U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-QSB





(Mark One)



[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended March 31, 2003



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



For the transition period from _______________ to _______________



Commission File Number 333-99449







LITERARY PLAYPEN, INC.

(Name of Small Business Issuer in its charter)





Delaware

33-0889194



(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)





1495 Ridgeview Drive, Suite 220

Reno, Nevada

89509

(Address or principal executive offices)

(Zip Code)





Issuer's telephone number (775) 827-6300





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





As of May 20, 2003 the Company had 5,703,000 shares of its $.001 par value common stock issued and outstanding.





Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ].



























INDEX







PART I FINANCIAL INFORMATION



Item 1. Financial Statements

Page



Condensed Balance Sheet at March 31, 2003 (unaudited)....3



Condensed Statements of Operations Cumulative During Development Stage,

and for the Three Months Ended March 31, 2003 (unaudited).4



Condensed Statements of Cash Flows Cumulative During Development Stage,

and for the Three Months Ended March 31, 2003 (unaudited).5



Notes to Condensed Financial Statements (unaudited)

.6



Item 2. Management's Discussion and Analysis or Plan of Operation.9



PART II OTHER INFORMATION



Item 1.  Legal Proceedings

10



Item 2.  Changes in Securities...10



Item 3.  Defaults Upon Senior Securities..10



Item 4.  Submission of Matters to a Vote of Security Holders.10



Item 5.  Other Information

11



Item 6.  Exhibits and Reports on Form 8-K..11



Signatures..11



Certification..12





























LITERARY PLAYPEN, INC.

(A Company in the Development Stage)

BALANCE SHEET





ASSETS



March 31, 2003

(unaudited)







CURRENT ASSETS

Cash

$

2,447



Prepaid consulting

4,060





Total current assets

6,507





DEFERRED TAX ASSET (NET)

-





Total assets

$

6,507









LIABILITIES AND SHAREHOLDERS' DEFICIT





CURRENT LIABILITIES

Accounts payable

$

17,152

Interest payable

24

Note payable

12,500



Shareholder advances

17,400





Total current and total liabilities

47,076





COMMITMENTS AND CONTINGENCIES



SHAREHOLDERS' DEFICIT

Preferred stock, $.001 par value, 10,000,000 shares

authorized and none issued and outstanding

Common stock, $.001 par value, 20,000,000 shares

authorized, 5,703,000 issued and outstanding

5,703

Common stock subscribed

25





Additional paid-in-capital

6,797





Deficit accumulated during the development stage

(53,094)





Total shareholders' deficit

(40,569)





Total liabilities and shareholders' deficit

$

6,507













See Notes to the Interim Financial Statements





LITERARY PLAYPEN, INC.

(A Company in the Development Stage)

STATEMENTS OF OPERATIONS (unaudited)

For the period from Inception (April 26, 2001) and the Three Months Ended March 31, 2003, and 2002





Cumulative





During



Development

March 31

March 31





Stage

2003  2002



REVENUE

$

-

$

-

$

-



ADMINISTRATIVE AND GENERAL COSTS

General and administrative expenses

(4,403)

(1,864)

(459)

Consulting services

(5,440)

-

-

Investor relations

(3,152)

-

(1,602)

Filing expenses

(2,300)

-

(2,175)

Legal and accounting expense

(34,750)

(5,250)

(5,000)

Loss on impairment of license agreement

(3,000)

-

(3,000)



Net loss before income taxes

(53,045)

(7,114)

(12,236)



INTEREST EXPENSE

(49)

(49)

-



Provision for income taxes

-

-

-



Net loss

$

(53,094)

$

(7,163)

$

(12,236)



Loss per common share basic and diluted

$

(0.01)

$

(0.00)

$

(0.00)





Weighted average common shares basic

4,062,500

5,500,000

4,500,000



Weighted average common shares diluted

4,062,735

5,501,882

4,500,000











































See Notes to the Interim Financial Statements



LITERARY PLAYPEN, INC.

(A Company in the Development Stage)

STATEMENTS OF CASH FLOWS

(unaudited)

For the period from Inception (April 26, 2001) and the Three Months Ended March 31, 2003, and 2002





Cumulative



During



Development



Stage

March 31, 2003

March 31, 2002



CASH FLOWS FROM OPERATING ACTIVITIES

Net loss

$

(53,094)

$

(7,163)

$

(12,236)





Adjustments to reconcile net loss to net cash used

in operating activities:

Loss on impairment of license agreement

3,000

-

3,000

Increase (decrease) in accounts payable

17,152

(7,123)

5,000



Increase in interest payable

24

24

-

Expense paid by issuance of stock

5,440

-

-

Expense paid by stock subscription

25

25

-



Net cash used in operating activities

(27,453)

(14,237)

(4,236)



CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issuance of note payable

12,500

12,500

-

Proceeds received from shareholder advances

23,400

-

2,400

Repayment of shareholder advances

(6,000)

-

-



Net cash provided by financing activities

29,900

12,500

2,400



Net increase (decrease) in cash

2,447

(1,737)

(1,836)



Cash and cash equivalents at April 26, 2001 (inception)

and December 31, 2002

-

4,184

5,391



Cash and cash equivalents at March 31, 2003

$

2,447

$

2,447

$

3,555





SUPPLEMENTARY AND NON-CASH INFORMATION:



No amounts were paid for either interest or income taxes during the period ended March 31, 2003.



In March 2003, 203,000 common shares were issued for prepaid consulting services valued at $4,060.





















See Notes to the Interim Financial Statements



LITERARY PLAYPEN, INC.

(A Company in the Development Stage)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

March 31, 2003





1.

Basis of Presentation

The accompanying unaudited interim financial statements of Literary Playpen, Inc. (the Company) have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America, pursuant to the Securities and Exchange Commission rules and regulations. In managements opinion all adjustments necessary for a fair presentation of the results for interim periods have been reflected in the interim financial statements. The results of operations for any interim period are not necessarily indicative of the results for a full year. All adjustments to the financial statements are of a normal recurring nature.



Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Such disclosures are those that would substantially duplicate information contained in the most recent audited financial statements of the Company, such as significant accounting policies.  Management presumes that users of the interim statements have read or have access to the audited financial statements and notes thereto included in the Companys most recent annual report on Form 10KSB.



NewPronouncements

In February 2003 the FASB issued SFAS No. 149, Accounting for Certain Financial Instruments with Characteristics of Liabilities and Equity, which is effective at the beginning of the first interim period beginning after March 15, 2003. SFAS No. 149 establishes standards for the Companys classification of liabilities in the financial statements that have characteristics of both liabilities and equity. The Company believes the adoption of SFAS No. 149 will not have a material effect on the Companys consolidated financial position or results of operations.



Going Concern

These financial statements have been prepared assuming that the Company will continue as a going concern. The Company is currently in the development stage, and existing cash, other material assets, and available credit are insufficient to fund the Companys cash flow needs for the next year. Their ability to continue as a going concern is dependent on their ability to generate revenues or raise funds through sale of their equity securities for use in administrative, marketing, research and development activities. The Company is planning to raise $1,500,000 to $2,000,000 through a private placement that is to be completed in 2003.



2.        Notes Payable

In March 2003 a note payable agreement was entered into in the amount of $12,500. The interest rate is 10% per annum. The note and related interest are due in July 2003, and the Company is obligated to provide 25,000 restricted common shares to the lender on the due date of the note (See note 3).



3.

Common Stock Subscribed

In March 2003 a note payable agreement was entered into. Per the terms of the agreement, the Company is obligated to provide 25,000 restricted common shares to the lender in full settlement of the note and related interest. (See note 2).



4.

Capital Stock

In March 2003 the Company entered into two consulting contracts and issued 203,000 restricted common shares for prepaid consulting services valued at $4,060.



5.         Related Party Transactions

The officers of Literary Playpen, Inc., have advanced the Company funds to pay expenses in prior years. The advances are due upon demand and carry no interest. As of March 31, 2003, the outstanding advance balance was $17,400.













ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



The Company has had no revenues, and the expenses incurred by the Company to date are mainly accounting, legal and investor relations expenses, which totaled $ 7,114 for the quarter ended March 31, 2003 and $ 53,045 for the period from inception (April 26, 2001).



In March of 2003 the Company offered 3,000,000 shares of its common stock, par value $0.001 in a Private Placement Memorandum.  The Companys plan of operation over the next 12 months is to obtain funding to implement its business plan.



The Company is classified as a development stage company because its principal activities involve seeking to develop business activities.



We are an entertainment company that owns rights to literary content by the author Sidney Sheldon. The target use for our technology is a series of wireless and PC-based video games intended to form a new literary art form.



We intend to develop and market a series of online and wireless interactive products, which merge contemporary best-selling fiction by established writers, such as our largest shareholder Sidney Sheldon, with communication and interactive media to create a new literary entertainment form, distributed by existing wireless networks and as CDROMs in book jackets of best-selling published works.



We intend to create a series of online interactive video games and believe that these proposed products may enjoy large-scale distribution through enclosure of a CDROM in the book jacket of published books by writers who have licensed content to LPI.



We have a strong technical foundation to develop the games proposed in this Summary.  The technical background of our management and advisory team span more than thirty years.



Short Term Goal



We intend to expand our existing development of interactive literature products.  Each product is anticipated to draw advances on royalties to offset development costs, with actual royalties to provide ongoing revenue.



The first wireless games may be targeted at the teen and young woman demographics (possibly released in Japan), as that is one of Sidney Sheldons prime demographics.



Long Term Goal



We intend to build an ongoing library of interactive literature products.  It is our hope that eventually this library will be quite sizable, with products for wireless and wired technologies.



One of our goals is that over the first two-years of the development cycle, we seek to develop a role-playing game based on, and to be distributed with, a current hardcover release. These games, to be played on personal computers and game consoles, are expected to be far more sophisticated in design and more far-reaching in possibilities



FORWARD LOOKING STATEMENTS



This quarterly report contains forward-looking statements that are based on the Company's beliefs as well as assumptions made by and information currently available to the Company. When used in this quarterly report, the words "believe," "endeavor," "expect," "anticipate," "estimate," "intends," and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties and assumptions. (Please refer to the companys Annual Report on Form 10KSB/A dated December 31, 2002, filed with the Securities and Exchange Commission and which are described in Part I, Item 1 of the Annual Report, Description of Business - Risk Factors"). Should one or more of those risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or projected. The Company cautions shareholders and potential investors not to place undue reliance on any such forward-looking statements all of which speak only as of the date made.











PART II OTHER INFORMATION



Item 1.

Legal Proceedings



There are no legal proceedings against the Company and the Company is unaware of proceedings contemplated against it.



Item 2.

Changes in Securities



None.



Item 3.

Defaults Upon Senior Securities



None.



Item 4.

Submission of Matters to a Vote of Security Holders



None



Item 5.

Other Information



There is no other information deemed material by management for disclosure herein.



Item 6.

Exhibits and Reports on Form 8-K



(a)

Exhibits



3.1

Certificate of Incorporation of the Company (1)



3.2

Bylaws of the Company (1)



4.1

Specimen of Common Stock Certificate (1)



10.1

[Form of] Indemnity Agreement. (1)



(1)

Previously filed as an exhibit to the Company's Registration Statement on Form 10-SB with the Commission on February 15, 2000.



(b)

Reports on Form 8-K



None

SIGNATURES

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



LITERARY PLAYPEN, INC.

(A Company in the Development Stage)





By: /s/ Jesse A. Sackman

Jesse A. Sackman

Chief Executive Officer





By: /s/ Roberto Crawford

Roberto Crawford

Chief Financial Officer



Dated: May 20, 2003

CERTIFICATION PURSUANT TO



18 U.S.C. SECTION 1350



AS ADOPTED PURSUANT TO



SECTION 906 OF THE SARBANES-OXLEY OF 2002





In connection with the quarterly report pursuant to section 13 or 15(d) of the securities exchange act of 1934 of Literary Playpen, Inc. on Form 10QSB dated for the period ended March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Quarterly Report"), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbannes-Oxley Act of 2002, that to the best of his knowledge:



1.   The Registration Statement fully complies with the requirements of Section 13 (a) pr 15(d) of the Securities Exchange Act of 1934; and



2.   The information contained in the Registration Statement fairly presents, in all material respects, the financial condition and results of operation of the Company.







May 20, 2003



By: /s/ Jesse A. Sackman

Jesse A. Sackman

Chief Executive Officer

Chairman



By: /s/ Roberto Crawford

Roberto Crawford

Chief Financial Officer

Treasurer, Director