SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                  FORM 10-QSB/A
                                (Amendment No. 1)



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


                     For the Quarter Ended December 31, 2004

                           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
                                  April 6, 2005
               Common Stock, $.0001 par value: 455,734,057 shares



The Registrant amended its September 30, 2004 quarterly report on Form 10-QSB/A
to include the $26,500 fair market value cost for the Chief Executive Officer's
salary. For the period, the CEO's actual salary, per an agreement with the Board
of Directors subsequent to June 30, 2004, was $1 per year.

<PAGE>

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

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

      Consolidated Balance Sheet - December 31, 2004 (unaudited)              3

      Consolidated Statements of Operations (unaudited) for the
           three months and nine months ended December 31, 2004 and
           December 31, 2003 (unaudited)                                      4
      Consolidated Statements of Cash Flows (unaudited) for nine months
           ended December 31, 2004 and December 31, 2003 (unaudited)          5

      Consolidated Statement of Shareholders' Deficit (unaudited) from
           April 1, 2004 through December 31, 2004                            6

      Notes to Financial Statements (unaudited)                               7

Item 2. Management's Discussion and Analysis                                 14


                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings                                                    24

Item 2. Changes in Securities                                                24

Item 3. Defaults upon Senior Securities                                      25

Item 4. Submission of Matters to a Vote of Security Holders                  25

Item 5. Other Information                                                    25

Item 6. Exhibits and Reports on Form 8-K                                     25


                                       2
<PAGE>

                         Trudy Corporation & Subsidiary
                                 Balance Sheet


                                                                   December 31,
                                                                       2004
                                                                  -------------
                                                                   (Unaudited)

Assets

Current assets:
  Cash and cash equivalents                                               1,363
  Accounts receivable, net                                            1,807,563
  Inventories                                                         1,185,429
  Prepaid expenses and other current assets                             146,127
                                                                  -------------
    Total current assets                                              3,140,482

Equipment, net                                                           35,171
  Royalty advances, net                                                 175,139
  Pre-publication costs and other assets, net                           491,772
                                                                  -------------
    Total other assets                                                  702,082
                                                                  -------------
    Total assets                                                      3,842,564
                                                                  =============


Liabilities and shareholders' deficit

Current liabilities:
  Notes payable - bank                                                1,202,049
  Notes payable - shareholder / officer and related parties           1,438,629
  Current portion of long term debt                                      15,311
  Accounts payable and accrued expenses                               1,405,493
  Royalties and commissions payable                                     646,911
                                                                  -------------
    Total current liabilities                                         4,708,393

Long-term liabilities:
  Due to The Chart Studio (Pty) Ltd.                                    345,033
  Notes payable to bank (less current portion)                          362,833
                                                                  -------------
    Total long-term liabilities                                         707,866
                                                                  -------------
    Total liabilities                                                 5,416,259

    Minority Interest                                                    12,365


Shareholders' deficit:
  Common stock: $.0001 par value                                         44,246
  Additional paid-in capital                                          5,178,167
  Accumulated equity / (deficit)                                     (6,808,473)
                                                                  -------------

    Total shareholders' deficit                                      (1,586,060)
                                                                  -------------
    Total liabilities and shareholders' equity                        3,842,564
                                                                  =============

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

                                       3
<PAGE>
<TABLE>
<CAPTION>

                         Trudy Corporation & Subsidiary
                      Consolidating Statement of Operations

                                                                Three Month Period                   Nine Month Period
                                                                Ended December 31,                  Ended December 31,
                                                         --------------------------------    --------------------------------
                                                              2004               2003             2004              2003
                                                         --------------    --------------    --------------    --------------
                                                           (Unaudited)       (Unaudited)       (Unaudited)       (Unaudited)
<S>                                                      <C>                    <C>               <C>               <C>
Net Sales                                                $    2,267,965         1,478,454         5,127,589         3,183,374

Cost of Sales                                                 1,135,700           774,992         2,598,114         1,921,867

                                                         --------------    --------------    --------------    --------------
Gross Profit                                                  1,132,265           703,462         2,529,475         1,261,507


Operating expenses
  Selling, general and administrative                           984,967           874,540         2,366,529         2,048,014
                                                         --------------    --------------    --------------    --------------

Income/(loss) from operations                                   147,298          (171,078)          162,946          (786,507)

Other income (expense)
  Interest, net                                                 (40,260)          (32,687)         (114,245)          (12,387)
  Royalties, net                                                 16,885            27,847            19,569            38,369
  Other income/(expense)                                         72,297              (350)           79,865              (905)
                                                         --------------    --------------    --------------    --------------

Other income/(expense):                                          48,922            (5,190)          (14,811)           25,077
                                                         --------------    --------------    --------------    --------------

Income/(loss) before minority interest                          196,220          (176,268)          148,135          (761,430)


  Minority interest income/(expense)                            (12,365)           (6,760)          (11,813)           (6,233)


                                                         --------------    --------------    --------------    --------------
Net income/(loss)                                               183,855          (183,028)          136,322          (767,663)
                                                         ==============    ==============    ==============    ==============


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

Weighted average number of shares outstanding               442,460,249       442,460,249       442,460,249       442,460,249
                                                         ==============    ==============    ==============    ==============
</TABLE>

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

                                        4
<PAGE>
<TABLE>
<CAPTION>

                                                                           For the Nine Months
                                                                            Ended December 31,
                                                                       ---------------------------
                                                                           2004           2003
                                                                       ------------   ------------
                                                                       (Unaudited)    (Unaudited)
<S>                                                                         <C>           <C>

Cash Flows From Operating Activities
Net income / (loss) before minority interest                                136,322       (767,664)
Adjustments to reconcile net loss/(income) before minority interest
to net cash provided by / (used in) operating activities:
  Depreciation                                                               27,250         61,707
  Amortization of pre-publication costs                                     149,688        162,784
  Amortization of organization costs                                              0          3,524
  Provision for losses on accounts receivable                                24,834       (100,951)
  Provision for promotional allowance                                        92,465              0
  Provision for slow moving inventory                                       115,456         35,417
  Provision for sales returns                                                88,755        155,329
  Minority interest                                                          11,814          6,233
  Contributed compensation                                                   79,250         76,251
  Imputed interest on long-term loan                                         18,815         17,460


Changes in operating assets and liabilities:
  Decrease (Increase) in accounts receivable                             (1,258,142)      (272,668)
  (Decrease) in Due to Chart Studio (Pty) Ltd.                                    0         (4,125)
  Decrease (Increase) in inventories                                       (163,094)      (255,488)
  (Increase) Decrease in prepaid expenses and other current assets           18,729         45,831
  Increase (Decrease) in accounts payable and accrued expenses              559,552        (18,403)
  Increase (Decrease) in royalties and commissions payable                  388,638        156,416
                                                                       ------------   ------------
Net cash provided by / (used in) operating activities                       290,332       (698,347)

Investing activities:
  Purchases of property and equipment                                        (7,173)       (22,356)
  Pre-publication and royalty advances                                     (255,623)      (145,414)
                                                                       ------------   ------------
Net cash (used in) investing activities                                    (262,796)      (167,770)

Financing activities:
  Net proceeds from short-term debt                                          35,977              0
  Repayments to related parties                                            (111,401)       (57,057)
  Proceeds from related parties                                                   0        614,131
                                                                       ------------   ------------
Net cash provided by / (used in) financing activities                       (75,424)       557,074
                                                                       ------------   ------------

Net increase (decrease) in cash and cash equivalents                        (47,889)      (309,043)
Cash and cash equivalents at beginning of period                             49,253        345,182
                                                                       ------------   ------------
Cash and cash equivalents at end of period                                    1,363         36,139
                                                                       ============   ============

Cash paid for interest                                                       36,061         31,357
Cash paid for income taxes                                                       --             --
</TABLE>

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

                                        5
<PAGE>
<TABLE>
<CAPTION>

                         Trudy Corporation & Subsidiary
                      Statement of Shareholders' Deficiency
                   For the Nine Months Ended December 31, 2004

                                             Common Stock                   Additional                                  Total
                                   ---------------------------------         Paid-in           Accumulated          Shareholders'
                                      Shares              Amount             Capital             Deficit          (Deficit) Equity
                                 ----------------    ----------------    ----------------    ----------------     ----------------

<S>                              <C>                           <C>       <C>                 <C>                  <C>
Balance at March 31, 2004        $    442,460,249              44,246    $      5,098,917    $     (6,944,793)    $     (1,801,630)

Contributed compensation                       --                  --              26,250                  --               26,250

Net loss (unaudited)                           --                  --                  --            (242,384)            (242,384)

                                 ----------------    ----------------    ----------------    ----------------     ----------------
Balance at June 30, 2004              442,460,249              44,246           5,125,167          (7,187,177)          (2,017,764)
                                 ================    ================    ================    ================     ================

Contributed compensation                       --                  --              26,500                  --               26,500

Net income (unaudited)                         --                  --                  --             194,849              194,849

                                 ----------------    ----------------    ----------------    ----------------     ----------------
Balance at September 30, 2004         442,460,249              44,246           5,151,667          (6,992,328)          (1,796,415)
                                 ================    ================    ================    ================     ================

Contributed compensation                       --                  --              26,500                  --               26,500

Net income (unaudited)                         --                  --                  --             183,855              183,855

                                 ----------------    ----------------    ----------------    ----------------     ----------------
Balance at December 31, 2004          442,460,249              44,246           5,178,167          (6,808,473)          (1,586,060)
                                 ================    ================    ================    ================     ================
</TABLE>


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

                                        6
<PAGE>

                        TRUDY CORPORATION AND SUBSIDIARY
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.   Description of Business and Basis of Presentation

Trudy Corporation and its subsidiary, Studio Mouse, LLC (the "Subsidiary")
(Trudy Corporation and the Subsidiary referred to collectively as the
`Company'), publish children's books and audiobooks and design, manufacture and
market plush toys for sale to both retail and wholesale customers, both
domestically and internationally. The Company's product is sold under the trade
names (imprints) of both 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, 2004 are not necessarily indicative of the results
that may be expected for the year ending March 31, 2005. 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, 2004.

The Company has incurred operating losses in the past four years, and has a
deficiency in net assets. The Company's revenues have increased from $1,447,931
in 2001, to $3,392,808 in 2002 and to $4,405,006 in 2003. However, revenues
declined to $3,904,866 in the year ended March 31, 2004. During this time the
Company had been funded by a principal shareholder/officer. As of February 2004,
the Company had received a line of credit and a term loan from its Bank.

The Company's ultimate ability to continue as a going concern is dependent upon
the continued market acceptance of its products, the ability of its vendors to
supply products in a timely manner, an increase in revenues coupled with
continuing licensing support from its primary licensors, Disney Licensed
Publishing, an imprint of Disney Children's Book Group, LLC ("Disney") the
Smithsonian Institution, and WGBH Educational Foundation, as well as positive
cash flow. The Company believes that continued improvement in its sales and its
ability to borrow money from its bank will be sufficient to allow the Company to
continue in operation.

                                       7
<PAGE>

2.   Summary of Significant Accounting Policies

Principles of Consolidation

Investments in 20% to 50% owned equities are accounted for by 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
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 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.

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.

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.

                                       8
<PAGE>

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.

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.

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.

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.

                                       9
<PAGE>

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.

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.

No provision or liability for federal income taxes has been included in the
Company's financial statements in relation to the income of Studio Mouse. As a
limited liability company, it is not subject to income taxes. However, its
equity owners are taxed on their proportionate share of Studio Mouse's taxable
income.

Stock-Based Compensation

The Company 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. Shares
issued for services are valued at the Company's estimate of fair value of the
common stock 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 2005 or 2004.

                                       10
<PAGE>

Comprehensive 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 loss for the Company
is the same as net 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.

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 $5,166 and $152,449
for the three month periods ended December 31, 2004 and 2003, respectively. For
the nine month periods ended December 31, 2004 and 2003, advertising expense
related to catalogs and brochures was $98,066 and $314,770, respectively.

Other advertising expense for the three month periods ended December 31, 2004
and 2003 was $2,489 and $4,357 respectively. For the nine month period ended
December 31, 2004 other advertising expense was $3,365 versus $18,957 for the
nine month period ended December 31, 2003.


Reclassifications

Certain reclassifications were necessary in the current quarter to be consistent
with the prior period's presentation. In the quarter year ended December, 2004
the Company had sub-rights expense of $8,885 which had been classified to
royalty expense and was a component of the Company's' income from operations.
This has been reclassified and is now a component of other income/expense.


3.   Inventories

Inventories consist of the following:

         Raw Materials                      $      33,377
         Finished Goods                         1,152,052
                                            -------------
         Inventory Value                    $   1,185,429
                                            =============

                                       11
<PAGE>

4.   Notes Payable, Bank

Notes payable, bank includes the following:

     A revolving line of credit totaling $750,000 through
     February 2005. Interest is payable monthly equal to
     the Wall Street Journal prime rate plus 1.5%.
     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 the majority shareholder. The credit
     line is currently being renegotiated with the bank.              $558,565

     Note payable, bank, due on demand. Interest is
     payable monthly at LIBOR plus 1%. The note is
     secured by a personal guarantee of the majority
     shareholder.                                                      643,484
                                                                  ------------
                    Total                                           $1,202,049
                                                                  ============

5.   Notes payable related parties/shareholders:

     Various notes payable to the president/shareholder
     due January, 2005. Interest payable monthly at 2.5%.
     The notes are currently being renegotiated.                       $39,629

     Notes payable to the president/shareholder due in
     January 2007. The shareholder has the right to
     demand payment earlier. Interest is payable monthly
     at 2.5%.                                                          945,000

     Notes payable, shareholder, payable at various dates
     between January 2005 and January 2007. The
     shareholder has the right to demand payment earlier.
     Interest is payable at specified maturity dates at
     5% per annum.                                                     454,000
                                                                  ------------
                    Total                                           $1,438,629
                                                                  ============

6.   Long term debt:

     Note payable, bank, payable in monthly installments
     of $2,713 including interest at 7%. Balance due in
     February 2007. The note is secured by all assets of
     the Company, a mortgage on the Company's premises
     and a personal guarantee of the majority
     shareholder.                                                     $290,345


                                       12
<PAGE>

     Note payable, affiliate, payable in monthly
     installments of $801 with interest imputed at 8%.
     The note is unsecured.                                             87,799
                    Less current portion                               (15,311)
                                                                  ------------
                    Total                                             $362,833
                                                                  ============

The scheduled principal payments on long term debt follow:
     Year ending March 31, 2005                                        $14,376
     Year ending March 31, 2006                                         15,448
     Year ending March 31, 2007                                         16,603
     Year ending March 31, 2008                                         17,780
     Year ending March 31, 2009                                        249,542
     There after                                                        64,395
                                                                  ------------
                    Total                                             $381,800
                                                                  ============

7.   Income Taxes

The Company has net operating loss carryforwards, on a fiscal year basis,
approximating $5,146,000, which expire as follows:

       2006                          1,246,000
       2007                            324,000
       2008                            258,000
       There after                   3,318,000
                              ----------------
                                   $ 5,146,000
                              ================

Because of the current uncertainty of realizing benefits of the tax
carryforward, a valuation allowance, all related to the net operating loss
carryforward, equal to the tax benefits for deferred taxes has been established.
The full realization of the tax benefit associated with the carryforward depends
predominantly upon the Company's ability to generate taxable income during the
carryforward period.

The net operating loss benefits could be reduced if there is a "382 Change of
Ownership".

                                       13
<PAGE>

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:

The Company has borrowings from related parties of $1,526,428. The terms of
these notes can be found in Notes 5 and 6 to the financial statements. Interest
to related parties totaled $3,899 and $6,641 for the quarters ended December 31,
2004 and 2003, respectively. Interest to related parties totaled $21,384 for the
nine month period ended December 31, 2004 and interest totaled $18,762 for the
nine months ended December 31, 2003. Repayments to related parties totaled
$101,920 in the nine months ended December 31, 2004. For the quarter ended
December 31, 2004 one principal shareholder/officer was repaid $36,061 relating
to pre-existing loans. In calendar year 2005 through March 11, 2005 the Company
repaid an additional $16,946 of these borrowings.

The Company leases office space from a related party. Rent expense under this
lease totaled $15,595 and $16,355 for the quarters ended December 31, 2004 and
2003, respectively. Rent expense for the nine months ended December 31, 3004 and
2003, respectively totaled $47,844 and $50,027.

Subsequent to June 30, 2004, the chief executive officer entered into an
agreement with the Board of Directors in which his salary was reduced to $1 per
year. For the quarter ended December 31, 2004, the Company recognized the
difference between the fair market value of his services and the accepted salary
of $1 per year. This was an expense of $26,500 and was recorded as a
contribution to capital.

9. Subsequent Events

On March 31, 2005 Trudy entered into an agreement with Ashley C. Andersen, a
Director and the Executive Vice President and Publisher of the Company, to
acquire the 5% of Studio Mouse, LLC not already owned. Trudy issued 13,273,808
shares of previously unissued Common Stock in exchange for the 5% interest.
Based upon the closing price of Trudy's Common Stock as of March 31, 2005, the
value of the acquisition was approximately $119,000.

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

NET SALES. Consolidated net sales for the three months ended December 31, 2004
and December 31, 2003 were $2,267,965 and $1,478,454, respectively. This
represents an increase of $789,511 or 53.4% over the prior quarter a year ago.
For the nine months ended December 31, 2004 and 2003, net sales were $5,127,589
and $3,183,374, respectively. This represents an increase of $1,944,215, or
61.1%. As discussed below, the majority of the increase in sales for the three
and nine month periods was related to Disney-licensed product sales.

In the quarter ended December 31, 2004, Disney-licensed product sales accounted
for 81.3% of the Company's total sales, versus 59.2% of the Company's sales in
the prior year. Sales of product under license with the Smithsonian Institution
and distributed by the Company's Soundprints division (and certain titles and
formats distributed by Studio Mouse in fiscal year 2003) decreased from 15.2% of
net sales in the prior fiscal year's quarter to 13.3% in the current quarter
ended December 31, 2004.

                                       14
<PAGE>

Disney-licensed product sales which commenced in July 2003 have increased year
over year as the Company expands the product range.

For the three months ended December 31, 2004, the increase in net sales is
attributable to several key channels. Sales to the Company's domestic warehouse
club distributor increased $293,312 to $781,382 versus the prior fiscal quarter
ended December 31, 2003, an increase of 37.5%. This was primarily as a result of
continued warehouse club acceptance of three Disney-licensed book formats. Sales
to non-returnable discount retailers increased $248,339 from $7,461 in the
quarter ended December 31, 2003 to $255,800 for the current quarter ended
December 31, 2004, an increase of 332.9%. This is a result of strong sales of
Smithsonian-licensed product into regional discount chains. Sales to display
marketers were $158,902 in the current quarter; there were no sales to this
channel in the quarter ended December 31, 2003.

These broad-based gains were offset by decreases in sales to several channels of
trade. Because the Company chose not to mail a consumer catalog this year,
direct to consumer sales decreased $114,514 from $123,951 in the prior year to
$9,437 in the current quarter ended December 31, 2004.

In October, the Company appointed a school and library distributor with a direct
to school sales force to sell the Soundprints book and audio cassette list. This
distribution method replaced the library direct mail catalog which was dropped
from the Company's mailing plan this year. As a result sales to school and
library distributors increased by $37,935 or 55.5% to $68,347 for the three
months ended December 31, 2004 versus the comparable period a year ago. Direct
sales to school and libraries declined $14,746 to $6,339 for the December
Quarter 2004 period versus the comparable period a year ago.

For the three month period ended December 31, 2004, sales of the Company's
Studio Mouse imprint increased 71.6% versus the prior year's comparable quarter.
The titles published by Studio Mouse are principally the Mother Goose and
Disney-licensed novelty book and audio CD formats. Titles published under the
Disney license were introduced in July 2003 and have resulted in increased
distribution as the Company expands this product range in number of titles and
formats.

For the Soundprints imprint, sales increased 2.7% versus the prior year.
Soundprints' content is primarily comprised of Smithsonian, African Wildlife
Foundation, and American Veterinary Medical Association licensed properties as
well as storybook series composed of proprietary content. Sales of Smithsonian
licensed product increased 37.6% versus the prior year period. This increase was
partially offset by Soundprints' decreased sales of proprietary titles.

Sales of the Company's two new product lines under license from the American
Veterinary Medical association (AVMA) and the African Wildlife Foundation (AWF)
were each less than 1% of sales. These two product lines were introduced in the
current fiscal year.

                                       15
<PAGE>

For the nine month period ended December 31, 2004, the increase in net sales is
primarily attributable to sales to domestic warehouse club distributors,
Canadian book distributors, international mass market distributors, discount
retailers and international trade book distributors. Sales to domestic warehouse
club distributors increased $1,350,806 from $378,157 in the prior year to
$1,782,963 for the nine months ended December 31, 2004, an increase of 357.2%.
Sales to the Company's Canadian book distributor increased $358,841 from
$275,731 to $634,572 for the nine months ended December 31, 2004, an increase of
130.1%. The increase is primarily attributable to expanded distribution of
Disney-licensed product to virtually all Canadian mass merchandisers and
warehouse clubs. Non-returnable discount retail sales increased for the nine
months ended December 31, 2004 from $388,227 for the comparable period a year
ago to $618,269 an increase of $230,042, or 59.3%. This increase is a result of
Smithsonian and Disney-licensed product sales into regional discount store
chains. Sales to international mass market distributors were $194,945 in the
nine months ended December 31, 2004, resulting from a first-time order from an
Australian mass market distributor. There were no sales to this channel in the
prior fiscal year.

Other sales gains were posted for domestic book retailers, school and library
distributors, catalogers, and international trade book distributors. Sales
declines were found among book distributors, e commerce and specialty retailers.

Again, because the Company chose not to mail a consumer catalog this year,
direct to consumer sales decreased $149,317 from $169,689 in the prior year to
$20,372 in the current nine month period ended December 31, 2004. Sales to
display marketers also declined $102,372 from $330,699 to $228,327 in the
current year as a result of a delay by the major customer in this division in
reviewing market test results of new titles and formats which can lead to larger
purchases and roll-outs.

For the nine month period ended December 31, 2004, sales from the Company's
Studio Mouse imprint increased 84.1% versus the prior year's comparable nine
month period. Sales for Soundprints' products increased 10.6% versus the prior
year nine month period largely as a result of sales of Smithsonian licensed
product which increased 31.2% versus the prior year period.

For the nine month period ended December 31, 2004, Disney-licensed product sales
accounted for 72.0% of the Company's total sales, versus 46.2% of sales for the
prior year. Sales of product under license with the Smithsonian Institution and
distributed by the Company's Soundprints division decreased from 23.8% of net
sales in the prior fiscal year to 16.7% in the current nine month period.

COST OF SALES. The Company's consolidated cost of sales for the quarter ended
December 31, 2004 increased $360,708 from $774,992 in the prior year's quarter
to $1,135,700 in the current year's quarter, an increase of 46.5%. Cost of sales
as a percentage of net sales decreased from 52.4% to 50.1% in the current fiscal
year. The decrease in cost of sales as a percentage of net sales is attributable
to the semi-fixed cost of the company's warehouse operations relative to the
Company's increase in net sales.

Direct product costs for the quarter increased 68.7% versus the prior year's
quarter, from $429,967 to $725,187, an increase of $295,220. As a percentage of
net sales, direct product costs increased 2.9% from 29.1% in the prior year's
comparable quarter to 32.0% in the current quarter.

                                       16
<PAGE>

Indirect product costs for the quarter ended December 31, 2004 increased $65,398
from $345,025 to $410,423, an increase of 19.0%. As a percentage of net sales,
indirect product costs decreased from 23.3% in the prior fiscal year to 18.1% in
the current quarter. Indirect product costs are comprised of warehouse, labor,
supplies, amortization of pre-publication materials and product development.

The Company's reserve for inventory obsolescence expense increased by $114,622
from $17,417 in the quarter ended December 31, 2003 to $132,039 in the current
quarter. The inventory provision increased as a result of additional inventory
evaluated to be obsolete or slow moving in the current quarter.

For the quarter ended December 31, 2003 management revised its estimate of the
average expected life of its publications based on current historical sales
patterns. As a result, amortization expenses in the quarter ended December 31,
2004 decreased $73,376 to $61,902 from $135,278 in the prior year.

Design costs increased $8,325 from $50,430 in the prior quarter to $58,755 in
the quarter ended December 31, 2004. This is primarily attributable to costs
related to editorial salaries. Miscellaneous warehouse and cost of goods
expenses increased $23,572 versus the prior quarter although this was partially
offset by decreases in outbound freight costs and inventory obsolescence
expenses.

For the nine months ended December 31, 2004, the Company's consolidated cost of
sales increased $676,247 from $1,921,867 in the prior year period to $2,598,114
in the current year, an increase of 35.2%. Cost of sales as a percentage of net
sales decreased from 60.4% to 50.7% in the current fiscal year.

Direct product costs for the nine month period ended December 31, 2004 increased
38.2% versus the prior year period, from $1,223,066 to $1,689,872, an increase
of $466,806. As a percentage of net sales, direct product costs decreased from
38.4% in the prior fiscal year to 33.0% in the current nine month period.

Indirect product costs for the nine month period ended December 31, 2004 and
2003 increased $209,351 from $698,802 to $908,153, respectively, an increase of
30.0%. As a percentage of net sales, indirect product costs decreased from 22.0%
in the prior fiscal year to 17.7% in the current year. For the nine month period
the increase is primarily attributable to increases in warehouse salaries,
design salaries, sub-contracted design costs, and miscellaneous warehouse costs.

The Company's reserve for inventory obsolescence expense increased by $101,644
from $63,894 in the nine month period ended December 31, 2003 to $165,537 in the
current nine month period. The inventory provision increased as a result of
additional inventory evaluated to be obsolete or slow moving in the current
quarter.

Sub-contracted design costs increased $24,461 from $8,186 for the prior year
period to $32,647 in the period ended December 31, 2004. This cost increase is a
result of retroactive salary adjustments for the Company's sub-contract
designer. Warehouse salaries increased 20.1% from $139,358 for the nine months
ended December 31, 2003 to $167,299 for the nine months ended December 31, 2004,
an increase of $27,941. This was primarily attributable to overtime pay to
handle the general increase in shipping volume, processing of returns and
general wage increases.

                                       17
<PAGE>

Editorial salaries also increased $29,288 from $115,844 in the prior year's nine
month period to $145,132 in the year to date period ended December 31, 2004, an
increase of 25.3%. This increase is a result of new hiring to support the
increase in new titles for the Fall to include Disney publications and a new
publishing program entitled PEEP and the Big Wide World, licensed to the Company
by WGBH Educational Foundation.


GROSS PROFIT. As a result of the above changes in net sales and cost of sales,
the Company's gross profit for the quarter ended December 31, 2004 increased
61.0% to $1,132,265 versus the prior quarter's gross profit of $703,462. The
Company's gross margin increased from 47.6% in the prior year's quarter to 49.9%
in the quarter ended December 31, 2004.

Gross profit for the nine months ended December 31, 2004 increased 100.5% to
$2,529,475 versus the prior year's gross profit of $1,261,507. The gross margin
increased from 39.6% in the prior year to 49.3% in the nine months ended
December 31, 2004.



SELLING, GENERAL & ADMINISTRATIVE COSTS. The Company's selling, general, and
administrative costs increased $110,427 to $984,967 for the three months ended
December 31, 2004 versus $874,540 for the three months ended December 31, 2003.
As a percentage of net sales, selling, general and administrative expenses
decreased from 59.2% of net sales in the quarter ended December 31, 2003 to
43.4% of net sales in the current quarter.

Royalty expenses largely attributable to Disney-licensed products increased
$257,307 from $196,040 to $453,347, a 131.3% increase. Disney-licensed product
sales commenced in July 2003 and have increased year over year as the Company
expands the product range.


Offsetting this increase, catalog expense decreased $147,283 from $152,449 in
the prior year to $5,166 in the current quarter. The Company did not mail a
direct to consumer catalog this fall as a result of disappointing results from
the prior year's mailing.

The provision for uncollectible accounts was $58,814 in the prior year's
quarter. No adjustment in this provision was deemed necessary in the current
quarter since the current year's allowance for uncollectible accounts was
satisfactory for the amount of aged receivables outstanding.

Executive and office salaries increased $29,698 from $154,377 in the quarter
ended December 31, 2003 to $184,075 in the current quarter ended December 31,
2004, an increase of 19.2%. This increase is attributable to performance
bonuses.

                                       18
<PAGE>

Legal services increased $9,140 from $9,280 for the three months ended March 31,
2003 to $18,420 for the three months ended December 31, 2004. The increase is
primarily attributed to the Company's exploration of its options related to
capital restructuring and auditing compliance in advance of mandatory compliance
requirements under Section 404 of the Sarbanes-Oxley Act of 2002 scheduled to
impact the Company for the fiscal year ending March 31, 2007. The Company had
initially foreseen that compliance with Section 404 would take effect for the
fiscal year ended March 31, 2006. As of March 1, 2005, compliance for small
business filers was delayed until the Company's fiscal year ending March 31,
2007.


For the nine month period ended December 31, 2004, the Company's selling,
general, and administrative costs increased 15.6% from $2,048,014 from the prior
year to $2,366,529 for the current year. As a percentage of net sales, selling,
general and administrative expenses decreased from 64.3% of net sales in 2003,
to 46.2% of net sales in the current year to date period.

Royalty expenses largely attributable to Disney-licensed products increased
$432,420 from $389,822 to $822,242, an increase of 111.0%. Disney-licensed
product sales commenced in July 2003 and have increased year over year as the
Company expands this product range.


Legal services increased $57,721 from $10,984 in the nine months in the prior
year to $68,705 in the nine months ended December 31, 2004. The increase is
primarily attributed to the Company's exploration of its options related to
capital restructuring and auditing compliance in advance of mandatory compliance
requirements under Section 404 of the Sarbanes-Oxley Act of 2002 scheduled to
impact the Company for the fiscal year ending March 31, 2006. The Company had
initially foreseen that compliance with Section 404 would take effect for the
fiscal year ended March 31, 2006. As of March 1, 2005, compliance for small
business filers was delayed until the Company's fiscal year ending March 31,
2007.

Outside services increased $34,108 from the nine months ended December 31, 2003
to December 31, 2004, from $37,012 to $71,120 respectively. This is primarily
attributed to engagement fees related to the Company's investment banker
retained to review strategic options for the Company.

Offsetting these increases, catalog expense decreased $216,704 from $314,770 in
the prior year to $98,066 in the current year. Again, the Company did not mail a
direct to consumer catalog this fall as a result of the disappointing results
from the prior year's mailing.

Provision for bad debts decreased in the current year from $100,842 in the prior
year to $26,187 in the current year, a decrease of $74,655. The current year's
allowance for uncollectible accounts was satisfactory for the amount of aged
receivables outstanding. As a result, the expense decreased for the year.

Depreciation expense decreased $34,457 versus the prior year, from $61,706 to
$27,249 in the nine months ended December 31, 2004. Depreciation expense for the
prior year was higher as a result of the retirement of certain assets that were
no longer being utilized.

                                       19
<PAGE>


INCOME/LOSS FROM OPERATIONS. For the quarter ended December 31, 2004, income
from operations was $147,298 versus a loss of $171,078 for the prior year's
quarter. This represents an increase of $318,376, which is primarily
attributable to higher revenues and a lower cost of sales.

For the nine month period ended December 31, 2004, the Company's income from
operations was $162,946 versus a loss of $786,507 for the same period the prior
year. This is an increase of $949,453.



INTEREST EXPENSE. The Company's interest expense (net) for the quarter ended
December 31, 2004 was $40,260, versus the comparable period a year ago expense
of $32,687. The $7,573 difference was attributable to a higher loan balance on
the Company's revolving credit line and increased interest rates.

For the nine month period ended December 31, 2004 interest expense was $114,245
versus an expense of $12,387 for the same period a year ago. Interest payments
coupled with rising interest rates on the Company's revolving credit line and
term loans accounted for this year's expense. In the prior year period a
one-time gain in interest income from customer accounts related to a recovery of
bad debt partially offset the Company's interest expense.


ROYALTY INCOME. The Company's non-operating sub-license royalty income (net) for
the quarter ended December 31, 2004 was $16,885 versus the prior quarter's
income of $27,847, a decrease of 39.4%.

For the nine month period ended December 31, 2004 the Company's non-operating
sub-license royalty income (net) was $19,569 versus income of $38,369 for the
prior year's nine month period.


OTHER INCOME/EXPENSE. The Company's other income (net) for the quarter ended
December 31, 2004 was $72,297 versus an expense of $350 for the quarter ended
December 31, 2003. The increased income for the current year is partially
attributable to a one-time gain related to the reduction of an obligation due to
non-performance. Gains from foreign currency exchange also contributed to the
Company's income in the current period versus the prior year.

The Company's other income (net) for the nine months ended December 31, 2004 was
$79,865 versus an expense of $905 for the quarter ended December 31, 2003. The
income for the current year is partially attributable to a one-time gain related
to the recoveries of bad debts. The increased income for the current year is
again partially attributable to a one-time gain related to the reduction of an
obligation due to non-performance.


INCOME/LOSS BEFORE MINORITY INTEREST. The Company's income before minority
interest for the quarter ended December 31, 2004 was $196,220 compared to a loss
of $176,268 for the quarter ended December 31, 2003.

                                       20
<PAGE>


The Company's income before minority interest for the nine months ended December
31, 2004 was $148,135 compared to a loss of $761,430 for the year to date period
ended December 31, 2003.


NET INCOME/LOSS. As a result of the items discussed above, the Company's net
income for the quarter ended December 31, 2004 was $183,855 compared to a net
loss of $183,028 for the comparable prior quarter. Net margin for the current
quarter was 8.1%.


The Company's net income for the nine months ended December 31, 2004 was
$136,322 compared to a net loss of $767,663 for the comparable period the prior
year. Net margin for the current year was 2.7%.



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

The Company is not aware of any recent accounting standards issued, but not yet
required to be adopted by the Company, that would have a material effect on its
financial position or results of operations.


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.

                                       21
<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.


Liquidity and Capital Resources

The Company continues to suffer from a deficiency in net assets and is
experiencing a deteriorating working capital position. At December 31, 2003 the
Company had a deficiency of net assets of $889,669 versus a deficiency at
December 31, 2004 of $1,573,695. Working capital has deteriorated $1,899,466
from $331,556 in December 31, 2003 to a deficiency of $1,567,910 at December 31,
2004. This is partially a result of shareholder loans that were due in January
2005 that are currently being renegotiated.

Accounts payable and accrued expenses increased $328,674 versus the prior year
from $1,076,819 to $1,405,493 at December 31, 2004. This is primarily a result
of the higher level of sales in the current period. Royalties and commissions
payable increased $301,232 year over year from $345,679 at December 31, 2003 to
$646,911 at December 31, 2004. Disney-licensed sales account for the majority of
this increase. Accounts receivable decreased from $1,825,052 at December 31,
2003 to $1,807,563 at December 31, 2004, a decrease of $17,489.

The Company has requested an increase in the credit line from its bank, which is
currently under consideration. As of March 28, 2005, the balance on the
Company's revolving credit line was $73,000.

As of April 6, 2005 the Company's backlog was approximately $2,247,000.

In order to sustain ongoing profitability, additional working capital is
required especially to fund new growth opportunities and publication
initiatives. It is believed a strategic investor would allow the Company to
better position itself for growth by providing working capital for future
publishing initiatives and even a strategic acquisition. In that regard, the
Company continues its relationship with the Delta Capital Group, LLC which
provides assistance in seeking and securing financing while exploring the
Company's strategic options.

As a result of the disappointing results reported in the March 31, 2004 Annual
report filed on Form 10-KSB, the Company believes that obtaining approval from
Disney for the renewal of its license whose current term expires on May 31, 2005
may be problematic without a cash infusion or capital restructuring. For the
quarter ended December 31, 2004, Disney-licensed product sales accounted for
81.3% of the Company's total sales, versus 59.2% of the Company's sales in the
prior year. For the nine month period ended December 31, 2004, Disney-licensed

                                       22
<PAGE>

product sales accounted for 72.0% of the Company's total sales, versus 46.2% of
sales for the prior year. Failure to renew the license would materially affect
the Company's continued viability. The Company continues to explore its options
in its negotiations with Disney. Additional financial guarantees would place a
substantial burden on the Company's working capital and thus further limit any
new publishing initiatives that are necessary to maintain growth.

Expected cash flows from operations supplemented by available lending sources
are forecast to be adequate in covering the Company's operations. However, the
Company continues to consider outside funding options in the event that cash
flow does not materialize in line with current expectations or if the renewal of
the Disney license requires additional financial guarantees. Although the
Company does not expect to run out of available funds in the coming fiscal year,
it does expect that the need for working capital will eclipse the limits of its
revolving credit facility if revenue growth is to be maintained and/or if
additional financial guarantees are imposed by Disney in conjunction with the
license renewal.

On March 4, 2004, the Company announced that it had executed a new Memorandum of
Understanding ("MOU") with Chart Studio, providing for a further restructuring
of ownership of Studio Mouse, and for share ownership by Chart Studio in Trudy
(please refer to the Company's Annual Report on form 10-QSB of March 31, 2004
for the full MOU). Under the terms of the MOU, Chart Studio had to obtain
Reserve Bank of South Africa approval by December 31, 2004 and satisfy several
other obligations in order to receive equity ownership (up to 33%) in Trudy. The
MOU further provided that if the necessary Reserve Bank approval was not
received by December 31, 2004, then Trudy would be obligated to pay Chart Studio
no later than August 20, 2007 a minimum of $444,852. As of December 31, 2004,
the Company had recorded $345,033 of this amount. Payment of such minimum amount
was conditioned upon the fulfillment of several obligations by Chart Studio
providing consideration to abet its business relationship, including but not
limited to, issuing corporate guarantees for 30% of Trudy's bank credit line of
$750,000 and term loans of $300,000, respectively. These guarantees as well as
other requirements outlined in the MOU were not provided by Chart Studio.

In the opinion of Management, there were material breaches by Chart Studio of
its obligations under the MOU. The obligations so breached represented a
material and substantial part of the consideration for Trudy's agreement to
provide Chart Studio with up to 33% of the Common Stock of Trudy or,
alternatively, to pay to Chart Studio a minimum of $444,852 by August 20, 2007.
In view of such material breaches, it is Management's opinion that Trudy has no
further obligation under the MOU although Chart Studio does not currently agree
with the Company's position. It is anticipated that an amicable solution will be
reached as both parties are in discussion.

Subsequent to June 30, 2004, the chief executive officer entered into an
agreement with the Board of Directors in which his salary was reduced to $1 per
year. For the quarter ended December 31, 2004, the Company recognized the
difference between the fair market value of his services and the accepted salary
of $1 per year. This was an expense of $26,500 and was recorded as a
contribution to capital.

                                       23
<PAGE>

The Company's ultimate ability to continue as a going concern is dependent upon
the continued market acceptance of its products, the ability of its vendors to
supply products in a timely manner, an increase in revenues coupled with
continuing licensing support from its primary licensors, Disney, the Smithsonian
Institution, and WGBH Educational Foundation, as well as positive cash flow. The
Company believes that continued improvement in its sales and its ability to
borrow money from its bank will be sufficient to allow the Company to continue
in operation.

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, 2004 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

The Company is not a party to any material legal proceedings.

Item 2.    Changes in Securities

None

                                       24
<PAGE>

Item 3.    Defaults upon Senior Securities

None

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)).

                                       25
<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: July 19, 2005                   By: /s/ WILLIAM W. BURNHAM
                                          -------------------------------------
                                           William W. Burnham,
                                           Chairman and Chief Executive Officer



                                       26