SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13D

UNDER THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 1)*

4 Kids Entertainment Inc.

(Name of Issuer)

Common Stock

(Title of Class of Securities)

350865101

(CUSIP Number)

Wilmot B. Harkey

Nantahala Capital Management, LLC

100 First Stamford Place, 2^nd Floor

Stamford, CT 06902

(203) 909-6430

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

February 15, 2012

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. £

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities and Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes.)

(Continued on following page(s))

Item 1. Security and Issuer.

This statement relates to the Common Stock of 4 Kids Entertainment, Inc.  The address of the principal executive offices of the Issuer is 53 West 23^rd Street, 11^th Floor, New York, NY 10010.

Item 2. Identity and Background.

The Reporting Person is the general partner and/or the investment manager of the following entities (each, an “Investment Vehicle,” collectively the “Investment Vehicles”), and in such capacity exercises voting and dispositive power over the securities beneficially owned by each of them.

Nantahala Capital Partners Limited Partnership

Nantahala Capital Partners II Limited Partnership

Nantahala Capital Partners CL Limited Partnership

Blackwell Partners LLC

Silver Creek CS SAV, LLC

Set forth in the attached Annex A and incorporated herein by reference is a listing of the directors, general partners, managing members and controlling persons of the Reporting Person and the Investment Vehicles (collectively, the “Covered Persons”), and sets forth the principal occupation, citizenship and principal place of business of each Covered Person.

100 First Stamford Place, 2^nd Floor

Stamford, CT 06902

Nantahala Capital Management, LLC is a Massachusetts limited liability company.

The citizenship of each Covered Person is set forth on the attached Annex A and incorporated herein by reference.

Item 3. Source and Amount of Funds or Other Consideration.

The securities to which this statement relates were acquired by the Reporting Person using the funds of each Investment Vehicle as follows:

Nantahala Capital Partners Limited Partnership:  $20,399

Nantahala Capital Partners II Limited Partnership: $58,223

Nantahala Capital Partners CL Limited Partnership: $16,754

Blackwell Partners LLC:  $29,454

Silver Creek CS SAV, LLC:  $7,942

Item 4. Purpose of Transaction.

The Reporting Person acquired the securities to which this statement relates for investment purposes and does not have a present intent to acquire or influence control over the business of the Issuer. The Reporting Person may, from time to time, dispose of some or all of such securities, acquire additional securities of the Issuer, or continue to hold such securities, depending on business and market conditions, the Reporting Person’s continuing evaluation of the business and prospects of the Issuer and other factors.  The Reporting Person does not have any current plans, proposals or negotiations that relate to or would result in any of the matters referred to in paragraphs (a) through (j) of Item 4 of Schedule 13D.

However, to the extent that the Issuer is in bankruptcy proceedings, the Reporting Person may in the future take necessary and appropriate actions within those proceedings to protect shareholders’ equity value.

Item 5.  Interest in Securities of the Issuer.

The percentages of the class of securities set forth below are based on 13,653,824 shares of the Issuer’s Common Stock outstanding as, stated in the Issuer’s Form 10-Q for the quarter ended September 30, 2011.

791,315 shares (5.796%)

(i)  Sole power to vote or to direct the vote:

791,315 shares (5.796%)

(ii)  Shared power to vote or to direct the vote:

0 shares (0%)

(iii)  Sole power to dispose or to direct the disposition of:

791,315 shares (5.796%)

(iv)  Shared power to dispose or to direct the disposition of:

0 shares (0%)

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

None.

Item 7. Material to be Filed as Exhibits.

None.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

MANAGERS AND GENERAL PARTNERS OF THE REPORTING PERSON AND THE INVESTMENT VEHICLES

The following sets forth the name, principal occupation, citizenship or jurisdiction of organization and principal place of business of the directors, general partners, managing members or controlling persons (the “Covered Persons”) of the Reporting Person and the Investment Vehicles indicated below:

Nantahala Capital Management, LLC

Nantahala Capital Partners Limited Partnership

Nantahala Capital Partners II Limited Partnership

Nantahala Capital Partners CL Limited Partnership

Blackwell Partners LLC

Silver Creek CS SAV, LLC

  (1)  The address of the principal place of business of each of the Covered Persons is 100 First Stamford Place, Second Floor, Stamford, Connecticut 06902