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

                               AMENDMENT NO. 3 TO

                                   FORM 10-QSB

Mark one
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934
                       For the period ended March 31, 2003

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15 (d) OF THE SECURITIES
             EXCHANGE ACT OF 1934 For the transition period from to
                                    000-49679



                             Commission File Number
            LITFUNDING CORP. formerly known as RP ENTERTAINMENT, INC.

             (Exact name of registrant as specified in its charter)

          Nevada                                                  93-1221399
          ------                                                 ------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)

                                LITFUNDING CORP.
                      5757 Wilshire Boulevard, Suite PH 10
                         Los Angeles, California 90036

               (Address of principal executive office) (Zip Code)
                                 (323) 857-0448

              (Registrant's telephone number, including area code)

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 ( )

The number of shares outstanding of the registrant's common stock as of March
31, 2003 was 8,270,000. There were no shares of the registrant's preferred stock
outstanding as of March 31, 2003.



                                       1
<PAGE>

                                LITFUNDING CORP.
                   (Formerly Known as RP Entertainment, Inc.)

                                   FORM 10-QSB

                                Table of Contents
                                -----------------



ITEM NO.  DESCRIPTION                                                   PAGE
--------  -----------                                                   ----

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

        Balance Sheets as of March 31, 2003 ..............................3

        Statements of Operations for the Three Months Periods Ended
        March 31, 2003 and 2002...........................................4
        Statements of Cash Flows for the Three Months Periods Ended
        March 31, 2003 and 2002...........................................5

        Notes to Financial Statements.....................................6-10


Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations...............................11-14

Item 3. Controls and Procedures...........................................15

                           PART II - OTHER INFORMATION


Item 1. Legal Proceedings.................................................15

Item 2. Changes in Securities and Use of Proceeds.........................15

Item 3. Defaults Upon Senior Securities...................................15

Item 4. Submission of Matters to a Vote of Security Holder................15

Item 5. Other Information.................................................15

Item 6. Exhibits and Reports on Form 8-K..................................13

Signatures................................................................16





                                       2
<PAGE>



                         PART I - FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



                                LITFUNDING CORP.
                       (Formerly, RP Entertainment, Inc.)

                                  BALANCE SHEET
                                 MARCH 31, 2003
                                   (Unaudited)


                                     ASSETS


Cash & cash equivalents                                           $     117,013
Accounts receivable                                                     875,205
Other
receivables                                                                   -
Contingent advances less reserve for unsuccessful resolution of
     lawsuit of                                                   $   2,094,612
                                                                     11,869,466
Prepaid commission on contingent advances                               685,911
Property and equipment, net                                              83,914
Other assets                                                             21,950
                                                                  --------------
                                                                  $  13,653,459
                                                                  ==============


 LIABILITIES AND STOCKHOLDERS' DEFICIT

Accounts payable and accrued expenses                             $      77,586
Investor deposit                                                              -
Debenture deposits                                                      200,000
Interest payable                                                      2,802,608
Investor participation                                               18,738,931
                                                                  --------------
          Total  liabilities                                         21,819,125

Redeemable stock                                                              -

COMMITMENTS


STOCKHOLDERS' DEFICIT
   Preferred stock, $0.001 par value; Authorized shares
       10,000,000; no shares issued and outstanding                           -
Common stock, $0.001 par value;
Authorized shares 50,000,000; 8,270,250 shares
issued and outstanding                                                    8,270

Additional paid in capital                                            3,441,052
Accumulated deficit                                                 (11,614,988)
                                                                  --------------
          Total stockholders' deficit                                (8,165,666)
                                                                  --------------
                                                                  $  13,653,459
                                                                  ==============



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

                                       3
<PAGE>




                                LITFUNDING CORP.
                            STATEMENTS OF OPERATIONS
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                              2003                       2002
                                                       -------------------        -------------------
<S>                                                            <C>                        <C>
Net revenue                                            $          162,495         $          283,444

Operating expenses:
      Selling                                                     288,366                    348,772
      Reserve for unsuccessful resolution of lawsuits             184,847                    579,044
      General and administrative                                  521,178                    543,970
                                                       -------------------        -------------------
             Total operating expenses                             994,391                  1,471,786
                                                       -------------------        -------------------

Loss from operations                                             (831,896)                (1,188,342)

Non-operating income (expense):
      Interest expense, net of interest income                   (932,711)                  (436,218)
                                                       -------------------        -------------------

Loss before income taxes                                       (1,764,607)                (1,624,560)

Provision for income tax                                            1,600                        800

                                                       -------------------        -------------------
Net loss                                               $       (1,766,207)        $       (1,625,360)
                                                       ===================        ===================

Basic and diluted weighted average number of
                                                       -------------------        -------------------
    common stock outstanding                                    6,380,542                  6,380,542
                                                       ===================        ===================

                                                       -------------------        -------------------
Basic and diluted net Income/(loss) per share          $            (0.28)        $            (0.25)
                                                       ===================        ===================
</TABLE>


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

                                       4
<PAGE>




                                LITFUNDING CORP.
                            STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2003 AND 2002
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  2003                 2002
                                                                            -----------------    -----------------
<S>                                                                                <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
           Net loss                                                        $     (1,766,207)    $     (1,625,360)
           Adjustments to reconcile loss to net cash used in operating
           activities:
                 Depreciation and amortization                                        6,637                2,867
                 Reserve for unsuccessful resolution of lawsuits                    184,847                    -
                 Deferred compensation                                                9,750                9,913
                 (Increase) / decrease in current assets:
                            Accounts receivable                                     308,741             (253,000)
                            Other receivable                                              -                6,748
                            Contingent advances                                     (47,001)          (2,913,492)
                            Prepaid commissions on contingent advances              197,720             (757,587)
                            Deposits                                                  3,089                    -
                 Increase / (decrease) in current liabilities:
                            Interest payable                                        846,107              426,548
                            Accounts payable and accrued expense                    (59,970)             (95,527)
                                                                           -----------------    -----------------
                 Total adjustments                                                1,449,920           (3,573,530)
                                                                           -----------------    -----------------
           Net cash used in operating activities                                   (316,287)          (5,198,890)
                                                                           -----------------    -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
                 Acquisition of treasury stock                                       (7,000)                   -
                 Acquisition of property & equipment                                 (8,181)              (7,517)
                                                                           -----------------    -----------------
           Net cash used in investing activities                                    (15,181)              (7,517)
                                                                           -----------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
                 Proceeds from investor participation                                78,766            4,564,986
                 Issuance/purchase of redeemable common stock                             -           (1,000,000)
                 Proceeds from issuance of common stock                                   -              134,286
                 Investor deposits                                                                      (823,750)
                 Debenture deposits                                                  70,000                    -
                 Receipt of cash on acquisition                                      25,000                    -
                 Payment for common stock repurchase                                      -
                 Shares issued on exercise of options                                     -               20,000
                                                                           -----------------    -----------------
           Net cash provided by financing activities                                173,766            2,895,522
                                                                           -----------------    -----------------

NET DECREASE IN CASH & CASH EQUIVALENTS                                            (157,702)          (2,310,885)

CASH & CASH EQUIVALENTS, BEGINNING BALANCE                                          274,715            2,649,032
                                                                            ----------------    ----------------

CASH & CASH EQUIVALENTS, ENDING BALANCE                                     $       117,013     $        338,147
                                                                            ================    ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
           Interest paid                                                    $       118,000     $              -
                                                                            ================    ================
           Income tax paid                                                  $         1,600     $              -
                                                                            ================    ================

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES
           Common stock options issued for services                         $             -     $        741,275
                                                                            ================    ================
</TABLE>




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


                                       5
<PAGE>




                                LITFUNDING CORP.


              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATIONS AND DESCRIPTION OF BUSINESS

LitFunding Corp., formerly RP Entertainment, Inc. (the "Company"), was
incorporated in the State of Nevada in July 1996 and in 2003 subsequent to
merger changed its name to LitFunding Corp.

On February  25,  2003,  the Company  entered  into an  Agreement of Merger with
California LitFunding, formerly LitFunding Corp. (LFC), a California corporation
organized in November 2000. LFC became a subsidiary  when the Articles of Merger
between RP Acquisition Corp., the Registrant's  wholly owned subsidiary that was
formed to facilitate the merger, and LFC were filed with the Nevada Secretary of
State.  The charter  documents  of the Company are the charter  documents of the
surviving corporation. Pursuant to the Merger Agreement, 7,592,250 shares of its
common stock were to be issued to the LFC  shareholders  in exchange for all the
issued  and  outstanding  shares  of  LFC  common  stock.  LitFunding  Corp.,  a
California  corporation,  changed its name to  California  LitFunding on May 30,
2003.

Pursuant to the Merger  Agreement,  the current officers of the Company resigned
and the officers of LFC were appointed as officers of the merged  company.  Upon
the closing of the merger,  the current  officers of the Company  agreed to have
their 4,500,000 shares of the Company's common stock cancelled.

On March 3, 2003, the Company  changed its name from RP  Entertainment,  Inc. to
LitFunding Corp.

California LitFunding (LFC) was incorporated in California on November 17, 2000.
The Company is in the business of funding individuals and/or entities that are
in the process of litigating as plaintiff in civil cases. Law case financing is
a program under which a non-recourse advance is made to a plaintiff, or to an
attorney for the purpose of covering the ongoing costs of the case (contingent
advances). The Company receives a fee for advancing the funding, which is based
on the length of time the funds are outstanding. If the recovery (amount of
settlement or award) is less than the aggregate fee (the contingent advance plus
the fees earned through repayment date), the aggregate fee will be reduced to
the amount of the recovery.

The  acquisition  of  California  LitFunding  (LFC) has been  accounted for as a
reverse   acquisition   under  the  purchase  method  of  accounting  since  the
shareholders of LitFunding Corp.  obtained  control of the consolidated  entity.
Accordingly,   the  merger  of  the  two   companies  has  been  recorded  as  a
recapitalization of LitFunding Corp., with LitFunding Corp. being treated as the
continuing entity. The historical  financial  statements to be presented will be
those of LitFunding Corp. The continuing company has retained December 31 as its
fiscal year end. The financial statements of legal acquirer are not significant;
therefore,  no pro forma  financial  information  is  submitted.  The  financial
statements for the period ended March 31, 2003, include financial  statements of
the Company and LFC whereas, the financial statements for the period ended March
31, 2002 comprised of the financial statements of LFC.


                                       6
<PAGE>


SEGMENT REPORTING

During the periods ended March 31, 2003 and 2002, the Company only operated in
one segment. Therefore, segment disclosure has not been presented.

2. BASIS OF PREPARATION

The accompanying Interim Condensed Financial Statements are prepared in
accordance with rules set forth in Regulation SB of the Securities and Exchange
Commission. As said, these statements do not include all disclosures required
under generally accepted principles and should be read in conjunction with the
audited financial statements for the year ended December 31, 2002. In the
opinion of management, all adjustments consisting of normal reoccurring accruals
have been made to the financial statements. The results of operation for the
three months ended March 31, 2003 are not necessarily indicative of the results
to be expected for the fiscal year ending December 31, 2003.

3. RECENT PRONOUNCEMENTS

In May 2002, the Board issued SFAS No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections ("SFAS
145"). SFAS 145 rescinds the automatic treatment of gains or losses from
extinguishments of debt as extraordinary unless they meet the criteria for
extraordinary items as outlined in APB Opinion No. 30, Reporting the Results of
Operations, Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS
145 also requires sale-leaseback accounting for certain lease modifications that
have economic effects that are similar to sale-leaseback transactions and makes
various technical corrections to existing pronouncements. The provisions of SFAS
145 related to the rescission of FASB Statement 4 are effective for fiscal years
beginning after May 15, 2002, with early adoption encouraged. All other
provisions of SFAS 145 are effective for transactions occurring after May 15,
2002, with early adoption encouraged. The adoption of SFAS 145 does not have a
material effect on the earnings or financial position of the Company.

In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated with
exit or Disposal  Activities." This Statement addresses financial accounting and
reporting for costs  associated  with exit or disposal  activities and nullifies
Emerging  Issues Task Force (EITF) Issue No. 94-3,  "Liability  Recognition  for
Certain  Employee  Termination  Benefits  and  Other  Costs to Exit an  Activity
(including Certain Costs Incurred in a Restructuring)."  This Statement requires
that a liability  for a cost  associated  with an exit or  disposal  activity be
recognized  when the liability is incurred.  Under Issue 94-3 a liability for an
exit cost as defined, was recognized at the date of an entity's commitment to an
exit plan.  . The  adoption  of SFAS 146 does not have a material  effect on the
earnings or financial position of the Company.

In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial Institutions." SFAS No. 147 removes the requirement in SFAS No. 72 and
Interpretation 9 thereto, to recognize and amortize any excess of the fair value
of liabilities assumed over the fair value of tangible and identifiable
intangible assets acquired as an unidentifiable intangible asset. This statement
requires that those transactions be accounted for in accordance with SFAS No.
141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." In addition, this statement amends SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," to include certain financial
institution-related intangible assets. . The adoption of SFAS 147 does not have
a material effect on the earnings or financial position of the Company.


                                       7
<PAGE>


In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). FIN 45 requires that upon
issuance of a guarantee, a guarantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 are effective for any guarantees issued or
modified after December 31, 2002. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002. . The adoption of this pronouncement does not have a material effect on
the earnings or financial position of the Company.

On April 30, the FASB  issued FASB  Statement  No. 149 (FAS 149),  Amendment  of
Statement 133 on Derivative  Instruments and Hedging Activities.  FAS 149 amends
and clarifies the accounting guidance on (1) derivative  instruments  (including
certain  derivative  instruments  embedded in other  contracts)  and (2) hedging
activities  that fall  within  the scope of FASB  Statement  No.  133 (FAS 133),
Accounting  for  Derivative  Instruments  and Hedging  Activities.  FAS 149 also
amends  certain  other  existing  pronouncements,  which  will  result  in  more
consistent reporting of contracts that are derivatives in their entirety or that
contain  embedded  derivatives  that  warrant  separate  accounting.  FAS 149 is
effective (1) for contracts  entered into or modified after June 30, 2003,  with
certain exceptions,  and (2) for hedging relationships designated after June 30,
2003. The guidance is to be applied  prospectively.  The Company does not expect
the adoption of SFAS No. 149 to have a material impact on its financial position
or results of operations or cash flows.

In December 2002, the FASB issued FAS No. 148, "Accounting for Stock-Based
Compensation Transition and Disclosure", which amended FAS No. 123, "Accounting
for Stock-Based Compensation." The new standard provides alternative methods of
transition for a voluntary change to the fair market value based method for
accounting for stock-based employee compensation. Additionally, the statement
amends the disclosure requirements of FAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. This statement is effective for financial statements
for the year ended December 31, 2002. In compliance with FAS No. 148, the
Company has elected to continue to follow the intrinsic value method in
accounting for its stock-based employee compensation plan as defined by APB No.
25 and has made the applicable disclosures below.

Had the Company determined employee stock based compensation cost based on a
fair value model at the grant date for its stock options under SFAS 123, the
Company's net loss per share would have been adjusted to the pro forma amounts
for the three months ended March 31, 2003 (no options were issued in the period
ended March 31, 2002) as follows ($ in thousands, except per share amounts). :



Net loss - as reported                      $     1,766
Stock-Based employee compensation
  expense included in reported net
  income, net of tax
                                                      -
Total stock-based employee
  compensation expense determined
  under fair-value-based method for all
  rewards, net of tax                                 -
                                            -------------
Pro forma net loss                          $     1,766
                                            =============

Loss per share:
Basic, as reported                                 0.28
Diluted, as reported                               0.28
Basic, pro forma                                   0.28
Diluted, pro forma                                 0.28


                                       8
<PAGE>

4. INCOME TAXES

The company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109, " Accounting for Income Taxes," under
which the liability method is used to calculate deferred income taxes. Under
this method, deferred tax assets and liabilities are determined based on the
differences between financial reporting and income tax basis of assets and
liabilities and are measured using enacted tax rates and laws that will be in
effect when the differences are expected to reverse.

No provision was made for Federal  income tax since the Company has  significant
net operating loss  carryforwards.  Through March 31, 2003, the Company incurred
net operating losses for tax purposes of approximately  $6,600,000.  Differences
between  financial  statement and tax losses consist  primarily of  amortization
allowance,   was   immaterial  at  March  31,  2003.   The  net  operating  loss
carryforwards  may be used to reduce  taxable  income through the year 2022. Net
operating  losses for  carry-forwards  for the State of California are generally
available to reduce taxable income  through the year 2007. The  availability  of
the  Company's  net operating  loss  carryforwards  are subject to limitation if
there is a 50% or more positive change in the ownership of the Company's  stock.
The  provision  for income  taxes  consists of the state  minimum tax imposed on
corporations.

The net deferred tax asset balance, due to net operating loss carryforwards, as
of March 31, 2003 and 2002 were approximately $2,900,000 and 1,400,000,
respectively. A 100% valuation allowance has been established against the
deferred tax assets, as the utilization of the loss carrytforwards cannot
reasonably be assured.

5. LOSS PER SHARE

Loss per share for the three month periods ended March 31, 2003 and 2002 were
determined by dividing net loss for the periods by the weighted average number
of both basic and diluted shares of common stock and common stock equivalents
outstanding. Stocks to be issued are regarded as common stock equivalents and
are considered in diluted loss per share calculations. Weighted average number
of shares used to compute basic and diluted loss per share is the same since the
effect of dilutive securities is anti-dilutive.

6. COMMITMENTS

The company leases its office space under a non-cancelable operating lease,
which expired on November 30, 2002. The Company entered into an amendment of
lease agreement which extended the lease to January 14, 2006. Minimum annual
rentals for twelve-month periods ended, subsequent to March 31, 2003 are as
follows:


                Year                            Amount
                ----                          ---------
                2004                          $ 142,956
                2005                            154,648
                2006                            158,117
                ----                          ---------
                Total                         $ 455,721
                =====                         =========

Rent expense amounted to $23,000 and $15,200 for the three month period ended
March 31, 2003 and 2002, respectively.

7. DEBENTURES

During the year ended  December  31,  2002,  LFC  issued  5-year 9%  convertible
debentures  amounting  $  130,000,  due  January 1, 2007.  The  interest  is due
semi-annually  on the first day of June and  December  of each year,  commencing
June 1, 2003 until  fully  paid.  LFC  issued  additional  debentures  amounting
$70,000 in the three month period ended March 31, 2003.

The registered  holders of the debentures has the right, after one year prior to
maturity,  to convert the principal at the original  conversion price of $10 for
one Common  share or at the  adjusted  conversion  price.  If and whenever on or
after the date of this debenture,  LFC issues or sells any share of common stock
for a consideration  per share less than the initial  conversion rate, then upon
such issue or sale, the initial  conversion  rate shall be reduced to the lowest
net price per share at which such share of common  stock have been  issued.  The
debentures are  subordinated  to all the senior  indebtedness,  including  debts
under Equity Participation Agreement.


                                       9
<PAGE>


8. SUPPLEMENTAL DISCLOSURE OF CASH FLOWS

The Company prepares its statements of cash flows using the indirect method as
defined under the Financial Accounting Standard No. 95. The Company paid $ 1,600
for income tax and $118,000 interest during the three month period ended March
31, 2003. The Company paid $0 for income tax and interest during the three month
period ended March 31, 2002.

9. GOING CONCERN

The Company's consolidated financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has accumulated deficit of $12,014,988 on March
31, 2003 including a net loss of $1,766,207 during the three month period ended
March 31, 2003. The Company's total liabilities exceeded the total assets by
$8,565,666 as of March 31, 2003. In view of the matters described above,
recoverability of a major portion of the recorded asset amounts shown in the
accompanying balance sheets is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to raise
additional capital, obtain financing and to succeed in its future operations.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

Management plans to take the following steps that it believes will be sufficient
to provide the Company with the ability to continue in existence. (i) Management
intends to continue to raise additional financing through private equity or debt
financing to pay down Company debt and/or reduce the cost of debt service. (ii)
In that regard, the Company consummated a reverse acquisition on February 25,
2003 (note 1). The financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

10. LITIGATION & SUBSEQUENT EVENT

The Company is defendant in several litigations in normal course of business,
including litigation for return of investments. The Company believes these suits
are without merit and intends to defend these litigations in court of law.

On April 2, 2003 an  involuntary  bankruptcy  petition  was filed in the  United
States Bankruptcy Court,  Central District of California,  Case No. LA03-19005ES
by nine  petitioners who maintain that they are joint  venturers,  three of whom
also claim to be "service  providers."  The Company  believes that filing of the
Petition is wholly without merit, baseless and without facts or legal grounds to
support it. The Company  intends to vigorously  contest this  Petition,  seek to
have the  Petition  dismissed,  and seek to recover  all  damages  caused by the
filing of the  Petition  in  proceedings  in the  Bankruptcy  Court  and/or  the
Superior  Court.  The Company is  permitted  to continue  and is  continuing  to
conduct  its  normal  business  notwithstanding  the  filing of the  involuntary
petition. The Company has commenced discussions with the petitioners in the hope
of expediting dismissal of the involuntary petition.

The Company  believes it has  meritorious  defenses to the  Petition,  including
among others:

o the filing of the  Petition by the three  former  directors  was  motivated by
self-interest  and a desire to take over  control  of the  Company  by  impeding
normal business operations;
o the Company is not insolvent; to the contrary, the Company is current with all
of its undisputed  creditors,  has substantial  remaining cash on hand and fully
expects to collect the more than $40.0 million it expects to receive in fees and
advances;
o but for the filing of the  Petition,  the Company  would have  entered  into a
transaction  with  one of four  offerors  of  $20.0  million  to  refinance  the
Company's debt; and
o The Company is  continuing to conduct its business and to advance funds to its
clients.

The Company is optimistic that upon dismissal of the involuntary petition, it
will be able to promptly consummate a refinancing.

11. RECLASSIFICATIONS

Certain  prior  period  amounts  have  been   reclassified  to  conform  to  the
three-month period ended March 31, 2003 presentation.




                                       10
<PAGE>


ITEM 2.

MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION:

The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the Company's financial
statements and the related notes thereto appearing elsewhere herein.

The  following  "Management's  Discussion  and  Analysis  or Plan of  Operation"
includes  "forward  looking  statements"  within  the  meaning  of  the  Private
Securities  Litigation Reform Act of 1995 (the "Act").  The Act provides a "safe
harbor"  for  forward-looking  statements  to  encourage  companies  to  provide
prospective  information  about  themselves  so  long  as  they  identify  these
statements  as  forward-looking  and provide  meaningful  cautionary  statements
identifying important factors that could cause actual results to differ from the
projected results.  All statements other than statements of historical fact made
in this Form  10-QSB are  forward-looking  and are made  pursuant to the Act. In
particular, any statements made in this Form 10-QSB regarding industry prospects
or the  Company's  future  results  of  operations  or  financial  position  are
forward-looking  statements.  Forward-looking  statements  reflect the Company's
current   expectations  and  are  inherently   uncertain.   The  forward-looking
statements contained herein are subject to a variety of risks and uncertainties,
including  those  discussed  below  under the heading  "Factors  That May Affect
Future  Results" and  elsewhere in this  Quarterly  Report on Form 10-QSB,  that
could cause actual results to differ  materially  from those  anticipated by the
Company's management. The Company's actual results may differ significantly from
the Company's expectations.

The Company is in the business of funding  individuals  and/or entities that are
in the process of litigating as plaintiff in civil cases.  Law case financing is
a program under which a  non-recourse  advance is made to a plaintiff for living
expenses, or to an attorney for the purpose of covering the ongoing costs of the
case  (contingent  advances).  The  Company  receives  a fee for  advancing  the
funding, which is based on the length of time the funds are outstanding.  If the
recovery  (amount of  settlement  or award) is less than the  aggregate fee (the
contingent  advance plus the fees earned through  repayment date), the aggregate
fee will be reduced to the amount of the recovery.

Pursuant to an Agreement of Merger with LitFunding Corp. (LFC), a California
corporation, the Company acquired 100% outstanding shares of LFC. LitFunding
Corp. (the Company) was incorporated in California on November 17, 2000.
Pursuant to the Merger Agreement, the Company issued 7,592,250 shares of its
common stock to the LFC shareholders in exchange for all the issued and
outstanding shares of LFC common stock. As per the Merger Agreement, the current
officers of the Company resigned and the officers of LFC were appointed as
officers of the combined company. Upon the closing of the merger, the former
officers of the Company agreed to have their 4,500,000 shares of the Company's
common stock cancelled. On March 3, 2003, the Company changed its name from RP
Entertainment, Inc. to LitFunding Corp. (LF).

The acquisition of LitFunding Corp. has been accounted for as a reverse
acquisition under the purchase method of accounting since the shareholders of
LitFunding Corp. obtained control of the consolidated entity. Accordingly, the
merger of the two companies has been recorded as a recapitalization of
LitFunding Corp., with LitFunding Corp. being treated as the continuing entity.


                                       11
<PAGE>


RESULTS OF OPERATIONS:

The results of operations of the Company for the three months ended March 31,
2003 consisted of primarily the operations of LF and its 100% owned subsidiary
LFC. The results of operations for the three months ended March 31, 2002
consisted of 100% the operations of LFC.

REVENUES AND COST OF REVENUES: The Company reported revenues of $162,495 and
$283,444 during the three months ended March 31, 2003 and 2002, respectively.
The decrease in revenue in the first quarter of 2003 was primarily due to
protracted settlement negotiations on several cases taking longer to resolve
than initially expected. Selling costs were $288,366 and $348,772 during the
three months ended March 31, 2003 and 2002, respectively. The decrease was
directly co-related to decrease in revenues. General and administrative expenses
were $521,178 and $543,970 during the three months ended March 31, 2003 and
2002, respectively. Reserve for unsuccessful resolution of lawsuits went down to
$184,847 in the quarter ended March 31, 2003 as compared $579,044 in the quarter
ended March 31, 2002. Loss from operations was $831,896 and $1,188,342 during
the three months ended March 31, 2003 and 2002, respectively. The decrease in
losses was primarily due to decrease in activities and resultant decrease in
Reserve for unsuccessful resolution of lawsuits of $394,197 from the same period
in last year.

Interest expenses were $932,711 during the three month period ended March 31,
2003 as compared to $436,218 in the three month period ended March 31, 2002. The
increase in interest expenses was due to increase in investor participation
debts to $18,738,931 at March 31, 2003 from $$11,433,960 as of March 31, 2002.

Net loss for the period ended March 31, 2003 was $1,766,207 as compared to
$1,625,360. Although the Company had 30% decrease in loss from operations in the
period ended March 2003 as compared to the period ended March 31, 2002, the
increase in interest by 114% in the period ended March 31, 2003 as compared to
the period ended March 31, 2002, resulted in an increase of 8.67% in net loss
for the current period as compared to net loss from the corresponding period in
the last year. The basic and diluted net losses per share were $0.28 and $0.25
during the three months ended March 31, 2003 and 2002, respectively.

LIQUIDITY AND CAPITAL RESOURCES: The Company's principal capital requirements
during the year 2003 are to fund the internal operations and fund the increase
in advances activity. The Company plans to raise necessary funds by selling its
own common shares or through the sale of interest bearing debentures to selected
investors. The Company will also consider establishing relationships with
selected business partners whose contributions include necessary cash.

As shown in the accompanying financial statements, the Company incurred a net
loss of $1,766,207 for the three months ended March 31, 2003 as compared to a
net loss of $1,625,360 for the same period in 2002. Additionally, in accordance
with GAAP, the Company's total liabilities exceeded its total assets by
$8,165,666 at March 31, 2003. In the ordinary course of events, this would raise
substantial doubt about the company's ability to continue as a going concern. .
However, it is important to note that the company recognizes revenue from
advances only when a case has been resolved and when it is confident that fees
calculated will in fact be realized. As of March 31, 2003, if the company made
no further advances to plaintiff's or their attorneys', the company can
reasonably expect to collect approximately $24 million in fees and return of
principal over the next 12 months and approximately $19 from open cases with
expected resolution beyond the 12 months. The estimate is based on historical
performance and other factors affecting each case.

OPERATING  ACTIVITIES:  During the three months  ended March 31, 2003,  net cash
used in operating  activities decreased to $316,287 compared to net cash used in
operating  activities of $5,198,890 during the same period in 2002. The decrease
in net cash used from operating  activities  resulted primarily from fewer funds
being  available for advances to plaintiffs  and their  attorneys as the company
devoted its energy to the reverse merger  discussed  above and began the process
of seeking new more affordable capital.  Other factors include the positive cash
flow from prepaid  commission of $197,720 in the current  quarter as compared to
usage of cash from prepaid  commission of $757,587 in the same period last year.
Also, the cash inflow from accounts  receivable was $308,741 in the period ended
March 31, 2003 as compared to usage of  $253,000.  Cash  outflow  from  Interest
payable was $846,107 as compared to $426,548.




                                       12
<PAGE>


INVESTING ACTIVITIES: Net cash used in investing activities during the three
months ended March 31, 2003, was $15,181 as compared to $7,517 for the same
period in 2002.

FINANCING ACTIVITIES: Net cash provided by financing activities
during the three months ended March 31, 2002 was $173,766 as compared to cash
provided by the financing activities of $2,895,522 during the same period in
2002. Decrease in cash flow from financing activities was mainly due to decrease
in proceeds from investor participation to $78,766 as compared to $4,564,986 in
the corresponding period last year.

As a result of the above activities, the Company experienced a net decrease in
cash of $157,702 for the three months ended March 31, 2003 as compared to a net
decrease of $2,310,885 in the period ended March 31, 2002.

The Company does not have any material  capital  expenditure  commitments  as of
March 31, 2003.

The Company fully expects that the current cash balances should, when combined
with the anticipated contract fee income on the Company's portfolio of advances,
be sufficient to finance the Company's operations for at least the next 12
months.

The Company is actively pursuing additional  institutional,  private banking and
other investment opportunities.

FACTORS THAT MAY AFFECT FUTURE RESULTS:

The Company's cash flow is dependant on a lengthy collection cycle and factors
beyond its control that may require the company to obtain interim financing. The
Company collection cycle on advances made is lengthy. Based on the Company's
experience, cases may take between 12 and 24 months to reach resolution. The
larger cases may take longer than that. Once the Company advances the money, the
collection cycle is out of the Company's control. This may force the company to
seek other sources of capital to fund its overhead expenses. There can be no
assurance that in such an event the Company could find such financing or that,
if it could, the financing would be available on satisfactory terms.


                                       13
<PAGE>


THE COMPANY HAS A LIMITED OPERATING HISTORY AND LACK OF PROFITABILITY:

The Company began business in late 2000 and has a limited operating history.
During that time, the company has incurred losses in every quarter since
inception and is subject to the risks and uncertainties usually encountered by
early stage companies.

Although  the Company  has and  continues  to attract  large well known firms of
attorneys as clients,  and has not yet  experienced an appreciable  inability to
attract  the talent that it needs,  there are and remain  risks that the Company
will not attract,  train or integrate into the business  organization  qualified
personnel.  Additionally,  it is  fair  to  expect  that  that  fluctuations  in
operating  results may be significant as the Company develops and tests business
practices.  There is also the risk that the Company will fail to properly manage
growth and expansion, if and when it occurs.

THE COMPANY'S ABILITY TO EXPAND IS LIMITED BY JURISDICTIONAL LIMITATIONS:

Not all states allow advances to plaintiffs' attorneys and plaintiffs. Some
jurisdictions do not allow maintaining, supporting, promoting or assisting
another person, with money or otherwise, to prosecute a lawsuit.

The Company is of the opinion that there is more than enough  business to pursue
in those states that do allow these advances but also  acknowledges that at some
indeterminate   time  in  the  future,   an  inability  to  expand  beyond  such
jurisdictions  may  negatively  impact its  business,  prospects  and results of
operations.  The company will  continue to relocate  business  operations to its
Nevada headquarters to take advantage of laws in that state.

COMPANY COMMON STOCK IS LISTED ON THE OVER-THE COUNTER (OTC) BULLETIN BOARD
WHICH MAY MAKE IT MORE DIFFICULT FOR STOCKHOLDERS TO SELL THEIR SHARES AND MAY
CAUSE THE MARKET PRICE OF COMPANY COMMON STOCK TO DECREASE:

The Company's common stock is listed on the OTC Bulletin Board. Factors that may
affect potential liquidity include limited coverage by security analysts and the
news media.  This may  negatively  affect the prices for shares of the Company's
common stock.

THE COMPANY'S STOCK PRICE MAY BE VOLATILE AND AN INVESTMENT IN SUCH COMMON STOCK
COULD SUFFER A DECLINE IN VALUE:

The market price of the Company's  common stock may fluctuate  significantly  in
response to a number of factors, some of which are beyond the Company's control.
These factors include:

o government regulatory action affecting the Company's services or competitors'
services;
o actual or anticipated fluctuations in operating results;
o the loss of key management or other personnel;
o the loss of major customers;
o the outcome of any future litigation;
o broad market fluctuations; and economic conditions in the United States or
abroad.


                                       14
<PAGE>


ITEM 3. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in this
report is recorded, processed, accumulated and communicated to our management,
including our chief executive officer and our chief financial officer, to allow
timely decisions regarding the required disclosure. Within the 90 days prior to
the filing date of this report, our management, with the participation of our
chief executive officer and chief financial officer, carried out an evaluation
of the effectiveness of the design and operation of these disclosure controls
and procedures. Our chief executive officer and chief financial officer
concluded, as of fifteen days prior to the filing date of this report, that
these disclosure controls and procedures are effective.

Changes in internal controls. Subsequent to the date of the above evaluation, we
made no significant changes in our internal controls or in other factors that
could significantly affect these controls, nor did we take any corrective
action, as the evaluation revealed no significant deficiencies or material
weaknesses.


                                     PART II

ITEM 1. LEGAL PROCEEDINGS

The Company is party to several legal proceedings during the period of this
report.

BANKRUPTCY OR RECEIVERSHIP

o On April 2, 2003 an involuntary bankruptcy petition was filed in the United
States Bankruptcy Court, Central District of California, Case No. LA03-19005ES
by nine petitioners who maintain that they are joint venturers, three of whom
also claim to be "service providers." The Company believes that filing of the
Petition is wholly without merit, baseless and without facts or legal grounds to
support it. The Company intends to vigorously contest this Petition, seek to
have the Petition dismissed, and seek to recover all damages caused by the
filing of the Petition in proceedings in the Bankruptcy Court and/or the
Superior Court. The Company is permitted to continue and is continuing to
conduct its normal business notwithstanding the filing of the involuntary
petition. The Company has commenced discussions with the petitioners in the hope
of expediting dismissal of the involuntary petition.

The Company  believes it has  meritorious  defenses to the  Petition,  including
among others:

  o the filing of the Petition by the three former directors was motivated by
    self-interest and a desire to take over control of the Company by impeding
    normal business operations;
  o the Company is not insolvent; to the contrary, the Company is current
    with all of its undisputed creditors, has substantial remaining cash on
    hand and fully expects to collect the more than $40.0 million it expects to
    receive in fees and advances;
  o but for the filing of the Petition, the Company would have entered into a
    transaction with one of four offerors of $20.0 million to refinance the
    Company's debt; and
  o The Company is continuing to conduct its business and to advance funds to
    its clients. The Company is optimistic that upon dismissal of the
    involuntary petition, it will be able to promptly consummate a refinancing.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

The Company made no amendments or modifications of any instruments governing or
affecting the rights of any security holders during the period of this report.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There were no defaults in the payment of any undisputed indebtedness during the
period of this report. As set forth in Item 1, the Company disputes whether
there was any default on any alleged obligation to any investors as alleged by
the persons who filed the involuntary petition.

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

No matters were submitted to a vote of security holders during the period of
this report.

ITEM 5. OTHER INFORMATION.

The registrant does not elect to state any other information in this report.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

Form 8-K filed April 17, 2003



                                       15
<PAGE>


                                   SIGNATURES


In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



LitFunding Corp.



September 15, 2004



By: /s/ Morton Reed
----------------------------------
Morton Reed, President and
Chief Executive Officer