SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                  FORM 10-QSB/A



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




                       For Quarter Ended December 31, 1998

                           Commission File No. 0-16056



                                TRUDY CORPORATION
                                 353 Main Avenue
                              Norwalk, Conn. 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 year.


                              SHARES OUTSTANDING AT
                                December 31, 1998

                Common Stock, $.0001 par value 331,222,249 shares
<PAGE>

                                TRUDY CORPORATION
                                                                           PAGE
INDEX                                                                     NUMBER
-----                                                                     ------

PART I.  FINANCIAL INFORMATION

Unaudited Balance Sheets - September 30 and December 31, 1998 ............... 2

Unaudited Statements of Income and Deficit - Three months
    and nine months ended December 31, 1997 and December 31, 1998 ........... 3

Unaudited Statements of Cash Flows - Nine months ended
    December 31, 1997 and December 31, 1998 ................................. 4

Notes to Unaudited Financial Statements ..................................... 5

Management's Discussion and Analysis ........................................ 6


PART II.  OTHER INFORMATION ................................................. 7

SIGNATURES .................................................................. 8


<PAGE>

                                TRUDY CORPORATION
                                 BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                December 31,   September 30,
ASSETS                                                             1998            1998
                                                                -----------    -----------
                                                                (Unaudited)     (Unaudited)
Current assets
<S>                                                             <C>            <C>        
      Cash                                                      $    35,553    $    69,999
      Accounts receivable, net of allowance for doubtful
        accounts 53,500 (December 31) 37,299 (September 30)         206,219        744,487
      Inventories                                                 1,603,744      1,718,561
      Due from vendors                                               13,851              0
      Prepaid expenses and other current assets                     139,605        470,555
      Prepaid income taxes                                            7,500         14,826
      Deferred income taxes                                          52,300         59,000
                                                                -----------    -----------
            Total current assets                                  2,058,772      3,077,428

Plant and equipment (net)                                           135,905        143,782

Pre-publication costs and royalty advances                          334,015        315,579
Deferred income taxes                                               325,700        319,000

                                                                -----------    -----------
      Total assets                                              $ 2,854,392    $ 3,855,789
                                                                ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
      Accounts payable and accrued expenses                     $   351,012    $   604,709
      Current portion of long-term debt                              26,387         37,159
      Current portion of notes payable to related parties and
        accrued interest                                            636,509        630,661
                                                                -----------    -----------
            Total current liabilities                             1,013,908      1,272,529

Bank note payable                                                   385,000        855,688
Long-term debt                                                      189,111        189,111
Notes payable to related parties                                    168,875        166,342

                                                                -----------    -----------
      Total liabilities                                           1,756,894      2,483,670
                                                                -----------    -----------

Stockholders' equity
      Common stock, par value $.0001; 850,000,000 shares
        authorized; 331,222,249 issued and outstanding               33,123         33,123
      Capital in excess of par value                              4,000,316      4,000,316
      Accumulated deficit                                        (2,935,941)    (2,661,320)
                                                                -----------    -----------

      Total stockholders' equity                                  1,097,498      1,372,119
                                                                -----------    -----------

      Total liabilities and stockholders' equity                $ 2,854,392    $ 3,855,789
                                                                ===========    ===========
</TABLE>

                                       2

<PAGE>
<TABLE>
<CAPTION>

                                              TRUDY CORPORATION
                                       Statements of Income and Deficit
                                                 (Unaudited)



                                                 Three Months Ended                 Nine Months Ended
                                         --------------------------------  ---------------------------------
                                             Dec. 31           Dec. 31          Dec. 31,          Dec. 31,
                                               1998             1997              1998              1997
                                         --------------   ---------------  ----------------    -------------
<S>                                      <C>              <C>              <C>                 <C>          
Net sales                                $    1,272,486   $     2,108,990  $      3,004,687    $   4,366,399
                                         --------------   ---------------  ----------------    -------------

Operating costs & expenses:
      Cost of sales                             509,331           811,383         1,436,846        2,108,811
      Selling, general and administrative       976,514         1,011,623         1,811,394        1,830,973
                                         --------------   ---------------  ----------------    -------------
                                              1,485,845         1,823,006         3,248,240        3,939,784
                                         --------------   ---------------  ----------------    -------------

Income (loss) from operations                  (213,359)          285,984          (243,553)         426,615
                                         --------------   ---------------  ----------------    -------------

Other income (expenses):
      Other income                              (12,371)            4,656            (2,112)          14,740
      Interest expense, net                     (30,891)          (25,986)          (86,913)         (64,110)
      Depreciation                              (18,000)           (2,781)          (53,500)          (8,421)
                                         --------------   ---------------  ----------------    -------------
                                                (61,262)          (24,111)         (142,525)         (57,791)
                                         --------------   ---------------  ----------------    -------------

Income (loss) before income taxes              (274,621)          261,873          (386,078)         368,824
      Provision for income taxes                      0            35,320                 0           40,977
                                         --------------   ---------------  ----------------    -------------
Net income (loss)                              (274,621)          226,553          (386,078)         327,847

Deficit-beginning of period                  (2,661,320)       (2,652,124)       (2,549,863)      (2,753,418)
                                         --------------   ---------------  ----------------    -------------
Deficit-end of period                    $   (2,935,941)  $    (2,425,571) $     (2,935,941)   $  (2,425,571)
                                         ==============   ===============  ================    =============

Net income (loss) per share                   (0.000829)         0.000698         (0.001166)        0.001010
                                         ==============   ===============  ================    =============

Weighted number of shares
      outstanding                           331,222,249       324,457,249       331,222,249      324,457,249
                                         ==============   ===============  ================    =============
</TABLE>

                                                      3
<PAGE>
                                TRUDY CORPORATION
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                     For the Nine Months Ended
                                                    ----------------------------
                                                    December 31,     December 31,
                                                       1998             1997
                                                     ---------       ----------
Cash flows from operating activities

<S>                                                  <C>               <C>      
NET INCOME (LOSS)                                    $(386,078)        $ 327,846

Adjustments to reconcile net loss to net cash
  used in operating activities
       Amortization of pre-publication costs           101,250            22,911
       Depreciation                                     53,500             8,421
       Provision for losses on accounts receivable      33,363            14,054

Changes in current assets and current liabilities
       Accounts receivable                              82,318          (319,370)
       Inventories                                     (28,843)          (13,337)
       Prepaid expenses and other current assets       (55,226)          (68,839)
       Accounts payable and accrued expenses            32,319            87,771
                                                     ---------         ---------
NET CASH USED IN OPERATING ACTIVITIES                 (167,397)           59,457
                                                     ---------         ---------

Cash flows from investing activities
       Pre-publication & royalty advances              (55,719)         (118,866)
       Additions to plant and equipment                (59,636)          (44,547)
                                                     ---------         ---------
NET CASH USED IN INVESTING ACTIVITIES                 (115,355)         (163,413)
                                                     ---------         ---------

Cash flows from financing activities
       Net change in short-term borrowings             322,245           146,424
       Proceeds of loans - long-term                         0                 0
       Repayment of loans - long-term                   (3,940)          (32,519)
                                                     ---------         ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES              318,305           113,905
                                                     ---------         ---------

Net increase in cash                                    35,553             9,949

Cash, beginning of period                            $       0             2,939
                                                     =========         =========
CASH, END OF PERIOD                                     35,553         $  12,888
                                                     =========         =========
</TABLE>

                                        4
<PAGE>

                                TRUDY CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

1.  Basis of Presentation:
    ---------------------

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles for interim financial information
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 generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  (consisting of normal  recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results  for  the  nine  months  ended  December  31,  1998  are  not
necessarily  indicative  of the results that may be expected for the year ending
March 31, 1999. 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, 1998.


                                       5

<PAGE>

                           MANAGEMENT'S DISCUSSION AND ANALYSIS

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

Revenues
--------

Trudy  Corporation's  revenues for the nine months ended  December  31,1998 were
$3,004,687 - a decrease of  $1,361,712  compared with the same period last year.
Sales to warehouse clubs, the largest market segment,  were down $775,443 or 44%
to  $977,961  due to the clubs'  decision to purchase  more  conservatively  and
minimize inventory carryover. Direct response sales of $874,605 were $293,631 or
25% lower than last year. Catalog  marketers,  in general,  experienced  reduced
buying early in the  pre-holiday  season  (September)  due to  financial  market
uncertainty.  Sales to bookstores  and specialty  retailers were also below last
year as the number of independent  bookstores continues to decline and specialty
stores have  become  more  selective  in their  purchases.  Sales to schools and
education wholesalers continue to increase as a result of the Company's decision
to target its direct marketing toward this growing market segment.

Sales for the three months ended December 31, 1998 were  $1,272,486 - a decrease
of $836,504 compared with the same period of last year due to lower shipments to
the warehouse clubs and reduced catalog sales.

Profit and Losses
-----------------

A net loss of $386,078  for the first nine  months of fiscal 1999  compares to a
profit of $327,847 for the same period last year. This decline in  profitability
is primarily  the result of the lower sales  volume.  Income was below last year
also because of higher expenses  associated with the amortization of book design
costs, the recording of subright royalty  expense,  and higher  depreciation and
interest  expense.  Product  procurement  costs have been reduced as a result of
improved  pricing  from  Asian  manufacturing  sources.  Selling,  general,  and
administrative  expenses were in line with last year's levels.  Interest expense
increased  as a result  of  higher  borrowing  needed  to fund  working  capital
requirements.  Depreciation  expense  was also  higher than last year due to the
acquisition of a new computer system and software.

A net loss for the three months ended December 31, 1998 of $274,621  compares to
a profit of $226,553  last year.  The reasons for this  decrease are the same as
those cited above for the first nine months.

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

Accounts receivable were $206,219 on December 31, 1998 compared with $744,487 on
September 30, 1998. This decrease is due to payments made by the warehouse clubs
during the quarter and the lower volume of purchases by the clubs  compared with

                                       6
<PAGE>

the preceding  quarter.  Inventory  levels were  $1,603,744 on December 31, 1998
compared with  $1,718,561 on September 30, 1998.  Inventory  levels were reduced
slightly  as a result of  holiday  retail and  direct  mail  orders in the third
quarter.  As of December 31,  1998,  the balance owed on bank loans was $600,498
compared with $1,081,958 on September 30, 1998.  Receipts from catalog sales and
the  warehouse  clubs  allowed for this  reduction in bank debt.  Loans from the
president  of the Company and his family  totaled  $805,384 on December 31, 1998
compared with $797,003 on September 30, 1998.

Acquisition of Trudy by Futech Interactive Products, Inc.
---------------------------------------------------------

On December 18, 1998 Trudy announced that it had signed a letter of intent to be
acquired  by  Futech  Interactive  Products,  Inc.  Futech  is a  privately-held
manufacturer  and distributor of children's  products  headquartered in Phoenix,
AZ.

The letter of intent  provides for the acquisition of all of the Common Stock of
Trudy, including shares subject to option, for a purchase price of approximately
$3.5 million payable in a combination of Futech  Preferred Stock (valued at $3.0
million) and cash of $500,000. In addition,  Futech will guarantee the repayment
of officer loans. On a fully diluted basis,  approximately 364 million shares of
Common Stock of Trudy will be issued and  outstanding.  The transaction  will be
structured  to be  tax-free  to  shareholders  of Trudy in  respect to the stock
portion of the  consideration.  In addition,  the  transaction is subject to the
negotiation,  execution,  and delivery of definitive documents,  approval of the
Board of Directors and shareholders of Trudy and Futech, as required by law, and
certain other terms and conditions. The transaction is expected to close in late
April or early May 1999.

Year 2000 Compliance Status
---------------------------

During 1998,  the Company  upgraded its computer  system and MAS90 software used
for accounting, order processing, and inventory management. The Company believes
that this equipment and software is Year 2000  compliant.  The Company is now in
the process of receiving certification from its major vendors that their systems
are Year 2000  compliant.  This survey  includes  vendors  who  provide  systems
related services,  e.g., banking,  credit card processing,  shipping,  security,
HVAC,  etc.  along  with  those  providing  the  company  with  its book and toy
products. The Company does not believe that the failure of any vendor to be Year
2000 compliant would have a material impact on the Company.


         PART II

         OTHER INFORMATION - Items 1-6.

Item 6(b).  Reports on Form 8-K.  On December  23,  1998,  the  Company  filed a
current  report on Form 8-K dated  December  18,  1998  reporting  the  proposed
acquisition of the Company by Futech Interactive Products, Inc. (Item no. 5).

                                       7
<PAGE>


                                   SIGNATURES


As required by Section 13 or 15(d) of the  Securities  Exchange Act of 1934, the
President  being  duly  authorized,  has signed  this  report on behalf of TRUDY
CORPORATION.






Date: March 1, 1999          By: /s/ WILLIAM W. BURNHAM 
                                ----------------------------------
                                     William W. Burnham,
                                     President


                                       8