<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q
               Quarterly Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


For the Quarterly Period Ended October 31, 2003      Commission File No. 0-15284


                             NATIONAL LAMPOON, INC.
             (Exact name of registrant as specified in its charter)


         Delaware                                           95-4053296
(State or other jurisdiction                             (I.R.S. Employer
       of incorporation)                                 Identification No.)


                        10850 Wilshire Blvd., Suite 1000
                          Los Angeles, California 90024
                    (Address of principal executive offices)


Registrant's telephone number:  (310) 474-5252


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                  YES X NO ___
                                      --


As of December 12, 2003 the registrant had 1,533,418  shares of its common stock
outstanding.


<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                     NATIONAL LAMPOON, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                      AS OF               AS OF
                                                                  OCT. 31, 2003       JUL. 31, 2003
                                                                  -------------       -------------
                                                                  (UNAUDITED)
   CURRENT ASSETS
<S>                                                               <C>                  <C>
        Cash and cash equivalents                                 $     88,556         $    140,255
         Accounts receivable                                            96,700               18,390
        Prepaid expenses and other current assets                       15,551               15,636
                                                                  ------------         ------------

            Total current assets                                       200,807              174,281

   NON-CURRENT ASSETS
        Capitalized production costs                                   411,497               27,000
        Fixed assets, net of accumulated depreciation                   64,002               42,859
        Intangible assets                                            6,505,732            6,505,732
        Accumulated amortization of intangible assets               (4,109,578)          (4,049,578)
        Other assets                                                    24,160                4,500
                                                                  ------------         ------------

            Total non-current assets                                 2,895,813            2,530,513
                                                                  ------------         ------------
   TOTAL ASSETS                                                   $  3,096,620         $  2,704,794
                                                                  ============         ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

  CURRENT LIABILITIES
        Accounts payable                                          $    135,227         $    183,485
        Accrued expenses                                               710,959              781,023
        Notes payable including $2,492,840 due to shareholders       2,954,730            1,443,856
         Deferred income                                               342,981              161,000
                                                                  ------------         ------------
          TOTAL LIABILITIES                                          4,143,897            2,569,364
                                                                  ------------         ------------
    MINORITY INTEREST                                                       --                   --

   SHAREHOLDERS' EQUITY (DEFICIT)
         Series B Preferred Stock, par value $.0001,
            68,406 shares  authorized, 63,607 and
            63,607 shares issued, respectively                               6                    6
        Common Stock, par value $.0001, 15,000,000 shares
            authorized, and 1,533,418 and 1,526,795 shares
            issued, respectively                                           153                  153
         Additional paid in capital                                 17,265,985           17,110,401
        Less: Note receivable on common stock                         (158,660)            (157,220)
                  Deferred compensation                               (986,298)          (1,001,066)
        Accumulated deficit                                        (17,168,463)         (15,816,844)
                                                                  ------------         ------------
          TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                      (1,047,277)             135,430
                                                                  ------------         ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)              $  3,096,620         $  2,704,794
                                                                  ============         ============
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       2
<PAGE>

                     NATIONAL LAMPOON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                     THREE MONTHS
                                                                     ENDED OCT. 31,
                                                               2003                 2002
                                                            -----------         -----------
REVENUES
<S>                                                         <C>                 <C>
    Trademark                                               $    56,174         $    72,274
    Consumer products                                               505               1,915
    Advertising and promotion revenues                          216,250                  --
                                                            -----------         -----------
       Total revenue                                        $   272,929         $    74,189
                                                            -----------         -----------

COSTS AND EXPENSES
    Costs related to trademark revenue                            5,714               5,432
    Costs related to consumer products                            4,421               9,537
    Production Costs                                            378,724             163,639
    Amortization of intangible assets                            60,000              60,000
    Selling, general & administrative expenses                1,004,377             823,834
    Stock, warrants& options issued for services                170,351             630,388
                                                            -----------         -----------
        Total costs and expenses                              1,623,587           1,692,830
                                                            -----------         -----------
    OPERATING LOSS                                           (1,350,658)         (1,618,641)

OTHER INCOME
    Interest income                                               1,440               2,698
                                                            -----------         -----------
      Total other income                                          1,440               2,698
                                                            -----------         -----------
LOSS BEFORE MINORITY INTEREST AND INCOME
      TAXES                                                  (1,349,217)         (1,615,943)

Minority interest in loss of consolidated subsidiary                 --              37,283

Provision for income taxes                                        2,400               1,623
                                                            -----------         -----------
 NET LOSS                                                   ($1,351,618)        ($1,580,283)
                                                            ===========         ===========

  Net loss per share - basic and diluted                    ($     0.89)        ($     1.10)
                                                            ===========         ===========
  Weighted average number of common
    shares - basic and diluted                                1,527,095           1,437,473
                                                            ===========         ===========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       3
<PAGE>

                     NATIONAL LAMPOON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                    FOR THE THREE MONTHS
                                                                       ENDED OCTOBER 31,
                                                                   2003                2002
                                                                -----------         -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                             <C>                 <C>
    Net loss                                                    ($1,351,618)        ($1,580,283)
    Adjustments to reconcile net loss to net cash
      provided by/(used in) operating activities:
         Depreciation and amortization                               67,051              69,734
         Other                                                       (1,440)             (1,440)
         Stock, warrants and options issued for services            170,351             630,388
    Changes in assets and liabilities:
         (Increase) in accounts receivable                          (78,310)            (25,000)
         (Increase) in prepaid expenses and other
             current assets, and other assets                       (19,575)            (10,290)
         (Decrease) in accounts payable                             (48,258)           (153,027)
         (Decrease) in accrued expenses                             (70,064)            (41,593)
         Production costs                                          (384,498)            (18,667)
         Increase in deferred revenues                              181,981                  --
         Minority interest                                                              (37,283)
                                                                -----------         -----------
    NET CASH AND CASH EQUIVALENTS
    USED IN OPERATING ACTIVITIES                                 (1,534,380)         (1,167,461)
                                                                -----------         -----------
 CASH FLOWS FROM INVESTING ACTIVITIES:
    Acquisition of Burly Bear networks                                   --            (200,000)
    Acquisition of equipment                                        (28,193)             (6,518)
                                                                -----------         -----------
    NET CASH AND CASH EQUIVALENTS
      USED IN INVESTING ACTIVITIES                                  (28,193)           (206,518)
                                                                -----------         -----------
 CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from Series B preferred stock issuance                      --             430,000
    Exercise of stock options                                            --              22,875
    Increase in notes payable                                     1,510,874                  --
                                                                -----------         -----------
    NET CASH AND CASH EQUIVALENTS
      PROVIDED BY FINANCING ACTIVITIES                            1,510,874             452,875
                                                                -----------         -----------
    NET (DECREASE) IN CASH AND CASH  EQUIVALENTS                    (51,699)           (921,104)

 CASH AND CASH EQUIVALENTS
   AT BEGINNING OF PERIOD                                           140,255           1,024,207
                                                                -----------         -----------
 CASH AND CASH EQUIVALENTS
   AT END OF PERIOD                                             $    88,556         $   103,103
                                                                ===========         ===========

    Non cash investing and financing activities:

    Shares and options issued for services                      $   170,351         $         0
                                                                ===========         ===========
    Burly Bear acquisition                                      $         0         $   400,000
                                                                ===========         ===========
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       4
<PAGE>


                     NATIONAL LAMPOON, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  statements.  Accordingly,  they do not include all of the information
and disclosures required for annual financial statements.  In the opinion of the
Company's management,  all adjustments (consisting of normal recurring accruals)
necessary to present fairly the Company's  financial  position as of October 31,
2003,  and the results of operations  and cash flows for the three month periods
ended October 31, 2003 and 2002 have been included.  These financial  statements
should  be read  in  conjunction  with  the  financial  statements  and  related
footnotes  for the year ended July 31, 2003  included in the  National  Lampoon,
Inc. ("Company" or "Registrant") annual report on Form 10-K for that period.

The results of operations  for the three month period ended October 31, 2003 are
not  necessarily  indicative  of the results to be expected  for the full fiscal
year.  For further  information,  refer to the financial  statements and related
footnotes  included  in the  Company's  annual  report on Form 10-K for the year
ended July 31, 2003.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. Since the consummation of the Reorganization
Transactions disclosed in detail in the Company's annual report on Form 10-K for
the year ended July 31, 2002, the Company has initiated a number of new business
activities, and significantly increased the Company's overhead by the hiring of
new employees and consultants. To date, these operations have provided limited
operating revenue, and the Company has been relying on funding received from a
group headed by Daniel S. Laikin, Paul Skjodt and Timothy S. Durham, as more
fully more set forth in disclosures on the Form 10-K for the year ended July 31,
2003, in the form of securities purchased in connections with the Reorganization
Transactions, and subsequent investment by Messrs. Laikin and Durham (the "NLAG
Group") in the form of a loan, to fund operations. Since the consummation of the
Reorganization Transactions, in which the Company received $2,085,318,
subsequent warrant exercises have provided us with $1,305,000, although $200,000
of this amount was allocated for the Burly Bear transaction, and an additional
$2,978,000 from the NLAG Group in the form of a loan. The Company is negotiating
a series of agreements with Avalon Equity Partners, Golden International Group,
Tim Durham and Daniel Laikin, which are anticipated to close by the end of
December 2003 (the "December Anticipated Financing Transaction"). Pursuant to
the terms of the December Anticipated Financing Transaction, Avalon Equity
Partners, Golden International Group, Tim Durham and Daniel Laikin, will invest
approximately $8,500,000 (which includes approximately $3.0 million already
loaned to us by the NLAG Group) in a new series of convertible preferred stock.
Of these amounts, approximately $1.5 million will be paid to James P. Jimirro as
part of the Reorganization Transaction of May 17, 2002. The December Anticipated
Financing Transaction is subject to numerous closing conditions and no assurance
can be given that the December Anticipated Financing Transaction will be
consummated. The Company's financial statements for the fiscal year ended July
31, 2003 contain an explanatory paragraph as to the Company's ability to
continue as a going concern. This explanatory paragraph may impact the Company's
ability to obtain future financing.


                                       5
<PAGE>


NOTE B - EARNINGS PER SHARE

Diluted  earnings per share amounts are calculated using the treasury method and
are based upon the  weighted  average  number of common  and  common  equivalent
shares outstanding  during the period.  Basic and diluted earnings per share are
the same as common equivalent shares have been excluded from the computation, as
they would have an  anti-dilutive  effect.  Options  and  warrants  to  purchase
203,612 and 28,159 common shares are not included in the  calculation of diluted
earnings  per share  during the three  months  ended  October  31, 2003 and 2002
respectively because their inclusion would be anti-dilutive.

NOTE C - SEGMENT INFORMATION

The Company operates in three business  segments:  licensing and exploitation of
the  "National  Lampoon"  trademark  and related  properties,  operation  of the
nationallampoon.com  website and video  distribution  whose products are sold to
consumers,  and television  production  and  distribution  to college  campuses.
Segment operating  income/(loss) excludes the amortization of intangible assets,
interest income, and income taxes. Selling,  general and administrative expenses
not specifically attributable to any segment have been allocated equally between
the three segments. Summarized financial information for the three month periods
ended October 31, 2003 and 2002 concerning the Company's segments is as follows:

<TABLE>
<CAPTION>
                                         Trademark         Internet       Television          Total
                                        -----------      -----------      -----------      -----------
Three Months Ended October 31, 2003
<S>                                     <C>              <C>              <C>              <C>
     Segment revenue                    $    56,000      $     1,000      $   216,000      $   273,000
     Segment operating (loss)           ($  216,000)     ($  340,000)     ($  737,000)     ($1,293,000)

Three Months Ended October 31, 2002
     Segment revenue                    $    72,000      $     2,000               --      $    74,000
      Segment operating(loss)           ($  710,000)     ($  611,000)     ($  202,000)     ($1,523,000)
</TABLE>

A reconciliation of segment operating loss to net income before income taxes for
the three month periods ended October 31, 2003 and 2002 is as follows:


<TABLE>
<CAPTION>
                                       FOR THE THREE MONTHS ENDED
                                     OCT. 31, 2003    OCT. 31, 2002
                                     -------------    -------------
<S>                                  <C>              <C>
Total segment operating (loss)        ($1,293,000)     ($1,523,000)
Amortization of intangible assets          60,000           60,000
Interest income                            (1,000)          (3,000)
                                      -----------      -----------
Net loss before income taxes          ($1,352,000)     ($1,580,000)
                                      ===========      ===========
</TABLE>


                                       6
<PAGE>


NOTE D - LITIGATION

On August 18,  2003,  a lawsuit  was filed  against  us by Duncan  Murray in Los
Angeles Superior Court, case number BC300908. Mr. Murray is claiming that he was
unjustly  terminated and is owed  severance.  Mr. Murray is alleging 3 causes of
action:  (i) breach of his employment  agreement;  (ii) wrongful  termination of
employment and breach of implied contract; and (iii) retaliatory  termination of
employment.  On September 24, 2003, we filed an answer to the lawsuit.  There is
an initial  status  conference  scheduled for December 12, 2003.  To date,  both
parties  have  initiated  discovery,  although no  depositions  have as yet been
taken. The parties have agreed to mediate the matter in February 2004.

We believe the  complaint to be totally  without  merit and intend to vigorously
contest the matter. At this time, the outcome of the matter cannot be determined
with any  certainty.  We have  included  $150,000  in  accrued  expenses  in the
accompanying financial statements in estimation of likely future costs.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
         RESULTS OF OPERATIONS

RECENT DEVELOPMENTS

We are  negotiating a series of agreements with Avalon Equity  Partners,  Golden
International  Group,  Tim Durham and Daniel  Laikin,  which are  anticipated to
close  by  the  end  of  December  2003  (the  "December  Anticipated  Financing
Transaction").  Pursuant  to the  terms of the  December  Anticipated  Financing
Transaction,  Avalon Equity Partners, Golden International Group, Tim Durham and
Daniel   Laikin,   will  invest   approximately   $8,500,000   (which   includes
approximately  $3.0 million already loaned to us) in a new series of convertible
preferred  stock. Of these amounts,  approximately  $1.5 million will be paid to
James P. Jimirro as part of the Reorganization Transaction of May 17, 2002. Upon
Mr. Jimirro's receiving payment he will vacate his offices with the Company, and
resign as  president.  Mr.  Jimirro  will retain his position as Chairman of the
Board and the composition of the board will not change until he receives another
$1 million,  to be paid out over the subsequent  12-month  period.  The December
Anticipated  Financing Transaction is subject to numerous closing conditions and
no assurance can be given that the December  Anticipated  Financing  Transaction
will be consummated.

CRITICAL ACCOUNTING POLICIES

Management  believes the following critical accounting  policies,  among others,
affect its more  significant  judgments and estimates used in preparation of its
consolidated financial statements.

Revenue  Recognition.  The Company's  trademark licensing revenues are generally
recognized  when  received  or when  earned  under the  terms of the  associated
agreement  and  when the  collection  of such  revenue  is  reasonably  assured.
Revenues from the sale of videocassettes  and DVDs, net of estimated  provisions
for returns  (which are not material for any period  presented)  are  recognized
when the units are shipped.  Revenues from Internet  operations  are  recognized
when earned under the terms of the  associated  agreement and the  collection of
such revenue is reasonably assured.  Revenues from advertising and promotion are
recognized  when earned under the terms of the associated  agreement or when the
advertisement  has  been  broadcast  and the  collection  of such  revenues  are
reasonably assured.


                                       7
<PAGE>

Production Costs. As provided by SOP 00-2,  production costs are not capitalized
unless there are advertising  agreements in place from which the production will
generate revenues. As a result, since there were limited advertising  agreements
in place for  particular  programs,  the  production  costs incurred by National
Lampoon  Networks during the first quarter of fiscal 2004 were  capitalized only
to the extent of the revenues generated by those agreements.  The balance of the
production costs were expensed during the period.

RESULTS OF OPERATIONS

THE THREE MONTHS ENDED OCTOBER 31, 2003 VS. THE THREE MONTHS ENDED OCTOBER 31,
2002

         For the quarter ended October 31, 2003 trademark revenues were $56,174
compared to $72,274 for the quarter ended October 31, 2002, representing a
decrease of 22%. This decrease resulted primarily from the receipt in the prior
year of $25,000 for signing a letter of intent with a gaming company to produce
National Lampoon casino type slot machine games. First quarter fiscal 2003
consumer products revenues of $505 decreased by 74% over fiscal 2002 consumer
products revenues of $1,915. Decreased merchandise sales accounted for this
change. Advertising and promotion revenues of $216,250 for the quarter ended
October 31, 2003 were earned by National Lampoon Networks. There were no
corresponding advertising and promotion revenues for National Lampoon Networks
in the prior year, because National Lampoon Networks was acquired in September
of 2002 and had just begun activities by the end of the fiscal quarter. Of the
$216,250 in National Lampoon Networks revenues, approximately $124,000 were for
advertising spots on National Lampoon Networks programs, and $92,000 were for
promotional activities performed by National Lampoon Networks to promote third
party motion pictures.

         Costs  related to trademark  revenue for the quarter  ended October 31,
2003  increased to $5,714 from $5,432 during fiscal 2002 or 5%. The cost in both
years is primarily from third party royalties  associated with certain trademark
revenues.  Costs  related to consumer  products  revenues were $4,421 during the
quarter  ended  October 31, 2003 versus  $9,537 during the quarter ended October
31, 2002,  representing a decrease of 54%. This decrease in costs was related to
the decrease in merchandise  activities.  Production costs of $378,724 in fiscal
2003  represents  an increase of 131% over the  $163,639  for the quarter  ended
October 31, 2002. The production  costs in the current fiscal year resulted from
the production of National Lampoon Networks programming.  In accordance with SOP
00-2  production  costs in excess of  contracted  advertising  revenue  has been
expensed  as  incurred.  Costs in the prior year  included  two direct  response
commercials,  which cost $82,500 and National  Lampoon  Networks  production  of
television programs totaling $81,139 for the quarter.

         Amortization  of  intangible   assets,   the  costs  of  the  Company's
acquisition of the "National Lampoon" trademark,  was $60,000 during each of the
quarters ended October 31, 2003 and 2002.  Selling,  general and  administrative
costs  increased  by $180,543  or 22% to  $1,004,377  during the  quarter  ended
October 31, 2003 from $823,834  during the same period last year.  This increase
resulted  primarily from the increase of National Lampoon Networks costs because
in the prior fiscal year the National Lampoon Networks  division was operational
for only approximately half of that quarter. National Lampoon Networks personnel
costs increased by approximately  $120,000,  and marketing and promotional costs
by  $38,000  in  fiscal  2003 over  fiscal  2002.  The  Company  also  increased
operations  during the current fiscal year,  which  resulted in personnel  costs
increasing  by  approximately  $97,000 in fiscal  2003 versus the same period in
fiscal 2002.


                                       8
<PAGE>

Stock,  warrants, and options issued for services costs decreased by $460,037 to
$170,351 in the first  quarter of fiscal 2004 from  $630,388 in the prior fiscal
year,  representing  a decrease of 73%. In the prior year there were a number of
large warrant  grants,  versus  several  relatively  small grants of options and
stock thus far in this fiscal year, that were issued for services.

         Minority interest in loss of consolidated subsidiary of $37,283 for the
quarter  ended October 31, 2002  represents a credit  against 15% of the loss of
the wholly owned subsidiary,  National Lampoon Networks ("NLN"),  due to a third
party owning a 15% interest in NLN. The Company could not recognize a comparable
income in the current  fiscal  year,  as the  minority  investors'  share of the
losses has  exceeded  their  original  investment.  Interest  income  during the
quarter  ended  October 31, 2003  decreased to $1,440  versus  $2,698 during the
quarter ended October 31, 2002.  This decrease  resulted from a decrease in cash
and cash equivalents held during the quarter versus the same period last year.

         For the three months ended October 31, 2003, the Company had a net loss
of $1,351,618 or $.89 per share versus a loss of $1,580,283,  or $1.10 per share
for the quarter  ended  October 31,  2002.  This  decrease in the loss  resulted
primarily  from a decline in costs from stock,  warrants,  & options  issued for
services.  The increase in revenues in the current  fiscal year was offset by an
increase in costs.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's  principal  source of working  capital during the quarter
ended  October  31, 2003 was from loans made by the NLAG  Group.  The  Company's
management believes that the December  Anticipated  Financing  Transaction along
with trademark and television  revenues will fund its ongoing operations through
the end of the current  fiscal year.  We anticipate  that any shortfall  will be
covered by the NLAG Group and other investors.

         For the three months ended  October 31, 2003,  the  Company's  net cash
flow used in its operating  activities was $1,534,380  versus  $1,148,794 during
the three  months  ended  October  31,  2002.  This  increase is the use of cash
resulted primarily from an increase in production costs expended by the National
Lampoon Networks. At October 31, 2003, the Company had cash and cash equivalents
of $88,556 as compared to $140,255 at July 31, 2003.

         Since the  consummation  of the  Reorganization  Transactions,  we have
initiated  a number  of new  business  activities,  including  our  August  2002
acquisition of  substantially  all the assets of Burly Bear,  and  significantly
increased our overhead by the hiring of new employees and consultants.  To date,
these  operations  have provided de minimis  operating  revenue and we have been
relying on capital  received from the NLAG Group in connection with the Series B
Units  purchased in  connections  with the  Reorganization  Transactions  and in
subsequent  purchases pursuant to the Purchase Agreement to fund operations,  as
well  as  loans  made  by  the  NLAG  Group.   Since  the  consummation  of  the
Reorganization  Transactions,  in  which  we  received  $2,085,718,   subsequent
purchases of Series B Units have provided us with  $2,615,000  through March 31,
2003,  their  expiration.  In addition the Company has received  loans  totaling
$2,978,140  through  December 6, 2003.  Unless our  revenues  from new  business
activities  significantly  increase  in the  near  term,  we will  need to raise
additional  capital  to  continue  to fund our  planned  operations  or,  in the
alternative,  significantly  reduce or even eliminate certain operations.  There
can be no  assurance  that we will be able to raise such  capital on  reasonable
terms,  or at all. As of December  6, 2003 we had cash on hand of  $163,677,  an
amount  which  reflects  an  infusion  of  $66,500  loaned  by  the  NLAG  Group
immediately prior to such date, and no significant  receivables.  This amount is
not sufficient to fund current operations, which we estimate to be approximately
$475,000 per month. We anticipate that any shortfall will be covered by the sale
of additional equity,  including the December Anticipated Financing Transaction,
and the exercise of warrants held by the NLAG Group and other investors.  If the
NLAG Group declines to make  additional  investments,  or should we be unable to
secure additional financing,  we could be forced to immediately curtail much, if
not all, of our current  plans.  Our  financial  statements  for the fiscal year
ended  July 31,  2003  contain an  explanatory  paragraph  as to our  ability to
continue as a going concern.  This explanatory  paragraph may impact our ability
to obtain future financing.


                                       9
<PAGE>

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

NONE.

ITEM 4 - CONTROLS AND PROCEDURES

The Company  maintains a system of disclosure  controls and  procedures  that is
designed to provide reasonable assurance that information,  which is required to
be disclosed  by the Company in the reports  that it files or submits  under the
Securities and Exchange Act of 1934, as amended, is accumulated and communicated
to management in a timely  manner.  The Company's  Chief  Executive  Officer and
Chief  Financial  Officer have evaluated this system of disclosure  controls and
procedures as of the end of the period  covered by this  quarterly  report,  and
believe  that  the  system  is  operating   effectively  to  ensure  appropriate
disclosure.  There have been no changes in the Company's  internal  control over
financial  reporting  during the most recent  fiscal  year that have  materially
affected,  or are reasonably likely to materially affect, the Company's internal
control over financial reporting.

FORWARD-LOOKING STATEMENTS

         The  foregoing  discussion,  as  well  as the  other  sections  of this
Quarterly Report on Form 10-Q,  contains  forward-looking  statements within the
meaning of the Private Securities Litigation Reform Act of 1995 that reflect the
Company's  current views with respect to future  events and  financial  results.
Forward-looking  statements usually include the verbs "anticipates," "believes,"
"estimates," "expects," "intends," "plans," "projects,"  "understands" and other
verbs   suggesting   uncertainty.   The  Company   reminds   shareholders   that
forward-looking  statements  are merely  predictions  and  therefore  inherently
subject to uncertainties  and other factors which could cause the actual results
to differ materially from the forward-looking statements. Potential factors that
could  affect  forward-looking  statements  include,  among  other  things,  the
Company's ability to identify, produce and complete projects that are successful
in the  marketplace,  to resolve  litigation  on  acceptable  terms,  to arrange
financing,  distribution  and promotion for these projects on favorable terms in
various markets and to attract and retain qualified personnel.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

On August 18,  2003,  a lawsuit  was filed  against  us by Duncan  Murray in Los
Angeles Superior Court, case number BC300908. Mr. Murray is claiming that he was
unjustly  terminated and is owed  severance.  Mr. Murray is alleging 3 causes of
action:  (i) breach of his employment  agreement;  (ii) wrongful  termination of
employment and breach of implied contract; and (iii) retaliatory  termination of
employment.  On September 24, 2003, we filed an answer to the lawsuit.  There is
an initial  status  conference  scheduled for December 12, 2003.  To date,  both
parties  have  initiated  discovery,  although no  depositions  have as yet been
taken. The parties have agreed to mediate the matter in February 2004.

We believe the  complaint to be totally  without  merit and intend to vigorously
contest the matter. At this time, the outcome of the matter cannot be determined
with any certainty.


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<PAGE>

ITEM 6 -  EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS

<TABLE>
<CAPTION>
<S>         <C>
3.1         Company's Second Amended and Restated Articles of Incorporation (1)
3.2         Company's Amended and Restated Bylaws (1)
4.1         NLAG Registration Rights Agreement, dated May 17, 2002, among the
            Company, the members of the NLAG Group, and GTH Capital, Inc. (1)
4.2         Jimirro Registration Rights Agreement, dated May 17, 2002, between
            the Company and James P. Jimirro (1)
4.3         Amended and Restated 1999 Stock Option, Deferred Stock and
            Restricted Stock Plan (2)
4.4         Piggyback Registration Rights Agreement, dated September 3, 2002 (5)
10.1        First Amendment to Preferred Stock and Warrant Purchase Agreement,
            dated as of May 17, 2002 (1)
10.2        2002 Employment Agreement Between J2 Communications and James P.
            Jimirro, dated May 17, 2002 (1)
10.3        Note Termination Agreement, dated May 17, 2002, between the Company
            and James P. Jimirro (1)
10.4        Security Agreement, dated May 17, 2002, between the Company and
            James P. Jimirro (1)
10.5        Absolute Assignment, dated May 17, 2002, between the Company and
            James P. Jimirro (1)
10.6        Termination of Stock Appreciation Rights Agreement, dated May 17,
            2002, between the Company and James P. Jimirro (1)
10.7        Mutual Release, dated May 17, 2002, among the Company, James P.
            Jimirro and the members of the NLAG Group (1)
10.8        Restated Indemnification Agreement, dated May 17, 2002, between the
            Company and James P. Jimirro (1)
10.9        2002 Employment Agreement Between J2 Communications and Daniel S.
            Laikin, dated May 17, 2002 (1)
10.10       Non-Qualified Stock Option Agreement, dated May 17, 2002, between
            the Company and Daniel S. Laikin (1)
10.11       Indemnification Agreement, dated May 17, 2002, between the Company
            and Daniel S. Laikin. (2)
10.12       Letter, dated May 17, 2002, regarding Termination of Surviving
            Provisions of Letter Agreement, from the Company to Daniel S.
            Laikin and Paul Skjodt (1)
10.13       Warrant Agreement, dated May 17, 2002, between the Company and GTH
            Capital, Inc (1)
10.14       Voting Agreement, dated May 17, 2002, among each of the members of
            the NLAG Group and James P. Jimirro (1)
10.15       Promissory Notes issued May 17, 2002, by the Company to law firms (1)
10.16       Form of Common Stock Warrant (including Schedule identifying material terms (1)
10.17       Agreement between Registrant and Harvard Lampoon, Inc. dated October 1, 1998 (3)
10.18       First Amendment to Office Lease between Registrant and Avco Center
            Corporation dated April 21, 2000 (4)
10.19       Letter Agreement between Registrant and Batchelder Partners, Inc.,
            dated August 16, 2000 (4)
10.20       Amendment to Letter Agreement between Registrant and Batchelder
            Partners, Inc. dated August 16, 2000 (4)
10.21       Warrant Issued by Registrant to George Vandemann dated August 18, 2000 (4)
10.22       Asset Purchase Agreement dated August 30, 2002 between National
            Lampoon Networks, Inc., Burly Bear Network, Inc., Constellation
            Venture Capital, L.P. and J2 Communications (5)
10.23       Consulting Agreement with Zelnick Media and related Warrant Agreements (6)
10.24       Advisory Agreement with SBI USA and related Warrant Agreement (6)
10.25       Lease for New York office space (7)
10.26       2003 Employment Agreement between the Company and Douglas Bennett (7)
21          Subsidiaries of Registrant (7)
31.1        Certification pursuant to Section 302 of Sarbanes-Oxley - James P.
            Jimirro
31.2        Certification pursuant to Section 302 of Sarbanes-Oxley - James Toll
32          Certification pursuant to Section 906 of Sarbanes-Oxley - James P.
            Jimirro and James Toll
</TABLE>

(1) Incorporated by reference to Form 8-K filed on May 31, 2002.
(2) Incorporated by reference to Form S-8 filed on June 26, 2002.
(3) Incorporated by reference to Form 10-Q for the period ended October 31, 1998
(4) Incorporated by reference to Form 10-K for the fiscal year ended July 31,
    1999.
(5) Incorporated by referenced to Form 8-K filed on September 9, 2002.
(6) Incorporated by reference to Form 10-K for the fiscal year ended July 31,
    2002.
(7) Incorporated by reference to Form 10-K for the fiscal year ended July 31,
    2003.
(8) Filed herewith.


(B)       REPORTS ON FORM 8-K

        None


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<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) 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.



Date:  December 15, 2003                 NATIONAL LAMPOON, INC.


                                         By: /s/James Toll
                                             --------------------------
                                             James Toll
                                             Chief Financial Officer



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