<PAGE>   1
                       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, 2000

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

    For the transition period from ___________________ to __________________

                         Commission file number 0-28530

                              STAN LEE MEDIA, INC.
        (Exact name of small business issuer as specified in its charter)


            Colorado                                          84-1341980
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                            Identification No.)

          15821 Ventura Boulevard, Suite 675, Encino, California, 91436
                    (Address of principal executive offices)

                                 (818) 461-1757
                (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 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
                         ---     ---

           The number of shares outstanding of the issuer's common stock as of
May 1, 2000, was 11,856,362.


<PAGE>   2
                                      INDEX


                              STAN LEE MEDIA, INC.
                          (a development stage company)


<TABLE>
<CAPTION>
                                                                                  Page
                                                                                  ----
<S>                                                                               <C>
PART I. Financial Information

Item 1.  Financial Statements

     Consolidated Balance sheets -
          March 31, 2000 (unaudited) and December 31, 1999;                         3

     Consolidated Statements of operations (unaudited) - Three months ended
          March 31, 2000 and 1999 and the period from
               inception (October 13, 1998 to March 31, 2000);                      4

     Consolidated Statements of cash flows (unaudited) - Three months ended
          March 31, 2000 and 1999 and the period from inception (October 13, 1998
          to March 31, 2000);                                                       5

     Notes to financial statements                                                  6

Item 2.  Management's Discussion and Analysis or Plan of
         operations                                                                13


PART II. Other Information

Item 1.  Legal Proceedings                                                         17

Item 2.  Changes in Securities                                                     17

Item 3.  Defaults Upon Senior Securities                                           17

Item 4.  Submission of Matters to Vote of Security Holders                         17

Item 5.  Other Information                                                         17

Item 6.  Exhibits and Reports on Form 8-K                                          18
</TABLE>


<PAGE>   3
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                           CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>
                                                                                        March 31,
                                                                                          2000              December 31,
                                                                                       (unaudited)             1999
                                                                                       ------------        ------------
<S>                                                                                    <C>                 <C>
Assets

Current assets
   Cash and cash equivalents                                                           $    184,036        $  2,020,162
   Accounts receivable, net of $32,922 allowance                                            267,282                  --
   Inventory                                                                                 11,883              11,883
   Prepaid expenses and other current assets                                                 22,279              10,450
                                                                                       --------------------------------
Total current assets                                                                        485,480           2,042,495

Property and equipment, net of accumulated depreciation (Note 3)                          1,291,274             602,009

Other assets
   Production costs                                                                         770,208                  --
   Debt offering costs (net of $0 and $36,257 of accumulated
   amortization) (Note 4)                                                                   245,030              17,756
   Licensing rights (net of $14,973 and $5,989
   of accumulated amortization)                                                             164,702             173,686
   Trademarks                                                                               161,692             103,636
   Deposits                                                                                 119,270              47,464
                                                                                       --------------------------------
Total other assets                                                                        1,460,902             342,542
                                                                                       --------------------------------
                                                                                       $  3,237,656        $  2,987,046
                                                                                       ================================

Liabilities and Shareholders' Equity

Current liabilities
   Accounts payable and accrued liabilities                                            $    612,877        $    172,267
   Obligations under capital leases, current portion (Note 5)                                91,017              45,864
   Notes payable (Note 4)                                                                   600,000             500,000
                                                                                       --------------------------------
Total current liabilities                                                                 1,303,894             718,131
                                                                                       --------------------------------

Obligations under capital leases, long-term portion (Note 5)                                262,375              80,979
Commitments (Note 5)
Shareholders' equity (Notes 1 and 6)
   Series A Convertible Preferred stock, par value $0.001, authorized 1,500,000
   issued and outstanding 714,286 and none;
   liquidation preference of $7 per share                                                 5,000,002           5,000,002

   Common stock, par value $0.001, authorized 100,000,000 issued and outstanding
   11,856,362 and 8,500,000                                                                  11,856              11,433
   Additional paid-in capital                                                            10,035,402           5,137,787
   Deficit accumulated during the development stage                                     (13,375,873)         (7,961,286)
                                                                                       --------------------------------
Total shareholders' equity                                                                1,671,388           2,187,936
                                                                                       --------------------------------
                                                                                       $  3,237,656        $  2,987,046
                                                                                       ================================
</TABLE>



                 See accompanying notes to financial statements.



                                       F-3
<PAGE>   4
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                            Three Months Ended           Period from Inception
                                                                  March 31,              (October 13, 1998) to
                                                          2000               1999           March 31, 2000
                                                      (unaudited)         (unaudited)        (unaudited)
                                                     ----------------------------------------------------
<S>                                                  <C>                 <C>             <C>
Revenue
    Comic book sales                                 $    204,565        $         --        $    204,565
    Webisode licenses                                      72,561                  --              72,561
    Other sales                                            19,033                  --              49,638
                                                     ----------------------------------------------------
                                                          296,159                                 326,764
                                                     ----------------------------------------------------
Operating expenses:
    Cost of comic books                                    58,904                  --              58,904
    Cost of webisodes                                      72,561                  --              72,561
    Cost of other sales                                    59,790                  --              61,065
    Development costs                                     830,499                  --           1,972,877
    General and administrative                          4,687,769             221,928          11,454,274
                                                     ----------------------------------------------------
Total operating expenses                                5,709,523             221,928          13,619,681
                                                     ----------------------------------------------------

Operating loss                                         (5,413,364)           (221,928)        (13,292,917)

Net interest expense                                       (1,215)               (102)            (82,956)
                                                     ----------------------------------------------------
Net loss                                             $ (5,414,579)       $   (222,030)       $(13,375,873)
                                                     ====================================================

Basic and diluted net loss per share                 $      (0.46)       $      (0.03)
                                                     ================================

Weighted average number of shares used in
computing basic and diluted net loss per share         11,684,032           8,190,959
                                                     ================================
</TABLE>



                 See accompanying notes to financial statements.



                                       F-4
<PAGE>   5
                       STAN LEE MEDIA, INC. AND SUBSIDIARY

                          (a development stage company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                          Three Months Ended          Period from Inception
                                                                                March 31,             (October 13, 1998) to
                                                                        2000                1999          March 31, 2000
                                                                     (unaudited)        (unaudited)         (unaudited)
                                                                    ----------------------------------------------------
<S>                                                                 <C>                 <C>           <C>
Cash flows from operating activities
   Net loss                                                         $ (5,414,579)       $   (222,030)       $(13,375,873)
   Adjustments to reconcile net loss to net cash and
     cash equivalents provided by (used in) operating
     activities:
      Non-cash items resulting from issuance of common stock,
         stock options and warrants                                      961,591                 250           4,454,826
      Depreciation and amortization                                       87,556               2,044             172,141
      Allowance for accounts receivable                                   32,922                  --              32,922
      Changes in:
         Accounts receivable                                            (300,204)                 --            (300,204)
         Production costs                                               (770,208)                 --            (770,208)
         Prepaid expenses and other current assets                       (11,829)            (17,000)            (34,162)
         Deposits                                                        (71,806)                 --            (119,270)
         Accounts payable                                                440,610              40,271             602,340
                                                                    ----------------------------------------------------
Net cash used in operating activities                                 (5,045,947)           (196,465)         (9,337,488)
                                                                    ----------------------------------------------------

Cash flows from investing activities
   Purchase of property and equipment                                   (519,822)            (24,179)         (1,010,392)
   Application for trademarks                                            (58,056)                 --            (161,692)
                                                                    ----------------------------------------------------
Net cash used in investing activities                                   (577,878)            (24,179)         (1,172,083)
                                                                    ----------------------------------------------------

Cash flows from financing activities
   Proceeds from notes and loans payable                                 600,000              10,000           2,017,000
   Repayment of notes and loans payable                                 (500,000)                 --          (1,417,000)
   Payments under capital lease obligations                              (21,466)                 --             (84,660)
  Receipt of subscriptions                                                    --                  --             275,000
   Issuance of preferred stock                                                --                  --           5,000,002
   Issuance of common stock                                            3,709,165                  --           4,843,165
   Capital contribution                                                       --             205,150              60,000
                                                                    ----------------------------------------------------
Net cash provided by financing activities:                             3,787,699             215,150          10,693,607
                                                                    ----------------------------------------------------
Increase (decrease) in cash and cash equivalents                      (1,836,126)             (5,494)            184,036

Cash and cash equivalents, beginning of period                         2,020,162              21,276                  --
                                                                    ----------------------------------------------------
Cash and cash equivalents, end of period                            $    184,036        $     15,782        $    184,036
                                                                    ====================================================
</TABLE>



                 See accompanying notes to financial statements.



                                       F-5

<PAGE>   6
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - NATURE OF BUSINESS

Stan Lee Media, Inc. ("SLM" or the "Company") is an Internet-based, global
branded content creation, production and marketing company founded by comic book
icon Stan Lee to conceive, create, co-create and produce marketable characters
and story franchises for entertainment, merchandising and promotional
exploitation worldwide.

Stan Lee Entertainment, Inc. ("Entertainment") was incorporated in the State of
Delaware on October 13, 1998. Stan Lee Media, Inc. ("SLM Delaware") was
originally incorporated in the State of Delaware on January 14, 1999.
Entertainment was merged with SLM Delaware on April 14, 1999 with SLM Delaware
being the surviving corporation. Effective July 23, 1999, SLM Delaware engaged
in a share exchange with Boulder Capital Opportunities, Inc. ("Boulder") a
public company, incorporated in the State of Colorado. This share exchange was
accounted for as a reverse acquisition in which SLM Delaware is considered the
predecessor of the Company because it had operations at the time of the share
exchange. The new name of the company after the share exchange is Stan Lee
Media, Inc. ("SLM" or the "Company"). In this share exchange, the shareholders
of SLM Delaware received 8,500,000 shares of common stock of Boulder in exchange
for all of the issued and outstanding shares of SLM Delaware common stock. The
number of shares outstanding after this transaction was 11,025,000.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements of the Company include the accounts of
Stan Lee Media, Inc., and its wholly owned subsidiary. All significant
intercompany balances and transactions have been eliminated.

BASIS OF PRESENTATION

The financial statements for the three months ended March 31, 2000 and 1999
include all adjustments, consisting of normal recurring adjustments, which
management considers necessary for a fair presentation of the results of these
periods. These financial statements have been prepared consistently with the
accounting policies described in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1999, as filed with the Securities and Exchange
Commission, and should be read in conjunction with this Quarterly Report on Form
10-QSB.



                                       F-6

<PAGE>   7
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NET LOSS PER SHARE

For the period ended March 31, 2000, potential dilutive securities representing
4,150,500 outstanding stock options, 512,529 outstanding warrants, and 714,286
shares of convertible preferred stock are not included in the earnings per share
calculation since their effect would be antidilutive.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consists of the following:


<TABLE>
<CAPTION>
                                                           March 31,
                                                             2000          December 31,     Estimated
                                                          (unaudited)         1999         Useful Life
                                                         ---------------------------------------------
<S>                                                        <C>             <C>             <C>
Automobile                                                 $ 15,000         $ 15,000         5 years
Computer equipment                                          453,437          103,249         3 years
Computer software                                            57,838           18,011         3 years
Accounting software                                          92,756               --         3 years
Furniture and fixtures                                      200,070          187,960         5 years
Leasehold improvements                                      191,289          166,349         5 years
Equipment under capital leases                              411,187          190,036
                                                         --------------------------------------------
                                                          1,421,577          680,605
Less accumulated depreciation and amortization              130,303           78,596
                                                         --------------------------------------------

                                                         $1,291,274         $602,009
                                                         ============================================
</TABLE>


At March 31, 2000, accumulated depreciation and amortization included $28,411
related to assets under capital leases.

NOTE 4 - DEBT

SHORT-TERM FINANCING

On October 11, 1999, SLM executed an unsecured promissory note (the "Note") in
the amount of $500,000. The terms of the note call for SLM to pay interest at 8%
per annum. The principal and accrued and unpaid interest shall be payable in one
lump sum by April 11, 2000. Pursuant to the promissory note, warrants for 25,000
shares of SLM's common stock exercisable at $6.18 per share expiring October 11,
2002 were granted to the Note holder. The fair value of $35,512 of these
warrants was capitalized as debt offering costs and amortized over the term of
the loan. The note and all accrued interest were paid in January 2000.

On March 30 and 31, 2000, SLM executed $600,000 of unsecured promissory notes
(of which $550,000 were with existing shareholders of SLM). The loans are due
and payable in sixty days with interest at the rate of 8% per annum, with the
exception that no interest will be due and payable for the first thirty days
after the notes were issued. Pursuant to the terms of the promissory notes,
warrants for 32,000 shares of SLM's common stock were issued, exercisable at
$12.00 per share and expiring three years from the date of the notes. The fair
value of $245,030 of these warrants was capitalized as debt offering costs and
will be amortized over the term of the notes.



                                       F-7
<PAGE>   8
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - COMMITMENTS

EQUIPMENT LEASES

SLM entered into various capital leases for computers and related equipment. The
leases range from 24 to 60 month terms. Minimum future lease payments under
capital leases as of March 31, 2000 for each of the next five years and in
aggregate are:



<TABLE>
<CAPTION>
Year ended                                                      Amount
                                                               --------
<S>                                                            <C>
     2000                                                      $158,365
     2001                                                       161,973
     2002                                                       127,647
     2003                                                        14,753
     2004                                                           527
                                                               --------

Total minimum payments                                         $463,265

Less: Amount representing interest                             (109,873)
                                                               --------

Present value of net minimum lease payments                    $353,392
                                                               ========
</TABLE>



                                       F-8

<PAGE>   9
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 6 - SHAREHOLDERS' EQUITY

SLM has 100,000,000 authorized shares of $0.001 par value common stock and
10,000,000 shares of $0.001 par value preferred stock. Of the total preferred
stock, 1,500,000 shares were designated as Series A. The Series A preferred
stock is convertible into common stock, has a liquidation preference of $7 per
share, and bears dividends equal to any dividends declared on the common shares.

The Series A preferred stock converts into common at the rate of one share of
common stock for one share of preferred stock (subject to adjustment). The
preferred stock shares may be converted any time at the option of the holder.
The preferred shares automatically convert to common shares upon the earlier of
a public offering priced at a minimum of $15 per share and raising proceeds of
$25 million or an affirmative vote of two-thirds of the preferred shareholders.

COMMON STOCK

On January 10, 2000, SLM issued 10,000 shares of restricted common stock at
$6.00 per share, for services to a consultant at fair value on the date of
issuance.

During February 2000, warrants for 13,333 shares of common stock were exercised
at a per share price of $5.00 for a cash consideration of $66,665.

On February 1, 2000, the Company issued 200,000 shares of SLM's restricted
common stock at $8.00 per share for a total purchase price of $1,600,000. With
this private placement, SLM issued five-year warrants to purchase an additional
100,000 shares of common stock at an exercise price of $10.00 per share. Certain
registration rights were granted under the terms of this private placement. Fees
totaling $50,000 were paid and warrants for 5,000 shares of common stock at an
exercise price of $10.00 per share were issued to finders in conjunction with
this private placement.

On February 4, 2000, the Company issued 200,000 shares of SLM's restricted
common stock at $11.00 per share for a total purchase price of $2,200,000. With
this private placement, SLM issued five-year warrants to purchase an additional
100,000 shares of common stock at an exercise price of $11.00 per share. Certain
registration rights were granted under the terms of this private placement.
Finder's fees and legal fees totaling $107,500 were paid in conjunction with
this private placement.

STOCK OPTIONS

During January and February 2000, SLM entered into stock option agreements with
certain consultants to purchase 500,000 common shares at $5.44 to $7.00 per
share, the fair market values at the date of grant. The options have terms
ranging up to five years. The options are subject to various vesting terms
ranging from immediate vesting to vesting in three years. The fair value of
$883,843 of these options was charged to operations during this quarter.



                                       F-9
<PAGE>   10
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 - SIGNIFICANT BUSINESS AGREEMENTS

MACROMEDIA, INC.

On November 5, 1999 SLM entered into a five-year distribution/license agreement
under which Macromedia will have the right to distribute and exploit no more
than five flash - animated episodic super-hero series produced by the Company
for initial exploitation over the Internet on Macromedia's shockwave.com site.
As of May 2, 2000, the Company has launched its first two series, The 7th Portal
and The Accuser, on shockwave and according to information provided by
Macromedia, it has recorded approximately 2.8 million downloads since the first
7th portal episode was launched on February 29, 2000. In addition to the
reimbursement by Macromedia for production costs (plus profit and overhead
allocations) the agreement provides for revenue sharing between the parties for
syndication, merchandising and licensing opportunities.

BACKSTREET BOYS

On February 2, 2000, SLM entered into an agreement with KBNHA Enterprises, Inc.
f/s/o Nicholas Carter, Alexander J. McLean, Howard Dorough, Kevin Richardson and
Brian Thomas Littrell, professionally collectively known as "The Backstreet
Boys" to produce and co-own a superhero franchise based on their personae,
having superhero alter-egos. The superhero franchise entitled "The Backstreet
Project," co-created by Stan Lee, is co-owned by the Company, and will be
exploited in all media and all major merchandising avenues

As partial consideration for entering into the agreement, KBNHA or its assignees
received options to purchase 300,000 shares of SLM's common stock at an exercise
price of $7.00 per share. The options will vest as follows: (i) 75,000 upon
execution of the agreement, 25,000 upon the initial webcast of the first
Webisode, 50,000 as of February 1, 2001, 50,000 as of August 1, 2001, 50,000 as
of February 1, 2002, and 50,000 as of February 1, 2003.

VIACOM

On January 25, 2000 SLM signed an agreement with Viacom Productions to produce
two new Webisodes utilizing Mighty Mouse and other Terry Toons characters.
Viacom owns all rights to these characters. SLM shall prepare and produce the
two new five-minute webisodes after approval from Viacom. Once approved, Viacom
will finance the production of the webisodes and SLM shall receive a production
fee equal to 12.5% of the approved production budget. SLM shall be entitled to
25% of net merchandising revenues derived from all exploitation of merchandising
rights for the characters for a period of two years. Viacom shall have an option
to have SLM produce additional Webisodes after the initial contract term. Each
subsequent series will consist of six webisodes with SLM having the same rights
as the previous contract.

Viacom will have another option to cause SLM to produce a television
broadcast-quality thirty-minute animated series. SLM will be reimbursed for
actual out-of-pocket production costs plus an overhead fee of $12,500 per
episode as well as 25% of Adjusted Gross Receipts, or 50% of Net Profits derived
from the exploitation of the animated series, whichever is greater. SLM will
also be entitled to 25% of net merchandising revenues.



                                      F-10

<PAGE>   11
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - SUBSEQUENT EVENTS

SHORT-TERM FINANCING

During April 2000, SLM executed $200,000 of unsecured promissory notes (of which
$100,000 was with an existing SLM shareholder). The loans are due and payable in
sixty days with interest at the rate of 8% per annum, with the exception that no
interest will be due and payable for the first thirty days after the notes were
issued. Pursuant to the promissory notes, warrants for 8,000 shares of SLM's
common stock exercisable at $12.00 per share and expiring three years from the
date of the notes were granted to the Note holders.

CONVERTIBLE PROMISSORY NOTE

On April 14, 2000 the company entered into an unsecured convertible promissory
note in the amount of $2,500,000 with a third party. The terms of the note call
for SLM to pay interest at 6% per annum with interest payable in cash or SLM
common stock at the option of SLM. Interest is payable quarterly with the first
payment due on September 30, 2000. The note matures on April 30, 2002 and is not
redeemable by the holder prior to maturity. The note can be prepaid by SLM prior
to maturity but only with the consent of the holder of the note. The holder of
the note was also issued five-year warrants to purchase 50,000 shares of common
stock at an exercise price of $14.33 per share.

The notes are convertible into SLM common stock at a price equal to the lower of
$13.13 or at a price based on a 20% discount to the market at time of
conversion. Any portion of the note remaining unconverted at the maturity date
shall automatically be converted on such date.

Certain registration rights were granted under the terms of the note. Finder's
fees and expenses totaling $232,500 were paid in conjunction with this
financing. Five-year warrants to purchase 20,000 shares of common stock at an
exercise price of $14.36 per share were also issued to the finder and
underwriter.



                                      F-11

<PAGE>   12
                       STAN LEE MEDIA, INC. AND SUBSIDIARY
                          (a development stage company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)

TOON BOOM

In April 2000, SLM entered into a Software Development and License Agreement
with Toon Boom Technologies Inc. for the development of Web-based animation
software, which SLM will utilize in producing its episodic Web comics. Toon
Boom's flagship software, the USAnimation V5 system, which permits animators to
create programming for direct export to television, film and the Internet
utilizing Macromedia Flash(TM) Player, will be the framework used in creating
the new software.

Under the terms of the agreement, SLM paid Toon Boom $250,000 for USAnimation
and other software licenses and will contribute engineering, promotional and
marketing services valued at $500,000. SLM will receive up to 1,044,888 Class A
Shares of Toon Boom (2.96% of its current outstanding shares) based on the
achievement of certain milestones. As of April 2000, SLM had satisfied the
milestone related to the issuance of 348,296 shares of Class A shares of Toon
Boom. SLM also was issued five-year warrants to purchase 150,000 shares of Toon
Boom stock at an exercise price of Canadian $0.70 per share. Toon Boom was
granted five-year options to purchase 30,000 shares of SLM common stock at an
exercise price of US$14.00 per share. The Agreement also provides for certain
royalty payments between the parties based upon product sales and software
bundling opportunities.

NOTE 9 - SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING ACTIVITY

During the first quarter, the Company purchased $248,015 of equipment under
capital leases.

From September through November, 1999, the Company issued warrants in
conjunction with debt offerings. The warrants had a fair value of $54,013, of
which $36,257 was charged to expense during 1999 and the balance of $17,756 was
charged to expense during the first quarter as of March 31, 2000.

On March 30 and 31, 2000, the Company executed $600,000 of unsecured promissory
notes and issued 32,000 warrants with a fair value of $245,030 in conjunction
with the debt financing.



                                      F-12

<PAGE>   13
       ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

          Certain of the matters and subject areas discussed in this Quarterly
Report on Form 10-QSB contain "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. All statements other than
statements of historical information provided herein are forward-looking
statements and may contain information about financial results, economic
conditions, trends and known uncertainties based on the Company's current
expectations, assumptions, estimates and projections about its business and the
Company's industry. These forward-looking statements involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of several factors,
including the availability of sufficient financing to implement the Company's
new characters and story franchises and distribution via the Internet, ability
to generate revenues through Internet distribution, increased levels of
competition, new products and technological changes, and regulatory factors.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis, judgment, belief or expectation
only as of the date hereof. The forward-looking statements made in this
Quarterly Report on Form 10-QSB relate only to events as of the date on which
the statements are made. The Company undertakes no obligation to publicly update
any forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.

OVERVIEW

           Stan Lee Media, Inc. (http://www.stanleemedia.com) is an
Internet-based, global branded content creation, production and marketing
company founded by comic book icon Stan Lee to conceive, create, co-create and
produce marketable characters and story franchises for entertainment,
merchandising and promotional exploitation worldwide. Stan Lee is the co-creator
of such classic characters as Spider-Man, The Incredible Hulk, and The X-Men,
and more than two billion copies of books featuring characters Lee co-created
have been published in 100 countries and 27 languages. Launching a new
generation of super-heroes and super-villains online, Stan Lee Media seeks to
become the premier creator of episodic entertainment on the Internet. The
Company has partnered with a range of talent and content creators to establish
the largest independent animation content creation, production and distribution
brand on the Internet.

           The Company expects to incur losses for the foreseeable future as a
result of the significant operating and capital expenditures required to achieve
its objectives. In order to achieve and maintain profitability, the Company will
need to generate revenues significantly above historical levels. The Company's
prospects for achieving profitability must be considered in light of the risks,
uncertainties, expenses, and difficulties encountered by companies in the
rapidly evolving market of online commerce.



                                      F-13
<PAGE>   14
RESULTS OF OPERATIONS

        Our predecessor company conducted only organizational activities.
Accordingly, there were no material operations for the comparable periods for
the prior year, and therefore, there is no discussion of comparable historical
periods.

        As of March 31, 2000, our company was considered to be a development
stage company as it had not recognized substantial revenue from planned
principal operations.

        Total revenues were $296,159 for the three months ended March 31, 2000
comprised of license fees for the delivery of webisodes to Macromedia, Inc.,
sales of The Backstreet Project comic books at concerts and on the Internet, and
sales of certain comic book related memorabilia. Since our formation in October
1998, we have incurred substantial operating expenses to produce our branded
content, establish our Internet infrastructure, and expand our operations to
include more than 125 employees and consultants. Operating expenses for the
three-month period ended March 31, 2000 were $5,709,523. Operating expenses have
increased as we engaged additional personnel and incurred other expenses in
producing original characters and content for delivery on the Internet and other
media pursuant to existing and anticipated contractual arrangements. We expect
to incur operating losses at least through 2000.

PLAN OF OPERATIONS

        Our plan of operations for the next 12 months is to carry out our
business plan as described in this Quarterly Report; namely, to create premier
branded content focused on the Super Hero genre, and develop and grow multiple
revenue streams through entertainment, merchandising (e.g., toys, video games
and apparel licenses) and promotional exploitation initially via the Internet,
and thereafter, by harnessing our offline strategic publishing/media partners
worldwide.

        We launched our initial two franchises, The 7th Portal and The Accuser,
on Macromedia's shockwave.com animation portal, on February 29, 2000 and May 2,
2000, respectively, thereby exposing our content to a global audience of
millions of registered users who will be encouraged to visit the stanlee.net
website. By contracting with best of breed online content distribution partners,
we intend to build the Stan Lee brand and community without incurring
traditional huge resource commitments to generate traffic that Internet
companies historically incur in order to aggregate audiences. In this regard, we
have entered into an agreement with The Backstreet Boys to produce and co-own a
Super Hero franchise based on their personae having Internet-based Super Hero
alter-egos, thereby extending our reach over the Internet to a dedicated
international fan base of girls and women aged 8 to 25. In February 2000, we
commenced selling The Backstreet Project comic book in furtherance of this
strategic partnership over the Internet and at the venue locations for The
Backstreet Boys current concert tour. We also have entered into an agreement
with Viacom Productions to reinvent and produce Internet-based animated
webisodes reviving Viacom's world famous Mighty Mouse franchise. Our site also
will feature content generated by our users, thereby creating a platform for
users to interact and tools that allow our members to personalize their user
experience.

        We plan to launch localized versions of our website in strategic
locations throughout the world. The Super Heroes of The 7th Portal are situated
in the following countries outside the United States: Japan, India, Germany,
Brazil and South Africa. Accordingly, we have entered into a relationship in
Japan and are pursuing the establishment of strategic partnerships with local
operators who will contribute assets, operating infrastructure and capital to
build, maintain, market and promote our Company's global branded content in
their local market, and who will host and webcast local language versions of
Super Hero series produced by us, repurpose such webisodes for exploitation in
the local language, and jointly develop original Super Hero and comic character
properties. We intend to leverage our domestic production facility to maintain
economies of scale as we focus on additional countries.



                                      F-14
<PAGE>   15
         We intend to license elements of our original content to third-parties
for exploitation in publishing, television and feature motion picture
productions, which opportunities will include licensing and merchandising fees.
In December 1999, we and Stan Lee were engaged by DC Comics to reinvent DC's
principal Super Heroes through the publishing of 12 issues of approximately 48
story pages each tentatively entitled "The Staniverse" or "If Stan Lee Had
Created the DC Universe," to enrich the DC Comic book characters such as
Superman, Batman and Wonder Woman with the sensibilities and style of Stan Lee.
Also, in November 1999, Simon & Schuster, Inc. entered into an agreement with
Stan Lee to publish a Stan Lee official biography entitled Stan Lee: Master of
Imagination. We are pursuing publishing, television and feature productions to
further broaden the reach of our branded content creations.

        In addition to the traditional online banner ads and sponsorships, we
have initiated a campaign through advertising supported insert entertainment
(via our majority-owned subsidiary, Eat-Time Media, Inc.), including without
limitation, the placement of card strips, promotional material and collectible
items into suitable prepackaged pastry products and other snack foods throughout
the country, which will cross-promote our branded content.

        We also have established strategic alliances with leading companies
engaging in Internet e-commerce (NPO Online (NextPlanetOver.com) and
WhatsHotNow.com). We intend to continue to make e-commerce an integrated and
valuable part of our website. The Stan store, operated by WhatsHotNow.com,
currently offers over 100 products, and we intend to significantly increase the
number of products we offer over the next year. In addition, we plan to
integrate global shopping opportunities into the store for our users outside of
the United States who seek access to American products.

        We have entered into a working relationship with Iwerks to license
elements of our original branded content for exploitation as simulation rides
and as wait-time entertainment at movie theaters and shopping malls. We also
have initiated a campaign to license elements of our branded content for
exploitation as theme-park attractions.

        We intend to develop the ability to access many of the features and
functionality found on stanlee.net by as many electronic means as possible,
including wireless phones, personal digital assistants and pagers. We are
planning to develop, with a strategic partner, the stanlee card, a co-branded
financial resource for children and teens that will not only provide them with a
non-credit based means of conducting transactions at the Stan store but will
also allow them to make purchases throughout the Internet.

LIQUIDITY AND CAPITAL RESOURCES

        Our primary sources of liquidity and capital resources have been private
placements of common stock and borrowings from related and non-related parties.
We refer you to Note 6 to the Financial Statements (Shareholders' Equity) and
Note 8 to the Financial Statements (Subsequent Events) for further descriptions
of these activities. We will require additional capital financing to continue
the development of our business plan consistent with anticipated growth in
operations, infrastructure and personnel. We anticipate that the cash on hand
coupled with the cash to be raised from additional private placements and public
offerings, assuming they will be successful, will be sufficient to satisfy our
operating expenses and capital until such time as revenues are sufficient to
meet operating requirements.  However, we cannot be certain that additional
financing will be available to us on acceptable terms, or at all.



                                      F-15

<PAGE>   16
              At March 31, 2000, the Company had cash and cash equivalents of
$184,036, compared to cash and cash equivalents of $2,020,162 as of December 31,
1999. Net cash used in operating activities of $5,045,947 for the three months
ended March 31, 2000 was primarily attributable to net losses, reduced by
noncash charges resulting from the issuance of common stock, stock options and
warrants and depreciation and amortization, and working capital changes
comprised primarily of increases in accounts payable and accrued expenses
(including production costs). Included in such operating expense increase are
non-recurring marketing and promotional expenses associated with the Company's
launch on February 29, 2000 in the amount of $1,408,511, non-cash charges of
$883,843 related to the Company's issuance of options for services, and non-cash
charges of $245,030 related to the Company's grant of warrants in connection
with financing transactions.

           Net cash used in investing activities was $577,878 for the three
months ended March 31, 2000, compared to $24,179 for the fiscal year ended
December 31, 1999, and consisted primarily of capital expenditures related to
the purchase of property and equipment, and trademark applications.

          Net cash provided by financing activities was $3,787,699 for the three
months ended March 31, 2000, compared to $215,150 for the fiscal year ended
December 31, 1999, resulting from the net proceeds from the issuance of common
stock in two private placements in February 2000 of $3,642,500, from short-term
financing evidenced by unsecured promissory notes in March 2000 of $600,000,
less the payment of fees associated with such financings. In April 2000, net
cash provided by financing activities was $2,467,500, resulting from the net
proceeds from short-term financing evidenced by unsecured promissory notes of
$200,000, and the issuance by the Company of Series A 6% Convertible Notes in
the aggregate amount of $2,500,000, maturing April 30, 2002, less the payment of
finder's fees associated with such financings.

         The Company intends to continue to invest heavily to support its growth
strategy and expand its Internet production and online distribution activities.
These investments include continued advertising and marketing programs designed
to enhance the Company's brand name recognition with customers, expansion of its
product lines, and the further development of its Website operating
infrastructure. The sale of additional equity or convertible debt securities
could result in additional dilution to the Company's stockholders. In addition,
the Company will, from time to time, consider the acquisition of or investment
in complementary businesses, products, services and technologies, which might
impact the Company's liquidity requirements or cause the Company to issue
additional equity or debt securities. There can be no assurance that financing
will be available in amounts or on terms acceptable to the Company, if at all.

PURCHASE OF EQUIPMENT

           Although we have no material commitments for capital expenditures, we
anticipate an increase in our capital expenditures and lease commitments
consistent with anticipated growth in operations, infrastructure and personnel.

CHANGES IN NUMBER OF EMPLOYEES

           As of May 5, 2000, there are 128 full-time employees, 94 of whom were
in content creation and production, and product development, 12 of whom were in
marketing and sales, and 22 of whom were in general and administrative
functions. We anticipate hiring additional staff in all areas consistent with
anticipated growth in operations.



                                      F-16

<PAGE>   17
                           PART II - OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

           There have been no matters during this reporting period that require
disclosure under this item.

ITEM 2.        CHANGES IN SECURITIES

           On February 1, 2000, the Company issued 200,000 shares of
unregistered common stock at $8.00 per share for a total purchase price of
$1,600,000. With this private placement, the Company issued five-year warrants
to purchase an additional 100,000 shares of common stock at an exercise price of
$10.00 per share. Certain registration rights were granted under the terms of
this private placement. Fees totaling $50,000 were paid and warrants for 5,000
shares of common stock at an exercise price of $10.00 per share were issued to
finders in conjunction with this private placement.

           On February 4, 2000, the Company issued 200,000 shares of
unregistered common stock at $11.00 per share for a total purchase price of
$2,200,000. With this private placement, the Company issued five-year warrants
to purchase an additional 100,000 shares of common stock at an exercise price of
$11.00 per share. Certain registration rights were granted under the terms of
this private placement. Finder's fees and legal fees totaling $107,500 were paid
in conjunction with this private placement.

           On April 14, 2000 the company entered into an unsecured convertible
promissory note in the amount of $2,500,000 with a third party. The terms of the
note call for SLM to pay interest at 6% per annum with interest payable in cash
or SLM common stock at the option of SLM. Interest is payable quarterly with the
first payment due on September 30, 2000. The note matures on April 30, 2002 and
is not redeemable by the holder prior to maturity. The note can be prepaid by
SLM prior to maturity but only with the consent of the holder of the note. The
holder of the note was also issued five-year warrants to purchase 50,000 shares
of common stock at an exercise price of $14.33 per share.

           The notes are convertible into SLM common stock at a price equal to
the lower of $13.13 or at a price based on a 20% discount to the market at time
of conversion. Any portion of the note remaining unconverted at the maturity
date shall automatically be converted on such date.

           Certain registration rights were granted under the terms of the note.
Finder's fees and expenses totaling $232,500 were paid in conjunction with this
financing. Five-year warrants to purchase 20,000 shares of common stock at an
exercise price of $14.36 per share were also issued to the finder and
underwriter.

ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

           There have been no matters during this reporting period that require
disclosure under this item.

ITEM 4.        SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

           There have been no matters submitted to a vote of security holders
during this reporting period.

ITEM 5.        OTHER INFORMATION

           There have been no matters during this reporting period that require
disclosure under this item.



                                      F-17
<PAGE>   18
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

           (a)  The following exhibits are included herein:

                     Exhibit 10.1         Securities Purchase Agreement
                                          dated as of April 14, 2000, between
                                          the Registrant and Augustine Fund,
                                          L.P.

                     Exhibit 10.2         Software Development and License
                                          Agreement dated as of April 19, 2000,
                                          between the Registrant and Toon Boom
                                          Technologies Inc.

                     Exhibit 27 -         Financial Data Schedule.

           (b)  Reports on Form 8-K relating to the quarter ended March 31,
                2000.

                The Company did not file any reports on Form 8-K during the
                quarter ended March 31, 2000.



     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, thereunto duly authorized.



                                       Stan Lee Media, Inc.

                                       /s/ Robert M. Schultz
                                       Robert M. Schultz
                                       Principal Accounting Officer


Date: May 12, 2000.

<PAGE>   19
                              STAN LEE MEDIA, INC.
                                   FORM 10-QSB
                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibits                                                                           Page
                                                                                   ----
<S>        <C>                                                                     <C>
10.1       Securities Purchase Agreement dated as of April 14, 2000, Between the
           Registrant and Augustine Fund, L.P.

10.2       Software Development and License Agreement dated as of April 19,
           2000, between the Registrant and Toon Boom Technologies Inc.

27         Financial Data Schedule
</TABLE>