##### Table of Contents



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 April 30, 2002 |  | Commission File No. 0-15284

J2 COMMUNICATIONS

(Exact name of registrant as specified in its charter)


|                                                          |  |                                                
|--------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction
of incorporation) |  | 95-4053296
(I.R.S. Employer
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 June 13, 2002 the registrant had 1,382,483 shares of its common stock
outstanding.





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TABLE OF CONTENTS



|                               |                                                                                               |  |  |  |  |  |  | 
|------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1  Financial Statements                                                                
|                               | Item 2  Managements Discussion and Analysis of Financial Position and Results of Operations
|PART II  OTHER INFORMATION   
|                               | Item 1  Legal Proceedings                                                                   
|                               | Item 5  Other Information                                                                   
|                               | Item 6  Exhibits and Reports on Form 8-K                                                    
|SIGNATURES                    



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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1  Financial Statements

J2 COMMUNICATIONS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

|                                           |                                                                                                               |                            |                          |            |               |           |               |            |           |           | 
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------ | ---------- | ------------- | --------- | ------------- | ---------- | --------- | --------- | 
|                                           |                                                                                                               |                            |                          |            | AS OF         |           | AS OF        
|                                           |                                                                                                               |                            |                          |            | APR. 30, 2002 |           | JUL. 31, 2001
|                                           |                                                                                                               |                            |                          |            |               |           |              
|                                           |                                                                                                               |                            |                          |            | (UNAUDITED)   |           |               |            |          
|CURRENT ASSETS                             |                                                                                                               |                            |                          |            |               |           |               |           
|                                           | Cash and cash equivalents                                                                                     |                            | $                        | 482,960    |               |           | $             | 324,472    |          
|                                           | Prepaid expenses and other current assets                                                                     |                            |                          | 31,127     |               |           |               | 32,685     |          
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|                                           |                                                                                                               |                            | Total current assets     |            |               | 514,087   |               |            |           | 357,157   | 
|NON-CURRENT ASSETS                         |                                                                                                               |                            |                          |            |               |           |               |           
|                                           | Fixed assets, net of accumulated depreciation                                                                 |                            |                          |           |               |           |               | 8,451      |          
|                                           | Intangible assets, net of accumulated amortization                                                            |                            |                          | 2,756,154  |               |           |               | 2,936,154  |          
|                                           | Deferred costs                                                                                                |                            |                          | 482,543    |               |           |               |           |          
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|                                           |                                                                                                               |                            | Total non-current assets |            |               | 3,238,697 |               |            |           | 2,944,605 | 
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|TOTAL ASSETS                               |                                                                                                               | $                          | 3,752,784                |            |               | $         | 3,301,762     |           
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|LIABILITIES AND SHAREHOLDERS EQUITY       |                                                                                                               |                            |                          |            |               |           |               |           
|CURRENT LIABILITIES                        |                                                                                                               |                            |                          |            |               |           |               |           
|                                           | Accounts payable                                                                                              |                            | $                        | 848,635    |               |           | $             | 242,451    |          
|                                           | Accrued expenses                                                                                              |                            |                          | 994,558    |               |           |               | 620,705    |          
|                                           | Settlement payable                                                                                            |                            |                          |           |               |           |               | 203,117    |          
|                                           | Stock appreciation rights payable                                                                             |                            |                          |           |               |           |               | 843,096    |          
|                                           | Extension payments                                                                                            |                            |                          | 450,000    |               |           |               | 200,000    |          
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|                                           |                                                                                                               | TOTAL LIABILITIES          |                          |            | 2,293,193     |           |               |            | 2,109,369 |          
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|SHAREHOLDERS EQUITY                       |                                                                                                               |                            |                          |            |               |           |               |           
|                                           | Preferred Stock, no par value, 2,000,000 shares
authorized, no shares issued and outstanding                  |                            |                          |           |               |           |               |           |          
|                                           | Common Stock, no par value, 15,000,000 shares
authorized, 1,381,483 and 1,371,116 shares
issued, respectively |                            |                          | 9,974,387  |               |           |               | 9,616,767  |          
|                                           | Less: Note receivable on common stock                                                                         |                            |                          | (150,020   | )             |           |               | (145,700   | )        
|                                           | Accumulated deficit                                                                                           |                            |                          | (8,364,776 | )             |           |               | (8,278,674 | )        
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|                                           |                                                                                                               | TOTAL SHAREHOLDERS EQUITY |                          |            | 1,459,591     |           |               |            | 1,192,393 |          
|                                           |                                                                                                               |                            |                          |            |               |           |               |           
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                               | $                          | 3,752,784                |            |               | $         | 3,301,762     |           
|                                           |                                                                                                               |                            |                          |            |               |           |               |           

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

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J2 COMMUNICATIONS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |           |           |            |  
|------------------ | ------------------------------------------------------------ | ------------------------------------------- | ------------------------ | --------- | -------------- | -------- | -------------- | --------- | ------- | --------- | ---- | --------- | --------- | ------- | - | --------- | --------- | ---------- | -
|                   |                                                              |                                             |                          |           | THREE MONTHS   |          | NINE MONTHS   
|                   |                                                              |                                             |                          |           | ENDED APR. 30, |          | ENDED APR. 30,
|                   |                                                              |                                             |                          |           |                |          |               
|                   |                                                              |                                             |                          |           | 2002           |          | 2001           |           | 2002    |           | 2001
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |     
|REVENUE            |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              | Trademark                                   |                          | $         | 426,068        |          |                | $         | 122,381 |           |      | $         | 796,516   |         |   | $         | 270,310   |           
|                   |                                                              | Video                                       |                          |           | 13,887         |          |                |           | 9,871   |           |      |           | 14,734    |         |   |           | 21,265    |           
|                   |                                                              | Internet                                    |                          |           | 3,492          |          |                |           | 1,452   |           |      |           | 7,719     |         |   |           | 6,275     |           
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              |                                             | Total revenue            |           |                | 443,447  |                |           |         | 133,704   |      |           |           | 818,969 |   |           |           | 297,850    |  
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|COSTS AND EXPENSES |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              | Costs related to trademark revenue          |                          |           | 53,703         |          |                |           | 10,409  |           |      |           | 64,593    |         |   |           | 22,108    |           
|                   |                                                              | Costs related to video revenue              |                          |           | 631            |          |                |           | 1,078   |           |      |           | 1,169     |         |   |           | 4,013     |           
|                   |                                                              | Costs related to internet revenue           |                          |           | 6,066          |          |                |           | 9,166   |           |      |           | 20,064    |         |   |           | 28,539    |           
|                   |                                                              | Amortization of intangible assets           |                          |           | 60,000         |          |                |           | 60,000  |           |      |           | 180,000   |         |   |           | 180,000   |           
|                   |                                                              | Selling, general & administrative expenses  |                          |           | 426,583        |          |                |           | 765,918 |           |      |           | 1,348,821 |         |   |           | 2,132,048 |           
|                   |                                                              | Stock appreciation rights expense/(benefit) |                          |           |               |          |                |           | 260,108 |           |      |           | (843,096  | )       |   |           | 520,530   |           
|                   |                                                              | Conversion of SARs to stock options        |                          |           |                |          |                |           |         |           |      |           | 140,894   |         |   |           |           |           
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              |                                             | Total costs and expenses |           |                | 546,983  |                |           |         | 1,106,679 |      |           |           | 912,445 |   |           |           | 2,887,238  |  
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              |                                             | OPERATING LOSS           |           |                | (103,536 | )              |           |         | (972,975  | )    |           |           | (93,476 | ) |           |           | (2,589,388 | )
|OTHER INCOME       |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              | Interest income                             |                          |           | 2,610          |          |                |           | 8,191   |           |      |           | 8,974     |         |   |           | 50,086    |           
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              |                                             | Total other income       |           |                | 2,610    |                |           |         | 8,191     |      |           |           | 8,974   |   |           |           | 50,086     |  
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              |                                             | LOSS BEFORE INCOME TAXES |           |                | (100,926 | )              |           |         | (964,784  | )    |           |           | (84,502 | ) |           |           | (2,539,302 | )
|                   | Provision for state income taxes                             |                                             |                          | 800       |                |          |                |          |         |           |      | 1,600     |           |         |   | 1,600     |          
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   |                                                              |                                             | NET LOSS                 |           | $              | (101,726 | )              |           | $       | (964,784  | )    |           | $         | (86,102 | ) |           | $         | (2,540,902 | )
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   | Net loss per share  basic and diluted                       |                                             | $                        | (0.07     | )              |          | $              | (0.71     | )       |           | $    | (0.06     | )         |         | $ | (1.88     | )        
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          
|                   | Weighted average number of common
Shares  basic and diluted |                                             |                          | 1,381,085 |                |          |                | 1,360,798 |         |           |      | 1,379,654 |           |         |   | 1,354,496 |          
|                   |                                                              |                                             |                          |           |                |          |                |           |         |           |      |           |           |         |   |          

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

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J2 COMMUNICATIONS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |            |         |   | 
|----------------------------------------------------------------------- | ------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------- | ------- | ------------------- | -------- | ---------- | ---------- | ------- | - | 
|                                                                        |                                                                                 |                                                                  |                              |         | FOR THE NINE MONTHS
|                                                                        |                                                                                 |                                                                  |                              |         | ENDED APR. 30,     
|                                                                        |                                                                                 |                                                                  |                              |         |                    
|                                                                        |                                                                                 |                                                                  |                              |         | 2002                |          | 2001      
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |           
|CASH FLOWS FROM OPERATING ACTIVITIES:                                   |                                                                                 |                                                                  |                              |         |                     |          |            |           
|                                                                        | Net loss                                                                        |                                                                  | $                            | (86,102 | )                   |          | $          | (2,540,902 | )      
|                                                                        | Adjustments to reconcile net loss to net
cash provided by operating activities: |                                                                  |                              |         |                     |          |            |            |        
|                                                                        |                                                                                 | Depreciation and amortization                                    |                              |         | 188,451             |          |            |            | 190,290 |  
|                                                                        |                                                                                 | Stock appreciation rights expense/(benefit)                      |                              |         | (843,096            | )        |            |            | 520,530 |  
|                                                                        |                                                                                 | Conversion of stock appreciation rights to stock options         |                              |         | 140,894             |          |            |            |        |  
|                                                                        |                                                                                 | Warrants issued for services                                     |                              |         | 146,000             |          |            |            | 271,263 |  
|                                                                        |                                                                                 | Other                                                            |                              |         | (4,320              | )        |            |            | (2,860  | )
|                                                                        | Changes in assets and liabilities:                                              |                                                                  |                              |         |                     |          |            |            |        
|                                                                        |                                                                                 | (Increase) in accounts receivable                                |                              |         |                    |          |            |            | (1,545  | )
|                                                                        |                                                                                 | (Increase)/decrease in prepaid expenses and
other current assets |                              |         | 1,558               |          |            |            | (2,285  | )
|                                                                        |                                                                                 |                                                                  | (Increase) in deferred costs |         |                     | (482,543 | )          |            |         |   | 
|                                                                        |                                                                                 | Decrease/in other assets                                         |                              |         |                    |          |            |            | 2,184   |  
|                                                                        |                                                                                 | Increase in accounts payable                                     |                              |         | 606,184             |          |            |            | 224,558 |  
|                                                                        |                                                                                 | Increase/(decrease) in accrued expenses                          |                              |         | 373,853             |          |            |            | 1,880   |  
|                                                                        |                                                                                 | (Decrease) in settlement payable                                 |                              |         | (203,117            | )        |            |            |        |  
|                                                                        |                                                                                 | Increase in extension payments                                   |                              |         | 250,000             |          |            |            |        |  
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|                                                                        | NET CASH PROVIDED BY/(USED IN)
OPERATING ACTIVITIES                             |                                                                  |                              | 87,762  |                     |          |            | (1,336,887 | )      
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|CASH FLOWS FROM INVESTING ACTIVITIES:                                   |                                                                                 |                                                                  |                              |         |                     |          |            |           
|                                                                        | Purchase of fixed assets                                                        |                                                                  |                              |        |                     |          |            | (2,355     | )      
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|                                                                        | NET CASH AND CASH EQUIVALENTS
USED IN INVESTING ACTIVITIES                      |                                                                  |                              |        |                     |          |            | (2,355     | )      
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|CASH FLOWS FROM FINANCING ACTIVITIES:                                   |                                                                                 |                                                                  |                              |         |                     |          |            |           
|                                                                        | Exercise of stock options                                                       |                                                                  |                              | 70,726  |                     |          |            | 17,142     |        
|                                                                        | Cash paid on exercise of stock appreciation rights                              |                                                                  |                              |         |                     |          |            | (105,419   | )      
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|                                                                        | NET CASH AND CASH EQUIVALENTS (USED IN)/
PROVIDED BY FINANCING ACTIVITIES       |                                                                  |                              | 70,726  |                     |          |            | (88,277    | )      
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|NET INCREASE/(DECREASE) IN CASH AND
AND CASH EQUIVALENTS                |                                                                                 |                                                                  | 158,488                      |         |                     |          | (1,427,519 | )         
|CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD                        |                                                                                 |                                                                  | 324,472                      |         |                     |          | 1,883,750  |           
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|CASH AND CASH EQUIVALENTS
AT END OF PERIOD                              |                                                                                 | $                                                                | 482,960                      |         |                     | $        | 456,231    |           
|                                                                        |                                                                                 |                                                                  |                              |         |                     |          |            |           
|Supplemental disclosure of non-cash investing and
financing activities: |                                                                                 |                                                                  |                              |         |                     |          |            |           
|Warrants for services                                                   |                                                                                 | $                                                                | 143,500                      |         |                     |          |           |           
|Conversion of SARs                                                     |                                                                                 | $                                                                | 140,894                      |         |                     |          |           |           

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

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J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A  BASIS OF PRESENTATION AND GOING CONCERN

The accompanying unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United
States for interim financial statements. Accordingly, they do not include all
of the information and disclosures required for annual financial statements.
These financial statements should be read in conjunction with the financial
statements and related footnotes for the year ended July 31, 2001 included in
the J2 Communications (Company or Registrant) annual report on Form 10-K
for that period.

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 April 30, 2002, and the results of operations and cash flows for
the three and nine month periods ended April 30, 2002 and 2001 have been
included.

The results of operations for the three and nine month periods ended April 30,
2002 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, 2001.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Item 2  Liquidity and
Capital Resources, the Companys management believes that its existing cash
resources will be sufficient to fund its current operations through July 31,
2002. The accompanying financial statements do not include any adjustments
relating to the recoverability and classification of asset carrying amounts or
the amount and classification of liabilities that might result should the
Company be unable to continue as a going concern.

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J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B DEFERRED COSTS

Deferred costs represent costs associated with Preferred Stock and Warrant
Purchase Agreement discussed in Note E  Subsequent Events, below. Until the
issuance of the preferred stock, the costs associated with that purchase are
classified as deferred costs. After issuance of the preferred shares, all
costs associated with the Preferred Stock and Warrant Purchase agreement will
properly be offset against capital raised through sale of Preferred Stock.

NOTE C  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. Common equivalent shares are excluded
from the computation in periods in which they would have an anti-dilutive
effect. The difference between basic and diluted earnings per share is solely
attributable to stock options, which are considered anti-dilutive when option
exercise prices exceed the weighted average market price per share of common
stock during the period.

Options to purchase 75,575 and 64,327 common shares for the three and nine
month periods ended April 30, 2001, and 303,999 and 135,926 common shares for
the three and nine month periods ended April 30, 2002 are not included in the
calculations of diluted earnings per share respectively, because they are
anti-dilutive.

NOTE D  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. Segment operating
(loss)/income excludes the amortization of intangible assets, stock
appreciation rights costs, interest income, certain corporate expenses related
to Recent Developments and income taxes. Selling, general and administrative
expenses not specifically attributable to any segment have been allocated
equally between the trademark and internet segments. Summarized financial
information for the three and nine month periods ended April 30, 2002 and 2001
concerning the Companys segments is as follows:

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J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D  SEGMENT INFORMATION (CONTINUED)

|                                  |                                 |  |           |          |          |  |       |          |       |  |   |        |  |  |   |          |  
|--------------------------------- | ------------------------------- |  | --------- | -------- | -------- |  | ----- | -------- | ----- |  | - | ------ |  |  | - | -------- | -
|                                  |                                 |  | Trademark |          | Internet |  | Video |          | Total
|                                  |                                 |  |           |          |          |  |       |          |      
|Three Months Ended April 30, 2002 |                                 |  |           |          |          |  |       |          |       |  |   |        |  |  |   |         
|                                  | Segment revenue                 |  | $         | 426,000  |          |  | $     | 3,000    |       |  | $ | 14,000 |  |  | $ | 443,000  |  
|                                  | Segment operating (loss)/income |  |           | 241,000  |          |  |       | (152,000 | )     |  |   | 13,000 |  |  |   | 102,000  |  
|Three Months Ended April 30, 2001 |                                 |  |           |          |          |  |       |          |       |  |   |        |  |  |   |         
|                                  | Segment revenue                 |  | $         | 122,000  |          |  | $     | 2,000    |       |  | $ | 10,000 |  |  | $ | 134,000  |  
|                                  | Segment operating income/(loss) |  |           | (4,000   | )        |  |       | (183,000 | )     |  |   | 9,000  |  |  |   | (178,000 | )
|Nine Months Ended April 30, 2002  |                                 |  |           |          |          |  |       |          |       |  |   |        |  |  |   |         
|                                  | Segment revenue                 |  |           | 797.000  |          |  |       | 7,000    |       |  |   | 15,000 |  |  |   | 819,000  |  
|                                  | Segment operating (loss)/income |  |           | 410,000  |          |  |       | (495,000 | )     |  |   | 14,000 |  |  |   | (71,000  | )
|Nine Months Ended April 30, 2001  |                                 |  |           |          |          |  |       |          |       |  |   |        |  |  |   |         
|                                  | Segment revenue                 |  | $         | 270,000  |          |  | $     | 7,000    |       |  | $ | 21,000 |  |  | $ | 298,000  |  
|                                  | Segment operating income/(loss) |  |           | (112,000 | )        |  |       | (612,000 | )     |  |   | 17,000 |  |  |   | (707,000 | )

A reconciliation of segment operating loss to net income before income taxes
for the three and nine month periods ended April 30, 2002 and 2001 is as
follows:

|                                                           |  |                            |         |               |  |   |          |  
|---------------------------------------------------------- |  | -------------------------- | ------- | ------------- |  | - | -------- | -
|                                                           |  | FOR THE THREE MONTHS ENDED
|                                                           |  |                           
|                                                           |  | APR. 30, 2002              |         | APR. 30, 2001
|                                                           |  |                            |         |              
|Total segment operating (loss)/income                      |  | $                          | 102,000 |               |  | $ | (178,000 | )
|Amortization of intangible assets                          |  |                            | 60,000  |               |  |   | 60,000   |  
|Stock appreciation rights expense/(benefit)                |  |                            |        |               |  |   | 260,000  |  
|Interest income                                            |  |                            | (3,000  | )             |  |   | (8,000   | )
|Corporate expenses incurred related to
Recent Developments |  |                            | 144,000 |               |  |   | 475,000  |  
|                                                           |  |                            |         |               |  |   |          |  
|Net (loss)/income before income taxes                      |  | $                          | (99,000 | )             |  | $ | (965,000 | )
|                                                           |  |                            |         |               |  |   |          |  

|                                                           |  |                           |          |               |  |   |            |  
|---------------------------------------------------------- |  | ------------------------- | -------- | ------------- |  | - | ---------- | -
|                                                           |  | FOR THE NINE MONTHS ENDED
|                                                           |  |                          
|                                                           |  | APR. 30, 2002             |          | APR. 30, 2001
|                                                           |  |                           |          |              
|Total segment operating loss                               |  | $                         | (71,000  | )             |  | $ | (707,000   | )
|Amortization of intangible assets                          |  |                           | 180,000  |               |  |   | 180,000    |  
|Stock appreciation rights expense/(benefit)                |  |                           | (702,000 | )             |  |   | 521,000    |  
|Interest income                                            |  |                           | (9,000   | )             |  |   | (50,000    | )
|Corporate expenses incurred related to
Recent Developments |  |                           | 544,000  |               |  |   | 1,183,000  |  
|                                                           |  |                           |          |               |  |   |            |  
|Net (loss)/income before income taxes                      |  | $                         | (84,000  | )             |  | $ | (2,541,000 | )
|                                                           |  |                           |          |               |  |   |            |  

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J2 COMMUNICATIONS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E  SUBSEQUENT EVENTS

On May 17, 2002, J2 Communications, a California corporation (the Company"),
completed the reorganization transactions previously reported in the Companys
Form 8-K filed on April 29, 2002 (the Reorganization Transactions"), involving
a group headed by Daniel S. Laikin, Paul Skjodt and Timothy S. Durham and also
including National Lampoon Acquisition Group LLC, a California limited
liability company; Samerian, LLP, an Indiana limited liability partnership;
Diamond Investments, LLC, an Indiana limited liability company; DW Leasing
Company, LLC, an Indiana limited liability company; Christopher R. Williams;
Helen C. Williams; Judy B. Laikin; Ronald Holzer; and DC Investments, LLC, an
Indiana limited liability company (DCI)(collectively, the NLAG Group"), and
James P. Jimirro, the Companys Chairman of the Board, President and Chief
Executive Officer. Certain of the Reorganization Transactions were undertaken
pursuant to a Preferred Stock and Warrant Purchase Agreement, dated April 25,
2002, as amended by the First Amendment to Preferred Stock and Warrant Purchase
Agreement, dated May 17, 2002 (the Purchase Agreement"). For more information
see Item 5- Other Information,below.

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Item 2  Managements Discussion and Analysis of Financial Position and
Results of Operations

Results of Operations

The Three Months Ended April 30, 2002 vs. the Three Months Ended April 30, 2001

For the three months ended April 30, 2002 trademark revenues were $426,068
as compared to $122,381 for the quarter ended April 30, 2001. The increase in
trademark revenues of 248% resulted primarily from increased receipts from the
three National Lampoons Vacation films. Video revenues of $13,887 for the
3rd fiscal quarter of 2002 were 41% higher than the $9,871 earned during the
same period in the prior year. This increase was due primarily to an
international sale of all four volumes of the Mother Goose Video Treasury.
Internet sales of $3,492 during the third fiscal quarter of 2002 increased
140% from the fiscal 2001 level of $1,452. A greater level of merchandize sold
through the internet accounted for the increase in fiscal 2002.

Costs related to trademark revenue during the quarter ended April 30, 2002
increased to $53,703 from $10,409 for the quarter ended April 30, 2001,
representing an increase of 416%. This was primarily due to increased
royalties owed as a consequence of the increase in trademark revenues during
the quarter ended April 30, 2002. Costs related to internet operations
(excluding selling, general and administrative expenses related to internet
operations) decreased to $6,066 during the quarter ended April 30, 2002 from
$9,166 for the same period in fiscal 2001. These costs include website
development and maintenance, content creation and third party hosting of the
website. Reduced payments to the web server accounted for the majority of that
savings. 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 April 30, 2002 and 2001.

Selling, general and administrative costs decreased to $426,583 during the
quarter ended April 30, 2002 versus $765,918 during the same period last year.
This decrease of approximately $339,000 or 44% resulted primarily from
capitalized expenses incurred by the Company relating to the NLAG transactions
mentioned in Subsequent Events, and reduced salary costs due to having less
full time personnel in the current fiscal year.

During the quarter ended April 30, 2001, the Company recorded an expense
of approximately $260,000 related to stock appreciation rights (SARs) granted
to the Companys chief executive officer. This expense resulted from an
increase in the Companys stock price during the quarter that increased the
amount payable by the Company to the chief executive officer upon the exercise
of any of the outstanding SARs. All SARs were converted to stock options in the
prior quarter in fiscal 2002 therefore there was no expense related to SARs in
the current fiscal quarter.

Interest income during the quarter ended April 30, 2002 decreased to
$2,610 versus approximately $8,191 during the quarter ended April 30, 2001.
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 April 30, 2002, the Company had a net loss of
$101,726, or $0.07 per share, versus net loss of $964,784, or $0.71 per share,
for the three months ended April 30, 2001. This increase in net income
resulted primarily from (i) the increase in revenues of approximately $309,000,
(ii) the reduced expense recorded by the Company relating to outstanding SARs
versus the prior year and (iii) the reduced expenses incurred by the Company

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relating to the NLAG transaction as discussed in Subsequent Events. During
the quarter ended April 30, 2002 and 2001, the Company had no significant
provision for income taxes due to the losses incurred.

The Nine Months Ended April 30, 2002 vs. the Nine Months Ended April 30, 2001

For the nine months ended April 30, 2002 trademark revenues were $796,516
as compared to $270,310 for the nine months ended April 30, 2001. The increase
in trademark revenues of approximately 195% resulted primarily from increases
in revenues from the films National Lampoons Animal House, the three
National Lampoons Vacation films, and the payment received for the film Van
Wilder in the current fiscal year. Video revenues of $14,734 in the nine
months ended April 30, 2002 represents a 31% decrease from video revenues of
$21,265 during the same period in the prior fiscal year. The decrease was due
primarily to a decrease in sales of the Stand Up Reagan video during the
current fiscal year. Internet sales for the nine months ended April 30, 2002
of $7,719 represents an increase of 23% from sales of $6,275 for the same
period in the prior fiscal year. A greater level merchandize sold through the
internet accounted for the increase in fiscal 2002.

Costs related to trademark revenue during the nine months ended April 30,
2002 increased to $64,593 from $22,108 for the same period ended April 30,
2001, representing an increase of 192%. This was primarily due to increased
royalties to third parties owed as a consequence of the increase in trademark
revenues during the nine months ended April 30, 2002. Costs related to
internet operations (excluding selling, general and administrative expenses
related to internet operations) decreased to $20,064 during fiscal 2002 from
$28,539 for the same period in fiscal 2001. These costs include website
development and maintenance, content creation and third party hosting of the
website. Reduced payments to the web server accounted for the majority of
those savings. Amortization of intangible assets, the costs of the Companys
acquisition of the National Lampoon trademark, was $180,000 during each of
the nine months ended April 30, 2002 and 2001.

Selling, general and administrative costs decreased to $1,348,821 during
the nine months ended April 30, 2002 versus $2,132,048 during the same period
in the prior year. This decrease of approximately $783,000 or 37% resulted
primarily from reduced expenses incurred by the Company relating to the NLAG
transactions mentioned in Subsequent Events, and reduced salary costs due to
having less full time personnel in the current fiscal year.

During the nine months ended April 30, 2002, the Company recorded a net
benefit of $843,096 related to stock appreciation rights (SARs) granted to
the Companys chief executive officer. This benefit resulted from a decrease
in the Companys stock price during the nine months ended April 30, 2002 that
decreased the amount payable by the Company to the chief executive officer upon
the exercise of any of the outstanding SARs. During the nine months ended
April 30, 2001, the Company recorded an expense of $520,530 related to such
SARs due to an increase in the Companys stock price during that period.

Interest income during the nine months ended April 30, 2002 decreased to
$8,974 versus $50,086 during the nine months ended April 30, 2001. This
decrease resulted from a decrease in cash and cash equivalents held during the
nine months ended April 30, 2002 versus the same period in the prior year.

For the nine months ended April 30, 2002, the Company had a net loss of
$86,102, or $0.06 per share, versus a net loss of $2,540,902, or $1.88 per
share, for the nine months ended April 30, 2001. This decrease in net loss
resulted primarily from (i) an increase in revenues of approximately $521,000
due to greater trademark revenues from the Companys

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films, (ii) the expense recorded by the Company during the nine months ended
April 30, 2001 relating to outstanding SARs versus a benefit recorded during
the same period this year and (iii) a reduction in expenses incurred by the
Company relating to the NLAG transaction as discussed in Subsequent Events.
During the nine months ended April 30, 2002 and 2001, the Company had no
significant provision for income taxes due to the losses incurred.

Liquidity and Capital Resources

The Companys principal sources of working capital during the nine months
ended April 30, 2002 were trademark and related income, extension fees, and
cash reserves. The Companys management believes that its existing cash
resources will be sufficient to fund its current operations through July 31,
2002.

For the nine months ended April 30, 2002, the Companys net cash flow
provided by its operating activities was $87,762, an increase of $1,424,649
versus $1,336,887 of net cash flow used in operating activities during the
nine months ended April 30, 2001. This increase results primarily from
increased trademark licensing income and decreased general and administrative
expenses incurred during the nine months ended April 30, 2002 including a
decrease of approximately $633,000 based on the treatment of costs as
capitalized deferred costs instead of an expense to retain various legal and
financial advisers in response to the NLAG transaction as discussed in
Subsequent Events. At April 30, 2002, the Company had cash and cash
equivalents of $482,960 as compared to $324,472 at July 31, 2001.

Future Commitments

The Company does not currently have any material future commitments for
capital expenditures.

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 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

None.




Item 5  Other Information

On May 17, 2002, J2 Communications, a California corporation (the
Company"), completed the reorganization transactions previously reported in
the Companys Form 8-K filed on April 29, 2002 (the Reorganization
Transactions"), involving a group headed by Daniel S.

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Laikin, Paul Skjodt and Timothy S. Durham and also including National
Lampoon Acquisition Group LLC, a California limited liability company;
Samerian, LLP, an Indiana limited liability partnership; Diamond Investments,
LLC, an Indiana limited liability company; DW Leasing Company, LLC, an Indiana
limited liability company; Christopher R. Williams; Helen C. Williams; Judy B.
Laikin; Ronald Holzer; and DC Investments, LLC, an Indiana limited liability
company (DCI)(collectively, the NLAG Group"), and James P. Jimirro, the
Companys Chairman of the Board, President and Chief Executive Officer. Certain
of the Reorganization Transactions were undertaken pursuant to a Preferred
Stock and Warrant Purchase Agreement, dated April 25, 2002, as amended by the
First Amendment to Preferred Stock and Warrant Purchase Agreement, dated May
17, 2002 (the Purchase Agreement"). The amendment added Mr. Holzer and DCI as
parties to the Purchase Agreement.

As part of the Reorganization Transactions, the Companys Articles of
Incorporation were amended on May 17, 2002 to designate 68,406 of the
previously authorized 2,000,000 shares of Preferred Stock as Series B
Convertible Preferred Stock (Series B Preferred), with each share of Series B
Preferred being convertible into 28.169 shares of Common Stock. The shares of
Series B Preferred vote on a converted basis as a class with the shares of
Common Stock. Pursuant to the Purchase Agreement, 35,244 units, with each unit
consisting of one share of Series B Preferred and a warrant to purchase 28.169
shares of Common Stock, were issued to five members of the NLAG Group for an
aggregate purchase price of $3,524,400.

The members of the NLAG Group (excluding Mr. Holzer, who was eliminated as
a party to the Voting Agreement by a subsequent decision on June 7, 2002) and
Mr. Jimirro entered into a Voting Agreement, dated May 17, 2002, regarding, in
addition to certain other matters, the voting of their shares of Common Stock
and Series B Preferred in the election of directors. To give effect to the
Voting Agreement, Joe De Simio and Gary Cowan resigned as directors of the
Company on May 17, 2002, and Messrs. Durham and Skjodt were elected to fill the
vacancies created by those resignations. In addition, Joshua A. Finkenberg was
elected to fill the vacancy created by an amendment to the Bylaws to increase
the size of the Board of Directors from six to seven members.

The Board also has voted unanimously to terminate the Rights Agreement,
dated July 15, 1999, as amended March 5, 2001, between the Company and U.S.
Stock Transfer Corporation, and to redeem all of the outstanding rights issued
thereunder for a cash payment of $.0001 per right. In voting to terminate the
Rights Agreement and redeem the rights, the Board of Directors made no finding
regarding the validity of the Rights Agreement or the rights.

The consummation of the Reorganization Transaction effectively concluded
all of the litigation between the Company, the member of the NLAG Group and Mr.
Jimirro. As part of or in connection with the Reorganization Transactions, the
following agreements also were entered into on May 17, 2002 :

NLAG Registration Rights Agreement, among the Company, the members of the NLAG
Group and GTH Capital, Inc.;

Jimirro Registration Rights Agreement, between the Company and James P.
Jimirro;

2002 Employment Agreement Between J2 Communications and James P. Jimirro;

Note Termination Agreement, between the Company and James P. Jimirro;

Security Agreement, between the Company and James P. Jimirro;

Absolute Assignment, between the Company and James P. Jimirro;

Termination of Stock Appreciation Rights Agreement, between the Company and
James P. Jimirro;

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Mutual Release, among the Company, James P. Jimirro and the members of the
NLAG Group;

Restated Indemnification Agreement, between the Company and James P.
Jimirro;

2002 Employment Agreement Between J2 Communications and Daniel S. Laikin;

Non-Qualified Stock Option Agreement, between the Company and Daniel S. Laikin;

Indemnification Agreement, between the Company and Daniel S. Laikin;

Letter regarding Termination of Surviving Provisions of Letter Agreement,
from the Company to Daniel S. Laikin and Paul Skjodt;

Warrant Agreement, between the Company and GTH Capital, Inc. and

Promissory Notes issued by the Company to certain law firms




Item 6  Exhibits and Reports on Form 8-K



|(a) |  | Exhibits (numbered in accordance with Item 601 of Regulation S-K)
|--- |  | -----------------------------------------------------------------

|    |  |                                                                                           
|--- |  | ------------------------------------------------------------------------------------------
|3.1 |  | Restated Articles of Incorporation of Registrant. (1)                                     
|3.2 |  | Certificate of Amendment of Restated Articles of Incorporation filed April 27, 1989. (2)  
|3.3 |  | Certificate of Amendment of Restated Articles of Incorporation filed July 14, 1993. (2)   
|3.4 |  | Certificate of Amendment of Restated Articles of Incorporation filed October 29, 1998. (3)
|3.5 |  | Bylaws of Registrant. (1)                                                                 
|3.6 |  | Amendment to Bylaws of Registrant dated July 15, 1999. (4)                                
|3.7 |  | Amendment to Bylaws of Registrant dated August 18, 2000. (5)                              



---

|(1) |  | Incorporated by reference to Form S-1 filed on July 28, 1986
as amended September 22, 1986 and October 2, 1986.
|--- |  | ---------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Incorporated by reference to Form 10-K filed for the fiscal
year ended July 31, 2000.                          
|   
|   
|   
|   
|(3) |  | Incorporated by reference to Form 10-K filed for the fiscal
year ended July 31, 1998.                          
|   
|   
|   
|   
|(4) |  | Incorporated by reference to Form 8-K filed July 16, 1999.                                                     
|   
|   
|   
|   
|(5) |  | Incorporated by reference to Form 8-K filed August 22, 2000.                                                   



|(b) |  | Forms 8-K
|--- |  | ---------
|   
|    |  | None.    

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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: June 14, 2002 | J2 COMMUNICATIONS                  
|                   
|                    | By:                                 | /s/   James Toll
|                    |                                    
|                    | James Toll,
Chief Financial Officer

14