U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)
[x]QUARTERLY REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES
     EXCHANGE ACT OF 1934

                    For the quarter ended September 30, 2001

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

                             Commission file number
                                     0-25037

                              stereoscape.com, inc.
                 (Name of small business issuer in its charter)

            Nevada                                  06-1469654
(State or other jurisdiction            (IRS Employer identification no.)
of incorporation or organization)

                3440 Highway 9 South, Freehold, New Jersey 07728
                    (Address of principal executive offices)

                                 (732) 462-7767
                           (Issuer's telephone number)
                        ---------------------------------

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

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                     PROCEEDINGS DURING THE PAST 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 ....... N/A

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     Number of shares  outstanding  of each of the  issuer's  classes  of common
equity as of September 30, 2001.

           Title of Each Class                 Number of Shares Outstanding
 Common Stock, $.001 par value per share                168,818,610

<PAGE>
                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                     CONSOLIDATED BALANCE SHEET (UNAUDITED)
                               September 30, 2001

                                     ASSETS

Current Assets:

          Cash                                                        $ 151,868
          Accounts and notes receivable                                  42,821
          Inventories                                                   814,186
          Other current assets                                          119,720
                                                                    ------------
Total Current Assets                                                  1,128,595

Property and Equipment - Net                                            939,351
Other assets                                                            203,348
                                                                    ------------
TOTAL ASSETS                                                        $ 2,271,294
                                                                    ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

     LIABILITIES

Current Liabilities:

          Accounts payable                                            $ 358,292
          Merchandise credits                                            91,494
          Notes and loans payable                                       492,781
          Accrued expenses and other current liabilities                165,818
                                                                    ------------
Total Current Liabilities                                           $ 1,108,385
                                                                    ------------
Commitments and Contingencies

                              STOCKHOLDERS' EQUITY

Common Stock
          Par value $.001 - 200,000,000 shares authorized,
             178,802,115 shares issued and outstanding                  178,802
Additional paid in capital                                            3,337,476
Deficit                                                              (2,353,369)
                                                                    ------------
Total Stockholders' Equity                                            1,162,909
                                                                    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 2,271,294
                                                                    ============

         See notes to the consolidated financial statements (unaudited).

                                       2
<PAGE>

                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                            For the Three Months Ended For the Nine Months Ended
                                    September 30             September 30
                                   2001        2000        2001          2000
                               -------------------------------------------------

Sales                          $ 218,681   $ 441,702  $ 1,074,655   $ 1,743,639


Cost of sales                    186,481     434,494      702,469     1,472,911
                               -------------------------------------------------

Gross profit                      32,200       7,208      372,186       270,728


Selling, General and
   Administrative                468,889     114,999    1,296,540       586,087
                               -------------------------------------------------


Net (Loss)                    $ (436,689) $ (107,791)  $ (924,354)   $ (315,359)
                               =================================================


Net Loss per share,
   basic and diluted            $ (0.003)   $ (0.001)    $ (0.007)     $ (0.005)

Weighted average number of
   shares, basic and diluted 153,195,567  82,872,585  132,016,742    63,103,875

         See notes to the consolidated financial statements (unaudited).

                                       3
<PAGE>

                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                     For the Nine Months Ended
                                                             September 30,
                                                        2001              2000
                                                   -----------------------------
Cash flows from operating activities:
          Net loss                                 $ (924,354)       $ (315,359)
Adjustments to reconcile net loss to net cash
   used in operations:
          Depreciation and amortization                27,407             2,839
     Changes in operating assets:
          Accounts and notes receivable               (19,459)          (73,409)
          Inventories                                (537,038)          103,867
          Other current assets                        (57,021)           42,256
     Changes in operating liabilities:
          Accounts payable                            135,939          (315,711)
          Merchandise credits                          (8,727)         (179,212)
          Accrued expenses and other
             current liabilities                     (114,075)           57,358
                                                   -----------------------------

Net cash used in operating activities              (1,497,328)         (677,371)

Cash flow from investing activities:
          Acquisition of intellectual properties     (175,000)         (250,000)
          Purchase of fixed assets                    (12,170)                -
                                                   -----------------------------

Net cash used in investing activities                (187,170)         (250,000)
                                                   -----------------------------
Cash flow from financing activities:
          Issuance of capital stock                 1,284,749         1,354,065
          Increase in other assets                     (5,600)                -
          Decrease in loans payable                   (27,971)
          Proceeds from note and loans payable        375,000             9,500
                                                   -----------------------------

Net cash provided by financing activities           1,626,178         1,363,565
                                                   -----------------------------

Increase (decrease) in cash                           (58,320)          436,194

Cash , beginning of period                            210,188             3,557

Cash, end of period                                $  151,868         $ 439,751
                                                   =============================

Supplemental disclosure of cash flow information:

     Interest paid                                     $7,024            $7,557


        See notes to the consolidated financial statements (unaudited).

                                       4
<PAGE>

                 stereoscape.com, inc. AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES

     ORGANIZATION

     stereoscape.com,  inc. (the  "Company")  was  established in 1988 under the
name Alliance  Health  Enterprises,  Inc. In April 1997 the  Company's  Board of
Directors  approved a change in the Company's  name from Alliance  Technologies,
Inc. at which time the Company acquired American Buyers Club International, Inc.
("ABC").  In April,  1997 ABC formed  Alpha Sound and  Vision,  Inc. as a wholly
owned subsidiary.  In December 1998 the Company's Board of Directors  approved a
change in the Company's name to stereoscape.com, inc. The Board of Directors has
approved a change in the Company's name to The Marx Toy Group,  Inc. This change
requires approval by the shareholders of the Company.
     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 sight for  children.  The terms of the  agreement  included the
transfer,  to the Company, of the "epiggybank" name, trademarks and intellectual
properties,  and other  assets being used in the  seller's  business.  Since the
sellers  have been  unable to deliver a valid  trademark  for  "epiggybank"  the
Company is in the process of  rescinding  the  transaction,  and to that end has
halted the shares issued in the transaction.
     Effective  October 1, 2000 the Company  acquired Marx Toys, Inc.  ("Marx").
"Marx" is located in North Miami,  Florida and sells collectible  action figures
and  play  sets  primarily   through   retail  stores,   the  internet  and  via
telemarketing.
     "ABC" is located in  Freehold,  New  Jersey  and sells  high  quality  home
entertainment   equipment.   Substantially  all  business  is  obtained  through
advertising in trade magazines and via the Internet.
     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  with the  development  of  intellectual  properties,  which  they will
license to our companies for use in the production of numerous products.

     FINANCIAL STATEMENT PRESENTATION

     The consolidated  financial  statements include the accounts of the Company
and its wholly owned subsidiary  companies.  All material inter company balances
are eliminated.

     INVENTORIES

     Inventories  are stated at the lower of cost or market as determined by the
first-in, first-out method.

     DEPRECIATION AND AMORTIZATION

     Depreciation  and  amortization  is computed  utilizing  the  straight-line
method  over the  estimated  useful  lives of the  related  assets,  which range
between three and fifteen years.

                                       5
<PAGE>

     ADVERTISING COSTS

     The  Company  expenses  production  costs of print,  radio  and  television
advertisements  as of the first date the  advertisements  take place.  All other
advertising  costs are expensed as incurred.  Advertising  expenses  included in
selling,  administrative  and general  expenses  were $48,204 in the nine months
ended September 30, 2001 and $18,734 in the same period in 2000.

     EARNINGS PER COMMON SHARE

     In the fourth quarter of 1997, the Company  adopted  Statement of Financial
Accounting  Standards No. 128, "Earnings per Share" (SFAS 128), which supersedes
Accounting  Principles  Board Opinion No. 15. Under SFAS 128 earnings per common
share is computed by dividing net income (loss) available to common shareholders
by the  weighted-average  number of common shares outstanding during the period.
On October 4, 2000 the Company effected a 15 for 1 stock split. All calculations
and share  amounts  have been  adjusted  to  reflect  the split  value.  Diluted
earnings  per share do not reflect the  potential  dilution  that could occur if
securities or other contracts to issue common shares were exercised or converted
into common shares or resulted in the issuance of common shares as the impact of
such would be antidilutive, given the net losses incurred.


     REVENUE RECOGNITION AND FINANCIAL STATEMENTS

     Net sales are recognized at the time  merchandise is released or shipped to
customer.

     In December 1999, the  Securities and Exchange  Commissions  ("SEC") issued
SEC Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB 101 summarized certain of the SEC's views in applying generally
accepted accounting  principles to revenue recognition in financial  statements.
SAB 101 is effective  for the Company in the third  quarter of fiscal year 2001.
The Company is reviewing the requirements of SAB 101 and currently believes that
its revenue recognition policy is consistent with the guidance of SAB 101.

                                       6
<PAGE>

                      stereoscape.com, inc. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (continued)


     USE OF ESTIMATES

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts in the financial  statements  and
accompanying notes. Actual results could differ from these estimates.

     WARRANTY

     A  subsidiary  of the Company  sells its products  with the  manufacturer's
factory or Alpha's company  warranty.  In addition,  the Company offers extended
warranties, at an additional cost. The extended warranties are underwritten by a
third party, for which the Company pays a fixed fee.

     NEW ACCOUNTING PRONOUNCEMENTS

     Effective in 1998, the Company  adopted  Statement of Financial  Accounting
Standards No.130,  Reporting  Comprehensive Income ("SFAS No. 130"). The Company
has no items of comprehensive income.

     The  Company  adopted  Statement  Financial  Accounting  Standard  No.131,"
Disclosures  about  Segments of an  Enterprise  and Related  Information"  . The
Company's  implementation  of this  standard  does not have  any  effect  on the
financial statements.

     LONG-LIVED ASSETS

     In  accordance  with  SFAS  No.  121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for  Long-Lived  Assets to be  Disposed  of,"  long-lived
assets to be held and used by the Company are reviewed to  determine  whether an
event or change in circumstances indicates that the carrying amount of the asset
may not be recoverable.  For long-lived  assets to be held and used, the Company
bases its evaluation on such impairment  indicators as the nature of the assets,
the  future   economic   benefit  of  the  assets,   any  historical  or  future
profitability  measurements,  as well as other  external  market  conditions  or
factors that may be present. If such impairment  indicators are present or other
factors  exist that  indicate  that the carrying  amount of the asset may not be
recoverable,  the Company  determines whether an impairment has occurred through
the use of an undiscounted cash flows analysis of assets at the lowest level for
which  identifiable  cash flows exist.  If impairment has occurred,  the Company
recognizes  a loss  for the  difference  between  the  carrying  amount  and the
estimated  value of the  asset.  The fair value of the asset is  measured  using
discounted  cash flow  analysis or other  valuation  techniques.  No  impairment
expense was recognized in either of the nine-month periods,  ended September 30,
2001 or 2000.

     CERTAIN TRANSACTIONS INVOLVING STOCK COMPENSATION

     In March 2000, FASB issued FASB Interpretation No. 44 (FIN 44), "Accounting
for Certain Transactions Involving Stock Compensation--an  Interpretation of APB
Opinion No. 25." FIN 44 clarifies the  following:  the definition of an employee
for  purposes of  applying  APB opinion  No. 25; the  criteria  for  determining
whether a plan qualifies as a non-compensatory  plan; the accounting consequence
of various  modifications  to the terms of the previously fixed stock options or
awards;  and the  accounting for an exchange of stock  compensation  awards in a
business combination.  FIN 44 is effective July 1, 2000, but certain conclusions
in FIN 44 covers specific events that occurred after either December 15, 1998 or
January 12, 2000. Management does not expect the application of FIN 44 to have a
material impact on the Company's financial position or results of operations.

                                       7
<PAGE>

     INCOME TAXES

     The Company  accounts  for income  taxes in  accordance  with  Statement of
Financial  Accounting Financial Standards No. 109, "Accounting for Income Taxes"
(SFAS  109).  Under the asset and  liability  method of SFAS 109,  deferred  tax
assets  and  liabilities   are  recognized  for  the  future  tax   consequences
attributable to differences between the financial statements carrying amounts of
existing  assets and  liabilities  and their  respective tax bases and operating
loss and tax credit  carry  forwards.  Deferred tax assets and  liabilities  are
measured  using  enacted tax rates  expected  to apply to taxable  income in the
years in which those  temporary  differences  are  expected to be  recovered  or
settled.  Under SFAS 109,  the effect of a change in tax rates on  deferred  tax
assets and  liabilities  is recognized in income in the period that includes the
enactment date.


     CONCENTRATION OF CREDIT RISK

     The Company  maintains its cash with various  financial  institutions.  The
Company performs  periodic  evaluations of the relative credit standing of these
institutions.


     NOTE 2 - ACQUISITIONS

     Effective  October 1, 2000, the Company acquired Marx Toys, Inc., which was
accounted for as a purchase whereby Marx became a wholly-owned subsidiary of the
Company.  Marx sells collectible action figures and play sets, primarily through
the internet and telemarketing.  In connection with the accounting,  the Company
issued 16,500,000 shares of common stock valued at $.0469 per share.

     The  operation  and  financial  position of Marx were  accounted for in the
consolidated  financial statements of the Company beginning October 1, 2000. The
molds,  which had an appraised  value in excess of  $10,000,000,  were valued at
$847,000 based upon the value of the 16,500,000 shares issued.

     Effective July 16, 2001, the Company  acquired Toontz Toyz, Inc., which was
accounted for as a purchase,  whereby Toontz became a wholly-owned subsidiary of
the Company.  In connection with the accounting,  the Company issued  10,000,000
restricted shares of common stock, valued at $.01 per share.


     The operation and  financial  position of Toontz were  accounted for in the
consolidated financial statements of the Company beginning July 16, 2001.

     NOTE 3 - INVENTORIES

     Inventories consist of the following at September 30, 2001:

        Finished goods                                     $701,526
        Raw materials                                       112,660
                                                           --------
                                                           $814,186

                                       8
<PAGE>

     NOTE 4 - FIXED ASSETS, at cost


     Fixed assets consist of the following at September 30, 2001:

        Furniture and fixtures                            $  53,308
        Molds                                               942,162
        Leasehold improvements                                5,974
                                                            -------
                                                          1,001,444
        Less-accumulated depreciation                      ( 62,093)
                                                         ----------
                                                           $939,351

     NOTE 5 - OTHER ASSETS

     Other assets consist of the following at September 30, 2001:

    Intellectual properties, net of accumulated amortization        $554,333
    Investments                                                        9,380
    Security deposits                                                  8,273
    Other                                                                112
                                                                  -----------
                                                                    $572,098

     NOTE 6 - NOTES AND LOANS PAYABLE

     In April 2001 the Company  received  loans,  totaling  $375,000,  for which
promissory  notes,  due in April 2002, were issued.  The notes are  non-interest
bearing. In consideration of the loan the Company has granted the payees options
to purchase  3,900,000 shares of their common stock at an exercise price of $.04
per share. The right to exercise the option shall terminate in April 2003.

     At the Balance Sheet date, Marx Toys, Inc. had a $100,000 revolving line of
credit, with a financial institution, with interest paid monthly, based upon the
prime  interest  rate.  The  outstanding  balance  on this  line of  credit,  at
Septe0ber 30, 2001, was $79,362.

     There are miscellaneous  loans payable,  totaling $38,419,  as of September
30, 2001.

     NOTE 7 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

     Accrued expenses and other current  liabilities consist of the following at
September 30, 2001:

               Accrued professional fees                   $33,557
               Customer credits                             20,134
               Payroll taxes                                98,209
               Accrued interest payable                      7,877
               Other accrued expenses                        6,041
                                                          ----------
                                                          $165,818

                                       9
<PAGE>

     NOTE 8 - COMMITMENTS

     The Company and a subsidiary  lease  office  facilities  in  Freehold,  New
Jersey and No.  Miami,  Florida,  and  warehouse  facilities  in  Sebring,  Ohio
requiring  minimum  annual rent of  approximately  $107,400.  The leases  expire
between May 2002 and April 2006.  The leases  require the Company to pay various
operating  expenditures  of the  facilities  and  contain  provisions  for  rent
escalations.  Rent expense totaled $65,387 and $31,100 for the nine months ended
September 30, 2001 and 2000, respectively.

     Future minimum  commitments  under operating lease  arrangements are due as
follows:

       Years Ending December 31,                               Amount
    ---------------------------------------------------------------------


                2001                                         $ 84,900
                2002                                          100,268
                2003                                           55,581
                2004                                           42,000
                                                   ------------------
                                                            $ 282,749
                                                   ==================

     NOTE 9 - INCOME Taxes

     The  Company  has   available  net   operating   loss  carry   forwards  of
approximately  $2,374,000  for federal and state income taxes  expiring  between
2003 and 2121 to offset future taxable income.
     A deferred tax asset  results from the benefit of utilizing  net  operating
loss carry forwards in future years. A valuation allowance has been provided for
the entire benefit.
     The Company  will  continue to assess the  recoverability  of its  deferred
income  tax  asset  and  adjustments  may be  necessary  based  on the  evidence
available at that time. The difference  between the expected rate of tax and the
actual tax expense  relates  entirely  to state tax  expense  and the  valuation
allowance.

     NOTE 10 - SEGMENT INFORMATION

     The  Company  adopted  Statement  Financial  Accounting  Standard  No.  131
"Disclosures about Segments of an Enterprise and Related Information (SFAS 131)"
in 2000.
     The accounting  policies and detail of operations of the operating segments
are the  same as  those  described  in the  summary  of  significant  accounting
policies.  There are no material inter-segment sales or transfers.  All revenues
are  generated  within the United  States and all revenue  producing  assets are
located therein.  Management evaluates a segment's performance based upon profit
or loss from operations before income taxes.

             Sales
                Home Theatre                           $838,271
                Toy  Products                           236,384
                Intellectual Properties Development           0
                                                      ----------
                  Total Sales                        $1,074,655
                                                      ==========

             Operating loss
                Home Theatre                          $(353,664)
                Toy Products                           (442,883)
                Intellectual Properties Development   (  12,122)
                                                      ----------
                                                       (808,669)
                Corporate other expenses                115,685
                                                      ----------

                Loss before income taxes              $(924,354)
                                                     ===========

             Assets
                Home Theatre                           $211,048
                Toy Products                          1,608,873
                Intellectual Properties Development     641,838
                Parent Company                          178,285
                                                      ----------
                     Total assets                    $2,640,044
                                                      ==========

             Depreciation and amortization expense
                Home Theatre                            $ 5,434
                Toy Products                             20,723
                Intellectual Properties Development       1,250
                                                       ---------
                   Total depreciation and amortization  $27,407
                                                       =========

                                       10
<PAGE>

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

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations  should  be read  in  conjunction  with  the  Consolidated  Unaudited
Financial Statements and related notes which are contained in Item 1 herein.

     Results of operations for stereoscape.com,  inc. and subsidiaries are being
presented on a consolidated basis.

     Three  Months  Ended  September  30, 2001  Compared to Three  Months  Ended
September 30, 2000

     Net sales for the three months ended  September 30, 2001 decreased 50.5% to
$218,681  from  $441,702  for the three  months ended  September  30, 2000.  The
decrease was the result of managements  decision to reduce the present  emphasis
on the audio and home  entertainment  segment of our business due to  cautionary
buying  trend in high end,  discretionary  items,  caused by a  slowdown  in the
economy.  The company felt that the  emergence  of Marx as an operating  company
required both financial and management resources to be allocated more heavily in
that area to help in the growth of Marx for the coming year.  In  addition,  the
company is placing needed attention to its new acquisition,  Toontz.  Management
feels that Toontz has great  potential in the animated  entertainment  world and
could deliver  substantial  revenues from licensing,  home video and games, toys
and trading card sales.

     Gross profit for the three months ended September 30, 2001 increased 346.7%
to $32,200  from $7,208 for the three  months ended  September  30,  2000.  As a
percentage  of net sales,  gross  profit  increased  to 14.7% in the 2001 period
compared to 1.6% in the 2000 period.  The increase was the direct  result of the
sales of higher margin toy products.

     Selling,  general and  administrative  expenses  for the three months ended
September  30, 2001  increased  308.0% to $469,200  from  $114,999 for the three
months  ended  September  30,  2000.  The  increase  in  selling,   general  and
administrative expenses was the result of additional overhead as a result of the
increased  emphasis  in the future  growth of "Marx" and  "Toontz".  The Company
succeeded in reducing  expenses in the audio division,  primarily as a result of
downsizing of office and warehouse personnel.

     Net losses for the three months ended  September 30, 2001 increased  305.4%
to ($437,000)  from  ($107,791)  for the three months ended  September 30, 2000.
This  was a a  direct  result  of the  drop  in  sales  in the  audio  and  home
entertainment  segment of our  business.  The drop in sales was due to a reduced
emphasis in the audio and home entertainment  segment of our business and a down
turn  in  the  overall  economy,  which  effected  the  sales  of  high  priced,
discretionary items. The emphasis placed on the future growth of Marx and Toontz
created  additional  overhead and costs without  offsetting sales and increasing
our operating losses for the quarter.

     Nine  Months  Ended  September  30,  2001  Compared  to Nine  Months  Ended
September 30, 2000

     Net sales for the nine months ended  September 30, 2001 decreased  38.4% to
$1,074,655  from  $1,743,639  for the nine months ended  September 30, 2000. The
decrease in sales was a direct  result of the increased  emphasis  placed on the
future growth of Marx and Toontz. The results of our increased emphasis on these
two segments of our business will be realized in the following year, 2002.

     Gross profit for the nine months ended  September 30, 2001 increased  37.5%
to $372,186  from  $270,728 for the nine months ended  September  30, 2000. As a
percentage  of net sales,  gross  profit  increased  to 34.6% in the 2001 period
compared  to  15.5% in the 2000  period.  The  increase  was the  result  of the
company's  emphasis on the sales of higher margin products in the toy segment of
our business.

     Selling,  general and  administrative  expenses  for the nine months  ended
September 30, 2001  increased  121.3% to  $1,296,851  from $586,087 for the nine
months  ended  September  30,  2000.  The  increase  in  selling,   general  and
administrative expenses was the result of additional overhead from "Marx", which
totaled approximately $632,000 for the nine months ended September 30, 2001. The
Company  succeeded  in reducing  expenses in the audio  division,  primarily  as
result of downsizing of the office and warehouse personnel .

     Net losses for the nine months ended September 30, 2001 increased to a loss
of  ($924,665)  compared  to a loss of  ($315,359)  for the  nine  months  ended
September 30, 2000.  This was due to the reduced  emphasis on the audio and home
entertainment  segment of our  business  while  investing  our  resources in the
future growth of Marx and Toontz.

                                       11
<PAGE>
     Liquidity and Capital Resources

     At September 30, 2001 the Company had  stockholders'  equity of $1,531,659,
whereas, at September 30, 2000 the Company had an equity deficit of ($482,430).

     The Company has  historically  financed its business through cash flow from
operations and sale of stock, which may be utilized from time to time.

     The Company expects to require additional capital to finance production for
its Toy Company and to acquire inventory for its audio products and home theatre
expansion.  The Company has completed a financing  package that includes  bridge
financing in the form of a promissory  note to private  investors  and a funding
agreement  with an investment  banking firm to a maximum of $10 million,  should
the Company need the funds.  The Company has no  obligation  to take down any of
the funds should it choose not to exercise its option.

     While no specific  acquisitions  are  presently  under  consideration,  the
Company  is  actively  seeking  acquisitions  and  anticipates  it  may  require
additional  capital in order to fund any  acquisitions or substantial  growth in
its current business.

     Anticipated Future Growth

     Management  believes  that the  future  growth of the  Company  will be the
result of focusing on the  restructuring of its businesses,  thereby  increasing
the  profitability.  In this effort the Company  intends to consider  these five
efforts  (1)  expand  the toy  sales to  include  major  national  and  regional
retailers,  (2) license intellectual  properties being developed by "Toontz",(3)
consider a strategic  partner for its audio and home theatre  sales to go beyond
the  consumer  and reach out to  industrial  markets  and  business  to business
relationships,  (4)  pursue  promotional  deals  for the  sale of  vintage  Marx
products on a large scale,  (5) consider  acquisitions of other companies in the
toy and home theater related industries.


     Forward Looking Statements

     Management's  Discussion and Analysis of Financial Condition and Results of
Operations contains information regarding management's planned growth, financing
and prospective  business  acquisitions and opportunities.  These statements are
forward looking statements that involve risks and  uncertainties.  The following
is a list of factors,  among others,  that could cause actual  results to differ
materially from the forward looking  statements:  business conditions and growth
in the  Company's  market and industry and in the general  economy;  competitive
factors including increased competition and price pressures; availability of raw
materials  and  purchased  products at  competitive  prices;  and  inadequate or
unsatisfactory financing sources.

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<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to be  signed  on  its  behalf  the
undersigned duly authorized

       stereoscape.com, inc.


By:   /s/ Mario Bassani                                   November 13, 2001
      -------------------
          Mario Bassani
          President (Principal Executive Officer)
          Chairman of the Board

By:   /s/ Steve Wise                                      November 13, 2001
      --------------
          Steve Wise
          Director

By:   /s/ Gary B. Hyman                                   November 13, 2001
      -----------------
          Gary B. Hyman
          Chief Financial Officer
         (Principal Accounting Officer)
          Director

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