10-Q

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2009

o    TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from ____________ to____________

Commission File No. 0-16056

TRUDY CORPORATION
(Exact name of Registrant as specified in its charter)

Delaware	06-1007765
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
353 Main Avenue
Norwalk, CT 06851
(Address of Principal Executive Offices)
(203) 846-2274
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)

Indicate by check mark whether the Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   o    No   x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   o    No   x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities and Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Not applicable.

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date:

February 12, 2010
Common Stock, $.0001 par value: 700,862,912 shares

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PART I

Item 1. Financial Statements

          The Financial Statements of the Registrant required to be filed with this 10-Q Quarterly Report were prepared by management and commence below, together with related notes. In the opinion of management, the Financial Statements fairly present the financial condition of the Registrant.

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INDEX		PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets – September 30, 2009 (unaudited) and March 31, 2009	5
	Unaudited Consolidated Statements of Operations for the three and six months ended September 30, 2009 and September 30, 2008	6
	Unaudited Consolidated Statement of Shareholders’ Deficit from March 31, 2009 through September 30, 2009	7
	Unaudited Consolidated Statements of Cash Flows for the six months ended September 30, 2009 and September 30, 2008	8
	Notes to Financial Statements (unaudited)	9
Item 2.	Management’s Discussion and Analysis	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 4.	Controls and Procedures	25
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 2.	Changes in Securities	27
Item 3.	Defaults upon Senior Securities	27
Item 4.	Submission of Matters to a Vote of Security Holders	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
Signatures		29

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Trudy Corporation
Balance Sheets
September 30, 2009 and March 31, 2009

	September 30, 2009			March 31, 2009
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	266,772		$	122,739
Accounts receivable, net		983,217			1,042,278
Inventory, net		1,333,585			1,649,476
Prepaid expenses and other current assets		84,969			172,827
Total current assets		2,668,543			2,987,320
Equipment, net		74,514			84,792
Royalty advances, net		220,639			264,820
Prepublication costs and other assets, net		446,014			484,645
Prepaid acquisitions		349,027			386,908
Total Other assets		1,090,194			1,221,165
Total assets	$	3,758,737		$	4,208,485
Current liabilities
Notes payable - Bank	$	849,706			1,045,947
Notes payable - Related parties		2,688,455			1,894,959
Accounts payable and accrued expenses		1,549,482			1,766,359
Deferred Revenue		37,125			280,231
Royalties and commissions payable		529,382			554,060
Total Current liabilities		5,654,150			5,541,556
Total liabilities		5,654,150			5,541,556
Commitments
Shareholders’ equity
Common stock - $.0001 par value 850,000,000 shares authorized 700,682,912 issued and outstanding at September 30, 2009 and March 31, 2009		70,087			70,087
Paid-in capital		7,140,750			7,140,750
Accumulated deficit		(9,106,250	)		(8,543,908	)
Total shareholders’ equity		(1,895,413	)		(1,333,071	)
Total liabilities and shareholders’ equity	$	3,758,737		$	4,208,485

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

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Trudy Corporation
Statements of Operations
For the three and six months ended September 30, 2009 and 2008

	Three Month Period Ended September 30,						Six Month Period Ended September 30,
	2009			2008			2009			2008
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Net product sales		1,308,381			1,567,363			2,418,985			3,099,277
Royalty sales		—			9,872			1,038			17,242
Net Sales		1,308,381			1,577,235			2,420,023			3,116,519
Cost of sales		922,683			984,414			1,547,505			1,864,714
Gross profit		385,698			592,820			872,518			1,251,805
Operating expenses:
Selling, general and administrative		718,623			708,071			1,378,327			1,553,558
Income/(loss) from operations		(332,925	)		(115,250	)		(505,809	)		(301,753	)
Other expense		(27,532	)		(21,370	)		(56,533	)		(53,423	)
Net income/(loss)	$	(360,457	)	$	(136,621	)	$	(562,342	)	$	(355,176	)
Basic and diluted net income/(loss) loss per share	$	—		$	—		$	—		$	—
Weighted average number of shares outstanding		700,862,912			641,307,356			700,862,912			630,605,639

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

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Trudy Corporation
Statements of Shareholders’ Equity
For the six months ended September 30, 2009

	Common Stock				Additional Paid-in		Accumulated			Total Shareholders’
	Shares		Amount		Capital		Deficit			Equity
Balance at March 31, 2009 (audited)		700,862,912	$	70,087	$	7,140,750	$	(8,543,908	)	$	(1,333,071	)
Net loss (unaudited)								(562,342	)		(562,342	)
Balance at September 30, 2009 (unaudited)		700,862,912	$	70,087	$	7,140,750	$	(9,106,250	)	$	(1,895,413	)

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

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Trudy Corporation
Statements of Cash Flows
For the Six month period ended September 30, 2009 and September 30, 2008

	For the Six Months Ended September 30,
	2009			2008
	(unaudited)			(unaudited)
Cash Flows From Operating Activities
Net loss	$	(562,342	)	$	(355,176	)
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities:
Depreciation		14,510			9,177
Amortization of pre-publication costs		90,735			123,847
Amortization of intangibles		82,061			37,419
Provision for losses on accounts receivable		29,404			—
Provision for promotional allowance		11,000			(27,000	)
Provision for slow moving inventory		—			(65,000	)
Provision for sales returns		—			(516,687	)
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable		18,657			497,513
Decrease (Increase) in inventories		315,891			(78,843	)
Decrease (Increase) in prepaid expenses and other current assets		87,858			89,788
Increase (Decrease) in accounts payable and accrued expenses		(216,877	)		193,017
Increase (Decrease) in deferred revenue		(243,106	)		182,019
Increase (Decrease) in royalties and commissions payable		(24,678	)		(1,068	)
Net cash (used) / provided by operating activities		(396,887	)		89,006
Investing activities:
Purchases of property and equipment		(4,232	)		(1,500	)
Pre-publication and royalty advances		(52,103	)		(166,932	)
Net cash (used) / provided by investing activities		(56,335	)		(168,432	)
Financing activities:
Net change in note payable, bank		35,000			66,938
Repayments of debt to related parties		(32,734	)		(24,040	)
Repayments of debt		(231,241	)		—
Proceeds from debt to related parties		826,230			106,800
Net cash provided/(used) by financing activities		597,255			149,698
Net increase / (decrease) in cash and cash equivalents		144,033			70,272
Cash and cash equivalents at beginning of period		122,739			21,256
Cash and cash equivalents at end of period	$	266,772		$	91,528
Cash paid for interest	$	31,733		$	39,337
Cash paid for income taxes	$	—		$	—

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

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TRUDY CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

1. Description of Business and Basis of Presentation

Trudy Corporation (hereinafter referred to as the ‘Company’), publishes children’s books, eBooks and audiobooks and designs, manufactures and markets plush stuffed toys, children’s instruments and musical electronics for sale directly to consumers in the United States and to domestic and international retail and wholesale customers. The Company’s products are sold under the trade names (i.e. imprints) of Studio Mouse, Soundprints, Little Soundprints, Fetching Books, Music for Little People and BeBop.

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-Q 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, 2009 are not necessarily indicative of the results that may be expected for the year ending March 31, 2010. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended March 31, 2009.

2. New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective March 31, 2009, the Company adopted a new accounting standard issued by the FASB related to the disclosure requirements of the fair value of the financial instruments. This standard expands the disclosure requirements of fair value (including the methods and significant assumptions used to estimate fair value) of certain financial instruments to interim period financial statements that were previously only required to be disclosed in financial statements for annual periods. In accordance with this standard, the disclosure requirements have been applied on a prospective basis and did not have a material impact on the Company’s financial statements.

On September 30, 2009, the Company adopted changes issued by the Financial Accounting Standards Board (FASB) to the authoritative hierarchy of GAAP. These changes establish the FASB Accounting Standards Codification (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue Accounting Standards Updates. Accounting Standards Updates will not be authoritative in their own right as they will only serve to update the Codification. These changes and the Codification itself do not change GAAP. Other than the manner in which new accounting guidance is referenced, the adoption of these changes had no impact on the Financial Statements.

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Recently Issued Accounting Standards

In August 2009, the FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The Company does not expect the impact of its adoption to be material to its financial statements.

In October 2009, the FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective for the Company on January 1, 2011.

In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective for the Company on January 1, 2011.

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3. Inventories

Inventories consist of the following:

	September 30, 2009			March 31, 2009
Raw Materials	$	42,941		$	44,066
Finished Goods		1,555,635			1,870,401
Reserve for Obsolescence		(264,991	)		(264,991	)
Inventory	$	1,333,585		$	1,649,476

4. Notes Payable, Bank and Related Parties

	September 30, 2009		March 31, 2009
A revolving line of credit totaling $850,000 due on demand. Interest is payable monthly equal to the Wall Street Journal reported prime rate plus 1.0%. Borrowings are subject to a borrowing base equal to 80% of eligible accounts receivable. The note is also secured by all of the assets of the Company, a mortgage on the Company’s premises and a personal guarantee of a principal shareholder (William W. Burnham, Chairman of the Board).	$	849,706	$	814,706
Various notes payable, to principal shareholder (William W. Burnham, Chairman of the Board) due on demand. Interest is payable monthly at LIBOR + 1.25%.		2,688,455		1,894,949
Note payable, bank, payable in monthly installments of $2,713 including interest at 7%. Balance due in February 2009. The note is secured by all assets of the Company, a mortgage on the Company’s premises and a personal guarantee of a principal shareholder, William W. Burnham.		0		231,241
Total	$	3,538,161	$	2,940,906

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5. Related Party Transactions

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

The Main Avenue property leased by the Company is owned by a Connecticut limited liability company, Noreast Management LLC, which is owned jointly by William W. Burnham, the Chairman of the Company, Peter Ogilvie, a former Director and Officer of the Company, and Fred M. Filoon, a Director of the Company. Rent expense totaled $28,010 and $29,150 for the three months ended September 30, 2009 and 2008, respectively. Rent expense totaled $43,943 and $56,948 for the six months ended September 30, 2009 and 2008, respectively.

As of September 30, 2009, the Company has borrowings from related parties of $2,688,455. Interest to related parties totaled $7,927 and $15,387 for the three months ended September 30, 2009 and 2008, respectively. Interest to related parties totaled $16,089 and $40,732 for the six months ended September 30, 2009 and 2008, respectively. Repayments to related parties totaled $12,435 and $14,883 for the three months ended September 30, 2009 and 2008, respectively. Repayments to related parties totaled $32,734 and $22,788 for the six months ended September 30, 2009 and 2008, respectively.

Accounts payable to related parties at September 30, 2009 was $92,063. Accounts payable to related parties at September 30, 2008 was $28,909.

Guarantor fees for Mr. Burnham for the quarter ended September 30, 2009 were $2,080.

6. Concentrations and Credit Risk

	Percentage of net sales for 3 months ended September 30,				Balance in Accounts Receivable as of
	2009		2008		September 30, 2009
Customer 1	38	%	14	%	24	%

All other individual customers comprised less than 10% of total sales for the 3 month period ended September 30, 2009. The Company does not require collateral to support accounts receivable or financial instruments subject to credit risk though it does pursue credit insurance on the larger accounts.

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	Percentage of Accounts Receivable (net) as of
	September 30, 2009			March 31, 2009
Customer 1		31	%		4	%
Customer 2		10	%		0	%
Total		41	%		4	%

All other individual customers comprised less than 10% of total accounts receivable (net) for the 3 months ended September 30, 2009.

	Percentage of net sales for six months ended September 30,						Balance in Accounts Receivable as of
	2009			2008			September 30, 2009
Customer 1		21	%		0	%		24	%
Customer 2		11	%		0	%		4	%
Total		32	%		0	%		28	%

All other individual customers comprised less than 10% of total sales for the six month period ended September 30, 2009. The Company does not require collateral to support accounts receivable or financial instruments subject to credit risk though it does pursue credit insurance on the larger accounts.

7. Subsequent Events

On December 18, 2009 the Company entered into a definitive Asset Purchase Agreement whereby Trudy would sell substantially all of its assets to MMAC, LLC, which also would assume certain liabilities of Trudy.

Under the terms of the agreement, MMAC will assume substantially all of the secured and unsecured liabilities of Trudy with the exception of $2.7MM of personal debt owed to the principal shareholder and Chairman of Trudy, William W. Burnham. In consideration of the sale of substantially all of its assets, at Closing, Trudy will receive a note from MMAC to Trudy in the principal amount of $225,000 and an equity interest in MMAC, not to exceed 33%, determined in accordance with the net asset value of Trudy at Closing. In addition, loans from an affiliate of MMAC to Trudy, estimated to be $600,000 at Closing, will be assumed by MMAC at Closing. Substantially simultaneously with the Closing, Trudy will transfer the note and the equity interest in MMAC to William W. Burnham in consideration of the cancellation by Mr. Burnham of the personal debt owed by Trudy to Mr. Burnham, with the exception of up to $50,000 of debt owed to Mr. Burnham which will remain outstanding and which will be repaid to Mr. Burnham one year following the closing if and to the extent Trudy has not spent the $50,000 of cash it will retain at the closing for general corporate purposes.

13

Holders of Trudy’s common stock will not receive any payment or distribution with respect to their shares pursuant to the sale of substantially all the assets to MMAC.

MMAC will also enter into a new four year lease with Noreast Management, LLC, a company that is 91% owned by Mr. Burnham, for Trudy’s current headquarters on substantially the same terms as the current lease with Trudy.

Ashley Andersen Zantop, CEO and President of Trudy, Fell Herdeg, CFO, and William W. Burnham, Director of Corporate Development will be retained as employees by MMAC on substantially the same terms as their current employment with Trudy. Mr. Burnham and Ms. Andersen Zantop will join the Board of Directors of MMAC.

Trudy’s senior management intends to recommend to its Board of Directors that, after Closing, Trudy dissolve or enter into a transaction whereby the Trudy corporate shell may be sold. There is no assurance that a sale of the shell can be arranged.

The Asset Purchase Agreement and the transactions contemplated thereby have been approved by an Independent Committee of outside Directors of Trudy, by the Board of Directors of Trudy and by written consent of holders of a majority of the issued and outstanding shares of Common Stock of Trudy. The transaction is, however, subject to compliance with U.S. securities laws, including the preparation and filing with the Securities and Exchange Commission of an Information Statement which will be mailed to all of Trudy’s shareholders for their information, as well as other closing conditions.

The Company shall use its reasonable best efforts, after consultation with the Buyer, to respond to and resolve all SEC comments with respect to the Information Statement promptly after receipt thereof.

Please refer to the Asset Purchase Agreement filed with the SEC on December 23, 2009 as an exhibit to the Company’s Form 8-K. It is anticipated that the transaction will close within the next couple of months.

The assets of the Company were not held for sale as of the September 30, 2009 balance sheet date as no transaction was imminent at that time.

Management evaluated subsequent events through the report date February 12, 2010

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

NET SALES.

Overview

Net Sales for the Company’s September quarter of fiscal 2010 decreased 17.0% versus the comparable quarter of fiscal 2009. This is primarily a result of decreased revenue related to the depressed retail economy both domestically and in international markets. Most notably affected by the economic downturn in this quarter were the Company’s domestic mass market distributors and international mass market distributors as well as the company’s proprietary direct-to-consumer business. While the Company made off-setting gains in revenue in certain domestic and international wholesale/distribution and direct-to-consumer distributor business divisions by negotiating larger discounts to save and/or grow distribution and retail placement, its distributors in key markets such as Canada and Mexico did not perform. The Company replaced its distributor for Canada effective December 1, 2009. The deeper discounts and significant cost increases from the Company’s Chinese printers depressed product margins from 60.3% in the quarter ending September 30, 2008 to 49.5% the current quarter. The three month period resulted in a net loss of $360,456 versus a net loss of $136,620 for the prior year.

Three months ended September 30, 2009

As noted above, net sales of $1,308,381 for the second quarter of fiscal 2010 decreased 17.0% versus the comparable quarter’s sales of 1,577,235 a year ago. Sales from the Company’s Music For Little People product line were 3.1% of sales for the current quarter versus 8.8% in the prior year’s quarter.

Sales of Disney-licensed products as a percentage of total Company sales decreased from 60.0% to 35.5% for the quarter versus the comparable quarter a year ago. Smithsonian-licensed product sales increased from 25.1% of Company sales to 47.0% as a result of a significant increase in orders for Smithsonian licensed products from a television home shopping customer.

	Percentage of Sales by license and/or product line for the quarters ended September 30,
License	2009			2008
Disney		35.5	%		60.0	%
Music For Little People (MFLP)		3.1			8.8
Proprietary		5.1			6.1
Smithsonian		47.0			25.1
Sesame Workshop		9.1			NMF
All other		0.2			0
Total		100.0			100.0

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	Sales decreases for the three months ended September 30,
Sales channel	2009		2008		Variance			% change
International Mass Market distributors	$	65,457	$	506,142	$	(437,685	)	-86.5	%
Mass Market distributors		0		111,814		(111,814	)	NMF
Music For Little People		45,008		152,418		(107,410	)	-69.5

Sales to international mass market distributors declined $437,685 as a result of the sharp economic decline in Mexico and Latin America and consequent loss of sales to the Company’s distributor to Latin America.

There were reduced sales to mass market distributors in the current quarter versus $111,814 in the prior year as a result of the decline in the domestic retail market and the Company’s corresponding reduction in inventory levels, increasing the lead time required by the Company to fill orders into this channel. Additionally, sales revenue for this channel is not booked until the distributors pay their invoices.

Proprietary direct-to-consumer and internet distributor sales for Music For Little People were $45,008 in the current quarter versus $152,418 in the comparable quarter a year ago, a decline of $107,410 due to an intentional reduction in third party product purchases and advertising to support web sales due to working capital constraints. In prior periods, sales for Music for Little People were generated through the Company’s website, targeted emailing and an annual catalog mailing supported by targeted online advertising.

Most of the Company’s channels of trade experienced decreased sales including but not limited to international trade book retailers, Canadian book distributors, and domestic book distributors.

	Sales increases for the three months ended September 30,
Sales channel	2009		2008		Variance		% change
Direct-to-consumer distributor	$	499,581	$	219,703	$	279,878	127.4	%
Domestic Book Retailers		118,665		14,257		104,408	NMF
Domestic Discount Retailers		215,298		149,936		65,362	43.6

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Sales to Direct-to-consumer distributor accounts increased $279,878 as a result of the shipment of three of five orders received from a television home shopping customer. This customer tested certain bundled Smithsonian titles and stuffed toys in the September Quarter, 2008. Having tested well, the home shopping network increased their orders dramatically in 2009.

Domestic Book Retailers sales increased over seven-fold to $118,665 as a result of a continued increase in non-returnable custom product sales to a major national book store chain.

Domestic Discount Retailers sales increased $65,362 to $215,298 as a result of a long term commitment by a group of leading non-returnable discount chains to purchase a broad spectrum of the Company’s licensed products prompted by significant discounts.

A few other channels of trade experienced increased sales for the quarter including direct-to-consumer book distributors, domestic warehouse club distributor, close-out accounts and international trade book distributors.

Six months ended September 30, 2009

Net sales for the six months ended September 30, 2009 decreased 22.3% versus the prior year. Sales from the Company’s Music For Little People product line were 6.6% of sales for the current six month period versus 11.7% in the prior year.

Sales of Disney-licensed products as a percentage of total Company sales decreased from 54.6% to 45.7% for the current six month period versus the comparable period a year ago as a result of a significant increase in Smithsonian-licensed product sales as a percentage of total Company revenue—an increase from 21.9% for the six months ending September 30, 2008 to 32.5% in the current Quarter. Again, this was the result of the significant order from the television home shopping network.

	Percentage of Sales by license and/or product line for the six months ended September 30,
License	2009			2008
Disney		45.7	%		54.6	%
Music For Little People (MFLP)		6.6			11.7
Proprietary		5.2			8.3
Smithsonian		32.5			21.9
Sesame Workshop		9.6			2.7
All other		0.4			0.8
Total		100.0			100.0

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	Sales decreases for the six months ended September 30,
Sales channel	2009		2008		Variance			% change
International Mass Market distributors	$	68,457	$	620,998	$	(552,542	)	-89.0	%
Mass Market distributors		41,238		205,718		(164,480	)	-80.0	%
Domestic Close outs		143,646		264,202		(120,555	)	-45.6
Proprietary Direct response/Internet Music For Little People		124,463		348,485		(224,022	)	-64.3

Sales to international mass market distributors declined $552,542 again as a result of the poor economic conditions of Latin America and the loss of distribution from the Company’s distributor in that market.

Sales to mass market distributors in the current year declined $164,480 as a result of maintaining lower levels of inventory and the decision to not recognize revenue until major returnable accounts pay their invoices.

Domestic close out account sales were $143,646 for the six months ended September 30, 2009 versus $264,202 in the prior year, a decline of $120,555. The Company from time to time needs to balance inventories by selling overstocks. Such sales happen only periodically.

Proprietary direct response/internet distributor Music For Little People sales were $124,463 in the current six month period versus $348,485 in the prior year, a decline of $224,022. Management intentionally pared back product purchases to support web sales due to working capital constraints.

Most of the Company’s channels of trade experienced decreased sales including but not limited to direct-to-consumer book distributors, military bases, ad specialty accounts, international trade book retailers and specialty retailers.

18

	Sales increases for the six months ended September 30,
Sales channel	2009		2008		Variance		% change
International trade book distributors	$	269,109	$	53,346	$	215,763	404.5	%
Direct-to-consumer		516,587		322,887		193,700	60.0
Domestic warehouse club distributors		259,488		126,949		132,539	104.4

Sales to international trade book distributors increased $215,763 as a result of a significant opening order from the Company’s new customer in Italy.

Sales to Direct-to-consumer distributor returnable accounts increased $193,700 as a result of the aforementioned orders received from the television home shopping customer.

Domestic warehouse club distributor sales increased $132,539 to $259,488.

A few other channels of trade experienced increased sales for the six month period including domestic book retailers, discount retailers and distributors.

COST OF SALES.

Three months ended September 30, 2009

The Company’s cost of sales for the quarter ended September 30, 2009 decreased $61,7231 from $984,414 in the prior year to $922,683 in the current year, a decrease of 6.3%. Cost of sales as a percentage of net sales increased from 62.4% to 70.5% in the current quarter as a result of a significant increase in direct product costs for the Company’s printers in China. These costs were partially offset by decreased warehousing and fulfillment expenses. The Company completed its move to a new lower cost fulfillment facility in Ohio to handle its proprietary Music for Little People direct-to-consumer fulfillment.

Six months ended September 30, 2009

The Company’s cost of sales for the six months ended September 30, 2009 decreased $317,209 from $1,867,714 in the prior year to $1,547,505 in the current year, a decrease of 17.0%. Cost of sales as a percentage of net sales increased from 59.8% to 63.9% in the current quarter as a result of a change in the sales mix and increased direct product costs which were partially offset by decreased warehousing and fulfillment expenses.

GROSS PROFIT.

Three months ended September 30, 2009

The resulting gross profit for the quarter ended September 30, 2009 decreased 34.9% from $592,821 to $385,699. Gross margin was 37.6% in the prior year versus 29.5% in the current year’s quarter.

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Six months ended September 30, 2009

The resulting gross profit for the six months ended September 30, 2009 decreased 30.3% from $1,251,805 to $872,518. Gross margin was 40.2% in the prior year’s six month period versus 36.1% in the current year’s six month period.

SELLING, GENERAL & ADMINISTRATIVE COSTS.

Three months ended September 30, 2009

The Company’s selling, general, and administrative costs increased 1.5% or $10,552 to $718,623 for the three months ended September 30, 2009 versus $708,071 for the three months ended September 30, 2008. As a percentage of net sales, selling, general and administrative expenses increased from 44.9% of net sales from the prior year to 54.9% of net sales in the current fiscal year. The increase in selling, general and administrative expenses as a percentage of net sales was primarily as result of the decrease in sales. Despite management efforts to control costs, certain expenses continue to increase such as health insurance, bank fees, accounting and legal expenses, casualty and property insurance.

Six months ended September 30, 2009

The Company’s selling, general, and administrative costs decreased 11.3% or $175,231 to $1,378,327 for the six months ended September 30, 2009 versus $1,553,558 for the six months ended September 30, 2008. As a percentage of net sales, selling, general and administrative expenses increased from 49.8% of net sales from the prior year to 57.0% of net sales in the current fiscal year. The increase in selling, general and administrative expenses as a percentage of net sales was primarily as result of the decrease in sales.

INCOME / LOSS FROM OPERATIONS.

Three months ended September 30, 2009

For the quarter ended September 30, 2009, the loss from operations was $332,924 versus a loss of $115,249 for the prior year’s quarter.

Six months ended September 30, 2009

For the six months ended September 30, 2009, the loss from operations was $505,809 versus a loss of $301,753 for the prior year’s six month period.

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OTHER EXPENSE.

Three months ended September 30, 2009

The Company’s other expense for the quarter ended September 30, 2009 was $27,532 versus $21,370 for the quarter ended September 30, 2008.

Six months ended September 30, 2009

The Company’s other expense for the six months ended September 30, 2009 was $56,553 versus an expense of $53,423 for the six months ended September 30, 2008.

NET INCOME / LOSS.

Three months ended September 30, 2009

As a result of the items discussed above, the Company’s net loss for the quarter ended September 30, 2009 was $360,456 compared to a net loss of $136,620 for the comparable prior quarter.

Six months ended September 30, 2009

As a result of the items discussed above, the Company’s net loss for the six months ended September 30, 2009 was $562,342 compared to a net loss of $355,176 for the comparable six month period in the prior year.

Impact of New Accounting Pronouncements

In April 2008, the FASB issued ASC 350-10, “Determination of the Useful Life of Intangible Assets.” ASC 350-10 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350-10, “Goodwill and Other Intangible Assets.” ASC No. 350-10 is effective for fiscal years beginning after December 15, 2008. The adoption of this ASC did not have a material impact on our financial statements.

In April 2009, the FASB issued ASC 805-10, “Accounting for Assets Acquired and Liabilities assumed in a Business Combination That Arise from Contingencies — an amendment of FASB Statement No. 141 (Revised December 2007), Business Combinations”. ASC 805-10 addresses application issues raised by preparers, auditors and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination. ASC 805-10 is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. ASC 805-10 will have an impact on our accounting for any future acquisitions and financial statements.

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In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”, which is included in ASC Topic 855, Subsequent Events. ASC Topic 855 established principles and requirements for evaluating and reporting subsequent events and distinguishes which subsequent events should be recognized in the financial statements versus which subsequent events should be disclosed in the financial statements. ASC Topic 855 also requires disclosure of the date through which subsequent events are evaluated by management. ASC Topic 855 was effective for interim periods ending after June 15, 2009 and applies prospectively. Because ASC Topic 855 impacts the disclosure requirements, and not the accounting treatment for subsequent events, the adoption of ASC Topic 855 did not impact our results of operations or financial condition.

Effective July 1, 2009, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 105-10, Generally Accepted Accounting Principles – Overall (“ASC 105-10”). ASC 105-10 establishes the FASB Accounting Standards Codification (the “Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification is non-authoritative. The FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASUs”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only to update the Codification, provide background information about the guidance and provide the bases for conclusions on the change(s) in the Codification. References made to FASB guidance throughout these consolidated financials have been updated for the Codification.

In August 2009, the FASB issued ASU No. 2009-05, Measuring Liabilities at Fair Value, which provides additional guidance on how companies should measure liabilities at fair value under ASC 820. The ASU clarifies that the quoted price for an identical liability should be used. However, if such information is not available, an entity may use the quoted price of an identical liability when traded as an asset, quoted prices for similar liabilities or similar liabilities traded as assets, or another valuation technique (such as the market or income approach). The ASU also indicates that the fair value of a liability is not adjusted to reflect the impact of contractual restrictions that prevent its transfer and indicates circumstances in which quoted prices for an identical liability or quoted price for an identical liability traded as an asset may be considered level 1 fair value measurements. This ASU is effective October 1, 2009. We are currently evaluating the impact of this standard, but would not expect it to have a material impact on our results of operations or financial condition.

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In October 2009, the FASB issued ASU No. 2009-13, Multiple-Deliverable Revenue Arrangements – a consensus of the FASB Emerging Issues Task Force that provides amendments to the criteria for separating consideration in multiple-deliverable arrangements. As a result of these amendments, multiple-deliverable revenue arrangements will be separated in more circumstances than under existing U.S. GAAP. The ASU does this by establishing a selling price hierarchy for determining the selling price of a deliverable. The selling price used for each deliverable will be based on vendor-specific objective evidence if available, third-party evidence if vendor-specific objective evidence is not available, or estimated selling price if neither vendor-specific objective evidence nor third-party evidence is available. A vendor will be required to determine its best estimate of selling price in a manner that is consistent with that used to determine the price to sell the deliverable on a standalone basis. This ASU also eliminates the residual method of allocation and will require that arrangement consideration be allocated at the inception of the arrangement to all deliverables using the relative selling price method, which allocates any discount in the overall arrangement proportionally to each deliverable based on its relative selling price. Expanded disclosures of qualitative and quantitative information regarding application of the multiple-deliverable revenue arrangement guidance are also required under the ASU. The ASU does not apply to arrangements for which industry specific allocation and measurement guidance exists, such as long-term construction contracts and software transactions. ASU No. 2009-13 is effective beginning January 1, 2011. We are currently evaluating the impact of this standard on our results of operations and financial condition.

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 title development costs including but not limited to authors, illustrators and other artists, narration, audio production, and studio time for recording and mixing final audio products. These costs are capitalized through the date of publication. At the date of publication the costs begin amortization on an accelerated method over their expected revenue generating lives. The accelerated method is based on historical and future expected sales.

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.

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Inventory

The Company writes down its inventories for estimated slow moving and obsolete goods based upon historical selling patterns, assumptions about future demand and market conditions. A significant sudden increase in the demand for the Company’s products could result in a short-term increase in the cost of inventory purchases while a significant decrease in demand could result in an increase in the amount of excess inventory quantities on-hand. Additionally, the Company’s estimates of future product demand may prove to be inaccurate, in which case the Company may have understated or overstated the write-down required for excess and obsolete inventory. In the future, if the Company’s inventory is determined to be overvalued, it would be required to recognize such costs in its cost of goods sold at the time of such determination. Likewise, if the Company does not properly estimate the lower of cost or market of its inventory and it is therefore determined to be undervalued, it may have over-reported its cost of goods sold in previous periods and would be required to recognize such additional operating income at the time of sale. Therefore, although the Company makes every effort to ensure the accuracy of its forecasts of future product demand, any significant unanticipated changes in demand could have a significant impact on the value of the Company’s inventory and its reported operating results.

Liquidity and Capital Resources

	For the quarters ended September 30,
	2009			2008			Variance			% change
Net assets (deficiency)	$	(1,895,412	)	$	(507,845	)	$	(1,387,567	)	NMF
Working capital (deficiency)		(2,985,606	)		(1,682,094	)		(1,303,512	)	-77.5	%
Accounts receivable, net		983,217			1,588,449			(605,232	)	-38.1
Accounts payable and accrued expenses		1,549,482			1,673,397			(152,022	)	-9.1
Royalties and commissions payable		529,382			351,330			178,052		50.7

The Company has suffered recurring losses from operations and has a deficiency in net assets. Such factors raise substantial doubt about the Company’s ability to continue as a going concern.

On December 18, 2009 the Company executed an Asset Purchase Agreement whereby it would sell substantially all of its assets to MMAC, LLC, which also would assume certain liabilities of the Company. A Form 8-K was filed with the Securities and Exchange Commission on December 23, 2009 to which the Agreement was attached as an Exhibit. For additional information on the proposed sale, see Note 7 (Subsequent Events) to Notes to Financial Statements above.

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At September 30, 2009 the Company had a deficiency of net assets of $1,895,412 versus a deficiency of $507,845 at September 30, 2008. Working capital deteriorated by $1,303,512 from a deficiency of $1,682,094 to a deficiency of $2,985,606 at September 30, 2008.

Accounts receivable decreased from $1,588,449 at September 30, 2008 to $983,217 at September 30, 2009, a decrease of $605,232. Accounts payable and accrued expenses decreased $152,022 versus the prior year from $1,673,397 to $1,549,482 at September 30, 2009. Royalties and commissions payable increased $178,052 versus the prior year from $351,330 at September 30, 2008 to $529,382 at September 30, 2009 primarily as a result of the sales mix.

On September 29, 2009 the Company refinanced its bank debt:

o The Company had a revolving line of credit totaling $850,000 with its bank that matured on August 25, 2009. On September 29, 2009 the Company and its bank signed a loan modification agreement for this $850,000 line with a new maturity of August 31, 2010 that is personally guaranteed by its Chairman, William W. Burnham.

o On September 29, 2009 the Company’s borrowed $224,238 from William W. Burnham and used these funds to pay off in full the note payable bank, with a balance of $227,239 as of June 30, 2009. As of September 29, 2009 a new promissory note was issued by the Company to Mr. Burnham in the amount of $224,238.

In the quarter ended September 30, 2009 the Company also received an additional $110,000 short-term note from Mr. Burnham, also its principal shareholder. All of his shareholder notes are demand notes.

As of February 12, 2009 the Company’s backlog was approximately $1,320,000

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable

Item 4. Controls and Procedures

There was no change in our internal control over financial reporting during the quarter ended September 30, 2009, that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

25

The Company’s Chief Executive Officer and the Chief Financial Officer conducted an evaluation of the Company’s critical disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2009, the Company’s most recent evaluation of these controls. Based on that evaluation, Management identified the following weaknesses:

(i)	The Company does not have adequate office and financial staffing in place to effectively control the level of transaction activity and consistently address the complex accounting matters that arise.
(ii)	A principal shareholder and Director of the Company who is involved in certain functions of the daily operations of the Company, could in theory override normal operating procedures.
(iii)	The Company currently does not have an Audit Committee.

Given the above identified matters, Management believes that disclosure controls and procedures are not effective and these identified matters have not been remedied as of September 30, 2009. Further, even with proper oversight and controls, Management does not expect that our disclosure controls and procedures or our internal controls will necessarily prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the registrant would be detected.

26

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-K for the year ended March 31, 2009 and other risks and uncertainties indicated from time to time in our filings with the SEC. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include the information concerning possible or assumed future results of operations. Also, when we use words such as “believes,” “expects,” “anticipates” or similar expressions, we are making forward-looking statements. Readers should understand that the following important factors, in addition to those discussed in the referenced SEC filings, could affect our future financial results, and could cause actual results to differ materially from those expressed in our forward-looking statements:

*	The implementation of our strategies;
*	The availability of additional capital;
*	Variations in stock prices and interest rates;
*	Fluctuations in quarterly operating results; and
*	Other risks and uncertainties described in our filings with the SEC.

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

PART II OTHER INFORMATION

Item 1.          Legal Proceedings

On January 6, 2009 the Company was sued in the Superior Court of California for breach of contract. The suit was later dismissed.

Item 2.          Changes in Securities

None.

Item 3.          Defaults upon Senior Securities

None

27

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

None

Item 5.          Other Information

None

Item 6.          Exhibits.

(a)	Exhibits
3a.	Certificate of Incorporation (incorporated by reference to the Company’s registration statement on Form S-18 (file number 33-14379B)).
3b.	Certificate of Amendment of Certificate of Incorporation (incorporated by reference to the Company’s registration statement on Form S-18 (file number 33-14379B)).
3c.	By-laws of Company (incorporated by reference to the Company’s registration statement on Form S-18 (file number 33-14379B)).
3d.	Certificate of Incorporation of Norwest Manufacturing Company (incorporated by reference to the Company’s registration statement on Form S-18 (file number 33-14379B)).
3e.	Certificate Amending Certificate of Incorporation of Norwest Manufacturing Company dated December 5, 1979 (incorporated by reference to the Company’s registration statement on Form S-18 (file number 33-14379B)).
3f.	Certificate Amending Certificate of Incorporation of Trudy Toys Company, Inc. dated March 27, 1984 (incorporated by reference to the Company’s registration statement on Form S-18 (file number 33-14379B)).
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

28

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRUDY CORPORATION
	(REGISTRANT)
Date: February 12, 2010	By:	/s/ Ashley C. Andersen Zantop
	Ashley C. Andersen Zantop,
	President, Chief Executive Officer

29

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Ashley C. Andersen Zantop, President and Chief Executive Officer of Trudy Corporation, (the “Company”) certify that:

1.	I have reviewed this Report on Form 10-Q (the “Report”) of the Company for the three month period ended September 30, 2009.
2.	Based on my knowledge, this 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 Report;
3.	Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Report;
4.	The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Report is being prepared;
	b)	evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
	c)	disclosed in this Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

5.	The Company’s other certifying officer and I have disclosed, based on the most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: February 12, 2010	By:	/s/ Ashley C. Andersen Zantop
	Ashley C. Andersen Zantop,
	President, Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Fell C. Herdeg, Chief Financial Officer of Trudy Corporation, (the “Company”) certify that:

1)	I have reviewed this Report on Form 10-Q (the “Report”) of the Company for the three month period ended September 30, 2009.
2)	Based on my knowledge, this 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 Report;
3)	Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this Report;
4)	The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
	c)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Report is being prepared;
	d)	evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this Report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
	e)	disclosed in this Report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
5)	The Company’s other certifying officer and I have disclosed, based on the most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: February 12, 2010	By:	/s/ Fell C. Herdeg
	Fell C. Herdeg,
	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Ashley C. Andersen Zantop, President and Chief Executive Officer of Trudy Corporation do hereby certify, to the best of my knowledge that:

1)	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2009 being filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Company or the certifying officer.

Date: February 12, 2010	By:	/s/ Ashley C. Andersen Zantop
	Ashley C. Andersen Zantop,
	President, Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Fell C. Herdeg, Chief Financial Officer, of Trudy Corporation do hereby certify, to the best of my knowledge that:

1)	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2009, being filed with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This Certification accompanies this Form 10-Q as an exhibit, but shall not be deemed as having been filed for purposes of Section 18 of the Securities Exchange Act of 1934 or as a separate disclosure document of the Company or the certifying officer.

Date: February 12, 2010	By:	/s/ Fell C. Herdeg
	Fell C. Herdeg,
	Chief Financial Officer