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For the transition period from _____________ to _____________

Commission file number 0-7843

4Kids Entertainment, Inc. (Exact name of Registrant as specified in its charter)

New York (State or other jurisdiction of incorporation or organization)

13-2691380 (I.R.S. Employer Identification No.)

1414 Avenue of the Americas New York, New York 10019 (212) 758-7666 (Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 |X|    No |_|               Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes |X|    No |_|       At August 9, 2004, the number of shares outstanding of the Registrant’s common stock, par value $.01 per share, was 13,679,143. 4Kids Entertainment, Inc. and Subsidiaries Table of Contents

Page # Part I--FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheets as of June 30, 2004    (Unaudited) and December 31, 2003	2
	Consolidated Statements of Income for the three and six    months ended June 30, 2004 and 2003 (Unaudited)	3
	Consolidated Statements of Cash Flows for the six    months ended June 30, 2004 and 2003 (Unaudited)	4
	Notes to Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial    Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	20
Item 4.	Controls and Procedures	20
Part II—OTHER INFORMATION
Item 2.	Changes in Securities and Use of Proceeds	21
Item 4.	Submission of Matters to a Vote of Security Holders	21
Item 6.	Exhibits and Reports on Form 8-K	22

Signatures

23

Part I - FINANCIAL INFORMATION Item 1. Financial Statements 4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 2004 AND DECEMBER 31, 2003 (In thousands of dollars, except share data)

ASSETS			2004			2003
CURRENT ASSETS:				(Unaudited)
Cash and cash equivalents			$	88,441		$	95,136
Investments				28,899			24,443
Total cash and investments				117,340			119,579
Accounts receivable - net				23,011			37,143
Prepaid Fox broadcast fee, net of accumulated amortization
of $47,152 and $36,447 in 2004 and 2003, respectively				17,573			8,688
Prepaid income taxes				2,486			2,670
Prepaid expenses and other current assets				2,032			1,690
Deferred income taxes				475			--
Total current assets				162,917			169,770
PROPERTY AND EQUIPMENT - NET				3,215			3,350
OTHER ASSETS:
Accounts receivable - noncurrent, net				4,266			2,662
Investment in equity securities				726			726
Film and television costs - net				9,193			8,183
Deferred income taxes - noncurrent				3,370			2,575
Other assets - net				9,723			6,014
TOTAL ASSETS			$	193,410		$	193,280
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Due to licensors			$	11,641		$	11,835
Media payable				714			2,178
Accounts payable and accrued expenses				13,309			9,706
Deferred revenue				7,638			8,070
Deferred income taxes				--			52
Total current liabilities				33,302			31,841
DEFERRED RENT				987			952
Total liabilities				34,289			32,793
COMMITMENTS AND CONTINGENCIES  (Note 3)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value - authorized, 3,000,000 shares; none issued				--			--
Common stock, $.01 par value - authorized, 40,000,000 shares;
issued, 14,079,143 and 13,965,343 shares; outstanding, 13,679,143 and        13,965,343 shares in 2004 and 2003, respectively				141			140
Additional paid-in capital				55,118			52,798
Accumulated other comprehensive income				791			693
Retained earnings				112,066			106,856
				168,116			160,487
Less- cost of 400,000 treasury shares				8,995			--
				159,121			160,487
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY			$	193,410		$	193,280

See notes to consolidated financial statements. 2 4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (In thousands of dollars, except share data)

			Three Months Ended June 30,						Six Months Ended June 30,
			2004			2003			2004			2003
NET REVENUES			$	22,097		$	23,369		$	44,564		$	44,347
COSTS AND EXPENSES:
Selling, general and administrative				8,424			8,174			16,938			15,417
Production service costs				3,038			1,989			5,001			3,982
Amortization of television and film costs and
Fox broadcast fee				7,555			7,388			14,549			14,504
Total costs and expenses				19,017			17,551			36,488			33,903
INCOME FROM OPERATIONS				3,080			5,818			8,076			10,444
INTEREST INCOME				293			259			578			583
INCOME BEFORE INCOME TAXES				3,373			6,077			8,654			11,027
INCOME TAXES				1,330			2,432			3,444			4,412
NET INCOME			$	2,043		$	3,645		$	5,210		$	6,615
PER SHARE AMOUNTS:
Basic earnings per common share			$	0.15		$	0.28		$	0.38		$	0.50
Diluted earnings per common share			$	0.14		$	0.26		$	0.36		$	0.47
Weighted average common shares
outstanding - basic				13,794,353			13,139,981			13,880,984			13,137,450
Weighted average common shares
outstanding - diluted				14,493,824			13,987,627			14,608,084			13,943,629

See notes to consolidated financial statements. 3 4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (In thousands of dollars)

			2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income			$	5,210		$	6,615
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization				665			616
Amortization of television and film costs and Fox broadcast fee				14,549			14,504
Provision for doubtful accounts				30			253
Deferred income taxes				(1,322	)		(1,037	)
Tax benefit on exercise of stock options				1,127			71
Changes in operating assets and liabilities:
Accounts receivable				12,498			9,370
Film and television costs				(4,854	)		(5,597	)
Prepaid income taxes				184			927
Prepaid Fox broadcast fee				(19,590	)		(18,985	)
Prepaid expenses and other current assets				(342	)		(1,998	)
Other assets - net				(3,709	)		(1,734	)
Due to licensors				(194	)		(676	)
Media payable				(1,464	)		(4,213	)
Accounts payable and accrued expenses				3,603			266
Income taxes payable				--			--
Deferred revenue				(432	)		2,075
Deferred rent				35			119
Net cash provided by operating activities				5,994			576
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investments				20,276			13,619
Purchase of investments				(24,732	)		(30,062	)
Purchase of property and equipment				(530	)		(405	)
Net cash used in investing activities				(4,986	)		(16,848	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options				1,194			256
Purchase of treasury shares				(8,995	)		--
Net cash used in financing activities				(7,801	)		256
EFFECTS OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS				98			38
NET DECREASE IN CASH AND CASH EQUIVALENTS				(6,695	)		(15,978	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD				95,136			78,712
CASH AND CASH EQUIVALENTS, END OF PERIOD			$	88,441		$	62,734
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
Income Taxes			$	2,919		$	4,300

See notes to consolidated financial statements. 4 4KIDS ENTERTAINMENT, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands of dollars, except share and per share data) 1. DESCRIPTION OF BUSINESS 4Kids Entertainment, Inc. (the “Company”), together with the subsidiaries through which the Company’s businesses are conducted (the “Company”), is a diversified entertainment and media company specializing in the youth oriented market with operations in the following business segments: (i) Licensing, (ii) Advertising Media and Broadcast, (iii) Television and Film Production/Distribution. Licensing — The Company’s wholly-owned subsidiaries, 4Kids Entertainment Licensing, Inc. (“4Kids Licensing”) and 4Kids Entertainment International, Ltd. (“4Kids International”), are engaged in the business of licensing the commercial rights to popular children’s properties, personalities and product concepts. 4Kids Licensing typically acts as exclusive agent in connection with the grant to third parties of licenses to manufacture and sell all types of merchandise based on such properties, personalities and product concepts. The licensing of these rights has been primarily in the areas of toys, electronic games, trading cards, food, toiletries, apparel, housewares, footwear and publishing rights. 4Kids Licensing also licenses merchandising rights in connection with certain television shows and motion pictures produced by the Company. 4Kids International, which is based in London, manages the Company’s properties in the United Kingdom and European marketplaces. 4Kids Technology, Inc., a wholly-owned subsidiary, develops ideas and concepts for licensing which integrate new and existing technologies with traditional game and toy play patterns. Websites 4Kids, Inc., a wholly-owned subsidiary, specializes in website development by creating websites designed to enhance and support the marketing of children’s properties represented by the Company. Advertising Media and Broadcast — The Company, through a multi-year agreement with the Fox Broadcasting Company (“Fox”), leases Fox’s Saturday morning programming block (the “Fox Box”). The Company provides substantially all programming content to be broadcast on the Fox Box, which airs on Saturday mornings from 8am to 12pm eastern/pacific time (7am to 11am central time); and retains all of the revenue from network advertising sales for the four-hour time period. 4Kids Ad Sales, Inc., a wholly-owned subsidiary of the Company manages and accounts for the revenue and costs associated with the Fox Box. The Company’s wholly-owned subsidiary, The Summit Media Group, Inc. (“Summit Media”), provides media planning and buying services for clients in both print and broadcast media. Summit Media is compensated by receiving a percentage of the cost of the media it places. Television and Film Production/Distribution — The Company’s wholly-owned subsidiary, 4Kids Productions, Inc. (“4Kids Productions”), produces and acquires animated and live-action television programs for distribution to the television, home video and theatrical markets. 4Kids Productions adapts foreign programming for the US market and also produces original animated television programming for domestic and international broadcast. Additionally, 4Kids Productions produces original music compositions for use with its television and film production activities. 4Kids Entertainment Music, Inc. (“4Kids Music”), a wholly-owned subsidiary, markets and administers the musical operations for the Company on certain existing and newly created music associated with its television programming. 4Kids Entertainment Home Video, Inc. (“4Kids Home Video”), a wholly-owned subsidiary, distributes home videos associated with television programming produced by 4Kids Productions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation — The consolidated financial statements, except for the December 31, 2003 consolidated balance sheet, are unaudited. In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position of the Company as of June 30, 2004 and December 31, 2003 and the results of operations for the three and six months ended June 30, 2004 and 2003 and cash flows for the six months ended June 30, 2004 and 2003. Because of the inherent seasonality and changing trends of the toy, game, entertainment and advertising industries, operating results for the Company on a quarterly basis may not be indicative of operating results for the full year. 5 These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto, for the year ended December 31, 2003, which are included in the Company’s Annual Report on Form 10-K with respect to such period filed with the Securities and Exchange Commission on March 15, 2004. All significant intercompany accounts and transactions have been eliminated. The December 31, 2003 consolidated balance sheet amounts are derived from the Company’s audited consolidated financial statements. Revenue Recognition – Merchandising licensing revenues: Merchandise licensing revenues are recognized when the underlying royalties from the sales of the related products are earned. The Company recognizes guaranteed royalties at the time the arrangement becomes effective if the Company has no significant direct continuing involvement with the underlying property or obligation to the licensee. Where the Company has significant continuing direct involvement with the underlying property or obligation to the licensee, guaranteed minimum royalties are recognized ratably over the term of the license or based on sales of the related products, if greater. Licensing advances and guaranteed payments collected, but not yet earned by the Company, are classified as deferred revenue in the accompanying consolidated balance sheets. Broadcast advertising revenues: Advertising revenues are recognized when the related commercials are aired and are recorded net of agency commissions and an appropriate reserve when advertising is sold together with a guaranteed audience delivery. Internet advertising revenues are recognized on the basis of impression views in the period the advertising is displayed. Fee-based commissions for media planning and buying services, for clients in both print and broadcast media, are recognized at the time the related media runs. Episodic television series revenue: Television series initially produced for networks and first-run syndication are generally licensed to domestic and foreign markets concurrently. The length of the revenue cycle for episodic television varies depending on the number of seasons a series remains in active exploitation. Revenues arising from television license agreements are recognized in the period that the films or episodic television series are available for telecast. Production and adaptation costs charged to the licensor are included in net revenues and the corresponding costs are included in production service costs in the accompanying consolidated statements of income. Home video revenues: Revenues from home video and DVD sales, net of a reserve for returns, are recognized on the date that video and DVD units are shipped by the Company’s distributor to wholesalers/retailers. Consistent with the practice in the home video industry, the Company estimates the reserve for returns based upon its review of historical returns rates and expected future performance. Music revenues: Revenues from music sales, net of a reserve for returns, are recognized on the date units are shipped by the Company’s distributor to wholesalers/retailers as reported to the Company. In the case of musical performance revenues, the revenue is recognized when the musical recordings are broadcast and/or performed. Prepaid Fox Broadcast Fee — The Company has capitalized the broadcast fee paid to Fox and amortized the amount over the broadcast season based on estimated advertising revenue. During the six months ended June 30, 2004, the Company has paid Fox and certain affiliates $6,934 and $12,656 attributable to the second and third year’s broadcast fees, respectively, and during calendar year 2003, the Company had paid Fox and certain affiliates $6,328 and $19,506 attributable to the first and second year’s broadcast fees, respectively. The unamortized portion of these fees of $17,573 and $8,688 are included in “Prepaid Fox broadcast fee” on the accompanying consolidated balance sheets as of June 30, 2004 and December 31, 2003, respectively. Film and Television Costs — The Company accounts for its film and television costs pursuant to AICPA Statement of Position (“SOP”) No. 00-2, Accounting by Producers or Distributors of Films. The cost of production for television programming, including overhead, participations and talent residuals is capitalized and amortized using the individual-film-forecast method under which such costs are amortized for each television program in the ratio that revenue earned in the current period for such program bears to management’s estimate of the total revenues to be realized from all media and markets for such program. Management regularly reviews, and revises when necessary, its total revenue estimates on a title-by-title basis, which may result in a change in the rate of amortization applicable to such title and/or a write-down of the value of such title to estimated fair value. These revisions can result in significant quarter-to-quarter and year-to-year fluctuations in film write-downs and rates of amortization. If a total net loss is projected for a particular title, the associated film and television costs are written down to estimated fair value. All exploitation costs, including advertising and marketing costs, are expensed as incurred. Television adaptation and production costs that are adapted and/or produced are stated at the lower of cost, less accumulated amortization, or fair value. Reclassifications — Certain amounts for the prior period have been reclassified to conform to the current period’s presentation. 6 Translation of Foreign Currency — In accordance with SFAS No. 130, Reporting Comprehensive Income (“SFAS No. 130”), the Company classifies items of other comprehensive income by their nature in the financial statements and displays the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the consolidated balance sheet. The assets and liabilities of the Company’s foreign subsidiary, 4Kids International have been recorded in their local currency and translated to U.S. dollars using period-end exchange rates. Income and expense items have been translated at the average rate of exchange prevailing during the period. Any adjustment resulting from translating the financial statements of the foreign subsidiary is reflected as “other comprehensive income”. Comprehensive income for the three and six months ended June 30, 2004 was $1,953 and $5,308, respectively, which included translation adjustments of ($90) and $98 for the respective periods. Comprehensive income for the three and six months ended June 30, 2003 was $3,720 and $6,653, respectively, which included translation adjustments of $75 and $38 for the respective periods Stock-Based Compensation — SFAS No. 123, “Accounting for Stock-Based Compensation,” encourages, but does not require, companies to record compensation cost for stock-based compensation plans at fair value. The Company has chosen to account for stock-based compensation awards to employees under APB No. 25, “Accounting for Stock Issued to Employees,” and its interpretation, FASB Interpretation No. (“FIN”) 44, “Accounting for Certain Transactions Involving Stock Compensation, an interpretation of APB Opinion No. 25.” In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure (“SFAS No. 148”). Among other things, SFAS No. 148 requires the disclosure in interim reports of compensation expense calculated according to SFAS No. 123 for those awards of stock-based employee compensation that were outstanding and accounted for under the intrinsic value method of APB No. 25. The following table illustrates the effect on net income and earnings per share as if the fair value based method under SFAS No. 123 had been applied to all outstanding and unvested awards in each period.

			Three Months Ended June 30,						Six Months Ended June 30,
			2004			2003			2004			2003
Net income as reported			$	2,043		$	3,645		$	5,210		$	6,615
Deduct stock-based employee compensation
expense determined under fair value based
method for all awards, net of tax				2,297			1,204			2,532			1,235
Pro forma net income (loss)			$