<PAGE>




                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[ x ]            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                          OF THE SECURITIES ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001

                                       OR

[   ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                          OF THE SECURITIES ACT OF 1934

            FOR THE TRANSITION PERIOD FROM ___________TO ____________

                         COMMISSION FILE NUMBER: 0-23215

                           TOYMAX INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

            DELAWARE                                     11-3391313
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                   Identification No.)

                             125 EAST BETHPAGE ROAD
                               PLAINVIEW, NY 11803
          (Address, including zip code, of principal executive offices)

                                 (516) 391-9898
              (Registrant's telephone number, including area code)

         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.

(1)  Yes     X       No
            ---          ---

(2)  Yes     X       No
            ---          ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

         Common stock, par value $.01, 12,148,477 as of February 8, 2002.


<PAGE>


                   TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                                DECEMBER 31, 2001

                                      INDEX
<TABLE>
<CAPTION>

                                                                                               Page
                                                                                               ----
<S>               <C>                                                                         <C>
                         PART I - FINANCIAL INFORMATION

Item 1.           Financial Statements:

                  Condensed Consolidated Balance Sheets as of
                  March 31, 2001 and December 31, 2001 (Unaudited)                                3

                  Condensed Consolidated Statements of Operations for the
                  Three and Nine Months Ended December 31, 2001 and 2000 (Unaudited)              4

                  Condensed Consolidated Statements of Cash Flows for the
                  Nine Months Ended December 31, 2001 and 2000 (Unaudited)                        5

                  Notes to Condensed Consolidated Financial
                  Statements                                                                      6

Item 2.           Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                                            11

Item 3.           Quantitative and Qualitative Disclosures about Market Risk                     18

                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings                                                              19

Item 2.           Changes in Securities and Use of Proceeds                                      19

Item 3.           Defaults by the Company upon Its Senior Securities                             19

Item 4.           Submission of Matters to a Vote of Security Holders                            19

Item 5.           Other Information                                                              19

Item 6.           Exhibits and Reports on Form 8-K                                               19

                  Signatures                                                                     20
</TABLE>


                                       2
<PAGE>
                           TOYMAX INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                            MARCH 31,         DECEMBER 31,
                                                                                               2001               2001
------------------------------------------------------------------------------------- ------------------- -----------------
<S>                                                                                         <C>                <C>
ASSETS                                                                                                         (UNAUDITED)
CURRENT:
   Cash and cash equivalents                                                                $1,718,754         $ 4,961,713
   Due from Factor                                                                           9,241,280          22,133,576
   Accounts receivable, less allowance for possible
      losses of $262,000 and $350,000                                                        6,668,456           1,125,167
   Inventories                                                                               9,220,010          12,913,188
   Prepaid expenses and other current assets                                                 4,271,561           3,106,866
   Assets of discontinued operations                                                         4,172,121           3,335,971
   Income tax refunds receivable                                                             2,236,624           1,393,001
   Deferred income taxes                                                                     1,966,948           3,551,284
------------------------------------------------------------------------------------- ------------------- -------------------
                    TOTAL CURRENT ASSETS                                                    39,495,754           52,520,766
------------------------------------------------------------------------------------- ------------------- -------------------
PROPERTY AND EQUIPMENT, NET                                                                  4,809,432           5,535,176
PROPERTY, EQUIPMENT AND OTHER ASSETS OF DISCONTINUED OPERATIONS, NET                           579,325             554,423
DEFERRED INCOME TAXES                                                                        2,168,509           2,136,167
INTANGIBLE ASSETS, net of amortization of $1,984,367 and $2,215,558                         14,497,309          15,508,291
OTHER ASSETS, primarily prepaid advertising                                                  7,537,263           5,921,540
------------------------------------------------------------------------------------- ------------------- -------------------
                                                                                          $ 69,087,592        $ 82,176,363
------------------------------------------------------------------------------------- ------------------- -------------------
------------------------------------------------------------------------------------- ------------------- -------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
   Bank credit facility                                                                   $  9,971,578        $ 20,563,396
   Accounts payable                                                                          7,404,595           4,177,092
   Accrued expenses                                                                          3,681,569           8,561,559
   Accrued rebates and allowances                                                            2,490,481           5,776,284
   Due to affiliates                                                                         6,273,154           7,731,215
   Current portion of long-term obligations                                                     27,926               3,518
   Current liabilities of discontinued operations                                              945,149           1,439,504
   Income taxes payable                                                                      1,008,062             806,174
------------------------------------------------------------------------------------- ------------------- -------------------
                    TOTAL CURRENT LIABILITIES                                               31,802,514          49,058,742
------------------------------------------------------------------------------------- ------------------- -------------------
LONG-TERM OBLIGATIONS                                                                        1,211,566             354,571
------------------------------------------------------------------------------------- ------------------- -------------------
                    TOTAL LIABILITIES                                                       33,014,080          49,413,313
------------------------------------------------------------------------------------- ------------------- -------------------
MINORITY INTEREST                                                                              479,882                   -
------------------------------------------------------------------------------------- ------------------- -------------------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
   Preferred stock, par value $.01 per share; 5,000,000 shares authorized;
         none outstanding                                                                            -                   -
   Common stock, par value $.01 per share; 50,000,000 shares authorized;
         12,166,441 shares issued                                                              121,664             121,664
   Additional paid-in capital                                                               27,144,942          27,144,942
   Retained earnings                                                                         8,520,065           5,721,999
   Treasury stock, 35,000 and 66,200 shares at cost                                           (177,889)           (210,403)
   Accumulated other comprehensive income                                                      (15,152)            (15,152)
------------------------------------------------------------------------------------- ------------------- -------------------
------------------------------------------------------------------------------------- ------------------- -------------------
                    TOTAL STOCKHOLDERS' EQUITY                                              35,593,630          32,763,050
------------------------------------------------------------------------------------- ------------------- -------------------
                                                                                          $ 69,087,592        $ 82,176,363
------------------------------------------------------------------------------------- ------------------- -------------------
------------------------------------------------------------------------------------- ------------------- -------------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       3
<PAGE>
                           TOYMAX INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                 DECEMBER 31,                          DECEMBER 31,
--------------------------------------------------------- -------------- -------------- ---------------------- ----------------
                                                                2000           2001               2000                2001
--------------------------------------------------------- -------------- -------------- ---------------------- ----------------
<S>                                                          <C>            <C>                 <C>                <C>
NET SALES                                                   $34,601,080   $ 25,612,895        $100,637,796       $ 84,724,918
--------------------------------------------------------- -------------- -------------- ------------------ ------------------
COSTS AND EXPENSES
   Cost of goods sold                                        19,914,607     19,390,203          62,957,542         59,015,426
   Selling and administrative                                14,698,284     13,937,202          28,338,842         28,495,664
--------------------------------------------------------- -------------- -------------- ------------------ ------------------
                                                             34,612,891     33,327,405          91,296,384         87,511,090
--------------------------------------------------------- -------------- -------------- ------------------ ------------------
     OPERATING INCOME (LOSS)                                    (11,811)    (7,714,510)          9,341,412         (2,786,172)
--------------------------------------------------------- -------------- -------------- ------------------ ------------------
OTHER INCOME (EXPENSES):
   Other income, net                                            211,469        312,128             354,728            520,417
   Interest income                                               84,443         49,878             167,934            130,267
   Interest expense                                            (344,419)      (349,477)           (944,588)          (957,336)
   Finance charges                                             (216,840)      (347,213)           (563,057)          (831,478)
    Equity in loss of joint venture                             (31,337)             -            (347,006)                 -
--------------------------------------------------------- -------------- --------------- ----------------- ------------------
                                                               (296,684)      (334,684)         (1,331,989)        (1,138,130)
--------------------------------------------------------- -------------- --------------- ----------------- ------------------

INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST        (308,495)    (8,049,194)          8,009,423         (3,924,302)
Provision (benefit) for income taxes                            165,653     (2,335,085)          3,086,197         (1,356,499)
--------------------------------------------------------- ------------- --------------- ------------------ ------------------
INCOME BEFORE MINORITY INTEREST                               ( 474,148)    (5,714,109)          4,923,226         (2,567,803)
Minority interest                                                96,133         13,705              96,133            479,883
--------------------------------------------------------- ------------- --------------- ------------------ ------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS                       (378,015)    (5,700,404)          5,019,359         (2,087,920)
Loss from discontinued operations                            (1,220,485)      (704,049)         (3,311,450)        (1,210,145)
Gain on disposal of discontinued operations                          -         500,000                   -            500,000
--------------------------------------------------------- ------------- --------------- ------------------ ------------------
NET INCOME (LOSS)                                          $ (1,598,500)  $ (5,904,453)        $ 1,707,909       $ (2,798,065)
--------------------------------------------------------- ------------- --------------- ------------------ ------------------
--------------------------------------------------------- ------------- --------------- ------------------ ------------------
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE FROM:
     CONTINUING OPERATIONS                                    $   (0.03)     $   (0.47)          $    0.46          $   (0.17)
     DISCONTINUED OPERATIONS                                  $   (0.11)     $   (0.02)          $   (0.30)         $   (0.06)
--------------------------------------------------------- ------------- --------------- -------------------- ----------------
     BASIC AND DILUTED EARNINGS PER SHARE                     $   (0.14)     $   (0.49)           $   0.16          $   (0.23)
--------------------------------------------------------- ------------- --------------- -------------------- ----------------
--------------------------------------------------------- ------------- --------------- -------------------- ----------------
SHARES USED IN COMPUTING EARNINGS (LOSS) PER SHARE:
     BASIC AND DILUTED                                       11,814,050     12,104,248          11,003,422         12,122,377
--------------------------------------------------------- --------------- -------------- -------------------- ----------------
--------------------------------------------------------- --------------- -------------- -------------------- ----------------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                                       4
<PAGE>



                           TOYMAX INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                            NINE MONTHS ENDED
                                                                                               DECEMBER 31,
--------------------------------------------------------------------------------- ----------------- ------------------
                                                                                         2000               2001
--------------------------------------------------------------------------------- ----------------- ------------------
<S>                                                                                   <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                                      $ 1,707,909        $ (2,798,065)
--------------------------------------------------------------------------------- ----------------- ------------------
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
   Depreciation and amortization                                                         3,688,694           2,654,124
   Minority interest                                                                       (96,133)           (479,883)
   Bad debts                                                                                (3,151)             88,000
   Deferred tax asset                                                                            -          (1,551,994)
   Equity in loss of joint venture                                                         347,006                   -
   Changes in operating assets and liabilities:
        Due from Factor and accounts receivable                                         (5,240,906)         (6,761,068)
        Inventories                                                                        902,413          (3,185,073)
        Prepaid expenses and other                                                         393,800           2,376,081
        Income tax refunds receivable                                                      (70,268)            843,623
        Accounts payable and accruals                                                   (5,182,297)          4,575,650
        Due to affiliates                                                                4,310,365           1,458,060
        Income taxes payable                                                                40,117            (201,888)
--------------------------------------------------------------------------------- ----------------- ------------------
        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                797,549          (2,982,433)
--------------------------------------------------------------------------------- ----------------- ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisition of property and equipment                                                (2,269,733)         (3,067,331)
   Business acquisitions                                                                (2,591,922)         (1,242,173)
--------------------------------------------------------------------------------- ----------------- ------------------
        NET CASH USED IN INVESTING ACTIVITIES                                           (4,861,655)         (4,309,504)
--------------------------------------------------------------------------------- ----------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in bank credit facility                                                        704,978          10,591,818
   Decrease in long-term obligations                                                      (640,262)            (24,408)
   Proceeds from private placement of common stock                                       4,600,000                   -
    Purchase of treasury stock                                                                   -             (32,514)
--------------------------------------------------------------------------------- ----------------- ------------------
        NET CASH PROVIDED BY FINANCING ACTIVITIES                                        4,664,716          10,534,896
--------------------------------------------------------------------------------- ----------------- ------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                  600,610           3,242,959
CASH AND CASH EQUIVALENTS, beginning of period                                           4,543,823           1,718,754
--------------------------------------------------------------------------------- ----------------- ------------------
--------------------------------------------------------------------------------- ----------------- ------------------
CASH AND CASH EQUIVALENTS, end of period                                               $ 5,144,433         $ 4,961,713
--------------------------------------------------------------------------------- ----------------- ------------------
--------------------------------------------------------------------------------- ----------------- ------------------
SUPPLEMENTAL CASH FLOW INFORMATION:
     Interest paid                                                                     $ 1,132,786         $   927,798
     Income taxes paid                                                                   1,680,760              85,363
--------------------------------------------------------------------------------- ----------------- ------------------

</TABLE>

SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.




                                       5
<PAGE>

TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES o
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS o
DECEMBER 31, 2000 AND 2001

NOTE 1- BASIS OF FINANCIAL STATEMENT PRESENTATION

         The accompanying unaudited condensed consolidated financial statements
of Toymax International, Inc. ("Toymax" or the "Company") include the accounts
of the Company and its subsidiaries after elimination of all material
intercompany accounts and transactions, and have been prepared in accordance
with the instructions to Form 10-Q. Accordingly, the unaudited consolidated
financial statements do not include all of the financial 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. The balance sheet at March 31, 2001 has been derived from the
audited balance sheet at that date. It is suggested that these condensed
consolidated financial statements, which are presented in U.S. Dollars, be read
in conjunction with the consolidated financial statements and related notes
included in the Company's Form 10-K for the fiscal year ended March 31, 2001.
The Company follows the same accounting policies in preparation of interim
reports. The results of operations and financial position for interim periods
are not necessarily indicative of those to be expected for the full year ended
March 31, 2002, due, in part, to seasonal fluctuations which are normal for the
Company's business.

         Certain reclassifications have been made to the prior period amounts to
conform with the current period presentation and with the presentation of
discontinued operations.

NOTE 2 - EARNINGS PER SHARE

         Basic earnings (loss) per share is computed by dividing income (loss)
available to common shareholders by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects, in periods in
which they have a dilutive effect, the effect of common shares issuable upon
exercise of stock options and warrants.

         Options and warrants to purchase an aggregate of 2,275,750 and
2,950,405 shares of common stock were outstanding at December 31, 2000 and 2001,
respectively.

NOTE 3 - OTHER COMPREHENSIVE INCOME

         Other comprehensive income (loss) refers to revenue, expenses, gains
and losses that under generally accepted accounting principles are excluded from
net income (loss), as these amounts are recorded directly as an adjustment to
shareholders' equity. The Company's other comprehensive income (loss) is
comprised of foreign currency translation adjustments. The comprehensive income
(loss) for the three and nine months ended December 31, 2000 and 2001 is the
same as the reported net income (loss).

NOTE 4 - RECENT ACCOUNTING STANDARDS

         In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "ACCOUNTING FOR
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES." SFAS No. 133, as amended, is
effective for fiscal years beginning after June 15, 2000. SFAS No. 133 requires
that all derivative instruments be recorded on the balance sheet at fair value.
Changes in the fair value of the derivatives are recorded each period in current
earnings or other comprehensive income, depending on whether a derivative is
designated as part of the hedged transaction and the type of hedge transaction.
The ineffective portion of all hedges will be recognized in operations.


                                       6
<PAGE>


TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES o
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS o
DECEMBER 31, 2000 AND 2001


         In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
Derivative Instruments and Certain Hedging Activities" which amended SFAS No.
133. The amendments in SFAS No. 138 address certain implementation issues and
related to such matters as the normal purchases and normal sales exception, the
definition of interest rate risk, hedging recognized foreign currency
denominated assets and liabilities, and intercompany derivatives.

         Effective April 2001, the Company adopted SFAS No. 133 and No. 138. The
initial impacts of adoption on the Company's financial statements were recorded
in the first fiscal quarter of fiscal 2002 and were not material. The ongoing
effect of adoption on the Company's consolidated financial statements will be
determined each quarter by several factors, including the specific hedging
instruments in place and their relationships to hedged items, as well as market
conditions at the end of each period. To date, the effect of adoption of these
pronouncements has not been material to the financial statements of the Company.

         In April 2001, the Company elected to adopt SFAS No. 141, "Business
Combinations," and No. 142, "Goodwill and Intangible Assets." SFAS No. 141
requires the use of the purchase method of accounting and prohibits the use of
the pooling-of-interests method of accounting for business combinations
initiated after June 30, 2001. SFAS No. 141 also requires that the Company
recognize acquired intangible assets apart from goodwill if the acquired
intangible assets meet certain criteria. SFAS No. 141 applies to all business
combinations initiated after June 30, 2001 and for purchase business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS No. 142, that the Company reclassify, if necessary, the carrying amounts
of intangible assets and goodwill based on the criteria of SFAS No. 141.

         SFAS No. 142 requires, among other things, that companies no longer
amortize goodwill, but instead test goodwill for impairment at least annually.
In addition, SFAS No. 142 requires that the Company identify reporting units for
the purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life.

         The Company's previous business combinations were accounted for using
the purchase method and as of April 1, 2001, the net carrying amount of goodwill
from prior purchase transactions was approximately $11.8 million. Annual
amortization of this amount, which ceased effective April 1, 2001, amounted to
approximately $1.2 million.

         The effect of adoption of SFAS No. 142 on the reported net income
for the prior period is as follows:

<TABLE>
<CAPTION>

     FOR THE THREE MONTHS ENDED DECEMBER 31,                                 2000                2001
     --------------------------------------------------------------- ------------------ -----------------
     <S>                                                                <C>                <C>
     Reported net loss                                                  $ (1,598,500)      $ (5,904,453)
     Add back:  Amortization of goodwill, net of tax effect                  176,154                  -
     --------------------------------------------------------------- ------------------ -----------------

     Net loss, as adjusted                                              $ (1,422,346)      $ (5,904,453)
     --------------------------------------------------------------- ------------------ -----------------
</TABLE>





                                       7
<PAGE>

TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES o
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS o
DECEMBER 31, 2000 AND 2001


<TABLE>
<CAPTION>

     FOR THE THREE MONTHS ENDED DECEMBER 31,                             2000              2001
     ------------------------------------------------------------ ------------------ ----------------
<S>                                                                <C>               <C>
     Basic and diluted earnings per share:
          Reported net loss                                              $  (0.14)          $ (0.49)
          Amortization of goodwill                                           0.02                    -
     ------------------------------------------------------------ ----------------- -----------------

     Basic and diluted earnings per share, as adjusted                    $ (0.12)          $ (0.49)
     ------------------------------------------------------------ ----------------- -----------------
     ------------------------------------------------------------ ----------------- -----------------

     FOR THE NINE MONTHS ENDED DECEMBER 31,                              2000              2001
     ------------------------------------------------------------ -------------------- --------------

     Reported net income (loss)                                       $ 1,707,909       $(2,798,065)
     Add back:  Amortization of goodwill, net of tax effect               564,853                -
     ------------------------------------------------------------ -------------------- --------------

     Net income (loss), as adjusted                                   $ 2,272,762       $(2,798,065)
     ------------------------------------------------------------ -------------------- --------------
     ------------------------------------------------------------ -------------------- --------------

     FOR THE NINE MONTHS ENDED DECEMBER 31,                             2000               2001
     ------------------------------------------------------------ ----------------- -----------------
     Basic and diluted earnings per share:
          Reported net income (loss)                                   $   0.16             $ (0.23)
          Amortization of goodwill                                         0.05                  -
     ------------------------------------------------------------ ----------------- -----------------

     Basic and diluted earnings per share, as adjusted                   $ 0.21             $ (0.23)
     ------------------------------------------------------------ ----------------- -----------------
     ------------------------------------------------------------ ----------------- -----------------
</TABLE>

         In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 requires the fair value of a liability for
an asset retirement obligation to be recognized in the period in which it is
incurred if a reasonable estimate of fair value can be made. The associated
asset retirement costs are capitalized as part of the carrying amount of the
long-lived asset. SFAS No. 143 is effective for fiscal years beginning after
June 15, 2002. We believe the adoption of this statement will have no material
impact on the financial statements.

         In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS No. 144 requires that those
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell, whether reported in continuing operations or in discontinued
operations. Therefore, discontinued operations will no longer be measured at net
realizable value or include amounts for operating losses that have not yet
occurred. SFAS No. 144 is effective for financial statements issued for fiscal
years beginning after December 14, 2001 and, generally, is to be applied
prospectively. The Company has elected to early adopt SFAS No. 144 in the
current fiscal year.

NOTE 5 - SEGMENT AND GEOGRAPHIC DATA

         The Company operates two reportable segments: Toymax Brands (which
consists of Toymax Inc., Toymax (H.K.) Limited, Maxverse Interactive, Inc. and
the Company's equity investment in Yaboom Limited) and Toymax Enterprises (which
consists of Go Fly A Kite, Inc., and Funnoodle, Inc. ("Funnoodle")).

         The following tables present summarized information about the Company's
operations by reportable segments (net of consolidating eliminations) as of and
for the three and nine months ended December 31, 2000 and 2001:



                                       8
<PAGE>
TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES o
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS o
DECEMBER 31, 2000 AND 2001
<TABLE>
<CAPTION>
     ---------------------------------------------------- ------------------- ---------------- ----------------
                                                                 TOYMAX           TOYMAX
     THREE MONTHS ENDED DECEMBER 31, 2000                        BRANDS          ENTERPRISES     CONSOLIDATED
     ---------------------------------------------------- ------------------- ---------------- ---------------
<S>                                                          <C>                  <C>                  <C>
     Revenues-net sales                                      $32,088,149       $2,512,931         $34,601,080
     Income (loss) before income taxes and
         minority interest                                       314,505         (623,000)           (308,495)
     Total assets                                             71,829,174       22,904,476          94,733,650
     Interest income                                              76,523            7,920              84,443
     Interest expense                                            338,213            6,206             344,419
     Depreciation and amortization                               529,866          746,619           1,276,485
     Capital expenditures                                        704,045          155,020             859,065
     ---------------------------------------------------- --------------- ---------------- -------------------
     ---------------------------------------------------- --------------- ---------------- -------------------

     ---------------------------------------------------- --------------- ---------------- -------------------
                                                                TOYMAX           TOYMAX
     THREE MONTHS ENDED DECEMBER 31, 2001                       BRANDS          ENTERPRISES      CONSOLIDATED
     --------------------------------------------------- ----------------- --------------- --------------------
     Revenues-net sales                                      $23,478,421       $2,134,474         $25,612,895
     Income (loss) before income taxes and minority
        interest                                              (7,287,933)        (761,261)         (8,049,194)
     Total assets                                             53,230,310       28,946,053          82,176,363
     Interest income                                              31,285           18,593              49,878
     Interest expense                                            349,477                 -            349,477
     Depreciation and amortization                               746,508          223,892             970,400
     Capital expenditures                                        543,012          203,159             746,171
     ---------------------------------------------------- --------------- ---------------- -------------------
     ---------------------------------------------------- --------------- ---------------- -------------------

     --------------------------------------------------- --------------- --------------- --------------------
                                                                TOYMAX         TOYMAX
     NINE MONTHS ENDED DECEMBER 31, 2000                        BRANDS       ENTERPRISES         CONSOLIDATED
     --------------------------------------------------- ---------------- --------------- ------------------
     Revenues-net sales                                      $80,712,283      $19,925,513        $100,637,796
     Income before income taxes and minority interest          6,047,258        1,962,165           8,009,423
     Total assets                                             71,829,174       22,904,476          94,733,650
     Interest income                                             147,079           20,855             167,934
     Interest expense                                            905,147           39,441             944,588
     Depreciation and amortization                             1,515,300        2,173,394           3,688,694
     Capital expenditures                                      1,844,453          425,280           2,269,733
     ---------------------------------------------------- --------------- ---------------- -------------------
     ---------------------------------------------------- --------------- ---------------- -------------------

     --------------------------------------------------- ---------------- ---------------- -------------------
                                                                TOYMAX           TOYMAX
     NINE MONTHS ENDED DECEMBER 31, 2001                        BRANDS         ENTERPRISES       CONSOLIDATED
     --------------------------------------------------- ---------------- --------------- --------------------
     Revenues-net sales                                      $65,931,094      $18,793,824         $84,724,918
     Income (loss) before income taxes and minority
        interest                                              (4,967,320)       1,043,018          (3,924,302)
     Total assets                                             53,230,310       28,946,053          82,176,363
     Interest income                                              84,850           45,417             130,267
     Interest expense                                            954,916            2,420             957,336
     Depreciation and amortization                             1,986,408          667,716           2,654,124
     Capital expenditures                                      2,808,792          258,539           3,067,331
     ---------------------------------------------------- --------------- ---------------- -------------------
     ---------------------------------------------------- --------------- ---------------- -------------------
</TABLE>

NOTE 6 - INVENTORIES

         Inventories are stated at the lower of cost (first-in, first-out) or
market. Inventories consist principally of purchased finished goods.

                                       9
<PAGE>


TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES o
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS o
DECEMBER 31, 2000 AND 2001



NOTE 7 - INCOME TAXES

         The Company provides for income taxes during interim periods based upon
an estimate of the effective annual tax rate.

         The Company's federal tax returns for 1992 through 2000 and New York
State returns for 1999 through 2001 are under examination. As of the date of
this Form 10-Q, the tax authorities have raised no issues that would have a
material effect on the financial statements. The Company cannot predict at this
time what the outcome of the examinations will be or the impact, if any, on the
Company's results of operations.

NOTE 8 - BUSINESS ACQUISITIONS

         In November 1999, Funnoodle acquired the Funnoodle product line
pursuant to an asset purchase agreement dated October 25, 1999. The
consideration for the acquisition was $8.7 million paid in cash at the closing,
the assumption of certain commitments in the amount of $500,000, plus up to $7.0
million payable after the closing if certain contingencies occur. The Company
recorded approximately $8.1 million of goodwill for the excess of the total
purchase price over the fair value of the net assets acquired. Based on the
occurrence of certain contingencies contained in the acquisition agreement, the
Company recorded additional consideration of approximately $2.6 million in the
fiscal year ended March 31, 2001 and $1.2 million in the nine months ended
December 31, 2001.

NOTE 9 - DISCONTINUED OPERATIONS

         Effective November 30, 2001, the Company sold the net assets of the
Monogram and Candy Planet segments of the business to an entity controlled by
David Chu, the Chairman of the Company's board of directors, for $2.25 million.
A gain of $0.5 million was recognized on the sale. The results of these
operations, which have been classified as discontinued operations in the
accompanying financial statements, are as follows:

<TABLE>
<CAPTION>

     FOR THE THREE MONTHS ENDED DECEMBER 31,                              2000                2001
     ------------------------------------------------------------ --------------------- -----------------
<S>                                                                   <C>                   <C>
     Net sales                                                        $4,450,581            $1,652,904
     Loss before income taxes                                         (1,781,383)
                                                                                              (832,931)
     Income tax benefit                                                  560,898               128,882
     ------------------------------------------------------------ --------------------- -----------------
     ------------------------------------------------------------ --------------------- -----------------

     Net loss from discontinued operations                          $ (1,220,485)           $ (704,049)
     ------------------------------------------------------------ --------------------- -----------------
     ------------------------------------------------------------ --------------------- -----------------

     FOR THE NINE MONTHS ENDED DECEMBER 31,                              2000                 2001
     ------------------------------------------------------------ ------------------- -------------------
     Net sales                                                       $13,208,071            $7,358,168
     Loss before income taxes                                         (5,099,857)           (1,877,756)
     Income tax benefit                                                1,788,407               667,611
     ------------------------------------------------------------ ------------------- -------------------
     ------------------------------------------------------------ ------------------- -------------------

     Net loss from discontinued operations                          $ (3,311,450)         $ (1,210,145)
     ------------------------------------------------------------ ------------------- -------------------
     ------------------------------------------------------------ ------------------- -------------------
</TABLE>



                                       10
<PAGE>


TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES o
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS o
DECEMBER 31, 2000 AND 2001


NOTE 10 - SUBSEQUENT EVENT

         On February 9, 2002, the Company entered into an agreement with Jakks
Pacific Inc. ("Jakks") for Jakks to acquire all of the outstanding shares of the
Company. In a two-step transaction, Jakks will initially acquire approximately
66% of the Company's outstanding shares from the Company's principal
shareholders pursuant to a stock purchase agreement, and then acquire the
remainder pursuant to a definitive merger agreement that is subject to
stockholder approval. Jakks will pay $3 per share in cash and the remainder in
shares valued at $1.50 each.














                                       11
<PAGE>


          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


THE FOLLOWING CAUTIONARY STATEMENT IS INCLUDED IN THIS QUARTERLY REPORT PURSUANT
TO THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995:

Certain expectations and projections regarding the future performance of Toymax
International, Inc. and its subsidiaries ("Toymax") discussed in this quarterly
report are forward-looking and are made under the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These expectations and
projections are based on currently available competitive, financial, and
economic data along with Toymax's operating plans and are subject to certain
future events and uncertainties. Forward-looking statements can be identified by
the use of forward-looking terminology, such as "may", "will", "should",
"expect", "anticipate", "estimate", "project", "continue", "plans", "intends" or
other similar terminology. Management cautions you that the following factors,
among others, could cause Toymax's actual consolidated results of operations and
financial position in fiscal 2001 and thereafter to differ significantly from
those expressed in forward-looking statements:

MARKETPLACE RISKS
     o   Dependence on the timely development, introduction and customer
         acceptance of new products, which may affect Toymax's ability to
         successfully redesign, restyle and extend existing core products and
         product lines and successfully bring new products to market.
     o   Possible weaknesses in economic conditions, both domestically and
         internationally, which may negatively affect the sales of Toymax's
         products and the costs associated with manufacturing and distributing
         these products.
     o   Dependence on the success of new licenses, which Toymax acquires for
         marketing with new and existing products.
     o   Toymax's inability to accurately predict future consumer demand.
     o   Increased competitive pressure, both domestically and internationally,
         which may negatively affect the sales of Toymax's products.
     o   Changes in consumer preferences, which may negatively affect Toymax's
         business.

FINANCIAL CONSIDERATIONS
     o   Significant changes in interest rates, both domestically and
         internationally, which may negatively affect Toymax's cost of financing
         its operations
     o   Currency fluctuations, which may affect Toymax's reportable income

OTHER RISKS
     o   Development of new technologies, including the Internet, which may
         create new risks to Toymax's ability to protect its intellectual
         property rights
     o   Changes in laws or regulations, both domestically and internationally,
         including those affecting consumer products, environmental activities
         or trade restrictions, which may lead to increased costs or
         interruption in normal business operations of Toymax
     o   Other factors and risks that may be described from time to time in
         Toymax's public announcements and filings with the Securities and
         Exchange Commission




                                       12
<PAGE>


RESULTS OF OPERATIONS

         FOR PURPOSES OF THE FISCAL YEAR COMPARISONS WHICH FOLLOW, FIGURES
REFERRING TO THE FINANCIAL PERFORMANCE OF TOYMAX INC. ("TMI"), TOYMAX (H.K.)
LIMITED ("THK"), MAXVERSE INTERACTIVE, INC. ("MAXVERSE") AND THE COMPANY'S
EQUITY INVESTMENT IN YABOOM LIMITED ("YABOOM") ARE REFERRED TO AS TOYMAX BRANDS
AND THOSE REFERRING TO THE PERFORMANCE OF GO FLY A KITE, INC. ("GFK") AND THE
FUNNOODLE PRODUCT LINE ("FUNNOODLE") ARE REFERRED TO AS TOYMAX ENTERPRISES. THE
OPERATIONS OF CANDY PLANET, MONOGRAM INTERNATIONAL, INC, MONOGRAM PRODUCTS
(H.K.) LIMITED (COLLECTIVELY WITH MONOGRAM INTERNATIONAL, INC.,"MONOGRAM") ARE
REFLECTED AS DISCONTINUED OPERATIONS.


THREE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH THE THREE MONTHS ENDED
DECEMBER 31, 2000

         NET SALES. Net sales for the quarter ended December 31, 2001 decreased
$9.0 million, or 26.0%, to $25.6 million from $34.6 million for the quarter
ended December 31, 2000.

         Net sales of Toymax Brands for the quarter ended December 31, 2001
decreased 26.8% to $23.5 million, or 91.7% of total net sales, from $32.1
million, or 92.7% of total net sales for the quarter ended December 31, 2000.
The decrease in net sales was primarily due to a decrease in sales of IR and
programmable vehicles and an increase in sales discounts and allowances.

         Net sales of Toymax Enterprises for the quarter ended December 31, 2001
decreased 15.1% to $2.1 million, or 8.3% of total net sales, from $2.5 million,
or 7.3% of total net sales for the quarter ended December 31, 2000. The decrease
in net sales was primarily the result of a decrease in sales of pool and
backyard water recreational products.

         GROSS PROFIT. Gross profit for the quarter ended December 31, 2001,
decreased by $8.5 million to $6.2 million from $14.7 million for the quarter
ended December 31, 2000, with a decrease in gross margin from 42.4% of net sales
to 24.3%.

         The gross profit of Toymax Brands decreased by $8.3 million to $5.8
million, or 24.8% of net sales, from $14.1 million, or 44.0% of net sales for
the quarter ended December 31, 2000. The decrease in the gross profit and margin
was primarily the result of the decrease in sales volume, along with the
increase in sales discounts and allowances. The gross profit of Toymax
Enterprises decreased by $0.1 million to $0.4 million, or 19.1% of net sales,
from $0.5 million, or 22.1% of net sales in the quarter ended December 31, 2000.
The decrease in the gross margin was primarily as a result of decreased margins
realized by GFK primarily as a result of product mix.

         SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses for the quarter ended December 31, 2001 decreased by $0.8 million, or
5.2%, to $13.9 million from $14.7 million for the quarter ended December 31,
2000.

         Selling and administrative expenses of Toymax Brands for the quarter
ended December 31, 2001 decreased by $0.8 million, or 5.7%, to $12.8 million
from $13.5 million for the quarter ended December 31, 2000. The decrease was
primarily due to decreased advertising, royalties and commission expenses
related to the decrease in sales, which were partially offset by increased
research and development costs. Selling and administrative expenses of Toymax
Enterprises for the quarter ended December 31, 2001 remained level with the
prior year period at $1.2 million.

         OPERATING INCOME. As a result of the foregoing, operating income for
the quarter ended December 31, 2001 decreased by $7.7 million to a loss of $7.7
million from a break-even for the quarter ended December 31, 2000.

         Operating income for Toymax Brands decreased by $7.5 million to an
operating loss of



                                       13
<PAGE>


$6.9 million from operating income of $0.6 million for the quarter ended
December 31, 2000. The operating loss for Toymax Enterprises increased by $0.2
million to $0.8 million from $0.6 million for the quarter ended December 31,
2000.

         OTHER EXPENSE, NET. Net other expense for the quarter ended December
31, 2001 was $0.3 million, which approximated the expense for the quarter ended
December 31, 2000.

         INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST. The loss
before taxes and minority interest for the quarter ending December 31, 2001
increased by $7.7 million to $8.0 million, compared to $0.3 million for the
quarter ended December 31, 2000. The loss before taxes for Toymax Brands
increased by $7.6 million to $7.3 million, compared to pre-tax income of $0.3
million for the quarter ended December 31, 2000. The loss before taxes for
Toymax Enterprises increased by $0.1 million to $0.7 million, compared to $0.6
million for the quarter ended December 31, 2000.

         PROVISION FOR INCOME TAXES. The effective tax rate for the quarter
ending December 31, 2001 decreased to 29.0% from 53% for the quarter ended
December 31, 2000 as a result of the geographic distribution of income.

         MINORITY INTEREST. For the quarter ended December 31, 2001, minority
interest decreased $0.1 million from $0.1 million in the quarter ended December
31, 2000. Minority interest, which represents the minority shareholders'
proportionate share of the loss of Maxverse, is limited to the extent of the
investment of the minority shareholders.

         DISCONTINUED OPERATIONS. For the quarter ended December 31, 2001, the
loss from discontinued operations decreased by $0.5 million to $0.7 million,
compared to $1.2 million in the quarter ended December 31, 2000.

         NET INCOME (LOSS). As a result of the foregoing, the net loss for the
quarter ended December 31, 2001 increased to $5.9 million, or $0.49 per share,
from $1.6 million, or $0.14 per share, for the quarter ended December 31, 2000.

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH THE NINE MONTHS ENDED DECEMBER
31, 2000

         NET SALES. Net sales for the nine months ended December 31, 2001
decreased $15.9 million, or 15.8% to $84.7 million from $100.6 million for the
nine months ended December 31, 2000.

         Net sales of Toymax Brands for the nine months ended December 31, 2001
decreased 18.3% to $65.9 million, or 77.8% of total net sales, from $80.7
million, or 80.2% of total net sales for the nine months ended December 31,
2000. The decrease in net sales was primarily due to a decrease in sales of IR
and programmable vehicles and increased sales discounts and allowances.

         Net sales of Toymax Enterprises for the nine months ended December 31,
2001 decreased 5.7% to $18.8 million, or 22.2% of total net sales, from $19.9
million, or 19.8% of total net sales for the nine months ended December 31,
2000. The decrease in net sales was primarily attributable to the decrease in
sales of pool and backyard water recreational products.

         GROSS PROFIT. Gross profit for the nine months ended December 31, 2001,
decreased by $12.0 million, or 31.8%, to $25.7 million, or 25.7% of net sales,
from $37.7 million, or 37.4% of net sales, for the nine months ended December
31, 2000.




                                       14
<PAGE>


         The gross profit of Toymax Brands decreased by $10.7 million, or 34.9%,
to $20.0 million, or 30.3% of net sales, from $30.7 million, or 38.0% of net
sales for the nine months ended December 31, 2000. The decrease in gross profit
is primarily attributable to the decrease in sales, volume and the increase in
sales discounts and allowances. The gross profit of Toymax Enterprises decreased
by $1.3 million, or 18.0%, to $5.7 million, or 30.6% of net sales, from $7.0
million, or 35.2% of net sales in the nine months ended December 31, 2000. The
decrease in gross profit is primarily attributable to the decrease in gross
margin realized by GFK primarily as a result of product mix.

         SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses for the nine months ended December 31, 2001 increased by $0.2 million,
or 0.5%, to $28.5 million, or 33.6% of net sales, from $28.3 million for the
nine months ended December 31, 2000, or 28.2% of net sales.

         Selling and administrative expenses of Toymax Brands for the nine
months ended December 31, 2001 increased $0.5 million, or 2.0%, to $23.9
million, or 36.2% of net sales, from $23.4 million, or 29% of net sales for the
nine months ended December 31, 2000. The increase was primarily due to the
incremental operating expenses related to Maxverse, which were partially offset
by decreased advertising expense. Selling and administrative expenses of Toymax
Enterprises for the nine months ended December 31, 2001 decreased by $0.3
million, or 6.2%, to $4.6 million, or 24.5% of net sales, from $4.9 million, or
24.7% of net sales for the nine months ended December 31, 2000. The decrease in
expenses was primarily due to the decrease in amortization of goodwill.

         OPERATING INCOME. As a result of the foregoing, operating income for
the nine months ended December 31, 2001 decreased by $12.1 million to a loss of
$2.8 million from income of $9.3 million for the nine months ended December 31,
2000.

         Operating income for Toymax Brands decreased by $11.2 million to a loss
of $3.9 million from income of $7.3 million for the nine months ended December
31, 2000. Operating income for Toymax Enterprises decreased by $1.0 million to
$1.1 million from $2.1 million for the nine months ended December 31, 2000.

         OTHER INCOME (EXPENSE), NET. Net other expense for the nine months
ended December 31, 2001 decreased by $0.2 million to $1.1 million, compared to
$1.3 million for the nine months ended December 31, 2000. The decrease in net
other expense was primarily attributable to the exclusion of the Company's
equity in the net loss of Yaboom.

         INCOME BEFORE INCOME TAXES AND MINORITY INTEREST. Income before taxes
for the nine months ending December 31, 2001 decreased by $11.9 million to a
pre-tax loss of $3.9 million, compared to pre-tax income of $8.0 million for the
nine months ended December 31, 2000. Income before taxes for Toymax Brands
decreased by $11.0 million to a pre-tax loss of $5.0 million, compared to
pre-tax income of $6.0 million for the nine months ended December 31, 2000.
Income before taxes for Toymax Enterprises decreased by $1.0 million to $1.0
million, compared to $2.0 million for the nine months ended December 31, 2000.

         PROVISION FOR INCOME TAXES. The effective tax rate for the nine months
ending December 31, 2001 decreased to 34.6% from 38.6% for the nine months ended
December 31, 2000 due to the geographic distribution of income.

         MINORITY INTEREST. Minority interest for the nine months ended December
31, 2001 increased by $0.4 million to $0.5 million, compared to $0.1 million for
the nine months ended December 31, 2000. Minority interest represents the
minority shareholders' proportionate share of the loss of Maxverse, which was
incorporated in the second half of fiscal 2001.



                                       15
<PAGE>


         DISCONTINUED OPERATIONS. For the nine months ended December 31, 2001,
the loss from discontinued operations decreased by $2.1 million to $1.2 million,
compared to $3.3 million in the nine months ended December 31, 2000.

         NET INCOME (LOSS). As a result of the foregoing, net income for the
nine months ended December 31, 2001 decreased $4.5 million to a net loss of $2.8
million, or $0.23 per diluted share, from net income of $1.7 million, or $0.16
per diluted share, for the nine months ended December 31, 2000.





                                       16
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

         The Company historically has funded its operations and capital
requirements from cash generated from operations and from financing activities.
During the nine months ended December 31, 2001, cash and cash equivalents
increased $3.2 million to $5.0 million.

         Cash used in operating activities was approximately $3.0 million, as
compared to $0.8 million provided by operations in the nine months ended
December 31, 2000. The decrease was primarily due to the net loss for the period
and the increase in due from factor, accounts receivable and inventories, which
was partially offset by the decrease in prepaid expenses and the increase in
accounts payable and due to affiliates.

         Investing activities used $4.3 million in net cash, as compared to $4.9
million in the nine months ended December 31, 2000. Investing activities in the
current and prior year periods consisted principally of capital expenditures,
principally for the purchase of molds and equipment for new products, and the
payment of additional consideration for the purchase of the Funnoodle product
line.

         Financing activities provided $10.5 million in net cash due to the
increase in the working capital credit facilities. In December 2000, the Company
replaced the TMI and GFK subsidiaries' existing $30.0 million credit facility
and the Funnoodle $5.0 million line of credit with a $40.0 million facility for
all of its U.S. based operating subsidiaries. Borrowings, which are subject to
availability according to a formula based on eligible accounts receivable and
inventory, bear interest at either the lender's U.S. prime rate (5.00% as of
December 31, 2001) or LIBOR plus 2.50% (4.38% as of December 31, 2001). The
credit agreement, which expires in December 2003, is secured by the accounts
receivable and inventories of the Company's domestic subsidiaries, as well as
other properties, and is guaranteed by Toymax. The agreement contains certain
restrictions relating to limitations on debt, certain investments and the
payment of dividends. As of December 31, 2001, the outstanding balance under the
Agreement was approximately $20.6 million and borrowing availability was
approximately $3.0 million. The Agreement is terminable by the Bank at any time
at its sole discretion, at which time the Company's obligations to the Bank
would become due and payable.

         Pursuant to a credit agreement dated July 4, 2001, the Company's Toymax
(H.K.) Limited subsidiary renewed its credit facility with The Hongkong and
Shanghai Banking Corporation Limited ("HONGKONG BANK"). The facility provides a
clean export loan of $1.0 million and the acceptance of an export letter of
credit guarantee for documents presented with discrepancies of up to
approximately $2.3 million. The facility, which is jointly available to the
Company's affiliates in Hong Kong, is terminable by the Hongkong Bank at any
time at its sole discretion, at which time the Company's obligations to the
Hongkong Bank would become due and payable. As of December 31, 2001 there was no
outstanding balance under this facility.

         In October 2001, the Company announced the resumption of the Company's
stock repurchase program. As of February 8, 2002, a total of 66,200 shares of
Toymax common stock have been repurchased for a total purchase price of
$210,403.

         The Company expects to fund its near-term cash requirements from a
combination of existing cash balances, cash flow from operations and borrowings
under its banking arrangements. The Company expects to finance its longer-term
growth primarily with cash flow from operations and with externally generated
funds, which will likely include borrowings under its existing or future credit
facilities. Additional funding from other sources, including equity investors,
may be required to support the continued marketing and development costs of
Maxverse. There can be no assurance that sufficient cash flows from operations
will materialize or that financing under a



                                       17
<PAGE>


credit facility will be available in amounts, or at rates, or on terms and
conditions acceptable to the Company. In such event, additional funding would be
required.

         In connection with any future cash needs or acquisition opportunities,
the Company may incur additional debt or issue additional equity or debt
securities depending on market conditions and other factors.







                                       18
<PAGE>


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to certain market risks, which arise from transactions
entered into in the normal course of business. The Company's primary exposures
are changes in interest rates with respect to its debt and foreign currency
exchange fluctuations.

INTEREST RATE RISK

The interest payable on the Company's revolving line-of-credit is variable based
on LIBOR and/or the prime rate, and therefore, affected by changes in market
interest rates. The Company does not use derivative financial instruments.

FOREIGN CURRENCY RISK

While the Company's product purchases are transacted in U.S. dollars, most
transactions among the suppliers and subcontractors of Tai Nam Industrial
Company Limited, an OEM toy manufacturer that has been the Company's most
important manufacturer since inception, are effected in Hong Kong dollars.
Accordingly, fluctuations in Hong Kong monetary rates may have an impact on the
Company's cost of goods. However, since 1983, the value of the Hong Kong dollar
has been tied to the value of the United States dollar, eliminating fluctuations
between the two currencies. Despite the announcements by the Hong Kong
Government that it is determined to maintain such a fixed exchange rate, there
can be no assurance that the Hong Kong dollar will continue to be tied to the
United States dollar in the near future or longer term. Furthermore,
appreciation of Chinese currency values relative to the Hong Kong dollar could
increase the cost to the Company of the products manufactured in China, and
thereby have a negative impact on the Company.








                                       19
<PAGE>





                                    PART II.
                                OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The Company is involved in various legal proceedings in the ordinary course of
its business activities. The Company believes that the resolution of such legal
proceedings and claims, individually and in the aggregate, are not likely to
have a material adverse effect on its financial position or results of
operations.

Reference is made to Part I, Item 3, Legal Proceedings, in the Registrant's
Annual Report on Form 10-K for the year ended March 31, 2001.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

Reference is made to Part II, Item 5, Market for the Registrant's Common Equity
and Related Stockholder Matters, in the Registrant's Annual Report on Form 10-K
for the year ended March 31, 2001.

Under the Company's stock repurchase program approved by the Board of Directors
in May 1999, as of February 8, 2002, a total of 66,200 shares of Toymax common
stock have been repurchased for a total purchase price of $210,403.

ITEM 3.   DEFAULTS BY THE COMPANY UPON ITS SENIOR SECURITIES

None.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.   OTHER INFORMATION

       At the Company's Annual Meeting of Stockholders on August 9, 2001, the
 stockholders  approved that the name of the Company be changed to Maxx
Enterprises,  Inc.  The steps to be taken to  effectuate  the name  change
from Toymax International, Inc. to Maxx Enterprises, Inc. are not complete as
of the date of this report.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

         a)  Exhibits

         10.27    Employment Agreement with Michael Sabatino, dated December 1,
                  2001

         10.28    Asset Purchase Agreement dated November 30, 2001 by and
                  between V2 Development Company Limited, Monogram
                  International, Inc., Monogram Products (H.K.) Limited,
                  Monogram Acquisition I, LLC, and Toymax International, Inc.

         b)  Reports on Form 8-K

                  None.





                                       20
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     TOYMAX INTERNATIONAL, INC.
                                     --------------------------
                                         (Registrant)


                                     By   /s/ STEVEN A. LEBENSFELD
                                          ----------------------------
                                          Steven A. Lebensfeld
                                          President and Director

                                     By   /s/ MICHAEL SABATINO
                                          ----------------------------
                                          Michael Sabatino
                                          Chief Financial Officer


Date:  February 14, 2002




                                       21