<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 JUNE 30, 1998

                                       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                                  11-3391335
      (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, 10,605,000 as of August 13, 1998.


<PAGE>

                   TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                                  JUNE 30, 1998

                                      INDEX

                         PART I - FINANCIAL INFORMATION

                                                                            Page

Item 1.  Financial Statements:

         Condensed Consolidated Balance Sheets as of
         June 30, 1998 and March 31, 1998                                      3

         Condensed Consolidated Statements of Operations
         for the Three Months Ended June 30, 1998 and 1997                     4

         Condensed Consolidated Statements of Cash Flows for
         the Three Months Ended June 30, 1998 and 1997                         5

         Notes to Unaudited Condensed Consolidated Financial
         Statements                                                            6

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                   8

                      PART II - OTHER INFORMATION

Item 1.  Legal Proceedings                                                    11

Item 2.  Changes in Securities and Use of Proceeds                            11

Item 6.  Exhibits and Reports on Form 8-K                                     11

         Signatures                                                           12


                                       2

<PAGE>

                            TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES

                                 CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                  JUNE 30,                MARCH 31,
                                                                    1998                    1998
                                                                -----------              -----------
                                                                (UNAUDITED)
<S>                                                            <C>                      <C>
ASSETS
CURRENT:
     Cash and cash equivalents                                  $26,623,012              $21,500,588
     Due from Factor                                              5,217,247               19,251,619
     Accounts receivable, net                                     2,799,260                  523,340
     Due from affiliates                                             41,233                    -
     Due from officers                                               17,537                    -
     Inventories                                                  5,316,792                5,474,301
     Prepaid expenses and other current assets                    1,826,931                1,620,124
     Income tax refunds receivable                                1,489,677                  226,389
     Deferred income taxes                                        2,240,099                2,240,098
                                                                -----------              -----------
         TOTAL CURRENT ASSETS                                    45,571,788               50,836,459
PROPERTY AND EQUIPMENT, NET                                       1,887,006                1,811,731
DEFERRED INCOME TAXES                                               886,461                  886,461
OTHER ASSETS                                                      1,342,920                  296,940
                                                                -----------              -----------
                                                                $49,688,175              $53,831,591
                                                                ===========              ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT:
     Accounts payable                                           $ 1,924,367              $ 2,016,548
     Accrued expenses                                             5,272,523                6,223,513
     Accrued rebates and allowances                               5,216,131                5,792,085
     Due to affiliates                                            2,566,137                3,781,974
     Current portion of long-term obligations                        30,686                   30,084
     Income taxes payable                                         1,199,935                1,237,332
                                                                -----------              -----------
         TOTAL CURRENT LIABILITIES                               16,209,779               19,081,536
LONG-TERM OBLIGATIONS                                                44,207                   47,162
                                                                -----------              -----------
         TOTAL LIABILITIES                                       16,253,986               19,128,698
                                                                -----------              -----------
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; 10,605,000 shares issued
      and outstanding                                               106,050                  106,050
     Additional paid-in capital                                  23,059,355               23,059,355
     Retained earnings                                           10,283,936               11,552,640
     Accumulated other comprehensive income                         (15,152)                 (15,152)
                                                                -----------              -----------
         TOTAL STOCKHOLDERS' EQUITY                              33,434,189               34,702,893
                                                                -----------              -----------
                                                                $49,688,175              $53,831,591
                                                                ===========              ===========

</TABLE>

     The accompanying notes are an integral part of these Condensed Consolidated
Financial Statements.


                                       3

<PAGE>

                              TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES

                            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                    THREE MONTHS ENDED
                                                                         JUNE 30,
                                                             ----------------------------------
                                                                1998                   1997
                                                             -----------            -----------
                                                             (UNAUDITED)            (UNAUDITED)
<S>                                                         <C>                    <C>
NET SALES                                                    $ 8,271,092            $ 7,090,862
                                                             -----------            -----------
COST AND EXPENSES:
   Cost of goods sold                                          6,125,887              3,783,717
   Selling and administrative                                  4,850,238              3,664,051
                                                             -----------            -----------
                                                              10,976,125              7,447,768
                                                             -----------            -----------
Operating loss                                                (2,705,033)              (356,906)
                                                             -----------            -----------

OTHER INCOME (EXPENSES):

   Other income, net                                             (52,769)                49,842
   Interest income                                               288,078                 17,587
   Interest expense                                               (1,367)              (148,810)
   Finance charges                                               (28,703)               (83,168)
                                                             -----------            -----------
                                                                 205,239               (164,549)
                                                             -----------            -----------
LOSS BEFORE INCOME TAX BENEFIT                                (2,499,794)              (521,455)
INCOME TAX BENEFIT                                            (1,231,090)              (152,187)
                                                             -----------            -----------
NET LOSS                                                     $(1,268,704)           $  (369,268)
                                                             ===========            ===========

BASIC AND DILUTED LOSS PER SHARE                             $     (0.12)           $     (0.05)
                                                             ===========            ===========
SHARES USED IN COMPUTING BASIC AND DILUTED LOSS PER
   SHARE                                                      10,605,000              7,500,000
                                                             ===========            ===========

</TABLE>

         The accompanying notes are an integral part of these Condensed 
Consolidated Financial Statements.


                                       4

<PAGE>

                            TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES

                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                               THREE MONTHS ENDED
                                                                                    JUNE 30,
                                                                  ---------------------------------------
                                                                      1998                       1997
                                                                  -----------                 -----------
                                                                  (UNAUDITED)                 (UNAUDITED)
<S>                                                              <C>                         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                       $(1,268,704)                $  (369,268)
   Adjustments to reconcile net loss to net cash provided by
    operating activities:
    Depreciation and amortization                                     193,258                     277,888
    Bad debts                                                          (1,453)                      -
    Non-cash compensation                                               -                         187,000
    Changes in operating assets and liabilities:
     Due from Factor and accounts receivable                       11,759,905                   9,464,124
     Due from affiliates                                              (41,233)                    (47,426)
     Inventories                                                      157,509                  (3,239,566)
     Prepaid expenses and other assets                             (1,252,787)                 (1,151,212)
     Income tax refunds receivable                                 (1,263,288)                   (215,484)
     Accounts payable and accruals                                 (1,619,125)                    519,662
     Due to affiliates                                             (1,215,837)                   (655,209)
     Income taxes payable                                             (37,397)                    (25,417)
                                                                  -----------                 -----------
       NET CASH PROVIDED BY OPERATING ACTIVITIES                    5,410,848                   4,745,092
                                                                  -----------                 -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property and equipment                             (268,534)                   (268,838)
   Advances to officers                                               (17,537)                    (28,921)
   Repayment from officers                                              -                             230
                                                                  -----------                 -----------

       NET CASH USED IN INVESTING ACTIVITIES                         (286,071)                   (297,529)
                                                                  -----------                 -----------
CASH FLOWS FROM FINANCING ACTIVITIES:

   Increase (decrease) in bank credit facility                          -                      (3,343,379)
   Repayment of long-term obligations                                  (2,353)                    (11,449)
   Repayment of loan from officers                                      -                        (157,096)
   Loans from officers                                                  -                          50,484
                                                                  -----------                 -----------
       NET CASH USED IN FINANCING ACTIVITIES                           (2,353)                 (3,461,440)
                                                                  -----------                 -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                           5,122,424                     986,123
CASH AND CASH EQUIVALENTS, beginning of year                       21,500,588                     564,659
                                                                  -----------                 -----------
CASH AND CASH EQUIVALENTS, end of period                          $26,623,012                 $ 1,550,782
                                                                  ===========                 ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
   Interest paid                                                  $     5,165                 $   118,412
                                                                  ===========                 ===========
   Income taxes paid                                              $     -                     $     1,200
                                                                  ===========                 ===========

SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
   Capital lease obligations incurred                             $     4,932                 $    65,434
                                                                  ===========                 ===========

</TABLE>

         The accompanying notes are an integral part of these Condensed 
Consolidated Financial Statements.


                                       5

<PAGE>

                  TOYMAX INTERNATIONAL, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                       THREE MONTHS ENDED JUNE 30, 1998
                                  (UNAUDITED)

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, 1998 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, 1998.
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 a full year, due, in
part, to seasonal fluctuations which are normal for the Company's business.

NOTE 2 -   EARNINGS PER SHARE

In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128 EARNINGS PER SHARE. Statement 128 replaced the
previously reported primary and fully diluted earnings per share with basic and
diluted earnings per share. Unlike primary earnings per share, basic earnings
per share excludes any dilutive effects of options, warrants and convertible
securities. Diluted earnings per share is very similar to the previously
reported fully diluted earnings per share. All earnings per share amounts for
all periods have been presented to conform to the Statement 128 requirements.

For the calculation of earnings per share for the three months ended June 30,
1998 and 1997, all of the Company's options and warrants are excluded from basic
and diluted earnings per share because they are anti-dilutive.

NOTE 3 -   COMPREHENSIVE INCOME

The Company has adopted Statement of Financial Standards (SFAS) No. 130,
REPORTING COMPREHENSIVE INCOME, which establishes standards for reporting and
display of comprehensive income, its components and accumulated balances.
Comprehensive income is defined to include all changes in equity except those
resulting from investments by owners and distributions to owners. Among other
disclosures, SFAS No. 130 requires that all items that are required to be
recognized under current accounting standards as components of comprehensive
income be reported in a financial staement that is displayed with the same
prominence as other financial 


                                       6

<PAGE>

statements.  For interim reporting purposes, SFAS No. 130 requires disclosure 
of total comprehensive income.

Total comprehensive income for the three months ended June 30, 1998 and June 30,
1997 is the same as the reported net loss.

NOTE 4 -   INCOME TAXES

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

NOTE 5 -   RECLASSIFICATIONS

Certain June 30, 1997 amounts were reclassified to conform to the June 30, 1998
presentation.


                                       7

<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:

From time to time, information provided by the Company or statements made by its
employees may contain "forward-looking" statements, as that term is defined in
the PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. For this purpose, any
statements contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes," "anticipates," "plans," "may," "estimate," "continue,"
"intends," "expects," and similar expressions are intended to identify
forward-looking statements.

This Form 10-Q may contain forward-looking statements, which involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in such statements. Certain factors that could cause such a
difference include, without limitation, the risks specifically described in the
Company's Registration Statement on Form S-1. Registration No. 333-33409, filed
with the Securities and Exchange Commission in connection with its recent
initial public offering, which factors are incorporated herein by reference, and
other factors including, without limitation, the demand for Laser Challenge and
other products of the Company; the Company's dependence on timely development,
introduction and customer acceptance of new products; possible weakness of the
Company's markets; dependence on a limited number of major customers; the impact
of competition on revenues, margins and pricing; the effect of currency
fluctuations; other risks and uncertainties as may be disclosed from time to
time in the Company's public announcements; the general state of the economy in
the United States and other major markets; customer inventory levels; the cost
and availability of raw materials; and changes in trade relations regarding
China.

RESULTS OF OPERATIONS

FOR PURPOSES OF THE THREE MONTH COMPARISONS BELOW, FIGURES REFERRING TO THE
FINANCIAL PERFORMANCE OF TOYMAX INC. (WHICH HAS CONDUCTED THE COMPANY'S U.S.
DOMESTIC SALES) ARE REFERRED TO AS THE "U.S. DOMESTIC OPERATION" AND THOSE
REFERRING TO THE PERFORMANCE OF TOYMAX (H.K.) LIMITED (WHICH HAS CONDUCTED THE
TOYMAX HK SALES) ARE REFERRED TO AS THE "FOB HONG KONG OPERATION."

THREE MONTHS ENDED JUNE 30, 1998 COMPARED WITH THE THREE MONTHS ENDED JUNE 30,
1997

     NET SALES. Net sales for the quarter ended June 30, 1998 increased to $8.3
million from $7.1 million for the quarter ended June 30, 1997, an increase of
$1.2 million, or 16.6%.

     Net sales of the FOB Hong Kong Operation increased 112.5% to $5.6 million,
or 67.6% of total net sales, in the quarter ended June 30, 1998 from $2.6
million, or 37.1% of total net sales, in the quarter ending June 30, 1997. The
increase in net sales was primarily due to increases in the sales of the Laser
Challenge and Precious Metals product lines and the introduction of the Mighty
Mo's vehicle line and Nintendo(R) Mini Classics hand held games. Net sales of
the U.S.


                                       8

<PAGE>

Domestic Operation decreased 39.9% to $2.7 million, or 32.4% of total net sales,
in the quarter ended June 30, 1998, from $4.5 million, or 62.9% of total net
sales, for the quarter ended June 30, 1997. The decrease in net sales was mainly
attributable to the decreased sales of the Laser Challenge(TM) product line
partially offset by sales of the recently launched Mighty Mo's(TM) vehicle 
line.

     GROSS PROFIT. Gross Profit for the quarter ended June 30, 1998, decreased
by $1.2 million, or 35.1%, to $2.1 million, or 25.9% of net sales, from $3.3
million, or 46.6% of net sales, for the quarter ended June 30, 1997.

     The decrease in gross profit as a percentage of net sales was mainly
attributable to higher sales promotion costs stemming from lower than expected
retail demand for the Company's CyberSplash(TM) product, introduced in the U.S.
during this calendar year. Increased sales of products by the FOB Hong Kong
Operation, which historically carry a lower gross profit margin also contributed
to the decline.

     SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses
for the quarter ended June 30, 1998 increased by $1.2 million, or 32.4%, to $4.9
million, or 58.6% of net sales, from $3.7 million, or 51.7% of net sales, for
the quarter ended June 30, 1997. The increase in selling and administrative
expenses was mainly attributable to an increase in advertising expenses of $0.9
million primarily to support the sales of Laser Challenge as the Company makes
the transition to the ELS V2 version. Spending for research and development
increased by $0.2 million as the Company increased its commitment to new product
development.

     OPERATING LOSS . As a result of the foregoing, the operating loss for the
quarter ended June 30, 1998 increased by $2.3 million, or 657.9%, to a loss of
$2.7 million from a loss of $0.4 million for the quarter ended June 30, 1997.

     INTEREST INCOME (EXPENSE),NET. Net interest income for the quarter ended
June 30, 1998 was $0.3 million, compared to a net interest expense of $0.1
million for the quarter ended June 30, 1997, an increase of $0.4 million, or 
318.5%. The increase in net interest income was primarily due to the 
investment of cash generated from operations and from the Company's initial 
public offering in October 1997.

     LOSS BEFORE TAXES. The loss before taxes for the quarter ending June 30,
1998 increased by $2.0 million to $2.5 million, compared to a loss before taxes
of $0.5 million for the quarter ended June 30, 1997.

     INCOME TAX BENEFIT. The income tax benefit for the quarter ending June 30,
1998 increased by approximately $1.1 million to a benefit of approximately $1.2
million from a benefit of approximately $0.1 for the quarter ended June 30, 1997
primarily due to increased losses in the quarter ended June 30, 1998.

     NET LOSS. As a result of the foregoing, the net loss for the quarter ended
June 30, 1998 increased to $1.3 million ($0.12 per share) from $0.4 million
($0.05 per share) for the quarter ended June 30, 1997, an increase of $0.9
million or 243.6 % from the quarter ended June 30, 1997.


                                       9

<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 three
months ended June 30, 1998 cash and cash equivalents increased $5.1 million to
$26.6 million.

The Company's operating activities provided net cash of approximately $5.4
million, which was primarily due to a net loss of $1.3 million offset by a net
increase in operating assets and liabilities of $6.5 million. This net increase
included an $11.8 million decrease in accounts receivable and amounts due from
factor partially offset by increases in income tax refunds receivable and
prepaid expenses and other assets and decreases in accounts payable, accruals,
and due to affiliates which totaled $5.4 million

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
credit facility with State Street Bank and Trust Company. The Company expects to
finance its longer-term growth primarily from cash flow from operations and with
externally generated funds that will likely include borrowings under its
existing or future credit facilities. There can be no assurance that sufficient
cash flows from operations will materialize or that financing under a 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.


                                       10

<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 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, 1998 for descriptions of
[Link Group International v. Toymax Inc., U.S. District Court for the District
of Connecticut].

In April 1998, the Company entered into a Settlement Agreement with Saban
Entertainment, Inc. and Saban International resolving all disputes between the
Companies. While the terms of the agreement are confidential, in management's
opinion, the terms of the agreement will not have a material effect on the
financial condition of the Company or the Company's results of operations.

The Company has been notified by the Internal Revenue Service concerning a
pending examination covering tax years 1993, 1994 and 1995. As of the date of
this Form 10-Q, no issues have been raised by the Internal Revenue Service. The
Company cannot predict at this time what the outcome of the examination will be
or the impact on the Company's results of operations, if any.

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, 1998.

ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

     a)  Exhibits
         None

     b)  Reports on Form 8-K
         None


                                       11

<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/ William A. Johnson, JR.
                                          --------------------------------
                                          William A. Johnson, Jr.
                                          Chief Financial Officer and
                                          Treasurer (Principal Financial
                                          and Accounting Officer)

Date:  August 13, 1998


                                       12