Small World Kids Raises $3.2 Million

CULVER CITY, Calif., Sept. 27, 2004 (PRIMEZONE) -- Small World Kids, Inc. (OTCBB:SWKD) today announced it has issued 10 percent Promisory Notes due September 2005 to each of St. Cloud Capital Partners and Strome Hedgecap Ltd., raising an aggregate amount of $3.2 million. In connection with these transactions, the company issued 650,000 common shares and warrants to purchase up to 350,000 common shares to St. Cloud and issued warrants to purchase 1.344 million common shares to Strome Hedgecap. The exercise price for the warrants is $0.50 per share. Additional information regarding this transaction is available in the company's Form 8-K filed with the Securities and Exchange Commission on September 23, 2004.

"The completion of these transactions enhances the company's working capital position and its ability to support a proactive corporate strategy that leverages Small World Kid's brand name awareness, as well as the new opportunities we expect to realize through our recent acquisition of electronic learning and related intellectual property from NeuroSmith," said Debra Fine, president and chief executive officer of Small World Kids, Inc.

About the Company

Small World Kids develops, manufacturers, markets and distributes high quality specialty toys and educational products for children. Its sales categories include infant, pre-school, early learning, imaginative and active play, represented by award-winning brand names Ryan's Room, Gertie Ball, IQ Baby, and Puzzibilities. The company also holds rights in the U.S. for specialty channel distribution for brands such as Little Tikes and Tolo. Its products are sold in over 3,000 locations -- including educational channels, retail chains, Internet sites, catalogues and specialty stores.

Forward Looking Statements

Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors which include but are not limited to risk factors inherent in doing business. Although the company's management believes that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The company has no obligation to update these forward-looking statements.