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 September 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
                                December 16, 2003
                Common Stock, $.001 par value: 442,460,249 shares

<PAGE>

<TABLE>
<CAPTION>
INDEX                                                                           PAGE NUMBER
-----                                                                           -----------

                  PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements
<S>                                                                                 <C>
      Consolidated Balance Sheet - September 30, 2003 (unaudited)                    3

      Consolidated Statements of Operations (unaudited) for the six months
                  ended September 30, 2003 and September 30, 2002                    4
      Consolidated Statements of Cash Flows (unaudited) for the six months
                  ended September 30, 2003 and September 30, 2002                    5

      Consolidated Statement of Shareholders' Deficit (unaudited) from
                  April 1, 2003 through September 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                                                           20

Item 2. Changes in Securities                                                       20

Item 3. Defaults upon Senior Securities                                             20

Item 4. Submission of Matters to a Vote of Security Holders                         20

Item 5. Other Information                                                           20

Item 6. Exhibits and Reports on Form 8-K                                            20
</TABLE>

                                        2
<PAGE>

                        Trudy Corporation and Subsidiary
                           Consolidated Balance Sheet

                                                            September 30, 2003
                                                            ------------------
                                                                (Unaudited)

Assets
Current assets:
Cash and cash equivalents                                   $          108,498
Accounts receivable, net                                             1,188,462
Inventories                                                          1,216,711
Prepaid expenses and other current assets                              296,045
                                                            ------------------
Total current assets                                                 2,809,716

Goodwill                                                               263,897
Equipment, net                                                          66,864
Royalty advances, net                                                   69,430
Organization costs, net                                                  2,982
Pre-publication costs and other assets, net                            382,177
                                                            ------------------
Total assets                                                $        3,595,066
                                                            ==================

Liabilities and shareholders' deficiency
Current liabilities:
Notes payable - shareholder / officer and related parties   $        1,214,824
Accounts payable and accrued expenses                                  959,363
Royalties and commissions payable                                      200,375
Due to The Chart Studio (Pty) Ltd.                                      10,950
                                                            ------------------
Total current liabilities                                            2,385,512

Long-term liabilities:
Due to The Chart Studio (Pty) Ltd.                                     314,248
Notes payable - shareholder / officer and related parties            1,617,084
Royalties payable                                                       15,371
                                                            ------------------
                                                                     1,946,703

                                                            ------------------
Total liabilities                                                    4,332,215

Minority interest                                                       13,834

Commitments and Contingencies

Shareholders' deficiency:
Common stock: $.0001 par value
850,000,000 shares authorized
442,460,249 shares issued and outstanding                               44,246
Additional paid-in capital                                           5,048,918
Accumulated deficit                                                 (5,844,147)
                                                            ------------------
Total shareholders' deficiency                                        (750,983)
                                                            ------------------
Total liabilities and shareholders' deficiency              $        3,595,066
                                                            ==================

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 and Subsidiary
                                    Consolidated Statement of Operations


                                                Three Month Period                   Six Month Period
                                                Ended September 30,                 Ended September 30,
                                         --------------------------------    --------------------------------
                                              2003              2002              2003              2002
                                         --------------    --------------    --------------    --------------
                                           (unaudited)       (unaudited)       (unaudited)       (unaudited)

<S>                                      <C>               <C>               <C>               <C>
Net Sales                                $      995,186    $      963,934    $    1,704,920    $    1,559,138

Cost of Sales                                   689,541           772,884         1,146,875         1,120,164
                                         --------------    --------------    --------------    --------------

Gross Profit                                    305,645           191,050           558,045           438,974

Operating expenses:
   Selling, general and administrative          656,280           428,449         1,124,441           829,898
   Depreciation and amortization                 36,123            14,966            49,033            29,133
                                         --------------    --------------    --------------    --------------

Loss from operations                           (386,758)         (252,365)         (615,429)         (420,057)

Other income (expense)
   Interest, net                                 47,753           (30,714)           20,300           (42,373)
   Royalties, net                                 2,579           (11,154)           10,522           (19,075)
   Other income (expense)                          (617)            4,740              (555)            5,011
   Loss in equity investment                         --            (2,521)               --                --
                                         --------------    --------------    --------------    --------------
Net loss before minority interest              (337,043)         (292,014)         (585,162)         (476,494)

   Minority interest                              1,626            (2,420)              527            (2,420)
                                         --------------    --------------    --------------    --------------
Net loss                                 $     (335,417)   $     (294,434)   $     (584,635)   $     (478,914)
                                         ==============    ==============    ==============    ==============

Net loss per share:
   Basic and diluted                     $        (0.00)   $        (0.00)   $        (0.00)   $        (0.00)
                                         ==============    ==============    ==============    ==============

Weighted avereage shares:
   Basic and diluted                        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>
                                      Trudy Corporation and Subsidiary
                                    Consolidated Statements of Cash Flows


                                                                      For the Six Months Ended September 30,
                                                                      --------------------------------------
                                                                           2003                    2002
                                                                      --------------          --------------
                                                                        (Unaudited)             (Unaudited)

<S>                                                                   <C>                     <C>
Cash Flows From Operating Activities
Net loss                                                              $     (584,635)         $     (478,914)
Adjustments to reconcile net loss to net cash used in operating
activities:
   Depreciation                                                               48,491                  29,133
   Amortization of pre-publication costs                                      27,506                  16,246
   Amortization of organization costs                                            542                     124
   Provision for losses on accounts receivable                              (153,500)                     --
   Provision for slow moving inventory                                        18,000                  70,662
   Minority interest                                                            (527)                     --
   Contributed compensation                                                   52,501                      --
   Imputed interest on long-term loan                                         11,531                      --

Changes in operating assets and liabilities:
   Decrease in accounts receivable                                           404,473                 348,815
   (Increase) in advances to Studio Mouse LLC                                     --                  (6,081)
   (Decrease) in due to Chart Studio (Pty) Ltd.                               (8,025)                 (1,050)
   (Increase) in inventories                                                 (14,337)               (276,457)
   (Increase) in prepaid expenses and other current assets                   (34,404)                (67,780)
   (Decrease) Increase in accounts payable and accrued expenses             (135,858)                284,302
   Increase (Decrease) in royalties and commissions payable                   11,110                 (85,923)
                                                                      --------------          --------------
Net cash used by operating activities                                       (357,132)               (166,923)

Investing activities:
   Purchases of property and equipment                                       (14,732)                 (1,027)
   Pre-publication costs and royalty advances                                (81,877)                (81,833)
                                                                      --------------          --------------
Net cash used by investing activities                                        (96,609)                (82,860)

Financing activities:
   Proceeds from short-term debt                                                  --                (300,000)
   Repayments of short-term debt                                                  --                 (35,381)
   Repayments to related parties                                             (30,913)                     --
   Proceeds from related parties                                             247,970                 690,000
                                                                      --------------          --------------
Net cash provided by financing activities                                    217,057                 354,619
                                                                      --------------          --------------

Net (decrease) increase in cash and cash equivalents                        (236,684)                104,836
Cash and cash equivalents at beginning of period                             345,182                   2,774
                                                                      --------------          --------------
Cash and cash equivalents at end of period                            $      108,498          $      107,610
                                                                      ==============          ==============



Cash paid for interest                                                $       31,357          $       21,472
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>

                               Trudy Corporation
                     Statement of Shareholders' Deficiency
                  For the Six Months Ended September 30, 2003

<TABLE>
<CAPTION>
                                                                                            Total
                                       Common Stock          Additional                  Shareholders'
                                -------------------------     Paid-in     Accumulated     (Deficit)
                                  Shares        Amount        Capital       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)

Contributed compensation                 --            --        28,751            --         28,751

Net loss (unaudited)                     --            --            --      (335,417)      (335,417)

                                -----------   -----------   -----------   -----------    -----------
Balance at September 30, 2003   442,460,249   $    44,246   $ 5,048,918   $(5,844,147)   $  (750,983)
                                ===========   ===========   ===========   ===========    ===========
</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"), designs, manufactures and markets plush stuffed animals and
publishes children's books and audiobooks 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.

During the previous quarter, the Subsidiary signed a non-exclusive license with
Disney Licensed Publishing (hereafter referred to as "Disney"), an imprint of
Disney Children's Book Group, LLC 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 certain Disney characters. The
new titles were available in North America in September 2003.

On August 23, 2002 Trudy announced the restructuring of the ownership of its
Subsidiary. Trudy and Chart Studio Publishing (Pty.) LTD, Gauteng, South Africa,
previously announced their plan for ownership of the venture to be structured
45% by Trudy, 45% by Chart Studio and the remaining 10% by employees of Chart
Studio and Trudy. However, the Reserve Bank of South Africa had disapproved
Chart Studio's second application for equity participation in Studio Mouse.
Accordingly, Trudy and Chart Studio entered into a Memorandum of Understanding
providing for changes in their business relationship as follows:


o    Studio Mouse has become a subsidiary of Trudy, 95% owned by Trudy and 5%
     owned by Ashley C. Andersen, President of Studio Mouse and Publisher of
     Trudy.

o    Chart Studio's contingent equity (see next paragraph) will be converted
     into a long term loan from Chart Studio to Studio Mouse in the amount of
     approximately $420,000.

                                       7
<PAGE>

o    Over the next 24 months, Chart Studio may reapply to the Reserve Bank of
     South Africa for approval of 50% equity ownership in Studio Mouse. Upon
     such approval and satisfaction of certain other conditions, Chart Studio
     may exercise the option to purchase a 50% equity ownership of Studio Mouse,
     in which case the long term loan will be forgiven. Should such approval not
     be forthcoming, or Chart Studio not exercise its option, the long term
     loan, plus any equity appreciation, must be repaid over the 36 months
     following such 24 month period.

o    In order to preserve its potential opportunity for equity participation in
     Studio Mouse, Chart Studio shall provide editorial and art content, graphic
     design services and worldwide marketing/sales support at cost to Studio
     Mouse.

While the Company has incurred operating losses in the past four years and has a
deficiency in net assets, working capital is positive at September 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 again increased to $4,405,006. The Company was funded in 2000 by Futech
Interactive Products, Inc., and has been funded since then by two principal
shareholders, one of whom is the Chief Executive Officer of the Company. The
Company received an asset-based line of credit and a term loan from its bank in
December, 2003. See Note 6 to the Financial Statements.

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 month and six
month periods ended September 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. Trudy Corporation previously
held a 45% ownership interest in the Subsidiary and accounted for such ownership
using the equity method. However, due to the change in ownership of the
Subsidiary, effective August 20, 2002, the results of the Subsidiary are
subsequently accounted for in consolidation. All material intercompany
transactions have been eliminated for reporting purposes. For the sake of
certain relevant discussions, the management discussion and analysis section may
make reference to figures including intercompany transactions only where noted.

The Company's ultimate ability to continue as a going concern is dependent upon
a continued increase in sales of higher margin product, upon continuing positive
market reception to its products, from positive cash flow and the maintenance of
its new asset-based line of credit and term loan.


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.

                                       8
<PAGE>

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 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.

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.

                                       9
<PAGE>

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.

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.

                                       10
<PAGE>

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 is offset against
equity and is 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.

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 for
the Company is the same as net loss 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.

                                       11
<PAGE>

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 and 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 future 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.

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.

                                       12
<PAGE>

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 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 September 30, 2003 was $5,600 versus a
net return of $5,000 on advertising expense for the prior year's comparable
quarter. Advertising expense for the six month period ended September 30, 2003
was $14,600 versus a net return of $5,000 on advertising expense for the prior
year's comparable period.


3.   Inventories

Inventories consist of the following:


         Raw Materials                      $      42,443
         Finished Goods                         1,174,268
                                            -------------
         Inventory Value                    $   1,216,711
                                            =============


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
September 30, 2003, the Company's management had determined that no such
impairment had occurred.

                                       13
<PAGE>

5.   Income Taxes

The Company has net operating loss carryforwards, on a fiscal year basis,
approximating $5,308,000, which expire as follows:

       2004                             $     27,000
       2005                                  157,000
       2006                                1,246,000
       2007                                  324,000
       2008                                  258,000
       There after                         3,296,000
                                        ------------
                                        $  5,308,000
                                        ============


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".


6.   Subsequent Events

In December, 2003, the Company received notice from its bank that an asset-based
revolving credit line, secured by the business assets of Trudy Corporation, was
approved in the amount of $750,000. A $300,000 term loan was also approved,
collateralized by the office and warehouse facility under lease to the Company
and owned by Noreast Management, a related party.

On October 31, 2003 and December 5, 2003, the Company received loans from a
principal shareholder/officer in the amount of $367,000 to cover inventory
purchases for the holiday season. Of this amount, $267,000 of these loans will
be transferred to the credit line.



Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations
---------------------

NET SALES. The Company's gross sales for the quarter ended September 30, 2003
were $1,214,765 compared to gross sales of $1,056,172 for the prior year's
quarter ended September 30, 2002, an increase of 158,593, or 15.0%. Net sales
for the quarter ended September 30, 2003 also increased versus the prior year
quarter from $963,934 to $995,186, an increase of 3.2%. While net sales
increased, there were product returns of $219,579 during the three months ended
September 30, 2003, principally from two sales to the warehouse clubs in the
last quarter of the fiscal year ended March 31, 2003. Factoring in these
returns, net sales for the quarter still rose $31,252 or 3.2%. Product returns
received during the six months ended September 30, 2003 from product sales
during the 12 months ended March 31, 2003 were approximately 9.1% of the Fiscal
2003 revenues, or $402,405.

                                       14
<PAGE>

Over the past two years the Company has made a concerted effort to increase
sales to large retailers, mass merchandisers, and distributors who sell to,
among other locations, the warehouse clubs. While sales to these larger
customers can be substantial, non-proprietary sales to these vendors carry the
right of return. The Company considers returns to be a reasonable cost of doing
business to gain access to a larger buying segment.

The Company's net sales for the six month period ended September 30, 2003
increased $145,782 to $1,704,920 versus $1,559,138 in the prior fiscal year
period, an increase of 9.4%. Gross sales for the six month period ended
September 30, 2003 were $2,107,325 versus $1,737,009 for the prior year's
comparable period, an increase of 21.3%. The increase was largely due to the
initial shipments to support Planograms in Target, Wal-Mart and other major mass
market retailers of new product developed under license from Disney Publishing
Worldwide. Planograms are display shelving in stores that are owned by a
distributor. Often times store management and the store's distributor make
decisions regarding product purchasing and placement in, and product rotation
through the displays.


COST OF SALES. The Company's cost of sales, net of returns, for the quarter
ended September 30, 2003 decreased $83,343 from $772,884 in the prior year
quarter to $689,541 in the current fiscal year, a decrease of 10.8%. As a
percent of net sales, the Company's cost of sales decreased from 80.2% in the
prior year's comparable quarter to 69.3% for the fiscal quarter ended September
30, 2003.

The Company's continued push to reduce direct product costs through improved
product purchasing showed strong results in the current fiscal quarter. However,
the short development time to create new Disney product following the license
execution in June 2003 impacted direct product costs. For example, an estimated
$65,000 in air freight to ship Disney licensed products from the Company's
printing plants in China was necessary to meet August planogram due dates for
major retailers in the United States.

The Disney and other new publishing initiatives required the Company to increase
its editorial expenses. Accordingly, editorial salary costs and subcontracted
design expenses increased 78.6% in the quarter ended September 30, 2003 to
$48,600 from $26,000 from the prior year's comparable period.

The Company's cost of sales for the six-month period ended September 30, 2003
increased $26,711 or 2.4% from $1,120,164 in the comparable prior year period to
$1,146,875 in the current fiscal year. As a percentage of net sales, cost of
sales decreased from 71.8% of net sales for the prior year's comparable six
month period to 67.3% in the current fiscal year to date period. Here again, a
continued push to reduce direct product costs through improved product
purchasing improved the year to date results versus last year's comparable six
month period.

                                       15
<PAGE>

GROSS PROFIT. For the quarter ended September 30, 2003, the Company's gross
profit increased 60.0% versus the prior year's comparable quarter to $305,645
from $191,050. Gross margin for the quarter ended September 30, 2003 was 30.7%
versus 19.8% for the quarter ended September 30, 2002. The increase in gross
profit came as a result of improved toy, book and packaging costs achieved on
orders to major non-returnable specialty retailers and improved purchasing costs
from printers as a result of larger print runs.

For the six month period ended September 30, 2003, gross profit increased
$119,071 to $558,045 in the current year period from $438,974 for the prior
comparable year period, an increase of 27.1%. Gross margin for the six month
period ended September 30, 2003 increased to 32.7% from 28.2% for the six month
period ended September 30, 2002.


SELLING, GENERAL, AND ADMINISTRATIVE. The Company's selling, general, and
administrative costs increased 53.2% from $428,449 from the prior year quarter
to $656,280 for the quarter ended September 30, 2003.

Royalty expenses for the current quarter increased 157% to $130,600 versus
$50,800 for the comparable prior year period. Higher royalty costs associated
with the Disney license and the resulting change in the mix of royalty sales led
to the increase.

The Company's catalog mailing to consumers, schools and libraries increased 100%
in the number of catalogs mailed versus a year ago resulting in an increase in
catalog production and postage expenses of $40,000 or 65.2% in the current
quarter versus the prior year's comparable quarter. Unfortunately early results
suggest the mailing requires further revisions as it is not expected that it
will be profitable. Furthermore, the Company took a $36,500 charge in the
current quarter, a $25,000 increase over the prior year's quarter, to reserve
for potential bad debt. The reserve was increased in order to be conservative
and was due to the anticipated increase in accounts receivable and number of
customers.

After deferring executive compensation increases for approximately one year,
salaries for Company management were adjusted to approximate industry averages.
Raises and bonuses were put into effect or awarded on September 1, 2003
resulting in an increase of $23,000 in executive compensation for the period
ended September 30, 2003 versus the prior year's comparable period. The
Company's new medical and dental plan costs increased approximately 32.9% for
the quarter ended September 30, 2003 versus the prior year's comparable quarter
resulting from an average 10% premium plan increase and added participants in
the plan. Offsetting increases in executive salaries and benefits were decreases
in accounting, legal, and telephone expenses for the quarter ended September 30,
2003. Furthermore, Company expenditures for trade show expenses declined $22,500
to $6,600 in the current fiscal year quarter versus $29,000 in the prior year
quarter ended September 30, 2003.

The Company's selling, general and administrative expenses increased 35.5% or
$294,543 to $1,124,441 for the six months ended September 30, 2003 from $829,898
for the comparable period in 2002. A large majority of the increases for this
six-month period came in the three-month period ended September 30, 2003, and
were attributable to the factors explained above.

                                       16
<PAGE>

INTEREST INCOME/EXPENSE. The Company's interest income and expense (net) for the
quarter ended September 30, 2003 resulted in a gain of $47,753, an increase of
$78,467 over the comparable prior year quarter. The increase in interest income
and expense for the quarter ended September 30, 2003 was primarily a result of a
one-time gain in interest income from customer accounts that was partially
offset by increased borrowing.

For the six months ended September 30, 2003, the Company's interest income and
expense (net) was $20,300, a gain of $62,673 versus the prior year's comparable
period. Again, the increase in interest income and expense for the six months
ended September 30, 2003 versus the prior year's comparable period was primarily
a result of a one-time gain in interest income from customer accounts that was
partially offset by increased borrowing.


ROYALTY INCOME/EXPENSE. The Company's royalty income (net) for the quarter ended
September 30, 2003 increased by $13,733 to $2,579 versus a loss of $11,154 for
the comparable period last year.

The Company's royalty income (net) for the six month period ended September 30,
2003 was $10,522, a gain of approximately $30,000 versus the prior's year's
comparable six-month period.

GAIN/LOSS IN EQUITY INVESTMENT. For the quarter ended September 30, 2003
Soundprints' operations reflect no gain or loss attributable to its equity
investment versus a loss of $2,521 for the comparable three month period a year
ago as a result of the Company's change in equity position, which changed the
accounting for the investment. For the six month period ended September 30, 2003
and September 30, 2002, Soundprints' operations reflect no gain or loss
attributable to its equity investment. The Company's change in equity position,
following the change of ownership of its Subsidiary in August, 2002, 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 September 30, 2003 was $335,417 compared to a net loss of
$294,434 for the comparable prior year quarter.

For the six month period ended September 30, 2003, the Company's net loss was
$584,635 versus a loss of $478,914 for the comparable six month period ended
September 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

                                       17
<PAGE>

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.

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 September 30, 2003, it still
experienced a decrease in cash. Direct mail catalog-related costs as well as an
increase in inventory in anticipation of the holiday season has resulted in a
significant lack of working capital for new investment initiatives. The Company
has evaluated staffing levels and will increase its staff in order to support
future sales growth derived from the Disney licensed products and other
publishing initiatives.

While the Company has made considerable progress since the 2001
recapitalization, it still has had to rely on meeting its financial obligations
through shareholder loans, as a result of the inability to secure a working
capital line before now. In December, 2003, the Company received notice of
approval of such a facility. Accordingly, the Company's borrowings of $250,000
from a principal shareholder/officer for the quarter ended September 30, 2003
will now be part of this facility.

As of December 8, 2003 the Company's backlog was $310,000.

During the September Quarter, 2003 the principal shareholder/officer was repaid
$30,913 relating to pre-existing loans. For the six month period ended September
30, 2003, the principal shareholder/officer was repaid $27,420 relating to
pre-existing loans.

                                       18
<PAGE>

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 believes that cost savings
from such vendors more than offsets restrictive payment terms.

The Company's ultimate ability to continue as a going concern is dependent upon
a continued increase in sales of higher margin product, upon continuing positive
market reception of its products, from positive cash flow and the maintenance of
its new asset-based line of credit and term loan.

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:

* 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.

                                       19
<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.

(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)).


(b)  Reports on Form 8-K
     -------------------

     No reports on Form 8-K were filed during the quarter ended 9/30/03.

                                       20
<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: December 16, 2003                 By: /s/ WILLIAM W. BURNHAM
                                            ------------------------------------
                                            William W. Burnham
                                            Chairman and Chief Executive Officer

                                       21