4Kids Posts Q2 Loss

NEW YORK, August 9: In the second quarter, 4Kids
Entertainment recorded a net loss of $2.2 million, as compared with last year’s
profit of $34,000, with revenues down 28 percent to $12 million.

For the six months ended June 30, 2007, net revenues fell 25
percent to $26.9 million, with a loss of $2.4 million; for the first half of
last year, the company’s profit was $1.6 million.

"Although we are disappointed by the company's overall
financial results for the second quarter of 2007, the company continued to take
the necessary steps to build for the future," said Alfred R. Kahn, 4Kids
Entertainment's chairman and CEO. "In the first half of the year, we invested
over $3 million in the company's digital assets, our 4Kids.TV website, our new
trading card company, TC Digital Games LLC and our new website company, TC
Websites LLC which is building out the www.chaoticgame.com
website. We are also encouraged by the performance of the Teenage Mutant
Ninja Turtles property in the first half of
2007 spurred on by the successful theatrical release of the new Turtles movie, TMNT in March 2007.”

Kahn continued: "We are excited about the much
anticipated launch of the Chaotic card game and website, which we expect will
occur this October. We are also looking forward to the new 2007-2008 4Kids TV
season on FOX when we will be broadcasting new episodes of Chaotic and Viva Piñata as well as launching the popular Dinosaur King animated series from Sega. We anticipate that some
of our newer properties will begin to contribute to our revenues in the second
half of the year joining our core properties.”