulation FD Disclosure.
|October 30, 2002 amended | March 10, 2003    | Item 7. Financial Statements and Exhibits.                                                        
|April 7, 2003            | April 7, 2003     | Item 5. Other Events.                                                                             

Item 7. Financial
Statements and Exhibits.

(2)
Exhibits (none)

15

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# Signatures

In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 15,
2003

Stealth MediaLabs,
Inc.

| | By: /s/ Howard Leventhal      Howard Leventhal, President and CEO;      Treasurer
     and Principal Accounting Officer
| | -----------------------------------------------------------------------------------------------------------------------

---

CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICERAND PRINCIPAL FINANCIAL OFFICER

I,
Howard E. Leventhal, Chief Executive Officer of Stealth MediaLabs, Inc., certify
that:

1.
I have reviewed this quarterly report on Form 10-QSB of Stealth MediaLabs, Inc.;

2.
Based on my knowledge, this quarterly report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;

3.
Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;

4.
The registrants other certifying officers and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

| | a) designed such disclosure controls and procedures to ensure that material information
     relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
     which this quarterly report is being prepared;   b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date
     within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and   c) presented in this quarterly report our conclusions
     about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5.
The registrants other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrants auditors and the audit committee
of registrants board of directors (or persons performing the equivalent function):

| | a) all significant deficiencies in the design or operation of internal controls which
     could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors
     any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | b) any fraud, whether or not material, that involves management or other employees
     who have a significant role in the registrants internal controls; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

6.
The registrants other certifying officers and I have indicated in this quarterly
report whether or not there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: July 15,
2003

/s/ Howard
E. LeventhalHoward E. LeventhalChief Executive Officer andPrincipal
Financial Officer