SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                   FORM 10-QSB



                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934




                     For the Quarter Ended December 31, 2006

                           Commission File No. 0-16056




                                TRUDY CORPORATION
                                 353 Main Avenue
                                Norwalk, CT 06851


                      Incorporated in the State of DELAWARE
                      Federal Identification No. 06-1007765


                            Telephone: (203) 846-2274


         Trudy Corporation has filed all reports required to be filed by
            section 13 or 15 (d) of the Securities Act of 1934 during
            the preceding twelve months and has been subject to such
                    filing requirements for the past 90 days.


                              SHARES OUTSTANDING AT
                                February 14, 2007
               Common Stock, $.0001 par value: 612,466,330 shares

<PAGE>

INDEX                                                                PAGE NUMBER
-----                                                                -----------

                  PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements

      Consolidated Balance Sheet - December 31, 2006 (unaudited)             3

      Consolidated Statements of Operations (unaudited) for the
         three and nine months ended December 31, 2006 and
         December 31, 2005 (unaudited)                                       4

      Consolidated Statement of Shareholders' Deficit (unaudited)
         from April 1, 2006 through December 31, 2006                        5

      Consolidated Statements of Cash Flows (unaudited) for the
         nine months ended December 31, 2006 and December 31,
         2005 (unaudited)                                                    6

      Notes to Financial Statements (unaudited)                              7

Item 2. Management's Discussion and Analysis                                15


                  PART II.  OTHER INFORMATION

Item 1. Legal Proceedings                                                   22

Item 2. Changes in Securities                                               23

Item 3. Defaults upon Senior Securities                                     23

Item 4. Submission of Matters to a Vote of Security Holders                 23

Item 5. Other Information                                                   23

Item 6. Exhibits and Reports on Form 8-K                                    23


                                       2
<PAGE>

                                Trudy Corporation
                           Consolidated Balance Sheet
                                December 31, 2006


Assets                                                               (Unaudited)

Current assets
  Cash and cash equivalents                                        $     12,352
  Accounts receivable, net                                            1,721,007
  Inventory, net                                                      1,496,943
  Prepaid expenses and other current assets                             193,848
                                                                   ------------

    Total current assets                                              3,424,150

  Equipment, net                                                         57,896
  Royalty advances, net                                                 196,528
  Prepublication costs and other assets, net                            503,129
                                                                   ------------

    Total other assets                                                  757,553
                                                                   ------------

    Total assets                                                   $  4,181,703
                                                                   ============



Liabilities and shareholders' equity

Current liabilities
  Notes payable - Bank & related parties                           $  1,486,926
  Current portion, long term debt                                        29,257
  Accounts payable and accrued expenses                               1,643,630
  Deferred Revenue                                                       52,443
  Royalties and commissions payable                                     370,561
                                                                   ------------

    Total current liabilities                                         3,582,817

Long term liabilities
  Long term debt, net of current portion                                255,522
                                                                   ------------

Total long term liabilities                                             255,522
                                                                   ------------

Total liabilities                                                     3,838,339

Commitments

Shareholders' equity
Common stock - par value
$0.0001, authorized 850,000,000                                          61,247
Paid-in capital                                                       6,931,881
Accumulated deficit                                                  (6,649,764)

Total shareholders' equity                                              343,364
                                                                   ------------

Total liabilities and shareholders' equity                         $  4,181,703
                                                                   ============



    The accompanying summary of significant accounting policies and notes to
     financial statements are an integral part of the consolidated financial
                                   statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>
                                              Trudy Corporation
                                    Consolidated Statement of Operations
                        For the Quarters Ended December 31, 2006 & December 31, 2005


                                                Three Month Period                  Nine Month Period
                                                Ended December 31,                  Ended December 31,
                                         -------------------------------     -------------------------------
                                             2006              2005              2006              2005
                                         -------------     -------------     -------------     -------------
                                          (unaudited)       (unaudited)       (unaudited)       (unaudited)
<S>                                      <C>               <C>               <C>               <C>
Net Revenue
  Net product sales                          1,779,371         1,074,595         4,123,471         4,405,633
  Net royalty sales                            143,147            11,682           203,912            40,104
                                         -------------     -------------     -------------     -------------

Net sales                                    1,922,518         1,086,277         4,327,383         4,445,737


Cost of sales                                  940,308           651,359         2,387,737         2,498,768
                                         -------------     -------------     -------------     -------------


Gross profit                                   982,210           434,918         1,939,646         1,946,969

Operating expenses:
  Selling, general and administrative          838,914           590,940         2,014,979         1,936,074
                                         -------------     -------------     -------------     -------------

Income/(loss) from operations                  143,296          (156,022)          (75,334)           10,895

Other income/(expense)
  Interest, net                                (34,438)          (45,838)         (107,590)         (125,982)
  Other income/(expense), net                    2,675              (999)           (6,560)            7,552
                                         -------------     -------------     -------------     -------------

Other income/(expense)                         (31,763)          (46,837)         (114,150)         (118,430)
                                         -------------     -------------     -------------     -------------

Net income/(loss)                        $     111,533     $    (202,859)    $    (189,484)    $    (107,535)
                                         =============     =============     =============     =============

Basic and diluted net
  income/(loss) loss per share           $          --     $          --                       $          --
                                         =============     =============     =============     =============

Weighted average number of
  shares outstanding                       612,466,330       458,734,057       555,622,583       457,414,057
                                         =============     =============     =============     =============
</TABLE>


    The accompanying summary of significant accounting policies and notes to
     financial statements are an integral part of the consolidated financial
                                   statements.

                                       4
<PAGE>

<TABLE>
<CAPTION>
                                                          Trudy Corporation
                                          Consolidated Statements of Shareholders' Deficit
                                                   Quarter ended December 31, 2006


                                                     Common Stock                Additional                              Total
                                            --------------------------------       Paid-in         Accumulated        Shareholders'
                                                Shares            Amount           Capital           Deficit             Equity
                                            --------------    --------------    --------------    --------------     --------------
<S>                                            <C>            <C>               <C>               <C>                <C>
Balance at March 31, 2006 (audited)            458,734,057    $       45,874    $    5,383,384    $   (6,460,280)    $   (1,031,022)

Contributed compensation                                --                --            22,697                --             22,697

Net loss (unaudited)                                    --                --                --          (349,481)          (349,481)

                                            --------------    --------------    --------------    --------------     --------------
Balance at June 30, 2006 (unaudited)           458,734,057    $       45,874    $    5,406,081    $   (6,809,761)    $   (1,357,806)
                                            ==============    ==============    ==============    ==============     ==============

Debt conversion                                140,432,273    $       14,043    $    1,390,280                       $    1,404,323

Stock-based consulting expense                  12,500,000             1,250           130,000                              131,250

Board Compensation                                 800,000                80             5,520                                5,600

Net income (unaudited)                                                                                    48,464             48,464

                                            --------------    --------------    --------------    --------------     --------------
Balance at September 30, 2006 (unaudited)      612,466,330    $       61,247    $    6,931,881    $   (6,761,297)    $      231,831
                                            ==============    ==============    ==============    ==============     ==============

Net income (unaudited)                                                                                   111,533            111,533

                                            --------------    --------------    --------------    --------------     --------------
Balance at December 31, 2006 (unaudited)       612,466,330    $       61,247    $    6,931,881    $   (6,649,764)    $      343,364
                                            ==============    ==============    ==============    ==============     ==============
</TABLE>


    The accompanying summary of significant accounting policies and notes to
     financial statements are an integral part of the consolidated financial
                                   statements.

                                       5
<PAGE>

                                           Trudy Corporation
                                 Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                             For the Nine Months
                                                                              Ended December 31,
                                                                      ---------------------------------
                                                                           2006               2005
                                                                      --------------     --------------
                                                                        (unaudited)        (unaudited)
<S>                                                                   <C>                <C>
Cash Flows From Operating Activities
Net loss                                                              $     (189,484)    $     (107,535)
Adjustments to reconcile net loss to net cash
used in operating activities:
  Depreciation                                                                12,684             13,355
  Amortization of pre-publication costs                                      101,251            207,286
  Provision for losses on accounts receivable                                 39,268              3,877
  Provision for promotional allowance                                        (14,048)                 0
  Provision for slow moving inventory                                         15,000                  0
  Provision for sales returns                                               (367,984)            (9,151)
  Contributed compensation                                                    22,697             74,603
  Consulting fee                                                              43,750                  0
  Board Compensation                                                           5,600             17,058
  Interest Expense                                                             5,798             20,276

Changes in operating assets and liabilities:
  Decrease (Increase) in accounts receivable                                  40,032            (57,516)
  Decrease (Increase) in inventories                                         155,354           (605,036)
  (Increase) Decrease in prepaid expenses and other current assets           (13,738)            58,911
  Increase (Decrease) in accounts payable and accrued expenses              (114,431)           413,527
  Increase (Decrease) in deferred revenue                                     52,442                  0
  Increase (Decrease) in royalties and commissions payable                    54,424           (121,799)
                                                                      --------------     --------------
Net cash used by operating activities                                       (151,385)           (92,144)

Investing activities:
  Purchases of property and equipment                                        (48,645)           (13,735)
  Pre-publication and royalty advances                                       (77,198)          (192,337)
                                                                      --------------     --------------
Net cash used by investing activities                                       (125,843)          (206,072)

Financing activities:
  Net change in note payable, bank                                            56,484            439,001
  Repayments to related parties                                              (37,365)          (149,834)
  Proceeds from related parties                                              260,000                  0
                                                                      --------------     --------------
Net cash provided by financing activities                                    279,119            289,167
                                                                      --------------     --------------

Net increase (decrease) in cash and cash equivalents                           1,891             (9,050)
Cash and cash equivalents at beginning of period                              10,461             32,442
                                                                      --------------     --------------
Cash and cash equivalents at end of period                            $       12,352     $       23,392
                                                                      ==============     ==============



Cash paid for interest                                                $       90,276     $       34,255
Cash paid for income taxes                                            $           --     $           --
</TABLE>


    The accompanying summary of significant accounting policies and notes to
     financial statements are an integral part of the consolidated financial
                                   statements.

                                       6
<PAGE>

                        TRUDY CORPORATION AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. Description of Business and Basis of Presentation

Trudy Corporation (hereinafter referred to as the `Company'), publishes
children's books and audiobooks and designs, manufactures and markets plush
stuffed animals for sale to domestic and international retail and wholesale
customers. The Company's products are sold under the trade names of Soundprints
and Studio Mouse.

The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of America for
complete financial statements. In the opinion of management, all adjustments
(including normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine month
periods ended December 31, 2006 are not necessarily indicative of the results
that may be expected for the year ending March 31, 2007. For further
information, refer to the financial statements and footnotes thereto included in
the Company's annual report on Form 10-KSB for the year ended March 31, 2006.

2. Reclassifications

Certain reclassifications pertaining to net sales, selling, general and
administrative expenses and other income/expense were necessary in the prior
fiscal year in order to be consistent with the current fiscal year's
presentation.


3. Summary of Significant Accounting Policies

Principles of Consolidation

Investments in 20% to 50% owned equities are accounted for using the equity
method. Ownership interests in excess of 50% are accounted for in consolidation.


Estimates

The preparation of these financial statements in conformity with accounting
principles generally accepted in the United States of America requires the
Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosures. On an
ongoing basis, the Company evaluates its estimates and judgments based on

                                       7
<PAGE>

historical experience and various other factors that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions.


Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.


Credit Risk

The Company transacts business on a credit basis with its customers. The Company
routinely assesses the financial strength of its customers and, as a
consequence, believes that its trade accounts receivable credit risk exposure is
limited. The Company does not require collateral or other security to support
credit sales, but provides an allowance for bad debts based on historical
experience and specifically identified risks. The Company also obtains credit
insurance on customers when it is deemed warranted.

On December 29, 2006, Advanced Marketing Services (AMS), one of the Company's
largest customers and the largest distributor to the warehouse clubs, filed for
Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.
AMS said it took the action after its bank, Wells Fargo, refused to extend its
loan agreement beyond December 28, depriving it of operating funds. Wells Fargo
had routinely extended its credit agreement with AMS even though the distributor
had been in violation of certain lending covenants. These violations include
AMS' inability to file updated financial information for fiscal year 2004
through the present.

AMS has secured $75 million debtor-in-possession financing from Wells Fargo
Foothill and as a result the Company continues to do business with AMS, with
lower risk credit terms including partial payment in advance of each shipment
and full payment shortly thereafter.

As of December 31, 2006, the Company had outstanding receivables from AMS of
approximately $251,000. Based on the information currently available the Company
believes its reserves are sufficient to cover any reduction in receivables that
may result from any bankruptcy settlement.


Inventories

Inventories, which consist principally of finished goods, are stated at the
lower of cost or market. Cost is determined using the first-in, first-out
method. The Company reviews its inventory for obsolescence and provides for
obsolescence when the inventory is deemed to be unsaleable over a reasonable
time.

                                       8
<PAGE>

Equipment

Equipment is stated at cost. Depreciation is computed principally by the
straight-line method over the estimated useful lives of the assets which range
from three to seven years for machinery and equipment, and furniture and
fixtures, and from one to three years for computer software and hardware.


Fair Value of Financial Instruments

The Company has the following financial instruments: cash and cash equivalents,
accounts receivable, inventories, prepaid expenses, accounts payable and accrued
expenses, notes payable and long-term debt. The carrying value of cash and cash
equivalents, accounts receivable, accounts payable and accrued expenses, and
notes payable approximate their fair value based on the liquidity of these
financial instruments or based on their short-term nature. The carrying value of
long-term debt approximates fair market value based on the market interest rates
available to the Company for debt of similar risk and maturities.


Pre-Publication Costs

Pre-publication costs are deferred and amortized on an accelerated method over
their expected revenue generating lives.


Intangible Assets

As a result of the merger of Studio Mouse, LLC into the Company effective March
31, 2005, an intangible asset was recorded as a result of the premium paid due
to the non-exclusive license granted by Disney Licensed Publishing, an imprint
of Disney Book Group, LLC, (formerly Disney Children's Book Group, LLC)
("Disney"). The intangible asset is being amortized on a straight line basis
over a three year period.


Long-Lived Assets


In accordance with Financial Accounting Standards Board Statement No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets", the Company
reviews its long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Management performs ongoing business reviews and evaluates
impairment indicators based on qualitative and quantitative factors. If it is
determined that the carrying amount of an asset cannot be fully recovered, an
impairment loss is recognized.

                                       9
<PAGE>

Revenue

Revenues are recorded in accordance with SEC Staff Accounting Bulletin No. 101
"Revenue Recognition in Financial Statements."

Revenues from product sales are recognized in the period when persuasive
evidence of an arrangement with the customer exists, the products are shipped
and title has transferred to the customer, all significant obligations have been
delivered, and collection is considered probable. Since many of the product
shipments are accompanied with the right of return, a provision for estimated
returns on these sales is made at the time of sale, in accordance with Statement
of Financial Accounting Standards No. 48, "Revenue Recognition When Right of
Return Exists", based on historical experience. Returned product is resold when
possible. Historically, a portion of returned product is deemed unsaleable and
is destroyed.


Royalties

The Company records royalty revenue as earned and provides for its royalty
expense at the time the royalty income is recorded. Royalty advances are
recorded as earned when such advances represent a nonrefundable guarantee and
there are no obligations to perform services. Advance royalty payments are
recorded as expense when such advance represents a nonrefundable guarantee.


Subsidiary Licensing Rights

Depending upon the terms of its various licensing agreements, the Company can
lease its intellectual property rights to another party. The associated income
is recorded as either advances against royalties or royalties. The associated
expenses due to the authors, illustrators or licensors are a percentage of such
income for use of their text, illustrations, content or imprimaturs.

Due to changes in the Company's business, effective December 31, 2006, royalty
revenue is presented as a component of net sales. All periods presented conform
with this presentation.


Income Taxes

Income taxes are accounted for in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." The
statement employs an asset and liability approach for financial accounting and
reporting of deferred income taxes. Generally, SFAS 109 allows for recognition
of deferred tax assets in the current period for the future benefit of net
operating loss carryforwards and items for which expenses have been recognized
for financial statement purposes but will be deductible for tax purposes in
future periods. A valuation allowance is recognized, if on the weight of the
available evidence, it is more likely than not that some portion or all of the
deferred tax assets will not be realized.

                                       10
<PAGE>

Stock-Based Compensation

The Company applies SFAS No. 123, "Accounting for Stock-Based Compensation" and
has elected to follow Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" (APB 25) and related Interpretations in
accounting for its employee stock options. Under APB 25, to the extent that the
exercise price of the Company's employee stock options equals management's
estimate of the fair value of the underlying stock on the date of grant, no
compensation expense is recognized.

Deferred expense on stock and options issued to officers and directors for
services or other consideration to be received in the future are offset against
equity and are amortized to expense over the period of benefit.

The Company periodically issues shares of its common stock to employees as
grants. Shares issued for services are valued either at the Company's estimate
of the fair value of the common stock at the date of issuance or based on the
market price at the date of issuance.


Income/Loss Per Share Computation

Income/loss per share is computed in accordance with Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share," (Statement 128).
Basic earnings per share is computed by dividing net income/loss by the weighted
average number of outstanding common shares. Diluted earnings per share is
computed using the weighted average number of outstanding common shares and
common share equivalents during the period. Dilutive common share equivalents
consist of employee stock options using the treasury method and dilutive
convertible securities, if any, using the if-converted method. The assumed
exercise of stock options would not have an effect on earnings per share in
either fiscal year 2007 or 2006.


Comprehensive Income (Loss)

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income"
(Statement 130). Statement 130 establishes rules for the reporting and display
of comprehensive income and its components. Comprehensive income (loss) for the
Company is the same as net income (loss) for all periods presented.


Segments of an Enterprise and Related Information

The Company has adopted the FASB's SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" (Statement 131). Statement 131
established standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. Statement 131 also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The Company has determined it has no reportable segments under Statement 131.

                                       11
<PAGE>

Advertising

Advertising costs are expensed as incurred, except for catalogs and brochures
which are all amortized over the period benefited not to exceed the publication
date of the new brochure or twelve months, whichever is less. The Company
provides cooperative advertising allowances to certain customers. These
allowances are accounted for in accordance with the requirements of Emerging
Issues Task Force Statement No. 01-9, "Accounting for Consideration Given by a
Vendor to a Customer".

Advertising expense related to catalogs and brochures was $12,258 and $1,618 for
the three month periods ended December 31, 2006 and 2005, respectively.
Advertising expense related to catalogs and brochures was $24,686 and $32,881
for the nine month periods ended December 31, 2006 and 2005, respectively.

Other advertising expense was $356 for the three month period ended December 31,
2006. There was no advertising expense for the three months ended December 31,
2005. Other advertising expense was $1,262 and $675 for the nine month periods
ended December 31, 2006 and 2005, respectively.


4.  Inventories

Inventories consist of the following:


        Raw Materials                                $    38,470
        Finished Goods                                 1,793,473
        Reserve for Obsolescence                        (335,000)
                                                     -----------
        Inventory                                    $ 1,496,943
                                                     ===========


5. Notes Payable, Bank and Related Parties

       A revolving line of credit totaling $850,000 due on
       demand. Interest is payable monthly equal to the Wall
       Street Journal reported prime rate plus 1.0%.
       Borrowings are subject to a borrowing base equal to
       80% of eligible accounts receivable. The note is also
       secured by all of the assets of the Company, a
       mortgage on the Company's premises and a personal
       guarantee of a principal shareholder (William W.
       Burnham, Chairman of the Board).                               $497,000

       Note payable, bank, due on demand with a maturity of
       February 28, 2007. Interest is payable monthly equal

                             12
<PAGE>

       to the Wall Street Journal reported prime rate plus
       1.0%. Borrowings are subject to a borrowing base
       equal to 80% of eligible accounts receivable. The
       note is also secured by all of the assets of the
       Company, a mortgage on the Company's premises and a
       personal guarantee of a principal shareholder
       (William W. Burnham, Chairman of the Board). 100,000

       Notes payable to a principal shareholder (William W.
       Burnham, Chairman of the Board) due May 27, 2007.
       Interest is payable monthly at 6.50%.                           260,000

       Note payable, bank, due on demand. Interest is
       payable monthly at LIBOR plus 1%. The note is secured
       by a personal guarantee of a principal shareholder
       (William W. Burnham, Chairman of the Board).                    629,926
                                                                    ----------
                                  Total                             $1,486,926
                                                                    ==========


6. Long term debt

       Note payable, bank, payable in monthly installments
       of $2,713 including interest at 7%. Balance due in
       February 2009. The note is secured by all assets of
       the Company, a mortgage on the Company's premises and
       a personal guarantee of a principal shareholder                 264,740

       Note payable, affiliate, payable in monthly
       installments of $2,241.  The note is unsecured.                  20,039
                      Less current portion                             (29,257)
                                                                    ----------
                      Total                                         $  255,522
                                                                    ==========


The scheduled principal payments on long term debt follow:
       Year ending December 31, 2007                                $   29,257
       Year ending December 31, 2008                                    20,229
       Year ending December 31, 2009                                   235,293
                                                                    ----------
                      Total                                         $  284,779
                                                                    ==========


7.   Income Taxes

The components of income tax (benefit) are as follows:

                                       13
<PAGE>

<TABLE>
<CAPTION>
                                                           December 31, 2006                    December 31, 2005
                                                   --------------------------------     --------------------------------
                                                       Current          Deferred            Current          Deferred
                                                   --------------------------------     --------------------------------
<S>                                                <C>               <C>                <C>               <C>
Income tax expense (benefit) before application
of operating loss carryforwards                    $            0    $      (75,800)    $            0    $      (43,000)

Income tax expense (benefit) of operating
Loss carryforwards                                              0                 0                  0                 0

Change in valuation allowance                                   0            75,800                  0            43,000
                                                   --------------------------------     --------------------------------

Income tax expense (benefit)                       $            0    $            0     $            0    $            0
                                                   ================================     ================================
</TABLE>


The deferred taxes are comprised of the following at December 31, 2006:

       Net operating loss carryforwards                     $  1,757,800
       Reserves and allowances                                   240,000
                                                            ------------

       Total deferred tax assets                               1,977,800
       Less valuation allowance                               (1,977,800)
                                                            ------------

       Net deferred tax assets                              $          0
                                                            ============


The deferred tax asset represents expected future tax savings resulting from the
Company's reserves and allowances expensed for financial reporting purposes but
not for tax purposes and net operating loss carryforwards. As of December 31,
2006, the Company has a net operating loss carryforward of approximately $3.9
million for federal income tax purposes which expire at various dates through
2024. Utilization of these benefits is primarily subject to the extent of future
earnings of the Company, and may be limited by, among other things, shareholder
changes, including the possible issuance by the Company of additional shares in
one or more financing transactions. The Company has established a valuation
allowance for the portion of possible tax savings not likely to be realized by
the end of the carryforward period.


8. Related Party Transactions

The Company is involved in several transactions with existing officers and
shareholders of the Company and entities which are controlled by these
individuals, collectively "related parties". The following is a summary of this
activity:

                                       14
<PAGE>

The Main Avenue property leased by the Company is owned by a Connecticut limited
liability company, Noreast Management LLC, which is owned jointly by William W.
Burnham, the Chairman of the Company, Peter Ogilvie, a former Director and
Officer of the Company, and Fred M. Filoon, a Director of the Company. Rent
expense totaled $23,943 and $13,990 for the three months ended December 31, 2006
and 2005, respectively. Rent expense totaled $71,228 and $57,488 for the nine
months ended December 31, 2006 and 2005, respectively.

In November, 2006 the Company borrowed $260,000 from William W. Burnham, the
Chairman of the Company and the principal shareholder. The terms of the note can
be found in Note 5 to the financial statements.

Interest to related parties totaled $2,873 and $14,136 for the three months
ended December 31, 2006 and 2005, respectively. For the nine months ended
December 31, 2006 and 2005, interest to related parties totaled $17,938 and
$23,562, respectively.

There were no repayments to related parties for the three months ended December
31, 2006. Repayments to related parties totaled $26,095 for the three months
ended December 31, 2005.

Mr. Bradford Mead is the President of Delta Capital Group, and he currently
serves on the Company's Board of Directors. Delta Capital was the Company's
investment advisor until October 30, 2006 when the consulting agreement was
terminated.

Delta Capital Group received fees in the amount of $3,000 and $9,000 from the
Company in the quarters ended December 31, 2006 and 2005, respectively. Delta
Capital Group received $18,000 and $30,000 in fees from the Company for the nine
months ended December 31, 2006 and 2005, respectively.




Item 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


NET SALES.

Overview

Net Sales for the Company's December Quarter of fiscal 2007 increased 77.0%
versus the comparable quarter of fiscal 2006. This is primarily a result of
revenue increases among domestic warehouse clubs and the Company's international
mass market distributors, including customers in Latin America and Spain. The
increases were broad-based across the Company's product lines, including
Smithsonian and Disney-branded products and sub-rights sales. In addition, the
Company' newest license from Sesame Workshop was launched during the quarter
with wide market acceptance, The Company's profit margin improved from 40.0% in
the prior year to 51.1% in the current year. The three month results in
operations were $111,533 versus a loss of $202,859 for the prior year and a loss
for the nine months of $189,484 versus a loss of $107,535 for the prior year.

                                       15
<PAGE>

Three months ended December 31, 2006

As noted above, net sales for the second quarter of fiscal 2007 increased 77.0%
versus the prior year due to the aforementioned reasons, and the three month
operations resulted in net income of $111,533. Sparking these increases were the
Company's introduction of two new novelty preschool book formats under the
Disney, Sesame Workshop and Smithsonian licenses. These formats generated
significant placement in the warehouse clubs and mass market retailers. Sales of
Disney-licensed products (including a product featuring characters from the
Disney o Pixar film, Cars) as a percentage of total Company sales, increased
from 69.0% to 73.1% for the quarter versus the comparable quarter a year ago.
Sesame Workshop licensed product sales were 6.9% of Company revenue with the
launch of just two titles in two novelty formats. Smithsonian-licensed product
sales declined from 17.7% of Company sales to 8.6%, principally due to the
significant increase in Disney-licensed product sales and the market
introduction of the two Sesame licensed titles.

                            Percentage of Sales by license for the quarters
                                           ended December 31,
                        --------------------------------------------------------
          License                     2006                        2005
--------------------------------------------------------------------------------
 Disney                                      73.1%                         69.0%
 Smithsonian                                  8.6                          17.7
 Sesame Workshop                              6.9                           0.0
 AWF                                          3.0                           1.1
 All other                                    8.4                          12.2
                        --------------------------------------------------------
 Total                                      100.0                         100.0
                        ========================================================


<TABLE>
<CAPTION>
                                 Sales increases, net of provisions
                                       for returns, for the
                                   three months ended December 31,
                             ------------------------------------------
       Sales channel                   2006              2005              Variance         % change
-----------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>                 <C>                <C>
International Mass
Market Distributors                  $597,173               $0             $597,173             NMF

Domestic Warehouse
Club Distributors                     184,455           17,349              167,106            963.2%

Domestic Non-returnable
Warehouse Club
Distributors                          148,950                0              148,950             NMF
</TABLE>

The Company's distributor in Latin America for Disney-licensed titles in Spanish
language continues to add new titles, which are translated, graphically designed
and printed by the Company for shipment on a non-returnable basis. In addition,

                                       16
<PAGE>

the Company continues to grow sales associated with its licenses from Disney
Publishing Worldwide for Spanish language book and audio editions for
distribution in Spain and North America. As a result of these events, sales to
International mass market distributors were $597,173. There were no orders in
the corresponding quarter in the prior year because the Christmas orders shipped
in the prior year's September quarter.

Sales to the Company's domestic warehouse club distributor, Advanced Marketing
Services (AMS) increased as a result of the rollout of new Fall 2006 formats and
a large sale to the distributor's proprietary division which purchased bundled
Smithsonian toy, book and audio sets on a non-returnable basis. However, on
December 29, 2006 AMS filed for Chapter 11 Bankruptcy in the U.S. Bankruptcy
Court for the District of Delaware. AMS said it took the action after its bank,
Wells Fargo, refused to extend its loan agreement beyond December 28, depriving
it of operating funds. Wells Fargo had routinely extended its credit agreement
with AMS even though the distributor had been in violation of certain lending
covenants. These violations include AMS' inability to file updated financial
information for fiscal year 2004 through the present.

AMS has secured $75 million debtor-in-possession financing from Wells Fargo
Foothill and as a result the Company continues to do business with AMS, with
lower risk credit terms including partial payment in advance of each shipment
and full payment shortly thereafter.

As of December 31, 2006, the Company had outstanding receivables from AMS of
approximately $251,000. Based on the information currently available the Company
believes its reserves are sufficient to cover any reduction in receivables that
may result from any bankruptcy settlement.

Sub-rights royalty sales increased by $131,465 versus the prior year's quarter
resulting primarily from the sale of publication rights of two of the Company's
proprietary Mother Goose titles to a door-to-door distributor. There was no
comparable sale in the prior year. As a result, the Company has reclassified
sub-rights royalty sales with operating revenue for the current and prior
comparative periods.

<TABLE>
<CAPTION>
                                 Sales decreases, net of provisions
                                       for returns, for the
                                   three months ended December 31,
                             ------------------------------------------
       Sales channel                   2006              2005              Variance         % change
-----------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>                 <C>                <C>
Canadian Book Distributors            $ 74,873          $139,615            $(64,742)          (46.4)

Domestic Discount Retail,
Non-returnable                         267,041           319,705             (52,664)          (16.5)

International Trade Book
Distributors                            19,935            62,223             (42,288)          (68.0)
</TABLE>

                                       17
<PAGE>

While most divisions experienced increased sales, sales to Canadian book
distributors decreased from $139,615 to $74,873 in the current quarter. This was
due mainly to decreased sales and the timing of holiday orders.

Several other channels of trade including non-returnable domestic discount
retailers, international trade book distributors, domestic book clubs and
consumer catalogs also experienced decreased sales.


Nine months ended December 31, 2006

Net sales for the nine months ended December 31, 2006 and December 31, 2005 were
$4,327,383 and $4,445,737, respectively. This represents a decrease of $118,354
or 2.7% versus the prior year. The nine months operations resulted in a net loss
of $189,484 versus a net loss of $107,535 for the prior year.

For the nine months ended December 31, 2006, Disney-licensed product sales
accounted for 56.5% of the Company's total sales, versus 69.2% of the Company's
sales in the prior year. Sales of product under license with the Smithsonian
Institution increased to 21.1% of sales in the current year from 15.1% in the
nine month period ended December 31, 2005. The Company's proprietary products,
largely its Mother Goose series, comprised 9.5% of sales versus 6.6% for the
nine month period last year.


                         Sales by license for the nine months ended December 31,
                         -------------------------------------------------------
          License                2006                                   2005
--------------------------------------------------------------------------------
 Disney                                   56.5%                            69.2%
 Smithsonian                              21.1                             15.1
 Proprietary                               9.5                              6.6
 Sesame Workshop                           3.6                              0.0
 AVMA                                      3.2                              2.3
 All other                                 6.1                              6.8
                         -------------------------------------------------------
 Total                                   100.0                            100.0
                         =======================================================


For the nine months ended December 31, 2006, the decrease in net sales is
attributable to several channels of trade:

                                       18
<PAGE>

<TABLE>
<CAPTION>
                                 Sales declines, net of provisions
                                          for returns, for
                                  the nine months ended December 31,
                             ------------------------------------------
       Sales channel                   2006              2005              Variance         % change
-----------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>                 <C>                <C>
International
Direct-to-Consumer Book
Distributors                          $ 30,570          $ 513,543           $(482,973)         (94.1%)

Domestic
Direct-to-Consumer Book
Distributors                           229,448            547,123            (317,675)         (58.1%)

Domestic Book Retailers                122,372            221,902             (99,530)         (44.9%)
</TABLE>


International direct-to-consumer book distributor sales decreased as a result of
non-repeating orders this year versus the comparable 2005 nine month period.

Sales to domestic direct-to-consumer book distributors decreased for the same
reason as the international direct-to-consumer division, where orders a year ago
to the single largest domestic display marketer were not repeated this year.
This channel of trade is based upon opportunistic sales and does not follow a
regularly repeating order cycle. In addition, the largest distributor in this
division has placed a freeze on new orders subject to the resolution of a
purchase/sale agreement.

Domestic book retail sales decreased as a result of distribution losses of
several titles in the major national book chains.


<TABLE>
<CAPTION>
                                 Sales increases, net of provisions
                                         for returns, for
                                 the nine months ended December 31,
                             ------------------------------------------
       Sales channel                   2006              2005              Variance         % change
-----------------------------------------------------------------------------------------------------
<S>                                   <C>               <C>                 <C>                <C>
International
Mass Market Distributors              $ 910,887         $ 473,317           $ 437,570          92.5%

Domestic Non-returnable
Warehouse Club Distributors             262,350                 0             262,350           NMF%

Domestic Warehouse Club
Distributors                            725,890           504,566             221,324          43.9%
</TABLE>

                                       19
<PAGE>

For the nine months ended December 31, 2006, several channels of trade
experienced increased sales, including international mass market distributors.
For the nine months, sales increased $437,570, or 92.5% versus the prior year.
This increase is a result of increased purchases of an expanded list of titles
from the Company's Spanish language distributor in Latin America and an initial
order from the Company's distributor in Spain for several Spanish language
titles, in addition to orders from the Company's distributor of Disney-licensed
product in South Africa.

Sales to the Company's non-returnable domestic warehouse club distributor, AMS,
were $262,350. There were no sales to this channel of trade in the prior year.
Sales in this division are attributable to Smithsonian-licensed book, toy and
compact disc products.

Sales to domestic warehouse club distributors increased $221,324 as a result of
acceptance by the clubs of new formats and titles as well as the Company's new
license initiative with Sesame Workshop.

Sub-rights royalty sales also increased by $163,808 versus the prior year
resulting primarily from the sale of publication rights of two of the Company's
proprietary Mother Goose titles to a door-to-door distributor. There was no
comparable sale in the prior year.



COST OF SALES.

Three months ended December 31, 2006

The Company's cost of sales for the quarter ended December 31, 2006 increased
$288,949 from $651,359 in the prior year to $940,308 in the current year, an
increase of 44.4%, as a result of the increased sales volume. Cost of sales as a
percentage of net sales decreased from 60.0% to 48.9% in the current quarter as
a result of increased sub-rights sales and a change in the product and customer
mix.


 Nine months ended December 31, 2006

The Company's cost of sales for the nine months ended December 31, 2006
decreased $111,031 from $2,498,768 in the prior year to $2,387,737 in the
current year, a decrease of 4.4%. The decrease came as a result of the lower
sales volume. Cost of sales as a percentage of net sales decreased from 56.2% to
55.2% in the current nine month period.



GROSS PROFIT.

Three months ended December 31, 2006

The resulting gross profit for the quarter ended December 31, 2006 increased
125.8% to $982,210 versus the prior quarter's gross profit of $434,918. Gross
margin was 51.1% in the current quarter versus 40.0% in the quarter ended
December 31, 2005.

                                       20
<PAGE>

Nine months ended December 31, 2006

Gross profit for the nine months ended December 31, 2006 decreased 0.4% to
$1,939,646 versus the prior year's gross profit of $1,946,969. Year to date
gross margin was 44.8% versus 43.8% in 2005.



SELLING, GENERAL & ADMINISTRATIVE COSTS.

Three months ended December 31, 2006

The Company's selling, general, and administrative costs increased $247,974 to
$838,914 for the three months ended December 31, 2006 versus $590,940 for the
three months ended December 31, 2005. As a percentage of net sales, selling,
general and administrative expenses decreased from 54.4% of net sales from the
prior quarter to 43.6% of net sales in the current quarter.

Selling expenses increased principally due to royalties which increased $91,558
from $183,957 to $275,515, a 49.8% increase for the current quarter versus the
prior year. The increase is primarily the result of the quarter's increased
sales and the sales mix of licensed products versus the prior year. Additional
factors contributing to the increase in selling and administrative expenses were
the increase in the provision for bad debt as a result of the bankruptcy filing
of AMS, accounting fees and strategic consultant fees resulting from the
engagement of Stanton & Walker Company.

Nine months ended December 31, 2006

For the nine months ended December 31, 2006 the Company's selling, general, and
administrative costs increased $78,905 to $2,014,979 from $1,936,074. As a
percentage of net sales, selling, general and administrative expenses increased
from 43.5% of net sales from the prior year to 46.6% of net sales in the current
year.

Selling expenses increased principally as a result of the increased provision
for bad debt versus the prior year and an increase in accounting and strategic
consulting fees.



INCOME/LOSS FROM OPERATIONS.

Three months ended December 31, 2006

For the quarter ended December 31, 2006, the income from operations was $143,296
versus a loss of $156,022 for the prior year's quarter.

                                       21
<PAGE>

Nine months ended December 31, 2006

For the nine months ended December 31, 2006, the loss from operations was
$75,335 versus income of $10,895 for the prior year, a decrease of $86,229.


OTHER INCOME/EXPENSE.

Three months ended December 31, 2006

The Company's other expense for the quarter ended December 31, 2006 was $31,763
versus a $46,837 expense for the quarter ended December 31, 2005. Interest
expense decreased for the quarter versus the comparable quarter a year ago as a
result of the conversion of shareholder debt into equity in July, 2006.

Nine months ended December 31, 2006

The Company's other expense for the nine months ended December 31, 2006 was
$114,150 versus a $118,430 expense for the nine months ended December 31, 2005.
Again, lower interest expense contributed to the period's decreased expense
versus the prior year.


NET INCOME/LOSS.

Three months ended December 31, 2006

As a result of the items discussed above, the Company's net income for the
quarter ended December 31, 2006 was $111,533 compared to a net loss of $202,859
for the comparable prior quarter.

Nine months ended December 31, 2006

For the nine months ended December 31, 2006 the Company's net loss was $189,484
compared to a net loss of $107,535 for the comparable prior year.



Impact of New Accounting Pronouncements
---------------------------------------

In December 2004, the FASB issued SFAS No. 123R, "Share-Based Payment" (SFAS
123R), replacing SFAS 123 and superseding Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25). SFAS 123R requires
public companies to recognize compensation expense for the cost of awards of
equity compensation effective for fiscal years beginning after July 1, 2005.
This compensation cost will be measured as the fair value of the award estimated
using an option-pricing model on the grant date. The Company is currently
evaluating the various transition provisions under SFAS 123R and will adopt SFAS

                                       22
<PAGE>

123R effective for the fiscal year beginning after July 1, 2005, which is
expected to result in increased compensation expense in future periods.

In May 2005, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards (SFAS) No. 154, "Accounting Changes and Error
Corrections" (SFAS 154), which supersedes Accounting Principles Bulletin (APB)
Opinion No. 20, "Accounting Changes" and SFAS No. 3, "Reporting Accounting
Changes in Interim Financial Statements". SFAS 154 changes the requirements for
and reporting of changes in accounting principle. The statement requires the
retroactive application to prior periods' financial statements of changes in
accounting principles, unless it is impracticable to determine either the period
specific effects of the cumulative effect of the change. SFAS 154 does not
change the guidance for reporting the correction of an error in previously
issued financial statements or the change in an accounting estimate. SFAS 154 is
effective for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005. The adoption of SFAS 154 is not expected to
have a material impact on our financial statements.


Critical Accounting Estimates
-----------------------------

Management's discussion and analysis of financial condition and results of
operations are based upon the Company's financial statements which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
the Company to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosures. On an
ongoing basis, the Company evaluates its estimates and judgments based on
historical experience and various other factors that are believed to be
reasonable under the circumstances. Actual results may differ from these
estimates under different assumptions or conditions. The Company annually
reviews its financial reporting and disclosure practices and accounting policies
to ensure that its financial reporting and disclosures provide accurate and
transparent information relative to the current economic and business
environment. The Company believes that of its significant accounting policies
(see summary of significant accounting policies more fully described on Note 2
of notes to our financial statements), the following policies involve a higher
degree of judgment and/or complexity:

Pre-Publication Costs

Pre-publication costs are deferred and amortized on an accelerated method over
their expected revenue generating lives.

Prepaid Catalog Costs

Catalogs and brochures are amortized over the period benefited, not to exceed
the publication date of the subsequent brochure or twelve months, whichever is
less.

                                       23
<PAGE>

Inventory

The company reviews its inventory for obsolescence and provides for obsolescence
when the inventory becomes unsaleable over a reasonable time.

Reserve for Returns

The Company maintains allowances for product returns. These allowances are based
on historical experience and known factors regarding specific information from
customers or a product's known sell-through performance in the marketplace. If
product return rates exceeded the established allowances, additional allowances
would be required. The Company attempts to resell all returned product whenever
possible.


Liquidity and Capital Resources

<TABLE>
<CAPTION>
                                   For the quarters ended
                                         December 31,
                                 ----------------------------
                                     2006           2005         Variance      % change
---------------------------------------------------------------------------------------
<S>                               <C>             <C>              <C>            <C>
Net assets (deficiency)          $  343,364     $(1,380,558)    $1,723,922         NMF%

Working capital (deficiency)       (158,666)       (146,997)       (11,669)        7.9

Accounts receivable, net          1,721,007       1,027,632        693,375        67.5

Accounts payable and
accrued expenses                  1,643,630       1,634,475          9,155         0.6

Royalties and commissions
payable                             370,561         269,544        101,017        37.5
</TABLE>

At December 31, 2006 the Company had net assets of $343,364 versus a deficiency
at December 31, 2005 of $1,380,558. Working capital deteriorated by $11,669 from
a deficiency of $146,997 to a deficiency of $158,666 at December 31, 2006.

Accounts receivable increased from $1,027,632 at December 31, 2005 to $1,721,007
at December 31, 2006, an increase of $693,375 (see comments below regarding
Advanced Marketing Services). Accounts payable and accrued expenses increased
$9,155 versus the prior year from $1,634,475 to $1,643,630 at December 31, 2006.
Royalties and commissions payable increased $101,017 versus the prior year from
$269,544 at December 31, 2005 to $370,561 at December 31, 2006 primarily as a
result of the sales mix and the increased level of sales.

On November 10, 2006 the Company closed on an additional $100,000 short term
note with the same terms as its existing credit line. The note is secured by all
of the assets of the Company, a mortgage on the Company's premises and a
personal guarantee of a principal shareholder (William W. Burnham, Chairman of
the Board).

                                       24
<PAGE>

On November 28, 2006 the Company received an additional $260,000 short term note
from its principal shareholder (William W. Burnham, Chairman of the Board). The
note is due May 27, 2007. Interest is payable monthly at 6.50%.

As of December 31, 2006 the balance on the Company's revolving line of credit
was $497,000. As noted above the maximum amount of funds currently available to
the Company is $850,000.

As of February 9, 2007 the Company's backlog was approximately $2,304,000.

Expected cash flows from operations supplemented by anticipated lending sources
are forecast to be adequate in covering the Company's operations. Although the
Company does not expect to run out of available funds in the coming fiscal year,
it does expect that the need for capital will continue to eclipse the limits of
its revolving credit facility, including the amended facility of $850,000, the
additional bank borrowing and the shareholder note, if revenue growth is to be
realized. The Company continues to explore outside funding options in the event
that cash flow does not materialize in line with current expectations.
Additional working capital would be required to fund new growth opportunities
and publication initiatives. It is believed a strategic or private equity
investor would allow the Company to better position itself for growth by
providing working capital for future publishing initiatives and even a strategic
acquisition.

On October 30, 2006 the Company and Delta Capital Group, LLC terminated their
engagement which had provided assistance in seeking and securing financing while
exploring the Company's strategic options. It continues to maintain its
engagement with Stanton, Walker & Company with the objective to seek out
accretive acquisitions.

On December 29, 2006, Advanced Marketing Services (AMS), one of the Company's
largest customers and the largest distributor to the warehouse clubs, filed for
Chapter 11 Bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.
AMS said it took the action after its bank, Wells Fargo, refused to extend its
loan agreement beyond December 28, depriving it of operating funds. Wells Fargo
had routinely extended its credit agreement with AMS even though the distributor
had been in violation of certain lending covenants. These violations include
AMS' inability to file updated financial information for fiscal year 2004
through the present.

AMS has secured $75 million debtor-in-possession financing from Wells Fargo
Foothill and as a result the Company continues to do business with AMS, with
lower risk credit terms including partial payment in advance of each shipment
and full payment shortly thereafter.

As of December 31, 2006, the Company had outstanding receivables from AMS of
approximately $251,000. Based on the information currently available the Company
believes its reserves are sufficient to cover any reduction in receivables that
may result from any bankruptcy settlement.

                                       25
<PAGE>

Forward-looking Statements
--------------------------

We have made forward-looking statements in this report that are subject to a
number of risks and uncertainties, including without limitation, those described
in our Annual Report on Form 10-KSB for the year ended March 31, 2006 and other
risks and uncertainties indicated from time to time in our filings with the SEC.
These forward-looking statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements include the information concerning possible or assumed future results
of operations. Also, when we use words such as "believes," "expects,"
"anticipates" or similar expressions, we are making forward-looking statements.
Readers should understand that the following important factors, in addition to
those discussed in the referenced SEC filings, could affect our future financial
results, and could cause actual results to differ materially from those
expressed in our forward-looking statements:

* The implementation of our strategies;

* The availability of additional capital;

* Variations in stock prices and interest rates;

* Fluctuations in quarterly operating results; and

* Other risks and uncertainties described in our filings with the SEC.

We make no commitment to disclose any revisions to forward-looking statements,
or any facts, events or circumstances after the date hereof that may bear upon
forward-looking statements.


         PART II      OTHER INFORMATION
         -------


Item 1.      Legal Proceedings

None.

Item 2.      Changes in Securities

None.


Item 3.      Defaults upon Senior Securities

None

                                       26
<PAGE>

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

None

Item 5.      Other Information

None

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

(a)    Exhibits
---------------

3a.    Certificate of Incorporation (incorporated by reference to the Company's
       registration statement on Form S-18 (file number 33-14379B)).

3b.    Certificate of Amendment of Certificate of Incorporation (incorporated by
       reference to the Company's registration statement on Form S-18 (file
       number 33-14379B)).

3c.    By-laws of Company (incorporated by reference to the Company's
       registration statement on Form S-18 (file number 33-14379B)).

3d.    Certificate of Incorporation of Norwest Manufacturing Company
       (incorporated by reference to the Company's registration statement on
       Form S-18 (file number 33-14379B)).

3e.    Certificate Amending Certificate of Incorporation of Norwest
       Manufacturing Company dated December 5, 1979 (incorporated by reference
       to the Company's registration statement on Form S-18 (file number
       33-14379B)).

3f.    Certificate Amending Certificate of Incorporation of Trudy Toys Company,
       Inc. dated March 27, 1984 (incorporated by reference to the Company's
       registration statement on Form S-18 (file number 33-14379B)).

31.1   Certification of Chief Executive Officer Pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002.

31.2   Certification of Chief Financial Officer Pursuant to Section 302 of the
       Sarbanes-Oxley Act of 2002.

32.1   Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
       1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
       2002.

32.2   Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
       1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
       2002.

                                       27
<PAGE>

(b)    Reports on Form 8-K

I.     Item 8.01. On December 19, 2006, the registrant announced in a press
       release issued December 18, 2006 that it had been advised that the assets
       in liquidation of Chart Studio Publishing (PTY) Ltd, Johannesburg, South
       Africa, were sold at auction by Court-appointed Liquidators to a
       successful bidder from Capetown, South Africa. The Company, whose bid was
       exceeded by a narrow margin, had been in negotiation with Chart Studio's
       management since September, prior to Chart Studio's filing in
       liquidation, for the purchase of substantially all its assets.

                                       28
<PAGE>

                                   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.

                                          TRUDY CORPORATION
                                          (REGISTRANT)

Date: February 14, 2007                   By: /s/ ASHLEY C. ANDERSEN
                                              ----------------------------------
                                              Ashley C. Andersen,
                                              President, Chief Executive Officer
                                              Acting Chief Financial Officer

                                       29