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About Toymax
Toymax Stock Offering - Aug 1997
Toymax was founded in 1990 by four experienced toy industry executives:

David Chu, the Company's Chairman, Steven Lebensfeld, its President, Harvey Goldberg, its Executive Vice President, and Kenneth Price, its Senior Vice President of Sales and Marketing. Since the early 1980s these executives have
worked together in managing or founding toy companies or in customer-supplier relationships. Each individual brings particular strengths to the management team: Mr. Chu in manufacturing, Mr. Lebensfeld in product development, and
Messrs. Goldberg and Price in sales and marketing. In addition, these executiveshave built a team of knowledgeable, highly skilled management and employees whose collective toy industry experience enhances the Company's ability to
effectively execute its business plan.

Toymax conducts its sales activities through its wholly-owned subsidiaries, Toymax Inc. and Toymax (H.K.) Limited ("Toymax HK"). Following the closing of the Offering, sales previously conducted through Toymax HK will be conducted through Toymax (Bermuda) Limited. U.S. domestic sales, conducted by Toymax Inc., consist of sales of the Company's promotional product lines to U.S. customers pursuant to customer purchase orders ("U.S. Domestic Sales"). Customers purchasing products on this basis include Toys "R" Us, Kay-Bee Toys, F.A.O. Schwarz, Wal-Mart, Kmart and Target. Sales conducted by Toymax HK ("Toymax HK Sales") consist of sales on an FOB Hong Kong basis which are generally based on letters of credit and which include sales of lower priced basic products to U.S. and international retailers, including Toys "R" Us International, Lojas
Americanas (Brazil) and Blokker (Holland) and sales of the Company's promotional product lines to approximately 40 international distributors (including Mattel Inc. and Hasbro Inc.). The Company's products are sold in over 50 countries around the world. In fiscal 1997, U.S. Domestic Sales constituted 70.9% of net sales, with the balance being Toymax HK Sales.

The Company has generated net profits in four out of the last five fiscal years. For the fiscal year ended March 31, 1997, Toymax had net sales of $54.7 million and a net income of $3.5 million. In fiscal 1996, the Company experienced a net loss of $9.8 million. This was due principally to the cancellation of orders and the failure by retailers to place re-orders during the 1995 holiday season. As a result, the Company had to sell the excess inventory at discounted prices which impacted both gross sales and net profits.

Toymax currently contracts for all of its manufacturing requirements. Tai Nam Industrial Company Limited ("Tai Nam"), based in Hong Kong, serves as the Company's purchasing agent and, through an affiliated company, Jauntiway Investments Limited ("Jauntiway"), manufactures a majority of the Company's products. Jauntiway is an OEM toy manufacturer with two manufacturing facilities in southern China, including an ISO 9002 factory. Tai Nam and Jauntiway are owned by David Chu, the Chairman and a principal stockholder of the Company. The Company believes that these relationships give it several competitive advantages, such as better quality control on merchandise, greater operating and financial flexibility, and improved reliability and scheduling.

The Company's principal offices are located at 125 East Bethpage Road, Plainview, New York 11803. The Company's telephone number is (516) 391-9898. In addition, the Company maintains a worldwide web site
(http://www.laserchallenge.com) on the Internet. Information contained on the Company's web site is not a part of this prospectus and must not be relied upon in evaluating the Company, its products or business or an investment in the
Common Stock offered hereby.
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