Net Loss Widens at 4Kids

NEW YORK, November 9: 4Kids Entertainment’s net loss for the
third quarter has increased from last year’s $265,000 to $4.2 million, on
revenues of $12.2 million, which were down 31 percent on the year-ago period.

For the nine months ended September 30, 2007, net revenues
totaled $39.1 million, a 27-percent drop, with a net loss of $6.6 million, as
compared with a $1.3 million profit in the same period last year.

Al Kahn, chairman and CEO of 4Kids Entertainment, stated,
“While we are disappointed by the financial results so far this year, we
believe that we have taken important steps to strengthen our business for 2008
and beyond. On October 24, 2007, we released the highly anticipated Chaotic
Trading Card Game to comic and hobby stores nationwide and launched the public
beta version of the Chaotic website, www.chaoticgame.com. We expect sales of
the Chaotic Trading Card Game to the comic and hobby channel to contribute to
revenues in the fourth quarter. Beginning in the first quarter of 2008, the
Chaotic Trading Card Game will be distributed to the mass market. Chaotic represents
a potentially dramatic shift in our business model as we will be able to add
the gross revenues and profits from the distribution and sale of trading cards
to the revenues from our share of the royalties that we receive in our
traditional licensing business.”

Kahn continued: “In addition, on October 3, 2007, we
announced a new five-year broadcast deal with The CW Network, under which we
will provide children's programming on Saturday mornings from 7 a.m. until 12
p.m. beginning in the 2008-09 broadcast season. We believe this deal will drive
greater exposure for our hit properties and provide us with the opportunity to
build ratings and increase advertising revenues over the long-term. Our strong
balance sheet enables us to be pursue opportunities that we expect will
increase shareholder value.”

—By Mansha Daswani