================================================================================

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   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 March 31, 2004

                                       OR

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

             For the transition period from __________ to __________

                         Commission File Number 0-25037

                        MARX TOYS AND ENTERTAINMENT CORP.
                        (formerly stereoscape.com, inc.)
        (Exact name of small business issuer as specified in its charter)


             NEVADA                                         06-1469654
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


                   101 South 15th Street, Sebring, Ohio 44672
                    (Address of Principal Executive Offices)

                                 (330) 938-1749
                           (Issuer's telephone number)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [ ].

Indicate the number of shares outstanding of each of the registrant's classes of
common stock as of the latest practicable date: 47,653,000 shares of common
stock, $0.001 par value, as of November 28, 2003.

================================================================================

<PAGE>

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The consolidated financial statements of Marx Toys and Entertainment Corp. and
subsidiaries (collectively, the "Company"), included herein were prepared,
without audit, pursuant to rules and regulations of the Securities and Exchange
Commission. Because certain information and notes normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States of America were condensed or omitted pursuant to such rules
and regulations, these financial statements should be read in conjunction with
the financial statements and notes thereto included in the audited financial
statements of the Company as included in the Company's Form 10-KSB for the year
ended December 31, 2003.


                                       2

<PAGE>


                        MARX TOYS AND ENTERTAINMENT CORP.

                                   FORM 10-QSB

                                 MARCH 31, 2004

                                      INDEX

                                                                            Page

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements (Unaudited)
         Consolidated Balance Sheets........................................F-2
         Consolidated Statements of Operations..............................F-3
         Consolidated Statements of Cash Flows..............................F-4
         Consolidated Statements of Stockholders' Equity....................F-5
         Notes to Consolidated Financial Information........................F-6

Item 2   Management's Discussion and Analysis or Plan of Operation............8

Item 3   Controls and Procedures.............................................12


Part II - OTHER INFORMATION

Item 1. Legal Proceedings....................................................13

Item 2. Changes In Securities................................................14

Item 3. Defaults Upon Senior Securities......................................14

Item 4. Submission Of Matters To A Vote Of Security Holders..................14

Item 5.  Other Information...................................................14

Item 6.  Exhibits and Reports on Form 8-K....................................14

Signatures...................................................................15

Certifications...............................................................16

<PAGE>

PART I:  FINANCIAL INFORMATION.

                        MARX TOYS AND ENTERTAINMENT CORP.
                                AND SUBSIDIARIES
                                 MARCH 31, 2004


TABLE OF CONTENTS                                                         Page

FINANCIAL STATEMENTS

         Balance Sheet as of March 31, 2004                               F-1
         Statements of Operations for the year
                  ended March 31, 2003 and March 31, 2004                 F-2
         Statements of Operations for the year
                  ended March 31, 2003 and March 31, 2004                 F-3
         Statements of Stockholders' Deficiency for year
                     ended March 31, 2003 and March 31, 2004              F-4
         Statements of Cash Flows for the year
                  ended March 31, 2003 and March 31, 2004                 F-5
         Notes to Financial Statements                                   F6-F11

<PAGE>

               MARX TOYS AND ENTERTAINMENT CORP. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                       March 31,         December 31,
                                                                         2004                2003
                                                                      -----------        -----------
                           ASSETS                                     (unaudited)
<S>                                                                   <C>                <C>
Current Assets
     Cash                                                             $       467        $       335
     Inventory, net                                                        93,484             96,194
                                                                      -----------        -----------
          Total Current Assets                                             93,951             96,529

                                                                      -----------        -----------
          Total Assets                                                $    93,951        $    96,529
                                                                      ===========        ===========

              LIABILITIES AND CAPITAL

Current Liabilities
     Accounts payable and accrued expenses                            $   838,835        $   827,988
     Liabilities of discontinued business segment                         183,914            183,914
     Merchandise credits                                                   80,939             80,939
     Notes and loans payable                                              665,000            690,000
                                                                      -----------        -----------
          Total Current Liabilities                                     1,768,688          1,782,841

Stockholders' Equity (Deficit)
  Common stock, 200,000,000 shares authorized at $.001
    par value; issued and outstanding 56,653,000 and 47,653,000
    at March 31, 2004 and December 31, 2003                                56,653             47,653
Additional paid-in capital                                              6,287,901          5,846,901
Accumulated deficit                                                    (8,019,291)        (7,580,866)
                                                                      -----------        -----------
          Stockholders' Equity (Deficit)                               (1,674,737)        (1,686,312)
                                                                      -----------        -----------
          Total Liabilities and Capital                               $    93,951        $    96,529
                                                                      ===========        ===========
</TABLE>

                       See Notes to Financial Statements.

                                       3
<PAGE>

               MARX TOYS AND ENTERTAINMENT CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                  For the Three Months Ended
                                                             March 31,
                                                   2004                2003
                                               ------------        ------------
                                                (unaudited)        (unaudited)
Sales                                          $      4,714        $     40,562

Cost of sales                                         2,710              28,590
                                               ------------        ------------

Gross profit                                          2,004              11,972

Stock compensation                                  400,000             267,000
General and administrative expenses                  15,429              98,287
                                               ------------        ------------
                                                    415,429             365,287

    Loss from operations                           (413,425)           (353,315)

Other income and expenses
    Interest expense                                (25,000)             (8,300)
                                               ------------        ------------

Net loss                                       $   (438,425)       $   (361,615)
                                               ============        ============

Net loss per common share                      $      (0.01)       $      (0.02)
                                               ============        ============

Weighted average shares outstanding              56,653,000          22,295,765
                                               ============        ============


                       See Notes to Financial Statements.

                                       4
<PAGE>

               MARX TOYS AND ENTERTAINMENT CORP. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                      For the Three Months Ended
                                                                               March 31,
                                                                         2004            2003
                                                                      ---------        ---------
                                                                     (unaudited)      (unaudited)
<S>                                                                   <C>              <C>
OPERATING ACTIVITIES
   Net loss                                                           $(438,425)       $(361,615)
   Adjustments to reconcile net loss to net cash
      used by operating activities:
   Common stock issued for services                                           -          107,000
   Stock issued for compensation                                        400,000          160,000
   Stock issued for interest expense                                     25,000
   Changes in operating assets and liabilities:
   (Increase) decrease in accounts receivable                                 -             (300)
   (Increase) decrease in inventory                                       2,710           24,337
   Increase (decrease) in accounts payable and accrued expenses          10,847           33,300
                                                                      ---------        ---------
   Net cash used by operating activities                                    132          (37,278)

INVESTING ACTIVITIES
   Officer laon receivable                                                    -         (318,600)
                                                                      ---------        ---------
   Net cash used by investing activities                                      -         (318,600)

FINANCING ACTIVITIES
   Sale of convertible notes                                                  -          318,600
   Loan payable                                                               -           36,978
                                                                      ---------        ---------
   Net cash provided by financing activities                                  -          355,578
                                                                      ---------        ---------

   Increase (decrease) in cash                                              132             (300)
   Cash at beginning of period                                              335              804
                                                                      ---------        ---------
   Cash at end of period                                              $     467        $     504
                                                                      =========        =========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during year for:
     Interest                                                         $      --        $      --
                                                                      =========        =========
     Income taxes (benefits)                                          $      --        $      --
                                                                      =========        =========
</TABLE>

                       SEE NOTES TO FINANCIAL STATEMENTS.

                                        5

<PAGE>

               MARX TOYS AND ENTERTAINMENT CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004

NOTE 1-  The accompanying consolidated financial statements contain all
         adjustments necessary to present fairly the financial position of Marx
         Toys and Entertainment Corp. and subsidiaries (collectively, the
         "Company") as of March 31, 2004 and their results of operations and
         their cash flows for the three month periods ended March 31, 2004 and
         2003. Results of operations for the three month period ended March 31,
         2004 are not necessarily indicative of the results that may be expected
         for the year ending December 31, 2004. All material inter-company
         balances and transactions have been eliminated in consolidation.

NOTE 2-  Basic earnings (loss) per common share ("EPS") is computed as net
         earnings (loss) divided by the weighted-average number of common shares
         outstanding for the period. Diluted EPS representing the potential
         dilution that could occur from common shares issuable through
         stock-based compensation including stock options, restricted stock
         awards, warrants and other convertible securities is not presented for
         the three month periods ended March 31, 2004 and 2003 since there was
         no dilutive effect of potential common shares.

NOTE 3-  In March 2004, the Company issued 9,000,000 shares of common stock
         for consulting services and interest and principle on the loans due
         April, 2002.

NOTE 4-  During April 2004, the Company sold 300,000 shares of common stock
         for gross proceeds of $10,000.

         During April 2004, the Company entered into an agreement with the
         parties holding a lien on the toy molds, whereby they received 400,000
         shares of common stock. When they receive an additional $125,000
         payment the lien on the toy molds will be released and the Company will
         then have good title to the toy molds.

         During April 2004, the Company defaulted on a litigation settlement and
         now has a judgment of approximately $30,000 against it.

         In April 2004, the Company borrowed $30,000 from an investor with no
         interest or definite terms of repayment.


                                        6

<PAGE>

               MARX TOYS AND ENTERTAINMENT CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004

Note 4- (continued)

         During May 2004, the Company amended all of its agreements with Michael
         Shalit and Michael Marx LLC (collectively "Shalit") whereby Shalit
         relinquishes the option to purchase 10,000,000 shares of the Company
         and all rights awarded under the prior agreements in exchange for the
         following:

            1,000,000 shares of the Company's restricted common stock

            2,000,000 shares of the Company's free trading common stock to be
            awarded no later than May 20, 2004.

         A note in the amount of $115,000 with interest at 6% compounded daily
         (to replace the existing note and interest payable) to be paid in
         installments of $10,000 with the first payment due February 1, 2005 and
         each additional payment to be made every 90 days until the debt is paid
         in full. The last payment will include all interest due.

         The above agreement is secured by a lien on the Company's inventory.

         During May 2004 the Company has negotiated a settlement of the Toontz
         litigation whereby the Company will pay the Toontz legal fees of
         $136,000 and pay $100,000 to its former employee to settle the
         employment agreement.


                                        7

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
FORWARD-LOOKING STATEMENTS

The following discussion should be read in conjunction with our audited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.

Forward-looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or our behalf. We disclaim any obligation to update
forward-looking statements.

OVERVIEW

         Marx Toys and Entertainment Corp. (formerly stereoscape.com, inc.)
("Marx" or the Company") was incorporated on June 8, 1988 as a corporate shell
developed to generate capital resources which were to be used to acquire or
participate in a business or business entity. The Company began as a Development
Stage Company, and on April 17, 1997 acquired 100% of the outstanding shares of
American Buyers Club International, Inc., ("ABC") in a business combination
accounted for as a purchase. ABC became a wholly owned subsidiary of the Company
through the exchange of 10,980,000 shares of the Company's common stock for all
of the outstanding shares of ABC.

         On August 23, 2000 the Company entered into a stock purchase agreement
with the principals of epiggybank.com, inc. ("epiggybank"), a financial and
educational web site for children. The terms of the agreement included the
transfer, to the Company, of the "epiggybank" name, trademarks, intellectual
properties, and other assets being used in the seller's business. Since the
sellers were unable to deliver a valid trademark for "epiggybank" the Company
rescinded the transaction, and halted and cancelled the shares issued in the
transaction.

         Effective October 1, 2000 the Company acquired 100% of the outstanding
shares of Marx Toys, Inc.("Marx Toys") in a business combination accounted for
as a purchase. Marx Toys became a wholly owned subsidiary of the Company through
the exchange of 15,000,000 shares of the Company's common stock for all of the
outstanding shares of Marx Toys, Inc.

         On July 16, 2001 the Company acquired all of the issued and outstanding
stock of Toontz Toyz, Inc. ("Toontz"), a New Jersey corporation. "Toontz" is
involved in the development of intellectual properties, which they will license
to other companies for the use in production of numerous products.


                                       8
<PAGE>


         On March 11, 2003 the parent company's name was changed to Mark Toys
and Entertainment Corp.

         Marx Toys was one of the world's largest toy brands through much of the
20th century. The Company acquired the right to use the "Marx Toys" name for the
sale of collectable action figures and play sets. The Company has been selling
Marx's collectibles and play sets primarily through the Internet and via
telemarketing. In the future the Company plans to expand their sales to include
major toy retailers. The Marx brand is synonymous with quality and value.

         References herein the "Marx" or "the Company" unless otherwise
indicated include Marx Toys and Entertainment Corp., Marx Toys and Toontz.

Products.

         The Marx products being sold include play sets, such as Fort
Apache(TM), Battleground(TM), Cape Canaveral, Castle of the Noble Knights and
Remember the Alamo! In addition, Marx sells action figures, which include the
highly detailed Noble Knights, Vikings, the ever popular Johnny West(TM) series,
Warriors of the World, and General Custer. The company is engaged in licensing
the vintage Marx train line. "Toontz" is still in the developmental stage, and
therefore, has not record any sales or income through December 31, 2002.

New Products and Expansion.

         Marx is primarily bringing back many of their toys that were coveted
throughout the years. The play sets and action figures are being sold for
collectors and for children as play toys. In many cases, the buyer will purchase
2 similar toys, one for show and one for play. The Company is evaluating various
alternatives to introduce additional Marx vintage toys while examining the
potential of selling new toys under the Marx name. The Company has been
discussing various licensing arrangement with several board game designers and
manufacturers to promote and sell these new game boards under the Marx name. The
company feels that this sector of the toy industry will open substantial revenue
producing channels for the Company. In one particular game board under review
the main character will be an original Marx creation. The exciting potential for
these game boards are that they are designed for a larger audience that would
include both children and adults. The company is also looking to utilize current
technology to enhance the marketability of several Marx creations for today's
market, and is the final stages of development of an interactive product to be
licensed to a major internet provider .

Product Line Exclusivity License & Trademark Agreements.

         Marx is currently licensing the rights to manufacture, and distribute,
the well-known line of Marx Trains(TM). These are carefully crafted, scale
trains made of qualified lithographed tin plate metal. They are made to the same
specifications that Marx made their metal trains from 1933 to 1955. Marx has
also entered into licensing and trademark agreements with several other
companies to produce Marx Toy products.

Government Regulations.

         The costs and effects of compliance with governmental regulations are
not material to the operations of the consolidated group.


                                       9
<PAGE>


Research & Development.

         Toontz is presently in negotiations for the licensing the development
of its animation series that will provide exposure to the Toontz characters
"Minook and the Brainbots". The company feels that the resources necessary to
complete this project will require alliances with currently established groups
in the entertainment and animation industry. The Company will expense research
and development costs as incurred. There were no research and development costs
for 2004.

Cost and Effects of Compliance with Environmental Laws

         The costs and effects of compliance with environmental laws are not
material to the operations of the consolidated group.

Current Employees

         The Company currently employs 1 person, on a full time basis, and 3 on
a part time basis. None of the Company's employees are members of unions.

RESULTS OF OPERATIONS

FOR THE QUARTER ENDED ENDING MARCH 31, 2004 VS. MARCH 31, 2003

For the quarter ended March 31, 2004, the Registrant had Revenues of $4,714,
compared to $40,562 for the quarter ended March 31, 2003, with Cost of Sales of
$2,710 compared to $28,590 in the comparison quarter. Gross profit for the
fiscal quarter was $2,004, compared to $11,972 gross profit in the fiscal
quarter ended March 31, 2003. Administrative expenses were $415,459, including
$400,000 in stock compensation for the recent fiscal quarter resulting in a loss
from operations of $413,425. It is anticipated by the Registrant that General
and Administrative costs will remain relatively the same, while Revenues and
Gross profit will increase. Cash and inventory decreased from $93.951 from
$96,529. Liabilities in the quarter ended March 31, 2004, decreased to
$1,768,688 from $1,782,841, mostly as a result of a reduction in Notes and loans
payable.

LIQUIDITY AND FINANCIAL RESOURCES

The Company incurred a net loss of $438,425 during the quarter ended March 31,
2004 and has incurred substantial net losses for each of the past two years. As
of March 31, 2004, current liabilities exceed current assets by $1,674,737.
These factors raise substantial doubt about the Company's ability to continue as
a going concern. It is the intention of the Company's management to improve
profitability by significantly reducing operating expenses and to increase
revenues significantly, through growth and acquisitions. The ultimate success of
these measures is not reasonably determinable at this time.

RISK FACTORS

Much of the information included in this statement includes or is based upon
estimates, projections or other "forward looking statements". Such forward
looking statements include any projections or estimates made by us and our
management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.


                                       10
<PAGE>


Such estimates, projections or other "forward looking statements" involve
various risks and uncertainties as outlined below. We caution the reader that
important factors in some cases have affected and, in the future, could
materially affect actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or other "forward
looking statements".

RISK FACTORS

We Have Limited Resources and No Revenues From Operations, and May Need
Additional Financing in Order to Execute our Business Plan; Our Auditors Have
Expressed Doubt as to our Ability to Continue Business as a Going Concern

         We have limited resources, no revenues from operations to date, and our
cash on hand may not be sufficient to satisfy our cash requirements during the
next twelve months. In addition, we will not achieve any revenues (other than
insignificant investment income) until, at the earliest, the consummation of a
merger and we cannot ascertain our capital requirements until such time. There
can be no assurance that determinations ultimately made by us will permit us to
achieve our business objectives. Our auditors have included an explanatory
paragraph in their report for the year ended December 31, 2003, indicating that
certain conditions raise substantial doubt regarding our ability to continue as
a going concern. The financial statements included in this Form 10-KSB do not
include any adjustment to asset values or recorded amounts of liability that
might be necessary in the event we are unable to continue as a going concern. If
we are in fact unable to continue as a going concern, shareholders may lose
their entire investment in our common stock.

"Penny Stock" Rules May Restrict the Market for the Company's Shares

         Our common shares are subject to rules promulgated by the Securities
and Exchange Commission relating to "penny stocks," which apply to companies
whose shares are not traded on a national stock exchange or on the NASDAQ
system, trade at less than $5.00 per share, or who do not meet certain other
financial requirements specified by the Securities and Exchange Commission.
These rules require brokers who sell "penny stocks" to persons other than
established customers and "accredited investors" to complete certain
documentation, make suitability inquiries of investors, and provide investors
with certain information concerning the risks of trading in the such penny
stocks. These rules may discourage or restrict the ability of brokers to sell
our common shares and may affect the secondary market for our common shares.
These rules could also hamper our ability to raise funds in the primary market
for our common shares.

Possible Volatility of Share Prices

         Our common shares are currently publicly traded on the Over-the-Counter
Bulletin Board service of the National Association of Securities Dealers, Inc.
The trading price of our common shares has been subject to wide fluctuations.
Trading prices of our common shares may fluctuate in response to a number of
factors, many of which will be beyond our control. The stock market has
generally experienced extreme price and volume fluctuations that have often been
unrelated or disproportionate to the operating performance of companies with no
current business operation. There can be no assurance that trading prices and
price earnings ratios previously experienced by our common shares will be
matched or maintained. These broad market and industry factors may adversely
affect the market price of our common shares, regardless of our operating
performance.


                                       11
<PAGE>


         In the past, following periods of volatility in the market price of a
company's securities, securities class-action litigation has often been
instituted. Such litigation, if instituted, could result in substantial costs
for us and a diversion of management's attention and resources.

Indemnification of Directors, Officers and Others

         Our By-Laws contain provisions with respect to the indemnification of
our officers and directors against all expenses (including, without limitation,
attorneys' fees, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with any proceeding arising by reason of the
fact that the person is one of our officers or directors) incurred by an officer
or director in defending any such proceeding to the maximum extent permitted by
Delaware law.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
our company under Delaware law or otherwise, we have been advised the opinion of
the Securities and Exchange Commission is that such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable.

Anti-Takeover Provisions

         We do not currently have a shareholder rights plan or any anti-takeover
provisions in our By-Laws. Without any anti-takeover provisions, there is no
deterrent for a take-over of our company, which may result in a change in our
management and directors.

We Do Not Expect to Pay Cash Dividends

         We do not expect to pay dividends and we have no cash reserves. The
payment of dividends after consummating a merger will be contingent upon the
incoming management's views and our revenues and earnings, if any, capital
requirements, and general financial condition subsequent to consummation of the
merger. We presently intend to retain all earnings, if any, for use in business
operations and accordingly, the Board does not anticipate declaring any
dividends in the foreseeable future. It is probable that any post-merger
arrangement will have a similar philosophy.

ITEM 3. CONTROLS AND PROCEDURES.

The Registrant's principal executive officers and principal financial officer,
based on their evaluation of the registrant's disclosure controls and procedures
(as defined in Rules 13a-14 (c) of the Securities Exchange Act of 1934) as of
January 2, 2004, have concluded that the Registrants' disclosure controls and
procedures are adequate and effective to ensure that material information
relating to the registrants and their consolidated subsidiaries is recorded,
processed, summarized and reported within the time periods specified by the
SEC's rules and forms, particularly during the period in which this quarterly
report has been prepared.

The Registrants' principal executive officers and principal financial officer
have concluded that there were no significant changes in the registrants'
internal controls or in other factors that could significantly affect these
controls subsequent to January 2, 2004, the date of their most recent evaluation
of such controls, and that there was no significant deficiencies or material
weaknesses in the registrant's internal controls.


                                       12
<PAGE>


PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

         In February 2002, the Company was named as a defendant in a complaint
filed by American Plastic Equipment "American." The complaint alleged that
substantially all of the assets acquired in the acquisition of Marx Toys, Inc.
were encumbered as collateral for an obligation due to American owed by the
former owner of Marx Toys, Inc. In the complaint, American asserted that they
had filed a security interest against certain assets of Marx Toys, Inc.
including plastic toy molds and non-toy molds stored in two facilities in
Mahoning County, Ohio. The security interest is in the sum of $675,000 and was
recorded prior to the Company's acquisition of Marx Toys. The Complaint was
pending in the Mahoning County Court of Common Pleas. A magistrate and Judge
ruled against the Company and the assets were seized. At December 31, 2001 the
Company provided for the impairment of these assets (see Note 6). The Company
plans to seek recovery of these assets through a settlement, and the Company
intends to seek to recover its lost assets from the former owner of Marx through
all legal means necessary.

         Three actions are pending against the Company in Florida State Court,
in Miami-Dade County Florida. Jay Horowitz v. Stereoscape.com, Inc. and Marx
Toys, Inc., Case No. 02-05 611 CC27. This action asserts various causes of
action, including money lent ($35,000) and breach of contract ($38,220) American
Plastic Equipment, Inc. v. Stereoscape.Com, Inc. and Marx Toys Inc., Case No.
02-04859 CC 05. This action asserts various causes of action, including breach
of contract ($5,076), unjust enrichment ($5,076), conversion ($482), and breach
of oral agreement ($798). Steven L. Horowitz v. Stereoscape. Com, Inc.,
00001-29822 CA 11. This action asserts a claim for moneys owed under a
promissory note in the amount of $50,000. The defendants have answered these
complaints, asserting various affirmative defenses. To date, no discovery has
been taken in the cases and the defendants' liability is as yet not
determinable.

         The Company was named as a defendant in an action titled, MICHAEL
TEMPURA V. STEREOSCAPE.COM, INC., AND STEVEN WISE, in the Supreme Court of the
State of New York, County of New York, Index No.: 02-127801. The Company has
filed an answer to the actions. The action seeks to recover for an investment
into the company and seeks a total of $25,000.00. The parties reached a
resolution of the action, calling for the payment of five payments of $5,000 per
payment commencing April 13, 2004 and ending on August 20, 2004. Upon failure to
pay, the Defendants consented to a Judgment in the amount of $30,000, without
pre-judgment interest. The Defendants failed to make a payment, as called for in
the Stipulation of Settlement. Therefore the Plaintiff filed a Judgment for the
entire amount, plus costs for a total of $30,495.00. If the Judgment is not
paid, the Plaintiff may seek to enforce his rights as a Judgment Creditor and
cause material harm to the Registrant.

         The Securities and Exchange Commission on September 5, 2003 instituted
public administrative and cease-and-desist proceedings, pursuant to Section 8A
of the Securities Act of 1933 ("Securities Act") and Sections 15(b) and 21C of
the Securities Exchange Act of 1934 ("Exchange Act"), Steven Wise. He was also
arrested pursuant to e a complaint in United States District Court for the
Southern District of New York. He was the Chief Executive Officer and sole
director of the Company. It is alleged in the Administrative proceeding and the
criminal case that Wise and Larry Vindman have engaged in fraudulent and
manipulative practices to inflate artificially the demand for, and the share
price of, MRXT common stock. It is alleged that Wise and Vindman also engaged in
other conduct to manipulate the demand for, and share price of, MRXT common
stock, including paying undisclosed kickbacks to registered representatives of
at least one other registered broker-dealer as compensation for those registered
representatives selling shares of MRXT common stock to their retail customers.
MRXT filed, on August 29, 2003, a Form S-8, registering 8,000,000 shares of
common stock issuable under its 1998 Incentive and Non-qualified Stock Option
Plan.


                                       13
<PAGE>


         Subsequent to this event he resigned as an officer and director of the
Company.

         On February 11, 2004, the Company received a letter from the Securities
and Exchange Commission (the "Commission") with respect to its Form 10-KSB for
December 31, 2002, Form 10-QSB for June 30, 2003 and Form 10-QSB for September
30, 2003. The Commission set forth seventeen comments with respect to items
contained in the aforementioned Forms of the Company. The comments dealt mostly
with specific inquiries regarding accounting issues. The Company intends to
address these issues with the Commission and file amended Forms as soon as
practicable.


ITEM 2. CHANGES IN SECURITIES.

None


ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.


ITEM 5. OTHER INFORMATION.

None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)   Exhibits

      3.1   Articles of Incorporation of the Registrant*

      3.2   By-laws of the Registrant*

      31.1  Section 302 Certification of President and Chief Executive Officer
            and Chief Financial Officer

      32.1  Section 906 Certification of President and Chief Executive Officer
            and Chief Financial Officer

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

* Previously filed as an exhibit to the Company's Form 10-SB filed on 10-SB, as
amended, filed on November 6, 1998, and as amended thereafter


                                       14
<PAGE>


(b)   Reports on Form 8-K filed during the three months ended March 31, 2004.


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: May 21, 2004

                                          Marx Toys and Entertainment Corp.

                                          /s/ Robert Bamberry
                                          -----------------------------------
                                          Robert Bamberry, President,
                                          Chief Financial Officer