FORM 10-QSB

     |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003

                                       OR

     |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                             COMMISSION FILE NUMBER

                       IMAGE TECHNOLOGY LABORATORIES, INC.

        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

                              DELAWARE 22-53531373
             ------------------------------- -----------------------
             (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER I.D. NO.)
                         INCORPORATION OR ORGANIZATION)

                  602 ENTERPRISE DR., KINGSTON, NEW YORK 12401
                  --------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (845) 338-3366
                ------------------------------------------------
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

 CHECK WHETHER THE ISSUER: (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
          13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE
       PAST 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
     REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
                       REQUIREMENTS FOR THE PAST 90 DAYS.
                                 YES |X| NO |_|

                      APPLICABLE ONLY TO CORPORATE ISSUERS

  THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF NOVEMBER 10, 2003 WAS
                                   13,251,278







<PAGE>


                       Image Technology Laboratories, Inc.




                          INDEX TO FINANCIAL STATEMENTS


                                                                            PAGE

Condensed Balance Sheet
    September 30, 2003 (Unaudited)                                           F-2

Condensed Statements of Operations
    Nine and Three Months Ended September 30, 2003 and 2002 (Unaudited)      F-3

Condensed Statement of Changes in Stockholders' Deficiency
    Nine Months Ended September 30, 2003 (Unaudited)                         F-4

Condensed Statements of Cash Flows
    Nine Months Ended September 30, 2003 and 2002 (Unaudited)                F-5

Notes to Condensed Financial Statements (Unaudited)                       F-6/10



                                      * * *








                                      F-1
<PAGE>

<TABLE>
<CAPTION>

                       Image Technology Laboratories, Inc.

                             Condensed Balance Sheet
                               September 30, 2003





                                     ASSETS

Current assets:
<S>                                                                 <C>
    Cash and cash equivalents                                       $   147,738
    Prepaid expenses and other current assets                             2,676
                                                                    -----------
            Total current assets                                        150,414

Equipment and improvements, net                                         181,781
                                                                    -----------

            Total                                                   $   332,195
                                                                    ===========


                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
    Accounts payable and accrued expenses                           $    41,344
    Notes payable to stockholders                                         5,200
    Note payable - bank                                                  70,833
                                                                    -----------
            Total current liabilities                                   117,377

Deferred revenues                                                       128,333
Accrued compensation payable to stockholders                            130,693
                                                                    -----------
            Total liabilities                                           376,403
                                                                    -----------

Stockholders' deficiency:
    Preferred stock, par value $.01 per share; 5,000,000 shares
        authorized; 1,500,000 shares issued and outstanding              15,000
    Common stock, par value $.01 per share; 50,000,000 shares
        authorized; 13,251,278 shares issued and outstanding            132,513
    Additional paid-in capital                                        2,473,305
    Accumulated deficit                                              (2,665,026)
                                                                    -----------
            Total stockholders' deficiency                              (44,208)
                                                                    -----------

            Total                                                   $   332,195
                                                                    ===========








See Notes to Condensed Financial Statements.
</TABLE>





                                      F-2
<PAGE>
<TABLE>
<CAPTION>


                       Image Technology Laboratories, Inc.

                       Condensed Statements of Operations
             Nine and Three Months Ended September 30, 2003 and 2002
                                   (Unaudited)




                                           NINE MONTHS                    THREE MONTHS
                                       ENDED SEPTEMBER 30,             ENDED SEPTEMBER 30,
                                 ----------------------------    ----------------------------
                                      2003            2002           2003           2002
                                 ------------    ------------    ------------    ------------

Revenues:
<S>                              <C>             <C>             <C>             <C>
    Service income               $    432,308    $    207,800    $    137,239    $    131,250
    Software license fees             105,000          11,667          35,000          11,667
                                 ------------    ------------    ------------    ------------

        Totals                        537,308         219,467         172,239         142,917
                                 ------------    ------------    ------------    ------------

Costs and expenses:
    Research and development          225,000         378,750          75,000         100,000
    Sales and marketing               213,858          65,626          89,172          52,865
    General and administrative        296,715         316,310         112,422         118,832
                                 ------------    ------------    ------------    ------------
        Totals                        735,573         760,686         276,594         271,697
                                 ------------    ------------    ------------    ------------

Net loss                         $   (198,265)   $   (541,219)   $   (104,355)   $   (128,780)
                                 ============    ============    ============    ============


Basic net loss per share         $       (.01)   $       (.04)   $       (.01)   $       (.01)
                                 ============    ============    ============    ============


Basic weighted average shares
    outstanding                    14,056,046      13,287,998      14,663,025      13,669,962
                                 ============    ============    ============    ============








See Notes to Condensed Financial Statements.
</TABLE>




                                      F-3
<PAGE>
<TABLE>
<CAPTION>


                       Image Technology Laboratories, Inc.

           Condensed Statement of Changes in Stockholders' Deficiency
                      Nine Months Ended September 30, 2003
                                   (Unaudited)




                                       PREFERRED STOCK               COMMON STOCK
                                  -------------------------   -------------------------                                   TOTAL
                                   NUMBER                        NUMBER                   ADDITIONAL                   STOCKHOLDERS'
                                     OF                            OF                       PAID-IN      ACCUMULATED      EQUITY
                                   SHARES         AMOUNT         SHARES        AMOUNT       CAPITAL        DEFICIT     (DEFICIENCY)
                                   ------         ------         ------        ------       -------        -------     ------------
<S>                               <C>          <C>             <C>          <C>           <C>           <C>            <C>
Balance, January 1, 2003          1,500,000    $    15,000     12,232,462   $   122,325   $ 1,827,395   $(2,466,761)   $  (502,041)

Return of common stock in
  settlement of dispute                                          (200,000)       (2,000)        2,000

Issuance of common stock upon
   exercise of warrants                                         1,188,816        11,888       209,206                      221,094

Accrued compensation
  contributed to capital                                                                      426,004                      426,004

Issuance of common
  stock to directors                                               30,000           300         8,700                        9,000

Net loss                                                                                                   (198,265)      (198,265)
                                -----------    -----------    -----------   -----------   ------------  -----------    -----------

Balance, September 30, 2003       1,500,000    $    15,000     13,251,278   $   132,513   $ 2,473,305   $(2,665,026)   $   (44,208)
                                ===========    ===========    ===========   ===========   ===========   ===========    ===========










See Notes to Condensed Financial Statements.
</TABLE>




                                      F-4
<PAGE>
<TABLE>
<CAPTION>


                       Image Technology Laboratories, Inc.

                       Condensed Statements of Cash Flows
                  Nine Months Ended September 30, 2003 and 2002
                                   (Unaudited)




                                                               2003         2002
                                                            ---------    ---------

Operating activities:
<S>                                                         <C>          <C>
    Net loss                                                $(198,265)   $(541,219)
    Adjustments to reconcile net loss to net cash
        used in operating activities:
        Depreciation and amortization of equipment
            and improvements                                    7,892        6,896
        Amortization of unearned compensation                              125,000
        Amortization of unearned marketing expenses                         56,250
        Issuance of common stock to directors                   9,000
        Changes in operating assets and liabilities:
            Prepaid expenses and other current assets           7,320
            Accounts payable and accrued expenses               6,097       17,776
            Deferred revenues                                  35,000      128,333
            Accrued compensation payable to stockholders        6,655      109,539
                                                            ---------    ---------
                Net cash used in operating activities        (126,301)     (97,425)
                                                            ---------    ---------

Investing activities - purchases of equipment                (150,342)
                                                            ---------

Financing activities:
    Proceeds from note payable - bank                          70,833
    Proceeds from exercise of warrants                        221,094       16,375
    Proceeds from private placement of common stock                        121,000
                                                            ---------    ---------
                Net cash provided by financing activities     291,927      137,375
                                                            ---------    ---------

Net increase in cash                                           15,284       39,950

Cash, beginning of period                                     132,454      151,730
                                                            ---------    ---------

Cash, end of period                                         $ 147,738    $ 191,680
                                                            =========    =========


Supplemental disclosure of
  cash flow information
    Interest paid                                           $     772
                                                            =========


Supplemental disclosure of noncash
    investing and financing activities:
    Contribution of accrued compensation
      payable to stockholders to capital                    $ 426,004
                                                            =========


See Notes to Condensed Financial Statements.
</TABLE>





                                      F-5
<PAGE>


                       Image Technology Laboratories, Inc.

                     Notes to Condensed Financial Statements
                                   (Unaudited)



Note 1 - Basis of presentation:
                  In the opinion of management, the accompanying unaudited
                  condensed financial statements reflect all adjustments,
                  consisting of normal recurring accruals, necessary to present
                  fairly the financial position of Image Technology
                  Laboratories, Inc. (the "Company") as of September 30, 2003,
                  its results of operations for the nine and three months ended
                  September 30, 2003 and 2002, changes in stockholders'
                  deficiency for the nine months ended September 30, 2003 and
                  cash flows for the nine months ended September 30, 2003 and
                  2002. Certain terms used herein are defined in the audited
                  financial statements of the Company as of December 31, 2002
                  and for the years ended December 31, 2002 and 2001 (the
                  "Audited Financial Statements") included in the Company's
                  Annual Report on Form 10-KSB previously filed with the
                  Securities and Exchange Commission (the "SEC"). Pursuant to
                  rules and regulations of the SEC, certain information and
                  disclosures normally included in financial statements prepared
                  in accordance with accounting principles generally accepted in
                  the United States of America have been condensed in or omitted
                  from these financial statements unless significant changes
                  have taken place since the end of the most recent fiscal year.
                  Accordingly, the accompanying unaudited condensed financial
                  statements should be read in conjunction with the Audited
                  Financial Statements and the other information included in the
                  Form 10-KSB.

                  The results of operations for the nine and three months ended
                  September 30, 2003 are not necessarily indicative of the
                  results of operations to be expected for the full year ending
                  December 31, 2003.

                  The Company was a development stage company for accounting
                  purposes, and was required to make certain related disclosures
                  from January 1, 1998 (date of inception) through April 2002,
                  at which time its "PACS" software product became available for
                  sale (see Notes 1 and 2 to the financial statements in the
                  Form 10-KSB). From time to time, the Company has and will
                  continue to derive revenues from the provision of radiology
                  and imaging services to affiliated and nonaffiliated
                  companies. However, management expects that the Company will
                  derive its revenues in the future primarily from sales of its
                  software products. The Company obtained its first contract for
                  the sale of its software product and related hardware and
                  maintenance services in August 2002. Accordingly, the Company
                  is no longer in the development stage.


                                      F-6
<PAGE>


                       Image Technology Laboratories, Inc.

                     Notes to Condensed Financial Statements
                                   (Unaudited)



Note 1 - Basis of presentation (concluded):
                  Although the Company has incurred recurring losses and
                  negative cash flows from operating activities since its
                  inception, the Company had cash and cash equivalents of
                  approximately $148,000 and working capital of approximately
                  $33,000 as of September 30, 2003. Management expects a
                  reduction in the level of such losses now that sales of the
                  Company's software products have commenced. A substantial
                  portion of the Company's losses, historically, have been
                  attributable to noncash charges. As of September 30, 2003,
                  certain stockholders of the Company had agreed to defer
                  approximately $131,000 of compensation due them under their
                  employment agreements as of that date until October 1, 2004
                  and to defer certain additional amounts that will accrue after
                  September 30, 2003 which has and will continue to preserve the
                  Company's liquidity. Management believes that as a result of
                  the additional cash flows from the software product sales and
                  the Company's ability to defer payments to certain
                  stockholders, the Company will be able to continue to meet its
                  obligations as they become due through at least September 30,
                  2004. Management also believes, but cannot assure, that if
                  needed, the Company will be able to obtain additional capital
                  resources from financing through financial institutions and
                  other unrelated sources and/or through additional related
                  party loans.


Note 2 - Earnings (loss) per share:
                  The Company presents basic earnings (loss) per share and, if
                  appropriate, diluted earnings per share in accordance with the
                  provisions of Statement of Financial Accounting Standards No.
                  128, "Earnings per Share" ("SFAS 128") as explained in Note 1
                  to the financial statements in the Form 10-KSB.

                  The rights of the Company's preferred and common stockholders
                  are substantially equivalent. The Company has included the
                  1,500,000 outstanding preferred shares from the date of their
                  issuance in the weighted average number of shares outstanding
                  in the computation of basic loss per share for the nine and
                  three months ended September 30, 2003 and 2002, in accordance
                  with the "two class" method of computing earnings (loss) per
                  share set forth in SFAS 128.

                  Since the Company had net losses for the nine and three months
                  ended September 30, 2003 and 2002, the assumed effects of the
                  exercise of options to purchase 2,000,000 and 3,000,000 common
                  shares outstanding at September 30, 2003 and 2002,
                  respectively, and warrants to purchase 1,999,029 and 3,429,512
                  common shares outstanding at September 30, 2003 and 2002,
                  respectively, therefore, diluted per share amounts have not
                  been presented in the accompanying condensed statements of
                  operations for those periods as the results would be
                  anti-dilutive.




                                      F-7
<PAGE>


                       Image Technology Laboratories, Inc.

                     Notes to Condensed Financial Statements
                                   (Unaudited)


Note 3 - Warrants:
                  On February 11, 2003, the Company reduced the exercise price
                  for its outstanding Class A and Class B warrants from $.40 and
                  $.50 per share, respectively, to $.20 per share during the
                  period from February 18, 2003 through July 1, 2003. The
                  original exercise prices will remain in effect for the period
                  from July 2, 2003 until the Class A and Class B warrants
                  expire on October 15, 2003.

                  During the nine months ended September 30, 2003, the Company
                  received $221,094 upon the exercise of Class A and Class B
                  warrants for the purchase of 1,105,483 shares of common stock
                  at $.20 per share. As of September 30, 2003, Class A and Class
                  B warrants for the purchase of a total of 1,999,029 remained
                  outstanding (see Note 5 in the Form 10-KSB) and expired
                  unexercised on October 15, 2003. In addition, the Company
                  issued 83,333 shares of common stock as compensation to the
                  investment banker in accordance with the terms of the sale of
                  units in the initial public offering.


Note 4 - Stock options:
                  During the nine months ended September 30, 2003, the Company
                  cancelled options it had previously granted to one of its
                  founders for the purchase of 1,000,000 shares of its common
                  stock at $.33 per share in connection with the termination of
                  his employment contract. In addition, the Company granted
                  options to a newly-hired sales director for the purchase of
                  100,000 shares of its common stock at $.18 per share (the fair
                  value at the date of grant) that are exercisable through
                  January 2013.

                  The Company continues to measure compensation cost related to
                  stock options issued to employees using the intrinsic value
                  method of accounting prescribed by Accounting Principles Board
                  Opinion No. 25 ("APB 25"), "Accounting For Stock Issued To
                  Employees". The Company has adopted the disclosure-only
                  provisions of Statement of Financial Accounting Standards No.
                  123 ("SFAS 123"), "Accounting For Stock-Based Compensation."
                  Accordingly, no earned or unearned compensation cost was
                  recognized in the accompanying condensed consolidated
                  financial statements for the stock options granted by the
                  Company to its employees since all of those options have been
                  granted at exercise prices that equaled or exceeded the market
                  value at the date of grant. The Company's historical net loss
                  and loss per share and pro forma net loss and loss per share
                  assuming compensation cost had been determined in 2003 and
                  2002 based on the fair value at the grant date for all awards
                  by the Company consistent with the provisions of SFAS 123 are
                  set forth below:





                                      F-8
<PAGE>


                       Image Technology Laboratories, Inc.

                     Notes to Condensed Financial Statements
                                   (Unaudited)



Note 4 - Stock options (concluded):
<TABLE>
<CAPTION>

                                                   NINE MONTHS ENDED        THREE MONTHS ENDED
                                                      SEPTEMBER 30,            SEPTEMBER 30,
                                                ----------------------    -----------------------
                                                   2003         2002         2003          2002
                                                ---------    ---------    ----------    ---------


<S>                                             <C>          <C>          <C>           <C>
     Net loss - as reported                     $(198,265)   $(541,219)   $ (104,355)   $(128,780)

     Deduct total stock-based employee
          compensation expense determined
          under a fair value based method
          for all awards                           (2,000)    (120,000)         --        (40,000)
                                                ---------    ---------    ----------    ---------

     Net loss - pro forma                       $(200,265)   $(661,219)   $ (104,355)   $(168,780)
                                                =========    =========    ==========    =========

     Net loss per share:
          Basic - as reported                   $    (.01)   $    (.04)   $     (.01)   $    (.01)
                                                =========    =========    ==========    =========

          Basic - pro forma                     $    (.01)   $    (.05)   $     (.01)   $    (.01)
                                                =========    =========    ==========    =========
</TABLE>


Note 5 - Shares for services:
                  During January 2002, the Company agreed to issue 450,000
                  shares of common stock and warrants to purchase 100,000 shares
                  of common stock in exchange for the provision of marketing
                  services by an investor relations firm. The Company recorded
                  the fair value of the shares of $112,500 on the date of the
                  agreement as unearned marketing expense. The shares and
                  warrants became issuable and were issued in June 2002.

                  Under the agreement, the investor relations firm was required
                  to provide the marketing services over the six month period
                  that commenced in July 2002, and the Company amortized the
                  unearned marketing expense over that period. However, during
                  that period, disputes arose related to those services. On
                  December 31, 2002, the disputes were resolved and the investor
                  relations firm agreed to return 200,000 shares of common stock
                  and allow the Company to cancel the warrants it had issued for
                  the purchase of 100,000 shares. During the nine months ended
                  September 30, 2003, the investor relations firm returned the
                  200,000 shares of common stock and the Company cancelled them.


Note 6 - Directors fees:
                  During September 2003, the Company agreed to issue to its
                  Board of Directors 30,000 shares of common stock as directors'
                  fees. The Company recorded the fair value of the shares of
                  $9,000 on the date they agreed to issue them as directors'
                  fees.




                                      F-9
<PAGE>


                       Image Technology Laboratories, Inc.

                     Notes to Condensed Financial Statements
                                   (Unaudited)



Note 7 - Accrued compensation payable to stockholders:
                  During the nine months ended September 30, 2003, the Company's
                  principal stockholder contributed $426,004 of compensation
                  owed to him to capital.



                                      * * *









                                      F-10
<PAGE>





OPERATIONS

OVERVIEW

THE FOLLOWING IS A DISCUSSION OF CERTAIN FACTORS AFFECTING OUR RESULTS OF
OPERATIONS, LIQUIDITY, AND CAPITAL RESOURCES. YOU SHOULD READ THE FOLLOWING
DISCUSSION AND ANALYSIS IN CONJUNCTION WITH OUR UNAUDITED CONDENSED FINANCIAL
STATEMENTS AND RELATED NOTES, WHICH ARE INCLUDED ELSEWHERE IN THIS FILING. WE
HAVE ENTERED THE MEDICAL IMAGE MANAGEMENT SEGMENT OF THE HEALTHCARE INFORMATION
SYSTEMS MARKET.

 WE WERE INCORPORATED IN DELAWARE ON DECEMBER 5, 1997. WE HAVE DEVELOPED A FULLY
INTEGRATED "RADIOLOGY INFORMATION SYSTEM/PICTURE ARCHIVING AND COMMUNICATIONS",
KNOWN AS RIS/PACS FOR USE IN THE MANAGEMENT OF MEDICAL DIAGNOSTIC IMAGES AND
PATIENT INFORMATION BY HOSPITALS. THE PACS PORTION OF THE SYSTEM INPUTS AND
STORES DIAGNOSTIC IMAGES IN DIGITAL FORMAT FROM ORIGINAL IMAGING SOURCES SUCH
AS: COMPUTERIZED TOMOGRAPHY, OR CT SCANS MAGNETIC RESONANCE IMAGING, OR MRIS,
ULTRASOUND, NUCLEAR IMAGING AND DIGITAL FLUOROSCOPY. THE RIS PORTION OF THE
SYSTEM INPUTS AND STORES PATIENT DEMOGRAPHICS, ALONG WITH THE APPROPRIATE
INSURANCE, BILLING AND SCHEDULING INFORMATION REQUIRED TO COMPLETE THE PATIENT
VISIT. ALL OF THE DATA IS RETAINED IN STANDARD FORMATS, INCLUDING DICOM AND HL-7
STANDARDS.







                                      -2-
<PAGE>


WE WERE A DEVELOPMENT STAGE COMPANY FOR ACCOUNTING PURPOSES, AND WERE REQUIRED
TO MAKE CERTAIN RELATED DISCLOSURES FROM JANUARY 1, 1998 (DATE OF INCEPTION)
THROUGH APRIL 2002, AT WHICH TIME OUR WARPSPEED PACS/RIS SYSTEM BECAME AVAILABLE
FOR SALE. FROM TIME TO TIME, WE HAVE AND WILL CONTINUE TO DERIVE REVENUES FROM
THE PROVISION OF RADIOLOGY AND IMAGING SERVICES TO AFFILIATED AND NONAFFILIATED
COMPANIES. HOWEVER, MANAGEMENT EXPECTS THAT WE WILL DERIVE OUR REVENUES IN THE
FUTURE PRIMARILY FROM SALES OF OUR SYSTEMS. WE OBTAINED OUR FIRST CONTRACT FOR
THE SALE OF OUR SOFTWARE PRODUCT AND RELATED HARDWARE AND MAINTENANCE SERVICES
IN AUGUST 2002. ACCORDINGLY, WE ARE NO LONGER IN THE DEVELOPMENT STAGE.

ALTHOUGH WE HAVE INCURRED RECURRING LOSSES AND NEGATIVE CASH FLOWS FROM OUR
OPERATING ACTIVITIES SINCE INCEPTION, WE HAVE CASH AND CASH EQUIVALENTS OF
APPROXIMATELY $148,000 AND WORKING CAPITAL OF APPROXIMATELY $33,000 AS OF
SEPTEMBER 30, 2003. WE EXPECT A REDUCTION IN THE LEVEL OF OUR OPERATING LOSSES
NOW THAT SALES OF OUR SOFTWARE PRODUCTS HAVE COMMENCED. A SUBSTANTIAL PORTION OF
OUR HISTORIC OPERATING LOSSES HAVE BEEN ATTRIBUTABLE TO NON-CASH CHARGES. AS OF
SEPTEMBER 30, 2003, CERTAIN OF OUR STOCKHOLDERS HAD AGREED TO DEFER
APPROXIMATELY $131,000 OF COMPENSATION DUE THEM UNDER THEIR EMPLOYMENT AGREEMENT
AS OF THAT DATE UNTIL OCTOBER 1, 2004 AND TO DEFER CERTAIN ADDITIONAL AMOUNTS
THAT WILL ACCRUE AFTER SEPTEMBER 30, 2003, IF NECESSARY. DURING SEPTEMBER 2002,
WE OBTAINED A $75,000 WORKING CAPITAL LINE OF CREDIT FROM M AND T BANK. THE
PROCEEDS OF THIS LOAN WERE UTILIZED FOR THE PURCHASE OF CAPITAL EQUIPMENT FOR
THE PARK AVENUE INSTALLATION, WHICH WAS COMPLETED IN THE THIRD QUARTER.
MANAGEMENT BELIEVES THAT AS A RESULT OF THE ADDITIONAL CASH FLOWS FROM THE
SOFTWARE PRODUCT SALES AND OUR ABILITY TO DEFER PAYMENTS TO CERTAIN
STOCKHOLDERS, WE WILL BE ABLE TO CONTINUE TO MEET OUR OBLIGATIONS AS THEY BECOME
DUE THROUGH AT LEAST SEPTEMBER 30, 2004. WE ALSO BELIEVE, BUT CANNOT ASSURE,
THAT IF NEEDED, WE WILL BE ABLE TO OBTAIN ADDITIONAL CAPITAL RESOURCES FROM
FINANCING THROUGH FINANCIAL INSTITUTIONS AND OTHER UNRELATED SOURCES AND/OR
THROUGH ADDITIONAL RELATED PARTY LOANS.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

OUR DISCUSSION AND ANALYSIS OF OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ARE BASED UPON OUR CONDENSED FINANCIAL STATEMENTS, WHICH HAVE BEEN PREPARED IN
ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF
AMERICA. THE PREPARATION OF THESE FINANCIAL STATEMENTS REQUIRES US TO MAKE
ESTIMATES AND JUDGEMENTS THAT AFFECT THE REPORTED AMOUNTS OF ASSETS,
LIABILITIES, REVENUES AND EXPENSES, AND RELATED DISCLOSURE OF CONTINGENT ASSETS
AND LIABILITIES. ON AN ON-GOING BASIS, WE EVALUATE OUR ESTIMATES, INCLUDING
THOSE RELATED TO DEPRECIATION AND DEFERRAL OF REVENUE. WE BASE OUR ESTIMATES ON
HISTORICAL EXPERIENCE AND ON VARIOUS OTHER ASSUMPTIONS THAT ARE BELIEVED TO BE
REASONABLE UNDER THE CIRCUMSTANCES, THE RESULTS OF WHICH FORM THE BASIS FOR
MAKING JUDGMENTS ABOUT THE CARRYING VALUES OF ASSETS AND LIABILITIES THAT ARE
NOT READILY APPARENT FROM OTHER SOURCES. ACTUAL RESULTS MAY DIFFER FROM THOSE
ESTIMATES UNDER DIFFERENT ASSUMPTIONS OR CONDITIONS.



                                      -3-
<PAGE>


RESULTS OF OPERATIONS FOR THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30,
2003 COMPARED TO THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 2002.

REVENUES:

WE WERE A DEVELOPMENT STAGE COMPANY FROM JANUARY 1, 1998 (DATE OF INCEPTION)
THROUGH APRIL 2002, AT WHICH TIME OUR SOFTWARE WAS AVAILABLE FOR SALE. DURING
THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2003, WE DERIVED SERVICE REVENUE
OF APPROXIMATELY $432,000 AND $137,000 RESPECTIVELY AS COMPARED TO APPROXIMATELY
$208,000 AND $131,000 FOR THE COMPARABLE PRIOR PERIODS. IN ADDITION, DURING THE
NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2003, WE EARNED APPROXIMATELY $105,000
AND $35,000 RESPECTIVELY, FROM THE SALE OF OUR INITIAL UNIT, AS WELL AS
DEFERRING APPROXIMATELY $35,000 OF ADDITIONAL REVENUE ( OR $128,000 IN TOTAL)
RELATING TO THE SALE OF OUR INITIAL UNIT WHICH WILL BE RECOGNIZED RATABLY OVER
THE PERIOD IN WHICH WE ARE REQUIRED TO PROVIDE MAINTENANCE AND OTHER SERVICES.

RESEARCH AND DEVELOPMENT EXPENSES:

DURING THE NINE MONTHS AND THREE MONTHS ENDED SEPTEMBER 30, 2003, WE INCURRED
RESEARCH AND DEVELOPMENT EXPENSES OF APPROXIMATELY $225,000 AND $75,000,
RESPECTIVELY, AS COMPARED WITH APPROXIMATELY $379,000 AND $100,000 IN THE
COMPARABLE PRIOR PERIODS. THESE EXPENSES CONSISTED PRIMARILY OF COMPENSATION TO
OUR FOUNDERS UNDER THEIR EMPLOYMENT CONTRACTS. IN ADDITION, $75,000 OF THESE
EXPENSES IN THE FIRST QUARTER OF 2002 WAS ATTRIBUTABLE TO COMPENSATION
ASSOCIATED WITH THE ISSUANCE OF THE SHARES OF PREFERRED STOCK TO THE FOUNDERS, A
NON-CASH CHARGE. DURING THE FIRST QUARTER OF 2002, ONE OF OUR FOUNDERS WAS
TERMINATED FOR CAUSE FOR BREACH OF HIS EMPLOYMENT AGREEMENT. AS A RESULT, OUR
RESEARCH AND DEVELOPMENT EXPENSES WERE REDUCED AND SHOULD REMAIN AT THIS REDUCED
LEVEL FOR THE FORESEEABLE FUTURE.

GENERAL AND ADMINISTRATIVE EXPENSES:

DURING THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2003, WE INCURRED GENERAL
AND ADMINISTRATIVE EXPENSES OF APPROXIMATELY $297,000 AND $112,000,
RESPECTIVELY, AS COMPARED TO APPROXIMATELY $316,000 AND $119,000 IN THE
COMPARABLE PRIOR PERIODS. THE DECREASE IN THESE PERIODS IS PRIMARILY
ATTRIBUTABLE TO US INITIALLY BUILDING OUR INFRASTRUCTURE DURING 2002 AND THEN
IDENTIFYING AND ELIMINATING CERTAIN NON-CRITICAL POSITIONS OR EXPENDITURES AT
OUR CURRENT STAGE. IN THE FUTURE, CERTAIN OF THESE COSTS WILL BE INCURRED OR
INCREASED.



                                      -4-
<PAGE>


SALES AND MARKETING EXPENSES:

DURING THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2003, WE BEGAN TO INCUR
MARKETING EXPENSES AS WE INTRODUCED OUR PRODUCT FOR SALE. DURING THIS PERIOD, WE
INCURRED APPROXIMATELY $214,000 AND $89,000, RESPECTIVELY, AS COMPARED TO
APPROXIMATELY $66,000 AND $53,000 IN THE COMPARABLE PRIOR PERIODS.

NET LOSS:

AS A RESULT OF THE AFOREMENTIONED, WE INCURRED A LOSS OF APPROXIMATELY $198,000
($.01 PER SHARE) AND $104,000 ($.01 PER SHARE) FOR THE NINE AND THREE MONTHS
ENDED SEPTEMBER 30, 2003, RESPECTIVELY, AS COMPARED TO A LOSS OF APPROXIMATELY
$541,000 ($.04 PER SHARE) AND $129,000 ($.01 PER SHARE) FOR THE NINE AND THREE
MONTHS ENDED SEPTEMBER 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES:

AS OF SEPTEMBER 30, 2003, WE HAD CASH AND CASH EQUIVALENTS OF $148,000 AND
WORKING CAPITAL SURPLUS OF $33,000. TO DATE, THE PRINCIPAL SOURCES OF OUR
CAPITAL RESOURCES INCLUDE PROCEEDS FROM ISSUANCE OF SHARES OF COMMON STOCK TO
OUR FOUNDERS OF $21,250 AND THE NET PROCEEDS FROM THE PRIVATE PLACEMENT OF UNITS
OF COMMON STOCK AND WARRANTS DURING 2000 OF APPROXIMATELY $180,000. ON OCTOBER
15, 2000, WE COMPLETED AN INITIAL PUBLIC OFFERING, WHEREBY WE SOLD UNITS
CONSISTING OF ONE SHARE OF COMMON STOCK AND ONE WARRANT TO PURCHASE ONE SHARE OF
COMMON STOCK AND RECEIVED AGGREGATE PROCEEDS OF APPROXIMATELY $840,000. IN
ADDITION, IN JANUARY 2002, WE SOLD 400,000 SHARES OF OUR COMMON STOCK TO THE
PENSION FUND OF OUR PRINCIPAL STOCKHOLDER AT $.25 PER SHARE (THE APPROXIMATE
FAIR VALUE OF THE SHARES AT THE TIME OF SALE) AND RECEIVED PROCEEDS OF $100,000.
THEN, DURING SEPTEMBER 2002, WE SOLD AN ADDITIONAL 75,000 SHARES OF OUR COMMON
STOCK TO THE SAME PENSION FUND FOR $.28 PER SHARE (THE APPROXIMATE FAIR VALUE OF
THE SHARES AT THE TIME OF SALE) AND RECEIVED PROCEEDS OF $21,000. IN THE FIRST
NINE MONTHS OF 2003, WE RAISED APPROXIMATELY $221,000 FROM THE EXERCISE OF OUR
WARRANTS. WE ALSO RECEIVED NET PROCEEDS OF $71,000 DRAWN UNDER A $75,000 BANK
LOAN FROM M & T BANK. THE AFOREMENTIONED PROCEEDS HAVE BEEN USED FOR WORKING
CAPITAL, CAPITAL EQUIPMENT, AND GENERAL CORPORATE PURPOSES. IN ADDITION TO THE
AFOREMENTIONED EQUITY TRANSACTIONS, WE HAVE FUNDED A PART OF OUR ACCUMULATED
LOSS OF APPROXIMATELY $2,665,000 BY HAVING OUR FOUNDERS DEFER APPROXIMATELY
$557,000 OF COMPENSATION DUE THEM UNDER THEIR EMPLOYMENT AGREEMENTS. OF THAT
AMOUNT, THE PRINCIPAL SHAREHOLDER HAS AGREED TO CONTRIBUTE APPROXIMATELY
$426,000 TO OUR CAPITAL. WE HAVE EXECUTED A FIVE-YEAR LEASE (AT $700 PER MONTH)
FOR OFFICE SPACE AT "TECH CITY", FORMALLY THE IBM FACILITY IN KINGSTON, NY. TECH
CITY HAS BECOME THE HOME OF MANY HIGH TECHNOLOGY FIRMS IN THE HUDSON VALLEY. THE
SPACE IS SUFFICIENT FOR BOTH OUR GROWING RESEARCH AND DEVELOPMENT TEAM AND A
SALES/MARKETING FORCE.



                                      -5-
<PAGE>


       IN MAY 2003, WE SIGNED A FIVE YEAR CONTRACT WITH PARK AVENUE ASSOCIATES
IN RADIOLOGY, P.C. TO INSTALL AND MAINTAIN OUR WARPSPEED PACS/RIS SYSTEM IN ONE
OF THEIR OUTPATIENT IMAGING CENTERS. THIS INSTALLATION WAS COMPLETED AND WE
SHOULD COMMENCE EARNING REVENUE UNDER THE AFOREMENTIONED CONTRACT DURING THE
FORTH QUARTER OF 2003. WE HAVE ENTERED INTO LETTER OF INTENT WITH ST. ANTHONY'S
HOSPITAL, WARWICK, NY. MANAGEMENT EXPECTS THE FINAL CONTRACT TO CLOSE BY THE END
OF THE FORTH QUARTER. WE EXPECT TO COMMENCE EARNING REVENUES UNDER THIS
AGREEMENT DURING THE FIRST QUARTER OF 2004.








ITEM 3.

CONTROLS AND PROCEDURES

UNDER THE SUPERVISION AND WITH THE PARTICIPATION OF OUR MANAGEMENT, INCLUDING
OUR PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER, WE HAVE
EVALUATED THE EFFECTIVENESS OF THE DESIGN AND OPERATION OF OUR DISCLOSURE
CONTROLS AND PROCEDURES PURSUANT TO EXCHANGE ACT RULE13A-15 AS OF THE END OF THE
PERIOD COVRED BY THIS QUARTERLY REPORT. BASED UPON THEIR EVALUATION, OUR
PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER HAVE CONCLUDED THAT
OUR DISCLOSURE CONTROLS AND PROCEDURES ARE EFFECTIVE IN TIMELY ALERTING THEM TO
MATERIAL INFORMATION RELATING TO US REQUIRED TO BE INCLUDED IN OUR PERIODIC SEC
FILINGS. THERE WERE NO SIGNIFICANT CHANGES IN OUR INTERNAL CONTROLS OR IN
FACTORS THAT COULD SIGNIFICANTLY AFFECT THESE CONTROLS SUBSEQUENT TO THE DATE
OF THE EVALUATION. CAUTIONARY STATEMENT FOR THE PURPOSES OF THE SAFE HARBOR
PROVISIONS OF THE PRIVATE SECURITIES ACT OF 1935.

THE STATEMENTS CONTAINED IN THE SECTION CAPTIONED MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS WHICH ARE NOT
HISTORICAL ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS REPRESENT THE
COMPANY'S PRESENT EXPECTATIONS OR BELIEFS CONCERNING FUTURE EVENTS. THE COMPANY
CAUTIONS THAT SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
RESULTS, PERFORMANCE, OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHER THINGS, THE
UNCERTAINTY AS TO THE COMPANY'S FUTURE PROFITABILITY, THE UNCERTAINTY AS TO THE
DEMAND FOR THE INTERNET VIRTUAL COMMUNITIES; INCREASING COMPETITION; THE ABILITY
TO HIRE, TRAIN, AND RETRAIN SUFFICIENT QUALIFIED PERSONNEL; THE ABILITY TO
OBTAIN FINANCING ON ACCEPTABLE TERMS TO FINANCE THE COMPANY'S GROWTH.



                                      -6-
<PAGE>


PART II

ITEM 1.

LEGAL PROCEEDINGS.

DURING THE THIRD QUARTER, THE COMPANY ENTERED INTO, AND HAS SINCE CONCLUDED,
BINDING ARBITRATION WITH CARLTON PHELPS PERTAINING TO CERTAIN PROVISIONS OF HIS
EMPLOYMENT AGREEMENT EXECUTED DECEMBER 1999. A DECISION IS PENDING AND IS
SCHEDULED FOR RELEASE BY THE ARBITRATOR ON JANUARY 14, 2004. IT IS THE OPINION
OF MANAGEMENT THAT THE COMPANY WILL PREVAIL IN THESE MATTERS, AND THERE WILL BE
NO MATERIAL EFFECT ON THE COMPANY, OR ITS OPERATIONS.

ITEM 2.

CHANGES IN SECURITIES.

DURING THE NINE MONTHS ENDED SEPTEMBER 30, 2003, WE RECEIVED APPROXIMATELY
$221,000 UPON THE EXERCISE OF CLASS A AND B WARRANTS FOR THE PURCHASE OF
APPROXIMATELY 1,189,000 SHARES OF COMMON STOCK AT $.20 PER SHARE. ALL OF WHICH
WERE ISSUED AND OUTSTANDING AS OF SEPTEMBER 30, 2003.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

NONE.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THERE ARE NO REPORTABLE
EVENTS RELATING TO THIS ITEM.

ITEM 5.

OTHER INFORMATION. THERE ARE NO REPORTABLE EVENTS RELATING TO THIS ITEM.

ITEM 6.

EXHIBITS AND REPORTS ON FORM 8-K.

(A) 31.1 AND 31.2. (B) NONE


PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.



IMAGE TECHNOLOGY LABORATORIES, INC.
DATE: NOVEMBER 14, 2003


/S/ DAVID RYON
------------------------------
DAVID RYON, CEO, PRESIDENT AND
PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER





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