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 June 30, 2003

                           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
                                 August 27, 2003
                Common Stock, $.001 par value: 442,460,249 shares
<PAGE>
                                                                           PAGE
INDEX                                                                     NUMBER

            PART I.   FINANCIAL INFORMATION

Item 1. Financial Statements

    Consolidated Balance Sheet - June 30, 2003 (unaudited)                     3

    Consolidated Statements of Operations (unaudited) for the three months
            ended June 30, 2003 and June 30, 2002                              4

    Consolidated Statements of Cash Flows (unaudited) for the three months
            ended June 30, 2003 and June 30, 2002                              5

    Consolidated Statement of Shareholders' Deficit (unaudited) from
            April 1, 2003 through June 30, 2003                                6

    Notes to Financial Statements (unaudited)                                  7

Item 2. Management's Discussion and Analysis                                  14


            PART II.  OTHER INFORMATION

Item 1. Legal Proceedings                                                     19

Item 2. Changes in Securities                                                 19

Item 3. Defaults upon Senior Securities                                       19

Item 4. Submission of Matters to a Vote of Security Holders                   19

Item 5. Other Information                                                     19

Item 6. Exhibits and Reports on Form 8-K                                      19
<PAGE>

                        Trudy Corporation and Subsidiary
                           Consolidated Balance Sheet

                                                                 June 30, 2003
                                                                --------------
                                                                    (Unaudited)
Assets

Current assets:

Cash and cash equivalents                                       $      171,603
Accounts receivable, net                                               839,885
Inventories                                                          1,092,473
Prepaid expenses and other current assets                              193,322
                                                                --------------
    Total current assets                                             2,297,283

Goodwill                                                               263,897
Equipment, net                                                          93,340
Royalty advances, net                                                   56,141
Organization costs, net                                                  3,253
Pre-publication costs and other assets, net                            448,173
                                                                --------------
    Total assets                                                $    3,162,087
                                                                ==============
Liabilities and shareholders' equity
Current liabilities:
Notes payable - shareholder/officer and related party           $      967,434
Accounts payable and accrued expenses                                  517,901
Royalties and commissions payable                                      131,089
                                                                --------------
    Total current liabilities                                        1,616,424

Long-term liabilities:
  Loan from The Chart Studio (Pty) Ltd.                                308,429
  Notes payable to related parties                                   1,635,350
  Royalties payable                                                     30,741
                                                                --------------
    Total long-term liabilities                                      1,974,520

                                                                --------------
    Total liabilities                                                3,590,944

Minority interest                                                       15,460

Shareholders' equity:
  Common stock: $.0001 par value:                                       44,246
  Authorized shares - 850,000,000
Issued and outstanding shares - 442,460,249
Additional paid-in capital                                           5,020,167
Accumulated equity / (deficit)                                      (5,508,730)
                                                                --------------
    Total shareholders' equity                                        (444,317)
                                                                --------------
    Total liabilities and shareholders' equity                  $    3,162,087
                                                                ==============


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

                                        3
<PAGE>

                        Trudy Corporation and Subsidiary
                      Consolidated Statement of Operations


                                            Three Month Period ended June 30,
                                                2003              2002
                                            -------------     -------------
                                             (Unaudited)       (Unaudited)

Net Sales                                   $     709,734     $     595,204

Cost of Sales                                     457,334           347,280
                                            -------------     -------------
Gross Profit                                      252,400           247,924

Operating expenses:

  Selling, general and administrative             468,161           401,449
  Depreciation and amortization                    12,910            14,167
                                            -------------     -------------

Loss from operations                             (228,671)         (167,692)

Other income (expense)
  Interest, net                                   (27,453)          (11,659)
  Royalties, net                                    7,943            (7,921)
  Other income (expense)                               62               271
  Minority interest income                         (1,099)            2,521
                                            -------------     -------------
Net (loss) income                           $    (249,218)    $    (184,480)
                                            =============     =============

Net loss per share:
Basic and diluted                           $          --     $          --
                                            =============     =============

Weighted average shares:

Basic and diluted                             442,460,249       442,460,249
                                            =============     =============

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

                                        4
<PAGE>
<TABLE>
<CAPTION>
                                    Trudy Corporation and Subsidiary
                                  Consolidated Statements of Cash Flows


                                                                  For the Three Months Ended June 30,
                                                                  ----------------------------------
                                                                      2003                 2002
                                                                  -------------        -------------
                                                                   (Unaudited)      (Unaudited)
<S>                                                               <C>                  <C>
Cash Flows From Operating Activities
Net loss                                                          $    (249,218)       $    (184,480)
Adjustments to reconcile net loss to net cash used in operating
activities:
  Depreciation                                                           12,640               14,167
  Amortization of pre-publication costs                                  14,238                7,225
  Amortization of organization costs                                        271                   --
  Provision for losses on accounts receivable                          (190,000)                  --
  Provision for slow moving inventory                                    24,000               15,000
  Income from joint venture                                                  --               (2,521)
  Minority interest                                                       1,099                   --
  Imputed interest on long-term loan                                      5,712                   --

Changes in operating assets and liabilities:
  Decrease (Increase) in accounts receivable                            789,549              423,577
  Decrease (Increase) in advances to Studio Mouse LLC                        --               (4,233)
  Decrease (Increase) in inventories                                    103,901              (37,063)
  Decrease in prepaid expenses and other current assets                  68,319               65,526
  (Decrease) in accounts payable and accrued expenses                  (596,295)            (149,353)
  (Decrease) in royalties and commissions payable                       (42,804)             (22,053)
                                                                  -------------        -------------
Net cash (used) by operating activities                                 (58,588)             125,792

Investing activities:
  Purchases of property and equipment                                    (5,358)             (10,070)
  Pre-publication and royalty advances                                 (121,318)             (24,227)
                                                                  -------------        -------------
Net cash used by investing activities                                  (126,676)             (34,297)

Financing activities:
  Proceeds from short-term debt                                                              (92,468)
  Contibuted compensation                                                23,750                   --
  Repayments to related parties                                         (27,420)                  --
  Proceeds from related parties                                          15,353                   --
                                                                  -------------        -------------
Net cash provided (used) by financing activities                         11,683              (92,468)
                                                                  -------------        -------------

Net (decrease) in cash and cash equivalents                            (173,580)                (973)
Cash and cash equivalents at beginning of period                        345,182                2,774
                                                                  -------------        -------------
Cash and cash equivalents at end of period                        $     171,602        $       1,801
                                                                  =============        =============

Cash paid for interest                                            $      10,103        $      11,306
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
                                         Statement of Shareholders' (Deficit) Equity
                                          For the Three Months Ended June 30, 2003

                                         Common Stock
                             -----------------------------------   Additional Paid-in      Accumulated      Total Shareholders'
                                  Shares              Amount             Capital             Deficit         (Deficit) Equity
                             ---------------     ---------------     ---------------     ---------------     ---------------
<S>                             <C>                      <C>              <C>                <C>                   <C>
Balance at March 31, 2003        442,460,249              44,246           4,996,417          (5,259,512)           (218,849)

Contributed compensation                  --                  --              23,750                  --              23,750

Net loss (unaudited)                      --                  --                  --            (249,218)           (249,218)

                             ---------------     ---------------     ---------------     ---------------     ---------------
Balance at June 30, 2003         442,460,249              44,246           5,020,167          (5,508,730)           (444,317)
                             ===============     ===============     ===============     ===============     ===============

</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 Subsidiary ("the Company") designs, manufactures and
markets plush stuffed animals and publishes children's books and audiocassettes
for sale to both retail and wholesale customers, both domestically and
internationally. The Company's product is sold under the trade names of both
Soundprints and Studio Mouse, LLC ("the Subsidiary").

During the quarter, Studio Mouse LLC, signed a license with Disney Publishing
Worldwide to publish certain novelty book and audio CD formats for distribution
within North America. The material to be published initially will be targeted to
a preschool audience and contain early childhood developmental and educational
content utilizing popular Disney characters. The new titles will be available in
North America in the Fall of 2003.

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 months ended
June 30, 2003 are not necessarily indicative of the results that may be expected
for the year ending March 31, 2004. 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, 2003.

The consolidated financial statements reflect the results of the Company's
operating division Soundprints and its subsidiary, Studio Mouse, LLC. Trudy
Corporation previously held a 45% ownership interest in Studio Mouse, LLC and
accounted for such ownership using the equity method. However, due to a change
in ownership of Studio Mouse, LLC effective August 20, 2002, the results of
Studio Mouse, LLC are subsequently accounted for in consolidation. All material
intercompany transactions have been eliminated. The Company's financial
statements for the three months ended June 30, 2002 do not reflect the balances
of Studio Mouse, LLC.

While the Company has incurred operating losses in the past four years and has a
deficiency in net assets, working capital is positive at June 30, 2003. While
the company experienced a significant decline in revenues from $2,476,252 in
2000 to $1,447,931 in 2001, 2002 revenues increased to $3,392,808 and 2003
revenues increased to $4,405,006. The Company has been funded by a principal
shareholder - officer and another shareholder and had been funded in 2000 by
Futech Interactive Products, Inc.

The Company's ultimate ability to continue as a going concern is dependent upon
an increase in revenues, upon continuing licensing support from the Smithsonian

                                        7
<PAGE>

Institution and from Disney Publishing Worldwide, from positive cash flow and
from the receipt of an asset-based line of credit (see note 7, Subsequent
Events).


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 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 a maturity of three
months or less when purchased to be cash equivalents.

Accounts Receivable

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.

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.

                                        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 approximates 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 capitalized and amortized over a three year period
using the sum-of-years digits method.

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. Management believes that no impairment loss has
occurred.

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. As the products are shipped
from the Soundprints division are accompanied with 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," of SFAS 48, 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, as either licensee or licensor, from or
to, another party. The associated income and expense are recorded in a similar
manner as royalties.

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
or financial statement purposes but will be deductible 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 corporation, it is not subject to corporation income taxes.
However, its shareholders 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 by dividing net income/loss by 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 using the if-converted
method. Any dilution caused by the assumed exercise of stock options would not
have an effect on earnings per share in either fiscal year 2004 or 2003.

                                       10
<PAGE>

Comprehensive Loss

As of April 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income" (Statement 130). Statement 130 establishes new rules for the reporting
and display of comprehensive income and its components. Comprehensive (loss)
income for the Company is the same as net (loss) income for all periods
presented.

Segments of an Enterprise and Related Information

Effective April 1, 1998, the Company 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.

New Accounting Standards

In August 1999, the SEC issued SAB No. 99 "Materiality". SAB 99 provides that
the exclusive reliance on certain quantitative benchmarks to assess materiality
in preparing financial statements is inappropriate; misstatements are not
immaterial simply because they fall beneath a numerical threshold. Management
believes the Company is in compliance with SAB 99.

In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations." SFAS 141 applies prospectively to all business
combinations initiated after June 30, 2001 and to all business combinations
accounted for using the purchase method for which the date of acquisition is
July 1, 2001, or later. This statement requires all business combinations to be
accounted for using one method, the purchase method. The adoption of SFAS No.
141 is expected to have a significant impact on the Company's financial
statements.

In June 2001, the Financial Accounting Standards Board issued SFAS No. 142,
"Goodwill & other Intangible Assets." According to this statement, goodwill and
other intangible assets acquired after June 30, 2001 are no longer amortized.
Instead, such assets are tested for impairment. The adoption of SFAS No. 142 may
have a significant impact on the Company's financial statements.

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The standard requires entities to record the fair value of
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
143 is not expected to have a material impact on the Company's financial
statements.

                                       11
<PAGE>

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 replaces SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of" and the accounting and reporting provisions of Accounting Principles Board
Opinion No. 30, "Reporting the Results of Operations-Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions", for the disposal of a "segment of a
business" (as previously defined in the Opinion). SFAS No. 144 requires that
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell, whether reported in continuing operations or in discontinued
operations. Therefore, discontinued operations will no longer be measured at net
realizable value or include amounts for operating losses that have not yet
occurred. SFAS No. 144 also broadens the reporting of discontinued operations to
include all components of an entity with operations that can be distinguished
from the rest of the entity and that will be eliminated from the ongoing
operations of the entity in a disposal transaction. The provisions of SFAS No.
144 are effective for financial statements issued for fiscal years beginning
after December 15, 2001. The adoption of SFAS 144 is not expected to have a
material impact on the Company's financial statements.

In April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS Statements No.
4, 44, and 64, Amendment of SFAS No. 13 and Technical Corrections". SFAS 145
updates, clarifies and simplifies existing accounting pronouncements by
rescinding Statement 4, which required all gains and losses from extinguishments
of debt to be aggregated and, if material, classified as an extraordinary item,
net of related tax effect. As a result, the criteria in Opinion 30 will now be
used to classify those gains and losses. Additionally, the Statement requires
that certain lease modifications that have economic effects similar to
sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. The Company has adopted the provisions of SFAS No.
145 as of July 1, 2002. The adoption of SFAS No. 145 did not have any impact on
the Company's consolidated financial statements.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities". SFAS 146 will spread out the reporting of
expenses related to restructurings initiated after 2002, because commitment to a
plan to exit an activity or dispose of long-lived assets will no longer be
enough to record a liability for the anticipated costs. Instead, companies will
record exit and disposal costs when they are "incurred" and can be measured at
fair value, and they will subsequently adjust the recorded liability for changes
in estimated cash flows. The Company is required to adopt the provisions of SFAS
146 as of January 1, 2003. The Company does not believe that the adoption of
this statement will have any impact on the Company's consolidated financial
statements as no planned restructuring charges currently exist.

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.

Advertising expense for the quarter ended June 30, 2003 was $9,000 versus no
advertising expense for the prior year comparable quarter.

                                       12
<PAGE>

3.  Inventories

Inventories consist of the following:


      Raw Materials           $    39,748
      Finished Goods            1,052,725
                              -----------
      Inventory Value         $ 1,092,473
                              ===========


4.   Goodwill

As a result in the change of ownership of Studio Mouse, LLC as of August 20,
2002, goodwill was recognized in the amount of $263,897. In accordance with FAS
No. 142, "Goodwill and Other Intangible Assets," the Company will not amortize
goodwill, but will instead evaluate it for impairment on a periodic basis. As of
June 30, 2003, the Company's management had determined that no such impairment
had occurred.


5. Income Taxes

The Company has net operating loss carryforwards, on a fiscal year basis,
approximating $4,723,000, which expire as follows:

     2004                      $    27,000
     2005                          157,000
     2006                        1,246,000
     2007                          324,000
     2008                          258,000
     There after                 2,480,000
                               -----------
                               $ 4,723,000
                               ===========

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


7. Subsequent Events

On July 16, 2003 the Company received a letter from Westport National Bank,
Westport, Connecticut, outlining a proposal offering the Company an asset-based
revolving line of credit and term loan. Discussions are proceeding and it is
anticipated that such a credit line will be in effect by September, 2003.

                                       13
<PAGE>

Item 2.               MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

NET SALES. The Company's net sales for the quarter ended June 30, 2003 were
$709,734 compared to $595,204 for the prior year's quarter ended June 30, 2002,
an increase of $114,531 or 19.2%. Of this figure $501,725 in net sales are
attributed to the Company's Soundprints division, compared to Soundprints net
sales of $595,204 for the prior year's quarter ended June 30, 2002, a decrease
of $93,479 or 15.7%. For Studio Mouse, LLC, the Company's subsidiary, net sales
for the quarter ended June 30, 2003 were $224,869.

For Soundprints, the decrease in net sales for the quarter ended June 30, 2003
was primarily a result of a change in timing of promotional sales to the book
retail division as well as a modest decrease in the toy and gift and museums,
zoos and aquariums channels. Additionally, through the Company's subsidiary,
Studio Mouse, LLC, the Company has made a larger effort to gain market share in
the mass market division. As a result of this effort and increased
international, library distributor and book fair sales, the Company's sales for
the quarter ended June 30, 2003 increased 19.2%

Soundprints' direct mail catalog to consumers, schools and libraries was
restructured for the fall 2002 catalog season. Soundprints mailed 69.3% fewer
catalogs to these divisional customers in a planned effort to creatively
restructure the catalog and mail more strategically to a better-targeted
audience. As a result of this initiative, sales to these customers for the
quarter ended June 30, 2003 decreased by 31.0% to $29,537 versus last year's
comparable quarter sales of $42,787. However, the profitability of the program
increased based upon lower mailing costs and higher response rates.
Additionally, total sales driven by the library edition of the direct mail
catalog mailed to the school and library and educational distributor market
increased 128.5% for the quarter ending June 30, 2003 versus the same quarter in
the prior year from $30,412 to $69,503.

COST OF SALES. The Company's cost of sales for the quarter ended June 30, 2003
increased $110,054 from $347,280 in the prior year quarter to $457,334 in the
current fiscal year, an increase of 31.7%. Soundprints' cost of sales for the
quarter ended June 30, 2003 decreased $46,288 to $300,992 from $347,280 for the
comparable prior year quarter. The decrease in cost of sales was primarily a
result of the $93,479 decrease in net sales. While warehouse and editorial
salary expenses increased versus the prior year quarter, the increase was
primarily offset by a decrease in miscellaneous assembly material expenses.

As a percent of net sales, Soundprints' cost of sales for the quarter ended June
30, 2003 was 60.0% as compared to 58.3% for the comparable quarter a year ago.
On a variable cost of sales basis excluding fixed charges such as packaging,
product development, shipping salaries, amortization of design costs, and
miscellaneous warehouse overhead costs, cost of goods sold decreased from 33.5%
of net sales in the quarter ended June 30, 2002 to 32.1% for the quarter ended
June 30, 2003. The improvement was the result of sales increases to Soundprints'
catalogs and fulfillment divisions, which have a higher gross profit margin.

                                       14
<PAGE>

GROSS PROFIT. For the quarter ended June 30, 2003, the Company's gross profit
increased 1.8% versus the prior year's comparable quarter to $252,400 from
$247,924. Gross margin for the quarter ended June 30, 2003 was 35.6% versus
41.7% for the quarter ended June 30, 2002.

For Soundprints, a 15.7% decrease in net sales for the quarter ended June 30,
2003 resulted in a gross profit of $200,733, a decrease of $47,191 or 19.0%
versus the prior year's comparable quarter. While most of the decrease in gross
profit can be explained by a decrease in sales, Soundprints decreased inventory
for additional inventory obsolescence by $15,000 in the quarter ended June 30,
2002, vs. $24,000 for the quarter ended June, 2003. The gross profit declined
from 41.7% for the prior year quarter, to 40.0% for the current quarter ended
June 30, 2003.

SELLING, GENERAL, AND ADMINISTRATIVE. The Company's selling, general, and
administrative costs increased 16.6% from $401,449 from the prior year quarter
to $468,161 for the quarter ended June 30, 2003.

Soundprints' selling, general, and administrative expenses for the quarter ended
June 30, 2003 increased by $15,502 to $416,951 compared to $401,449 for the
quarter ended June 30, 2003.

Both temporary and medium-term consultant fees attributable to current staffing
requirements and financial audit compliance costs led to an increase of $10,600
in accounting services expenses compared to last year's comparable quarter. Due
to the retention of an investment advisory firm, Soundprints' other outside
service expenses increased $11,000 in the quarter ended June 30, 2003, versus
the prior year's comparable quarter. Furthermore, increased medical and dental
costs due to plan increases and greater employee participation increased medical
and dental costs by 135.9% for the quarter ended June 30, 2003 versus last
year's quarter ended June 30, 2002.

Soundprints' executive travel and entertainment expenditures for the quarter
ended June 30, 2003 declined 39.5% to $7,304 versus last year's comparable
quarter. However, this decrease was offset by a $7,796 increase in Soundprints'
exhibits and shows expenditures for the quarter ended June 30, 2003 versus the
prior year's quarter.

Soundprints' royalty expenses decreased by $16,940 to $18,369 for the quarter
ended June 30, 2003 from $35,309 for the quarter ended June 30, 2002 due to
greater sales of royalty-free products, such as products distributed by
Soundprints on behalf of Studio Mouse. Soundprints' catalog expense for the
quarter ended June 30, 2003 also decreased by 31.74% versus last year's
comparable quarter to $59,913 as a result of a lower-volume fall 2002 direct
mail catalog mailing.

INTEREST INCOME/EXPENSE. The Company's interest expense (net) for the quarter
ended June 30, 2003 was $27,453, an increase of $15,794 over the comparable
prior year quarter. The increase in interest expense for the quarter ended
December 31, 2002 was primarily a result of the reduction in interest income
from customer accounts and a result of increased borrowing.

                                       15
<PAGE>

ROYALTY INCOME/EXPENSE. The Company's royalty income (net) for the quarter ended
June 30, 2003 increased by $15,864 to $7,943 versus a loss of $7,921 for the
comparable period last year.

For the current quarter, Soundprints' royalty income (net) of $23,004 increased
by $30,925 versus the June Quarter, 2002 royalty income of a loss of $7,921.

GAIN/LOSS IN EQUITY INVESTMENT. For the quarter ended June 30, 2003 Soundprints'
operations reflect no gain or loss attributable to its equity investment versus
a gain of $2,521 for the comparable period a year ago as a result of the
Company's change in equity position, which changed the accounting for the
investment.

NET LOSS. As a result of the items discussed above, the Company's net loss for
the quarter ended June 30, 2003 was $249,218 compared to a net loss of $184,480
for the comparable prior year quarter.

For Soundprints, the previously-discussed items result in a loss of $226,676 for
the quarter ended June 30, 2003, versus a loss of $184,480 for the quarter ended
June 30, 2002.

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

The Company believes that any current pronouncements would not have a material
effect on its financial position or results of operations, except for SFAS 141
and SFAS 142, which may impact following quarters.

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 capitalized and amortized over a three-year period
using the sum-of-years digits method.

                                       16
<PAGE>

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.

Inventory

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

Liquidity and Capital Resources
-------------------------------

While the Company's working capital is positive at June 30, 2003, it still
experienced a decrease in cash. An increase in prepublication costs led to a
significant use of cash for investing activities as of June 30, 2003 and
inventories remain high in an effort to service customer requests. The Company
continues to increase its staff in order to support future sales growth to a
level that it anticipates to achieve profitability. While the Company has made
considerable progress since the 2001 recapitalization, it has been difficult to
meet its financial obligations as they become due, barring the receipt of an
asset based line of credit from a commercial lending institution. The Company
did not increase its borrowings for the quarter ended June 30, 2003.

As of July 31, 2003 the Company's backlog was $1,805,000.

During the June Quarter, 2003 the principal shareholder/officer was repaid
$12,000 relating to pre-existing loans.

As the company continues to source products with new vendors in order to lower
its product costs, it has done so at unfavorable credit terms in order to secure
lower pricing for its books and plush.

The Company's ultimate ability to continue as a going concern is dependent upon
an increase in revenues, upon continuing licensing support from the Smithsonian
Institution and from Disney Publishing Worldwide, from positive cash flow and
from the receipt of an asset-based line of credit (see note 7, Subsequent
Events).

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, 2003 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:

                                       17
<PAGE>

* 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.

                                       18
<PAGE>

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

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.


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)).

                                       19
<PAGE>

3g.  The registrant filed a report on Form 8-K, dated April 8, 2002, disclosing
     that The Reserve Bank of South Africa disapproved its application to form a
     joint venture with Trudy Corporation in the name of Studio Mouse LLC, a
     Connecticut Limited Liability company. The application provided for
     ownership of Studio Mouse to be held 45% by Chart Studio, 45% by Trudy
     Corporation and the remaining 10% by employees of Chart Studio and Trudy.

     The press release disclosed that Chart Studio intended to resubmit this
     application, using counsel for RMB Corvest, the investment banking unit of
     RMB Bank, Johannesburg, which is a minority stockholder in Chart Studio.

3h.  The registrant filed a report on Form 8-K, dated May 13, 2002, disclosing
     that Ashley C. Andersen had been elected to its Board of Directors. Ms.
     Andersen is the Publisher of Trudy Corporation and the President of Studio
     Mouse LLC, a joint venture company formed by Trudy Corporation and Chart
     Studio (Pty) Ltd., a privately held South African company.

     After working in the field for several years as an editor, graphic artist
     and art director, Ms. Andersen joined Trudy in March of 2000 as Associate
     Publisher. She was subsequently promoted to Publisher.

3i.  The registrant filed a report on Form 8-K, dated August 30, 2002,
     disclosing the restructuring of the ownership of Studio Mouse, LLC. A
     memorandum of understanding was executed between the Registrant, Studio
     Mouse, LLC, The Chart Studio (Pty) Ltd., and Ashley C. Andersen, president
     of Studio Mouse and a director of the registrant. Under the terms of the
     memorandum of understanding, the registrant increased its ownership of
     Studio Mouse, LLC to 95% from 45%.

     An amendment was subsequently filed to include the financial statements of
     Studio Mouse, LLC.

3j.  The registrant filed a report on Form 8-K, dated September 10, 2002, for
     the purpose of submitting a written certification by the Chief Executive
     Officer and Acting Chief Financial Officer of the Company's Report on Form
     10-QSB for the quarter ended June 30, 2002, pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

3k.  The registrant filed a report on Form 8-K, dated December 23, 2002, for the
     purpose of submitting a written certification by the Chief Executive
     Officer and Acting Chief Financial Officer of the Company's Report on Form
     10-QSB for the quarter ended September 30, 2002, pursuant to Section 906 of
     the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

3l.  The registrant filed a report on Form 8-K, dated June 27, 2003, disclosing
     that on June 25, 2003 its subsidiary, Studio Mouse, LLC, signed a
     publishing license with Disney Publishing Worldwide. The license provides
     for Studio Mouse to publish certain novelty book and audio CD formats for
     distribution within North America. The material to be published initially

                                       20
<PAGE>

     will be targeted to a preschool audience and contain early childhood
     developmental and educational content utilizing popular Disney characters.
     All Studio Mouse books featuring Disney characters will be sold at
     suggested retail prices of US$12.99 and above. The new titles will be
     available in North America in the fall of 2003.

3m.  The registrant filed a report on Form 8-K, dated June 27, 2003, disclosing
     that on June 25, 2003 its subsidiary, Studio Mouse, LLC, signed a
     publishing license with Disney Publishing Worldwide.

                                       21
<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: August 27, 2003         By: /s/ WILLIAM W. BURNHAM
                                  --------------------------------
                                  William W. Burnham,
                                  Chairman and Chief Executive Officer


                                       22
<PAGE>

                                 CERTIFICATIONS

I, WILLIAM W. BURNHAM, certify that:

1.    I have reviewed this quarterly report on Form 10-QSB of Trudy Corporation
      (the "Registrant");

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report.

4.    I am responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Securities Exchange Act of 1934 ("Exchange Act")
      Rules 13a-14 and 15d-14) for the Registrant and I have:


      (i)   designed such disclosure controls and procedures to ensure that
            material information relating to the Registrant, including its
            consolidated subsidiaries, is made known to me by others within
            those entities, particularly during the period in which this
            quarterly report is being prepared;

      (ii)  evaluated the effectiveness of the Registrant's disclosure controls
            and procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      (iii) presented in this quarterly report my conclusions about the
            effectiveness of the disclosure controls and procedures based on my
            evaluation as of the Evaluation Date;

5.    I have disclosed, based on my most recent evaluation, to the Registrant's
      auditors and the audit committee of registrant's board of directors:


      (i)   all significant deficiencies in the design or operation of internal
            controls which could adversely affect the Registrant's ability to
            record, process, summarize and report financial data and have
            identified for the Registrant's auditors any material weaknesses in
            internal controls; and

      (ii)  any fraud, whether or not material, that involves management or
            other employees who have a significant role in the Registrant's
            internal controls; and

6.    I have indicated in this quarterly report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of our most
      recent evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.


Date: August 27, 2003


                                    /s/ WILLIAM W. BURNHAM
                                    ------------------------------------
                                    William W. Burnham,
                                    Principal Executive Officer


                                       23
<PAGE>
I, WILLIAM W. BURNHAM, certify that:

1.    I have reviewed this quarterly report on Form 10-QSB of Trudy Corporation
      (the "Registrant");

2.    Based on my knowledge, this quarterly report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the circumstances under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my knowledge, the financial statements, and other financial
      information included in this quarterly report, fairly present in all
      material respects the financial condition, results of operations and cash
      flows of the Registrant as of, and for, the periods presented in this
      quarterly report.

4.    I am responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Securities Exchange Act of 1934 ("Exchange Act")
      Rules 13a-14 and 15d-14) for the Registrant and I have:

      (i)     designed such disclosure controls and procedures to ensure that
              material information relating to the Registrant, including its
              consolidated subsidiaries, is made known to me by others within
              those entities, particularly during the period in which this
              quarterly report is being prepared;

      (ii)    evaluated the effectiveness of the Registrant's disclosure
              controls and procedures as of a date within 90 days prior to the
              filing date of this quarterly report (the "Evaluation Date"); and

      (iii)   presented in this quarterly report my conclusions about the
              effectiveness of the disclosure controls and procedures based on
              my evaluation as of the Evaluation Date;

5.    I have disclosed, based on my most recent evaluation, to the Registrant's
      auditors and the audit committee of registrant's board of directors:

      (i)     all significant deficiencies in the design or operation of
              internal controls which could adversely affect the Registrant's
              ability to record, process, summarize and report financial data
              and have identified for the Registrant's auditors any material
              weaknesses in internal controls; and

      (ii)    any fraud, whether or not material, that involves management or
              other employees who have a significant role in the Registrant's
              internal controls; and

6.    I have indicated in this quarterly report whether or not there were
      significant changes in internal controls or in other factors that could
      significantly affect internal controls subsequent to the date of our most
      recent evaluation, including any corrective actions with regard to
      significant deficiencies and material weaknesses.


Date: August 27, 2003


                                    /s/ WILLIAM W. BURNHAM
                                    ----------------------------------
                                    William W. Burnham,
                                    Acting Principal Financial Officer


                                       24