NewKidCo Announces Closing of Private Placement Offering.

BURLINGTON, Mass.--(BUSINESS WIRE)--June 15, 1999--

NewKidCo International Inc. ("NewKidCo International" or the "Company") (OTC BB:NKCIF)(TSE:NKC) is pleased to announce that it has completed a private placement offering of 5,700,000 Special Warrants at a price of Cdn.$2.50 each, for gross proceeds of Cdn.$14,250,000. A further closing of 300,000 Special Warrants ($750,000) is anticipated to occur within the next few days. Griffiths McBurney & Partners acted as agent for the financing and has been engaged by NewKidCo International to act as the company's Canadian financial advisor for the next 12 months. Proceeds from the financing will be used to obtain additional licenses, develop more product and increase marketing efforts for NewKidCo International.

Each Special Warrant will be convertible into one common share of NewKidCo International for no additional consideration at any time up to June 14, 2000. In the event that the Ontario Securities Commission or Manitoba Securities Commission does not issue a receipt for a prospectus by 5:00 p.m. on October 11, 1999, each Special Warrant will be convertible into 1.1 common shares.

$11,733,107.50 of the proceeds from the Special Warrants are being held in escrow pending obtaining necessary shareholder approvals and the satisfaction of the conditions for approval by The Toronto Stock Exchange. In the event that such conditions are not met on or before 5:00 p.m. (Toronto time) on July 31, 1999, the proceeds which are being held in escrow shall be returned to the purchasers thereof with applicable interest and the Special Warrants issued in respect of such proceeds shall be cancelled. A special meeting of the shareholders to obtain such approvals is scheduled for July 26, 1999.

In connection with this financing, NewKidCo International has granted to Mattel, Inc., which was a significant participant in the Special Warrant Financing, a common share purchase warrant exercisable for 2,000,000 common shares at a price of Cdn.$2.60 exercisable until December 21, 2000 (subject to adjustment under certain circumstances). Such warrant is exercisable only in certain circumstances involving a change of control of the Company or the sale of all or substantially all of the video console assets of the Company or a bid by Mattel, Inc. for the shares or offer by Mattel, Inc. to acquire all the assets of the Company at a price which is at least a 15% premium to market which is not approved by the board or accepted by the shareholders.

NewKidCo is also pleased to announce that it has acquired control of the remaining 25% interest in NewKidCo Holdings, LLC (the "LLC"), which conducts the Company's children's video console game business. Pursuant to the arrangements entered into in June 1998, when the Company acquired its initial 75% interest in the LLC, the Company has paid or will pay US$500,000 and issued 641,667 common shares to acquire the remaining 25% interest. As well, under the acquisition arrangements, the Company is obligated to pay the original owners of the LLC 25% of the net profits of the LLC for the three year period ending April 30, 2001, to a maximum of US$6,000,000. In addition, as part of such acquisition, warrants entitling the vendors to acquire 4,000,000 common shares of the Company until June 1, 2003, at prices ranging from US$1.50 to US$4.00 have become exercisable. 2,600,000 of such warrants, however, remain subject to shareholder approval. Shareholder approval of such warrants will be sought at the July 26, 1999 shareholders meeting.

The Company is also pleased to announce the appointment of Greg Bestick, an officer of Mattel, Inc., and Hank Kaplan, President of the LLC, to the Company's board of directors.

These securities have not been and will not be registered under the U.S. Securities Act of 1933. This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities in the United States.

About NewKidCo International Inc.

NewKidCo International Inc. (OTC BB: NKCIF; TSE: NKC) owns NewKidCo, LLC, a publisher of video games for young children on "next generation" game console systems. NewKidCo's mission is to become the leading provider in the children's video game category with such popular licensed properties as Sesame Street(R) from Children's Television Workshop(R), Steven Spielberg presents TINY TOON Adventures(R) from Warner Bros and HelloKitty(R) from Sanrio. NewKidCo's products are sold nationwide through the retail channel. For more information please visit http://newkidco.com

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risk and uncertainties, including without limitation risks of intellectual property rights and litigation, risks in technology development and commercialization, risks in product development and market acceptance of and demand for the Company's products, risks of downturns in economic conditions generally, risks associated with competition and competitive pricing pressures, risks associated with foreign sales, risks associates with the sell-through of products in the sales channels, risks associated with customer concentration and other risks detailed in the Company's filings with the Securities and Exchange Commission.