10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the fiscal year ended December 31, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File No. 0-7843

4Licensing Corporation

(Exact name of registrant as specified in its charter)

Delaware	13-2691380
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

767 Third Avenue, New York, New York	10017
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 758-7666

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  o No x

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 the filing requirements for the past 90 days. Yes  x  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer,” “accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o	Accelerated filer o	Non-accelerated filer  o	Smaller reporting company  x
	(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No x

The aggregate market value of the voting stock held by non-affiliates of the registrant, based on the $0.39 closing price of Common Stock on June 28, 2013 as reported on the OTC Bulletin Board, was approximately $3,640,089. The calculation of the aggregate market value of voting stock excludes shares of Common Stock held by current executive officers, directors, and stockholders that the registrant has concluded are affiliates of the registrant. Exclusion of such shares should not be construed to indicate that any such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the registrant or that such person is controlled by or under common control with the registrant.

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes  x No o

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Common Stock, $.01 Par Value	13,714,992
(Title of Class)	(No. of Shares Outstanding at March 31, 2014)

Portions of the registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on May 21, 2014 are incorporated by reference into Part III of this Annual Report  on Form 10-K.

FORM 10-K REPORT INDEX

10-K Part and Item No.		Page No.
PART I
Item 1	Business	1
Item 1A	Risk Factors	5
Item 1B	Unresolved Staff Comments	7
Item 2	Properties	7
Item 3	Legal Proceedings	8
Item 4	Mine Safety Disclosures	9
PART II
Item 5	Market for the Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 6	Selected Financial Data	10
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	23
Item 8	Financial Statements and Supplementary Data	23
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	23
Item 9A	Controls and Procedures	23
Item 9B	Other Information	24
PART III
Item 10	Directors and Executive Officers of the Registrant	24
Item 11	Executive Compensation	24
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item 13	Certain Relationships and Related Transactions	24
Item 14	Principal Accountant Fees and Services	24
PART IV
Item 15	Exhibits and Financial Statement Schedules	25

PART I

Throughout this Annual Report on Form 10-K, we “incorporate by reference” certain information in parts of other documents filed with the Securities and Exchange Commission (the “SEC”).  The SEC allows us to disclose important information by referring to it in that manner.  Please refer to such information.

This Annual Report on Form 10-K, including the sections titled "Item 1A. Risk Factors" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements that relate to future events or our future financial performance. We may also make written and oral forward-looking statements in our Securities and Exchange Commission ("SEC") filings and otherwise. We have tried, where possible, to identify such statements by using words such as "believe," "expect," "intend," "estimate," "anticipate," "will," "project," "plan" and similar expressions in connection with any discussion of future operating or financial performance. Any forward-looking statements are and will be based upon our then-current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated in any forward-looking statements. Such risks and uncertainties include those described in "Item 1A. Risk Factors" below as well as other factors. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.   Throughout this Annual Report on Form 10-K, all dollar amounts are reported in thousands unless otherwise specified.

Item 1. Business.

General Development and Narrative Description of Business - 4Licensing Corporation, a Delaware corporation (“4LC”), formerly, 4Kids Entertainment, Inc. (“4Kids”), together with the subsidiaries through which its business is conducted (collectively, the “Company”), is a licensing and technology company specializing in the youth oriented markets, sports and specialty brands. The Company was originally organized as a New York corporation in 1970, and in December 2012 was reincorporated in Delaware.

Liquidity – On December 21, 2012, the Company (including the other Debtors) emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim.  Despite the $8,000 cash received from the Yu-Gi-Oh! Settlement (as defined below) and the $14,997 received on the sale of certain of the Company’s assets under the Asset Purchase Agreement (as defined below) during the bankruptcy proceedings, the Company’s overall cash position as of December 31, 2013, together with the costs and settlement of the related claims in connection with the bankruptcy proceedings, provides only limited liquidity to fund the Company’s day-to-day operations.  The Company will consider all alternatives available to generate additional cash to fund its operations, including, but not limited to sales of assets, issuance of equity or debt securities, and other third party arrangements.  There can be no assurance that any of these alternatives will generate additional cash.

The Company’s consolidated financial statements have been prepared assuming that it will be able to continue to operate as a going concern.  The Company’s limited liquidity as of December 31, 2013 and potential settlement of the remaining material unresolved claim, taken together, raise substantial doubt about the Company’s ability to continue as a going concern.

Emerging from Chapter 11 Bankruptcy Proceedings – On April 6, 2011 (the “Petition Date”), the Company and all of its domestic wholly-owned subsidiaries (the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Cases”) under Title 11 of Chapter 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which Bankruptcy Cases were jointly administered under Case No. 11-11607.  After filing the Bankruptcy Cases, the Debtors continued to operate as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.  As debtors-in-possession, the Debtors were authorized under Chapter 11 of the Bankruptcy Code to continue to operate as an ongoing business. 4Kids Entertainment International, Ltd., (“4Kids International”), the Company’s former subsidiary based in London, England, and TC Digital Games LLC (“TC Digital”) and TC Websites LLC (“TC Websites”), two domestic subsidiaries in each of which the Company holds a majority ownership, were not included in the filing and continued to operate outside the Bankruptcy Court’s jurisdiction.

After the filing of the Bankruptcy Cases, the United States Trustee for the Southern District of New York appointed an official committee of unsecured creditors.

1

On February 29, 2012, the Company, and Nihon Ad Systems, Inc. and Tokyo Corporation (collectively, the “Licensors”) entered into a Settlement Agreement, dated as of February 27, 2012 (the “Settlement Agreement”), settling all claims brought by the Licensors against the Company and all counterclaims brought by the Company against the Licensors in the Yu-Gi-Oh! Litigation (as hereinafter defined). The Settlement Agreement provided, among other things, for the Licensors to make a payment to the Company in the amount of $8,000 upon the order of the Bankruptcy Court approving the Settlement Agreement becoming final.  On March 9, 2012, the Bankruptcy Court issued an order approving the Settlement Agreement and, accordingly, the Company recognized a gain on litigation settlement of $8,000 (the “Yu-Gi-Oh! Settlement”).  Under the Settlement Agreement, the Licensors acknowledged that the Yu-Gi-Oh! Agreement (hereinafter defined) remained valid, binding and legally enforceable with the Company continuing to serve as the exclusive licensing agent for the merchandise licensing, television broadcast and home video rights to the Yu-Gi-Oh! Property (as hereinafter defined) throughout the world outside of Asia.  The Settlement Agreement further provided for each of the Company and the Licensors to release the other from all claims they may have had against each other, other than certain indemnification claims and claims that may arise under the Settlement Agreement.  The Settlement Agreement also provided that the Settlement Agreement does not constitute an admission by any party of any violation of any agreement or law.  On March 27, 2012, the Company received the payment in the amount of $8,000 pursuant to the Settlement Agreement.

On April 26, 2012, the Debtors entered into an Asset Purchase Agreement, which contemplated the sale of substantially all of its assets to Kidsco Media Ventures LLC (“Kidsco”), a Delaware limited liability company, and an affiliate of Saban Capital Group (“Saban Bidder”) for a purchase price of $10,000, subject to certain adjustments. The transaction was proposed as a sale of the Debtors’ assets pursuant to Section 363 of the Bankruptcy Code.  The transaction was subject to, among other things, (i) competitive bidding pursuant to sale procedures approved by the Bankruptcy Court at a hearing on April 27, 2012 (the “Bidding Procedures”), and (ii) approval of the transaction by the Bankruptcy Court.

In May 2012, the Company received a competing bid (the “Konami Bid”) from 4K Acquisition Corp. (the “Konami Bidder”), an indirect subsidiary of Konami Corporation, a Japanese corporation (“Konami”). In the competing bid, the Konami Bidder offered to purchase substantially all of the assets of the Company in a transaction under Section 363 of the Bankruptcy Code. The Konami Bid, in the judgment of the Company, represented a qualified bid under the terms of the Bidding Procedures.

On June 5, 2012, the Company commenced an auction between the Saban Bidder and the Konami Bidder (together with the Saban Bidder, the “Purchasers”).  During the auction, each of the Purchasers made several improved bids. After several rounds of competitive bidding, the auction was adjourned to allow the Purchasers to consider an alternative transaction among the Company and the Purchasers pursuant to which each of the Purchasers would acquire certain assets of the Company. The proposed alternative transaction represented a substantial improvement in the proceeds payable to the Company over the last bid made prior to such adjournment.  The possible alternative transaction was conditioned upon the negotiation of definitive documentation among the Company and the Purchasers and the approval of such alternative transaction by the Bankruptcy Court.

On June 24, 2012, the Debtors entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), which contemplated the sale of substantially all of its assets to the Purchasers, for an aggregate purchase price of $15,000, subject to certain adjustments (the “Purchase Price”).  The transaction was a sale pursuant to Section 363 of the Bankruptcy Code.  On June 26, 2012, the Bankruptcy Court entered a final sale order approving the transactions contemplated by the Asset Purchase Agreement.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement.  In connection with the consummation of such transactions, the Konami Bidder paid the Debtors an aggregate amount equal to $14,997, representing a base purchase price of $15,000, less a $3 downward adjustment contemplated by the Asset Purchase Agreement.  In addition, in connection with the consummation of the transactions contemplated by the Asset Purchase Agreement, the following payments were made by or on behalf of the Debtors:

(a) $1,000 was delivered to the escrow agent under the escrow agreements provided for in the Asset Purchase Agreement, to be used to satisfy any indemnification obligations that the Debtors may have to either of the Purchasers pursuant to the provisions of the Asset Purchase Agreement; such amount was received by the Company in February 2013 upon the expiration of the escrow agreements;

(b) $3 was paid to the escrow agent as the Debtors’ portion of fees payable to it for its performance of services as escrow agent under the escrow agreements;

(c) $3,051 was paid to The CW Network, LLC (“The CW”) as a cure cost under the term sheet originally entered into with The CW as of October 1, 2007 and amended as of October 2, 2008 and June 23, 2010 (“The CW Agreement”);

(d) $429 was paid to Toei Animation as a cure cost;

(e) $28 was paid to Twenty Three R.P. Associates as a cure cost;

(f) approximately $21 was paid to satisfy cure costs under other agreements; and

(g) $504 was paid to the Saban Bidder in accordance with the terms of the Asset Purchase Agreement, with $476 representing an adjustment to the purchase price for the Saban Purchased Business (as defined below) and $28 representing the Debtors’ share of national advertising proceeds from the broadcast of commercials during the second calendar quarter of 2012 on the five hour Saturday morning block of programs telecast on The CW.

2

The assets sold by the Debtors to the Konami Bidder (the “Konami Purchased Assets”) included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to and commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise (the “Konami Purchased Business”), as well as other assets relating to the Konami Purchased Business.  The Company was party to an agreement with Konami Corporation, dated as of August 1, 2001, as amended by the First Amendment, dated September 12, 2007 (the “Konami Agreement”), which agreement related to, inter alia, sales of Yu-Gi-Oh! trading cards and videogames.  The Konami Agreement was included as part of the Konami Purchased Assets transferred to the Konami Bidder in connection with the closing of the transactions contemplated by the Asset Purchase Agreement on July 2, 2012.

The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors including The CW Agreement and certain television episodes and rights related thereto (the “Saban Purchased Business”), as well as other assets relating to the Saban Purchased Business.

On October 5, 2012, the Company filed (i) the Disclosure Statement with Respect to Debtors’ Proposed Joint Plan of Reorganization (as may be amended, the “Disclosure Statement”), (ii) the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code and (iii) a motion establishing deadlines and procedures with respect to the solicitation of votes on the Plan (the “Procedures Motion”).  On October 29, 2012, the Company filed (i) the Amended Disclosure Statement with Respect to Debtors’ Proposed Plan of Reorganization (the “Disclosure Statement”) and (ii) the Debtor’s Amended Joint Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code. (the “Plan”).  On October 31, 2012, the Bankruptcy Court approved the Procedures Motion and the Disclosure Statement and authorized the Debtors to solicit votes on the Plan.  The Debtors formally commenced solicitation in respect of the Plan in early November 2012.

On December 13, 2012, the Bankruptcy Court entered an order in the Bankruptcy Cases confirming the Plan.  On December 21, 2012, the effective date of the Plan, the Company (including the other Debtors) emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim.  In accordance with the Plan, 4Kids reincorporated in Delaware under the name “4Licensing Corporation.” On the effective date of the Plan, 4Kids’ common stock was cancelled and holders of 4Kids’ common stock were issued one (1) share of common stock of 4LC in exchange for each share of 4Kids’ common stock held by them.

Financial Reporting Considerations - The Company’s emergence from bankruptcy did not qualify for fresh start accounting in accordance with ASC Topic 852, Reorganization.

The Company’s business consists of the following two segments:

IsoBLOX™and Sports Licensing/Distribution – The IsoBLOX™and Sports Licensing/Distribution business segment consists of the following wholly owned subsidiaries of the Company: 4LC Sports & Entertainment, Inc. (“4LC Sports”), formerly known as 4Kids Ad Sales, Inc., and 4LC Technology, Inc. (“4LC Technology”), formerly known as 4Kids Technology, Inc., which in February 2013, acquired, through Pinwrest Development Group, LLC (“Pinwrest”), of which 70% of the membership interests are owned by 4LC Technology, a patent for the IsoBLOX™ technology (the “Patent”) from The Dodd Group, LLC (“TDG”), a Texas limited liability company. The Patent covers a protective shin guard for use in products in the athletic, recreational, police/military, medical and industrial sectors consisting of an elastomeric sleeve within which is deposited protective plastic material consisting of rigid plates joined together by living hinges. The protective plastic material is solid enough to provide protection, flexible enough to better fit the wearer of the shin guard and is lightweight.

In December 2013, Pinwrest filed a provisional patent application (the “Provisional Patent”) with the U.S. Patent Office covering its newly developed body protection systems and devices that can be used to prevent or limit serious injuries from impacts or collisions during an activity.  The products covered by this Provisional Patent provide body protection systems and devices that can be incorporated into articles of clothing, materials or articles such as seats, linings, or walls of vehicles to reduce the effect of impact.  These body protection devices can form part of headgear, gear, or clothing that is designed to cover and protect one or more parts of a person, such as a military or law enforcement individual, or a professional or recreational athlete.

3

The protective material uses a combination of energy dispersion and absorption to diffuse the impact on the wearer of the protective gear. The technology covered by the Patent is hereinafter referred to as “IsoBLOX™” technology.

After further development Pinwrest intends to license and distribute the IsoBLOX™ technology in protective gear within the youth, teen and adult markets.

4LC Sports, when operating under the name of 4Kids Ad Sales, Inc., had been engaged in the business of the Company’s advertising media and broadcast segment before the Company discontinued its operations, effective June 30, 2012.  On January 31, 2013, the name of 4Kids Ad Sales, Inc. was changed to 4LC Sports which then started its new business of licensing and distributing sports related brands.

The operations of Pinwrest, 4LC Sports, and 4LC Technology constitute the new “IsoBLOX™and Sports Licensing/Distribution” business segment of the Company. The Company reports its financial operations from these entities under the  “IsoBLOX™and Sports Licensing/Distribution” segment.

Entertainment and Brand Licensing – The Entertainment and Brand Licensing business segment consists of the operations of the following wholly-owned subsidiaries of the Company: 4Kids Entertainment Licensing, Inc. (“4Kids Licensing”) and 4Sight Licensing Solutions, Inc. (“4Sight Licensing”). 4Kids Licensing is engaged in the business of licensing the merchandising rights to popular children’s television series, properties and product concepts (individually, the “Property” or collectively the “Properties”). 4Kids Licensing typically acts as exclusive merchandising agent in connection with the grant to third parties of licenses to manufacture and sell all types of merchandise, including toys, videogames, trading cards, apparel, housewares, footwear, books and other published materials, based on such Properties. 4Sight Licensing is engaged in the business of licensing properties and product concepts to adults, teens and “tweens”.  4Sight Licensing focuses on brand building through licensing.

Discontinued Operations -On August 16, 2012, the Board of Directors determined to discontinue the operations of its United Kingdom (“UK”) subsidiary, 4Kids International, effective September 30, 2012.  The results of operations for the international business are reported as a discontinued operation.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement.  The assets sold by the Debtors to the Konami Bidder included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to and commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise, as well as other assets relating to the Konami Purchased Business.  The Konami Purchased Assets also included the Konami Agreement, related to, inter alia, sales of Yu-Gi-Oh! trading cards and video games.  The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors, including The CW Agreement and the television episodes and rights related thereto, as well as other assets relating to the Saban Purchased Business.

Pursuant to the Asset Purchase Agreement and the corresponding assets sold, and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, Inc. (“4Kids Ad Sales”), 4Kids Productions, Inc. (“4Kids Productions”), 4Kids Entertainment Music, Inc. (“4Kids Music”) and 4Kids Entertainment Home Video, Inc. (“4Kids Home Video”).  Previously, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites.  The results of operations attributable to these entities are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14).

Dependence on a Few Sources of Revenues - The Company typically derives a substantial portion of its revenues from a small number of Properties, which usually generate revenues for only a limited period of time. The Company’s revenues are highly subject to changing trends in the toy, game and entertainment businesses, causing dramatic increases and decreases from year to year due to the popularity of particular Properties. It is not possible to accurately predict the length of time that a Property will be commercially successful and/or if a Property will be commercially successful at all. Due to these factors, the Company must continually seek new Properties from which it can derive revenues. In addition, the Company also does not control the timing of the release of products by licensees which can affect both the amount of licensing revenues earned and the periods during which such revenues are recognized.

Three Properties, “American Kennel Club”, “Dinosaur King” and “Huntik”, represented 21%, 14% and 10%, respectively, for a total of 45% of consolidated net revenues for fiscal 2013.  One Property, “Yu-Gi-Oh!”, which was sold pursuant to the terms of the Asset Purchase Agreement, represented 75% and 64% of consolidated net revenues for fiscal 2012 and 2011, respectively.  Three licensees represented 37% of consolidated net revenues for fiscal 2013.  Two licensees, Konami and JAKKS Pacific, represented 85% of consolidated net revenues for fiscal 2012.  One licensee, Konami, represented 64% of consolidated net revenues for fiscal 2011.  For more information on the Company’s Revenues/Major Customers, please see Note 8 of the notes to the Company’s consolidated financial statements.

Trademarks and Copyrights - Except as provided below, the Company generally does not own any trademarks or copyrights in Properties which the Company represents as a merchandising agent. The trademarks and copyrights are typically owned by the creators of the Properties or by other entities, which may have expended substantial amounts of resources in developing or promoting the Properties.

The Company owns the copyrights and trademarks to the “WMAC Masters” live action television series.  The Company is also a joint copyright holder of the “Chaotic” animated television series.   Additionally, the Company is a joint copyright holder of the “Chaotic” trading card artwork for the “Chaotic” trading card game. The Company also jointly owns the copyright to the “Chaotic” trading card game as it relates to revisions to the original “Chaotic” trading card game previously sold in Denmark.

4

Seasonal Aspects - A substantial portion of the Company’s revenues and net income are subject to the seasonal and trend variations of the toy and game industry. Typically, a majority of toy orders are shipped in the third and fourth calendar quarters.  Historically, the Company’s net revenues from toy and game royalties during the second half of the year have generally been greater than during the first half of the year.

Competition - The Company's principal competitors in its IsoBLOX^TM  and Sports Licensing/Distribution business are large sporting goods and apparel companies (e.g, Nike, Evoshield and Under Armour) with consumer products/merchandise and licensing divisions. Many of these companies have substantially greater resources than we do and represent products which have been commercially successful for longer periods than our products. The Company’s principal competitors in its Entertainment and Brand Licensing business are large media companies (e.g., Disney, Time Warner and Nickelodeon, which is owned by Viacom) with consumer products/merchandise licensing divisions, toy companies, other licensing companies, and numerous individuals who act as merchandising agents. There are also many independent product development firms with which the Company competes. Many of these companies have substantially greater resources than the Company and represent properties which have been commercially successful for longer periods than the Properties represented by the Company. The Company believes it would be relatively easy for a potential competitor to enter the market in light of the relatively small investment required to commence operations as a merchandising agent.

Employees - As of March 31, 2014, the Company had a total of 10 employees all of whom were full-time employees in its operations.  During 2013 the Company substantially reduced the number of its employees primarily at its corporate office.

Available Information - The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and the Proxy Statement for its Annual Meeting of Stockholders will be made available, free of charge, through its website, www.4LicensingCorp.com, as soon as reasonably practicable after such reports have been filed with or furnished to the Securities and Exchange Commission (the “SEC”). In addition, you may read and copy any materials the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC maintains an Internet site, www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

Executive Officer of the Company

Name	Age	Employed By Registrant Since	Recent Position(s) Held As Of March 31, 2014
Bruce R. Foster	54	2002	Chief Executive Officer, Executive Vice President and Chief Financial Officer

Item 1A. Risk Factors.

The following significant factors, as well as others of which we are unaware or deem to be immaterial at this time, could materially adversely affect our business, financial condition or operating results in the future. Therefore, the following information should be considered carefully together with other information contained in this report.  Past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Our inability to generate sufficient cash flows may result in our Company not being able to continue as a going concern.

The Company’s overall cash position as of December 31, 2013 provides only limited liquidity to fund the Company’s day-to-day operations. The Company’s independent registered public accounting firm has expressed substantial doubt about the Company’s ability to continue as a going concern. We may need to seek additional financing or sell our assets to support our continued operation; however, there are no assurances that any such financing or asset sale can be obtained or achieved on favorable terms, if at all. In view of these conditions, our ability to continue as a going concern depends on our ability to generate sufficient cash flows from our operations or to obtain the necessary financing. The outcome of these matters cannot be predicted at this time. The consolidated financial statements for the year ended December 31, 2013 do not include any adjustment to the amounts and classification of assets and liabilities that might be necessary should we be unable to continue in business. Any such adjustment could be material.

Revenues are largely derived from a small number of Properties and may dramatically decrease if we are not able to develop new revenue sources.

We have historically derived a substantial portion of our licensing revenues from a small number of Properties which usually generate revenues only for a limited period of time.  For the year ended December 31, 2013, we derived approximately 45%, or $549 of our licensing revenues from three Properties – “American Kennel Club”, “Dinosaur King” and “Huntik”.  Our licensing revenues are also subject to the changing trends in the toy, game and entertainment industries.  Consequently, our licensing revenues may dramatically decrease if we are not able to find other revenue sources. In addition, we do not control the timing of the release of products by licensees which can affect both the amount of licensing revenues earned and the periods during which such revenues are recognized.  A significant decrease in our licensing revenues could have a material adverse impact on our financial condition and results of operations.  We expect to derive future product revenue from the sale of IsoBLOX™ related products.  The IsoBLOX™ technology continues to be developed.  There can be no assurance that these products will be commercially viable in the marketplace, that revenues will be derived from such products, or how soon such products will become available for sale, if at all.

5

We have been and may continue to be negatively affected by adverse general economic and other conditions.

Conditions in the domestic and global economies are extremely unpredictable and our business has been impacted by changes in such conditions. Softening global economies, stock market uncertainty and wavering consumer confidence caused by economic weakness, the decline in the housing market, the threat or occurrence of terrorist attacks, war or other factors generally affecting economic conditions have adversely affected our business, financial condition and results of operations and may continue to do so in the future.

Continued turmoil in U.S. and foreign credit markets, equity markets, and in the global financial services industry,  and an unprecedented level of intervention from the U.S. and foreign governments, have continued to place pressure on the global economy and affect overall consumer spending, spending by advertisers and the availability of credit to us, our clients, and our customers.  If conditions in the global economy, U.S. economy or other key vertical or geographic markets remain uncertain or weaken further, they may have a further material adverse effect on our business, financial condition and results of operations.

The changing entertainment preferences of consumers could adversely affect our business.

Our business and operating results depend upon the appeal of our Properties, product concepts and programming to consumers.  Consumer entertainment preferences, as well as industry trends and demands are continuously changing and are difficult to predict as they vary over time. In addition, as entertainment properties often have short life cycles, there can be no assurances that:

(i) our current Properties, product concepts or programming will continue to be popular for any significant period of time;

(ii) new Properties, product concepts or programming we represent or produce will achieve and or sustain popularity in the marketplace;

(iii) a Property’s life cycle will be sufficient to permit us to recover revenues in excess of the costs of advance payments, guarantees, development, marketing, royalties and other costs relating to such Property; or

(iv) we will successfully anticipate, identify and react to consumer preferences.

Our failure to accomplish any of these events could result in reduced overall revenues, which could have a material adverse effect on our business, financial condition and results of operations.  In addition, the volatility of consumer preferences could cause our revenues and net income to vary significantly between comparable periods.

Revenues from Licensing are directly impacted by the amount of retail shelf space dedicated to our Properties.

As an exclusive merchandising agent, we grant licenses to third parties to manufacture and sell all types of merchandise based on the Properties that we represent.  The ability of these third parties to design, manufacture, and ultimately market and sell this merchandise through various distribution channels has a direct impact on our revenues.  If these third parties are not successful in obtaining distribution or placement for this merchandise at retail, the performance of certain Properties could suffer which could have a material adverse impact on our financial condition and results of operations.

We must continually seek new Properties from which we can derive revenues.

It is difficult to predict whether a Property will be successful, and if so, for how long.  Because of this, we are constantly seeking new Properties that are already successful or that we believe are likely to become successful in the future.  If we are unable to identify and acquire the rights to successful new Properties, our revenues, financial condition and results of operations could be adversely affected.

6

Our business is seasonal and highly dependent on our performance during the holiday season.

A high percentage of our annual operating results have historically depended on our performance during the holiday season.  Sales of our licensed toy and game concepts are seasonal and most retail sales of these products occur during the third and fourth fiscal quarters.  As a result of the seasonal nature of our business, we would be significantly and adversely affected by unfavorable economic conditions and other unforeseen events during the holiday season, such as a terrorist attack or a military engagement, that negatively affect the retail environment or consumer buying patterns.

We operate in a highly competitive marketplace.

In the IsoBLOX^TM and Sports Licensing/Distribution business segment, our principal competitors are large sporting goods and apparel companies (e.g., Nike, Evoshield and Under Armour) with consumer products/merchandise and licensing divisions. Many of these companies have substantially greater resources than we do and represent products which have been commercially successful for longer periods than our products.

Our future success is dependent on certain key employees.

The success of our business depends to a significant extent upon the skills, experience and efforts of a number of management personnel and other key employees.  The loss of the services of any of our management personnel or other key employees could have a material adverse effect on our business, results of operations or financial condition.

We may not be able to successfully protect our intellectual property rights.

We rely on a combination of copyright, trademark, patent and other proprietary rights laws to protect the intellectual property rights that we own or license.  It is possible that third parties may challenge our rights to such intellectual property.  In addition, there is a risk of third parties infringing upon our licensors’ or our intellectual property rights and producing counterfeit products.  These events may result in lost revenue as well as litigation, which may be expensive and time-consuming even if a favorable outcome is obtained.  There can be no assurance that adequate remedies would be available for any infringement of the intellectual property rights owned or licensed by the Company. Any such failure to successfully protect our intellectual property rights may have a material adverse effect on our competitive position.

We may be subject to audit claims from our partners.

We may be subject to audits by certain of our Property partners.  There can be no assurance that the parties will conclude their discussions regarding the audit issues satisfactorily. Any such failure to successfully resolve any audit issues may result in litigation which may have a material adverse effect on our financial position or the results of our operations.

Potential labor disputes may lead to increased costs or disrupt the operation of our business.

The success of our business is dependent on our employees who are involved with our operations.  Any labor dispute may adversely affect our business through increased costs which could adversely affect our results of operations.

Item 1B. Unresolved Staff Comments.

None.

7

Item 2. Properties.

The following table sets forth, the location of the Company’s executive office and other properties, the date on which the leases expire and the use which the Company makes of each such facility:

Address	Expiration of Lease	Use	Approximate Square Feet
767 Third Avenue,  17th Floor New York, New York 10017	October 30, 2015	Executive and Administrative Facilities	6,850
3608 Commerce Drive Arnold, Missouri 63010	January 31, 2015	Administrative and General Warehousing	2,500

Item 3. Legal Proceedings.

TCD International, Ltd. - On February 12, 2010, Home Focus Development, Ltd., a British Virgin Islands corporation (“Home Focus”), filed suit against the Company in the United States District Court for the Southern District of New York. Home Focus alleged that the Company owed Home Focus $1,075 under an Interest Purchase Agreement among the Company, Home Focus and TC Digital entered into on March 2, 2009, pursuant to which the Company acquired a 25% ownership interest in TCD International, Ltd. (“TDI”).

On April 26, 2010, the Company filed an answer and asserted various counterclaims against Home Focus and its owners, in their individual capacities. In its counterclaims, the Company has alleged that Home Focus failed to make its contractually required initial capital contribution of $250 to TDI necessary to acquire the 25% ownership interest in TDI it purported to sell to the Company and also failed to contribute its 50% share of the expenses. The Company has further asserted counterclaims of fraud and misrepresentation.

The parties have not proceeded with the litigation in light of the filing of the Bankruptcy Cases, which had the effect of automatically staying such litigation. The parties have had substantive discussions and have exchanged draft agreements regarding the possible resolution of the claims and counterclaims. There can be no assurance that the parties will conclude their settlement discussions satisfactorily. The Home Focus claim is currently a disputed claim in the Bankruptcy Cases. If the Home Focus claim is not settled, it may need to be litigated by the Company either in the Bankruptcy Court or in the United States District Court for the Southern District of New York should the Bankruptcy Court cede jurisdiction of this dispute.

Cornerstone Patent Technologies, LLC – On April 25, 2011, Cornerstone Patent Technologies, LLC (“Cornerstone”) filed proof of claim No. 20 (the “Cornerstone Claim”) in the Bankruptcy Court against the Debtors in the Bankruptcy Cases in the amount of $3,300.  Other than filing the Cornerstone Claim, Cornerstone has not commenced litigation against the Debtors.  The Cornerstone Claim alleges (i) breach of a Patent License Agreement dated September 10, 2007 by non-Debtors TC Digital and TC Websites; (ii) breach of Patent Purchase Agreement dated by September 7, 2007, by 4Kids Technology for failing to notify Cornerstone of alleged wrongdoing by TC Digital and TC Websites; (iii) unfair competition; (iv) tortious interference with contract; (v) unjust enrichment; and (vi) piercing the corporate veil.  The Company disputes the Cornerstone Claim in its entirety.  On November 12, 2012, the Company filed a motion with the Bankruptcy Court to estimate the Cornerstone Claim at $0 or in the alternative disallow the claim.  On December 5, 2012, the Bankruptcy Court entered an agreed order between the Company and Cornerstone providing that on the effective date of the Plan, the Debtors would establish a disputed claims reserve on account of the Cornerstone Claim in the amount of $228, without prejudice to (i) Cornerstone’s rights to pursue an allowed claim or judgment against the Debtors in an amount greater than the reserve, with such allowed claim or judgment to be paid pursuant to the Plan and (ii) the Debtors’ rights to defend, contest or otherwise oppose on any grounds, the Cornerstone Claim or any other claims or litigation asserted by or on behalf of Cornerstone or any other party.  On August 29, 2013, the Bankruptcy Court entered an order disallowing and expunging the Cornerstone Claim.  As a result, a gain of $443 from the reversal of a liability was recognized during the year ended December 31, 2013 in the income from discontinued operations (see Note 14).

8

Lehman Brothers, Inc. Claim - The Company believes that Lehman Brothers, Inc., the securities broker-dealer that purchased the auction rate securities on behalf of the Company violated its legal obligations to the Company.  As a result, the Company took various measures to obtain appropriate legal relief, including initiating an arbitration on April 3, 2008 against Lehman Brothers, Inc. (“Lehman”) and the brokers who had serviced the Company’s Lehman account with the Financial Industry Regulatory Authority.  On September 15, 2008, Lehman Brothers Holdings, Inc., the parent company of Lehman Brothers, Inc., filed for bankruptcy.  The Company’s arbitration proceeding was stayed by the Lehman bankruptcy.  On September 16, 2008, Barclays PLC announced that it had reached an agreement to purchase the assets of Lehman Brothers Holdings, Inc.’s North American operations, including substantial assets of Lehman Brothers, Inc.  The Lehman-Barclays transaction was approved by the United States Bankruptcy Court for the Southern District of New York on September 20, 2008.  On September 19, 2008, the Securities Investor Protection Corporation (“SIPC”) filed a proceeding, placing Lehman Brothers, Inc. in liquidation under the Securities Investor Protection Act (“SIPA”).  SIPC, pursuant to its authority under SIPA, has acted to facilitate the transfer of Lehman Brothers, Inc.’s customer accounts (including the Company’s accounts) to Barclays, PLC.  In late September, 2009, the Company filed a proof of claim against Lehman Brothers, Inc. in the United States Bankruptcy Court for the Southern District of New York. The principal amount of the claim was approximately $31,500 plus interest. In addition, the proof of claim requested treble damages. The proof of claim is a general unsecured claim. The Company’s claim against Lehman Brothers, Inc. is still pending and there has been no determination made as to the validity or allowed amount of the claim.  On October 18, 2011, the Company entered into a settlement agreement and general release with the brokers who had serviced the Company’s account with Lehman Brothers, Inc. in exchange for a payment to the Company of approximately $489. The trustee in the Lehman Brothers, Inc. bankruptcy proceeding is expected to begin the claims resolution process with respect to the unsecured claims at some point in 2014.

The Bankruptcy Cases – The Bankruptcy Cases were initially filed by the Debtors with the Bankruptcy Court on April 6, 2011.  On October 5, 2012, the Company filed the Plan and Disclosure Statement.  On October 29, 2012, the Debtors filed an amended Plan and Disclosure Statement.  On October 31, 2012, the Bankruptcy Court entered a solicitation procedures order permitting the Debtors to send the Plan and Disclosure Statement to the parties entitled to vote on the Plan.  On December 13, 2012, the Bankruptcy Court held a confirmation hearing with respect to the Plan. After a hearing and consideration by the Bankruptcy Court of the provisions of the Plan, including consideration of support for the Plan by a vote of approximately 99.93% of shareholders who voted their shares, and there being only one objector to the Plan, the Bankruptcy Court issued an order confirming the Plan.  The Plan became effective on December 21, 2012.

On the effective date of the Plan, the Company commenced paying creditors holding undisputed, allowed claims the full amount of such allowed claims. The Company and its counsel have also negotiated various settlement agreements with creditors holding disputed claims.  As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim.  If the disputed claim is not satisfactorily resolved, the disputed claim may need to be litigated in the Bankruptcy Court or in other courts or administrative bodies. The cost and expense to litigate the disputed claim as well as any damages which may be awarded to the holder of such disputed claim may have a material adverse effect on the Company’s financial position or the results of its operations or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities

(a) Market Information - On February 26, 2013, our Common Stock resumed trading on the OTC pink sheets under the trading symbol “FOUR.”  Prior to that, our Common Stock was quoted on the OTC Bulletin Board Market since June 1, 2010 under the trading symbol “KIDEQ.PK.” Prior to June 1, 2010, our common stock was listed for trading on the New York Stock Exchange under the symbol “KDE”.  The following table indicates high and low sales quotations for the periods indicated based upon information reported by the OTC Bulletin Board. The prices quoted on the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, markdown or commissions. The OTC Bulletin Board prices listed below may not represent actual transaction prices.

2013	Low		High
First Quarter	$	0.02	$	0.62
Second Quarter		0.38		0.54
Third Quarter		0.45		0.73
Fourth Quarter		0.49		0.75
2012	Low		High
First Quarter	$	0.12	$	0.55
Second Quarter		0.30		0.78
Third Quarter		0.36		0.70
Fourth Quarter		0.38		0.59

9

(b) Holders - The approximate number of holders of record of the Company’s Common Stock on March 31, 2014 was 350.

(c) Dividends - There were no dividends or other distributions declared or made by the Company during 2013 or 2012. Future dividend policies will be determined by the Board of Directors based on the Company’s earnings, financial condition, capital requirements and other existing conditions. It is anticipated that cash dividends will not be paid to the holders of the Company’s Common Stock in the foreseeable future.

(d) Equity Compensation Plan Information - Information regarding the Company’s equity compensation plans is incorporated by reference to Item 12 in Part III of this Form 10-K.

(e)Sales or Purchases of Equity Securities by the Issuer - None

Item 6. Selected Financial Data.

(In thousands of dollars, except share and per share data)

Our selected financial data presented below has been derived from our audited consolidated financial statements in Item 8. Financial Statements and Supplementary Data and should be read in conjunction with the notes to the Company’s consolidated financial statements and “Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

10

	2013			2012			2011			2010			2009
Net revenues:
Service revenue	$	1,087		$	3,325		$	7,191		$	10,977		$	21,662
Product Revenue		127			—			—			—			—
Other revenue		—			—			882			—			—
Total net revenues		1,214			3,325			8,073			10,977			21,662
Costs and expenses:
Selling, general and administrative		5,364			6,639			7,944			11,716			12,310
Cost of product sales		53			—			—			—			—
Impairment of investment in international trading card subsidiary		—			—			—			—			2,175
Total costs and expenses		5,417			6,639			7,944			11,716			14,485
(Loss) income from operations		(4,203	)		(3,314	)		129			(739	)		7,177
Other income (expense):
Interest (expense) income		(3	)		(8	)		63			401			1,074
Impairment of investment securities		—			—			—			(3,578	)		(6,175	)
Loss on sale of investment securities		—			—			(910	)		(1,616	)		(7,647	)
Total other expense		(3	)		(8	)		(847	)		(4,793	)		(12,748	)
Loss from continuing operations before reorganization and litigation items		(4,206	)		(3,322	)		(718	)		(5,532	)		(5,571	)
Reorganization items		(151	)		(4,071	)		(1,628	)		—			—
Gain on settlement of pre-petition liabilities		26			1,331			—			—			—
Gain on litigation		—			8,000			489			—			—
Gain on sale		—			17,714			—			—			—
(Loss) income from continuing operations before income taxes		(4,331	)		19,652			(1,857	)		(5,532	)		(5,571	)
Benefit from (provision for) income taxes		—			—			—			—			3,805
(Loss) income from continuing operations		(4,331	)		19,652			(1,857	)		(5,532	)		(1,766	)
Income (loss) from discontinued operations		1,170			(10,109	)		(15,227	)		(26,108	)		(50,690	)
Net (loss) income		(3,161	)		9,543			(17,084	)		(31,640	)		(52,456	)
Loss (income) attributable to noncontrolling interests, continuing operations		331			—			—			—			—
(Income) loss attributable to noncontrolling interests, discontinued operations		(399	)		1			1,884			4,479			10,380
Net (loss)  income attributable to 4Licensing Corporation	$	(3,229	)	$	9,544		$	(15,200	)	$	(27,161	)	$	(42,076	)
Per share amounts:
Basic and diluted (loss) income per share attributable to 4Licensing Corporation common shareholders
Continuing operations	$	(0.29	)	$	1.44		$	(0.14	)	$	(0.41	)	$	(0.13	)
Discontinued operations		0.06			(0.74	)		(0.98	)		(1.61	)		(3.03	)
Basic and diluted (loss) income per share attributable to 4Licensing Corporation common shareholders	$	(0.23	)	$	0.70		$	(1.12	)	$	(2.02	)	$	(3.16	)
Weighted average common shares outstanding – basic and diluted		13,714,992			13,690,998			13,605,148			13,460,214			13,303,192
Net income (loss) attributable to 4Licensing Corporation:
(Loss) income from continuing operations	$	(4,331	)	$	19,652		$	(1,857	)	$	(5,532	)	$	(1,766	)
Loss attributable to noncontrolling interest, continuing operations		331			—			—			—			—
Net (loss) income from continuing operations		(4,000	)		19,652			(1,857	)		(5,532	)		(1,766	)
Income (loss) from discontinued operations		1,170			(10,109	)		(15,227	)		(26,108	)		(50,690	)
(Income) loss attributable to noncontrolling interests, discontinued operations		(399	)		1			1,884			4,479			10,380
Net income (loss) from discontinued operations		771			(10,108	)		(13,343	)		(21,629	)		(40,310	)
Net (loss) income attributable to 4Licensing Corporation	$	(3,229	)	$	9,544		$	(15,200	)	$	(27,161	)	$	(42,076	)

11

	Years Ended December 31,
	2013			2012			2011			2010			2009
Other Operating Data:
Cash flow (used in) provided by:
Operating activities	$	(8,316	)	$	(6,632	)	$	(8,834	)	$	(6,139	)	$	(13,580	)
Investing activities		(1,126	)		13,997			6,239			6,812			3,429
Financing activities		787			—			—			(44	)		74

	As of December 31,
	2013			2012		2011			2010		2009
Total assets	$	3,568		$	11,540	$	15,944		$	29,070	$	56,653
Working capital (deficiency)		(1,661	)		3,683		(4,883	)		2,052		4,859
Equity (deficit)		804			3,417		(6,057	)		10,258		35,117

The Company did not declare or pay any cash dividends during the five-year period ended December 31, 2013.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following is a discussion and analysis of our financial position and results of operations for each of the three years in the period ended December 31, 2013.  This commentary should be read in conjunction with our consolidated financial statements and the notes to the Company’s consolidated financial statements, which begin on page F-1 under “Item 8. Financial Statements and Supplementary Data”.

Overview

The Company’s operating results for the year ended December 31, 2013 were primarily impacted by the Company transitioning out of bankruptcy, and the reorganization of its business moving forward.  Following the effective date of the Plan, the Company’s resources were spent on renewing existing licenses and licensees, and seeking out new properties and/or brands for future representation.  During the year ended December 31, 2013, the Company renewed two long-standing representation agreements with the “American Kennel Club®” and Artlist’s “The Dog and Friends”, as part of its ongoing efforts to continue to grow the Company’s core licensing business.  These renewed licenses, as well as the Company’s existing portfolio of Properties, are expected to serve as a foundation to re-establish the Company’s overall licensing business.

In addition, during January 2013, the Company, together with certain investors, formed Pinwrest, a Delaware limited liability company, in which the Company indirectly owns 70% of the membership interest.  In February 2013, the Company acquired through Pinwrest the Patent (and certain related assets) from TDG (see Note 1).  During the year ended December 31, 2013, the management of Pinwrest worked to further enhance the technology within this Patent, and to develop various products which could have applications in a number of industries.

These initiatives, while important to the future of the Company, did not translate into significant revenues during 2013.

Our ability to achieve and maintain profitability and positive cash flow is dependent upon the success of our reorganizational efforts and a number of other factors, including our ability to generate additional revenues.

Emerging from Chapter 11 Bankruptcy Proceedings – On April 6, 2011 (the “Petition Date”), the Company and all of its domestic wholly-owned subsidiaries (the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Cases”) under Title 11 of Chapter 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which Bankruptcy Cases were jointly administered under Case No. 11-11607.  After filing the Bankruptcy Cases, the Debtors continued to operate as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.  As debtors-in-possession, the Company was authorized under Chapter 11 of the Bankruptcy Code to continue to operate as an ongoing business.4Kids Entertainment International, Ltd., (“4Kids International”), the Company’s former subsidiary based in London, England, and TC Digital Games LLC (“TC Digital”) and TC Websites LLC (“TC Websites”), two domestic subsidiaries in each of which the Company holds a majority ownership, were not included in the filing and continued to operate outside the Bankruptcy Court’s jurisdiction.

After the filing of the Bankruptcy Cases, the United States Trustee for the Southern District of New York appointed an official committee of unsecured creditors.

12

On February 29, 2012, the Company, and Nihon Ad Systems, Inc. and Tokyo Corporation (collectively, the “Licensors”) entered into a Settlement Agreement, dated as of February 27, 2012 (the “Settlement Agreement”), settling all claims brought by Licensors against the Company and all counterclaims brought by the Company against the Licensors in the Yu-Gi-Oh! Litigation (as hereinafter defined). The Settlement Agreement provided, among other things, for the Licensors to make a payment to the Company in the amount of $8,000 upon the order of the Bankruptcy Court approving the Settlement Agreement becoming final.  On March 9, 2012, the Bankruptcy Court issued an order approving the Settlement Agreement and, accordingly, the Company recognized a gain on litigation settlement of $8,000 (the “Yu-Gi-Oh! Settlement”).  Under the Settlement Agreement, the Licensors acknowledged that the Yu-Gi-Oh! Agreement (hereinafter defined) remained valid, binding and legally enforceable with the Company continuing to serve as the exclusive licensing agent for the merchandise licensing, television broadcast and home video rights to the Yu-Gi-Oh! Property (as hereinafter defined) throughout the world outside of Asia.  The Settlement Agreement further provided for each of the Company and the Licensors to release the other from all claims they may have had against each other, other than certain indemnification claims and claims that may arise under the Settlement Agreement.  The Settlement Agreement also provided that the Settlement Agreement does not constitute an admission by any party of any violation of any agreement or law.  On March 27, 2012, the Company received the payment in the amount of $8,000 pursuant to the Settlement Agreement.

On April 26, 2012, the Debtors entered into an Asset Purchase Agreement, which contemplated the sale of substantially all of its assets to Kidsco Media Ventures LLC (“Kidsco”), a Delaware limited liability company, and an affiliate of Saban Capital Group (“Saban Bidder”) for a purchase price of $10,000, subject to certain adjustments. The transaction was proposed as a sale of the Debtors’ assets pursuant to Section 363 of the Bankruptcy Code.  The transaction was subject to, among other things, (i) competitive bidding pursuant to sale procedures approved by the Bankruptcy Court at a hearing on April 27, 2012 (the “Bidding Procedures”), and (ii) approval of the transaction by the Bankruptcy Court.

In May 2012, the Company received a competing bid (the “Konami Bid”) from 4K Acquisition Corp. (the “Konami Bidder”), an indirect subsidiary of Konami Corporation, a Japanese corporation (“Konami”). In the competing bid, the Konami Bidder offered to purchase substantially all of the assets of the Company in a transaction under Section 363 of the Bankruptcy Code. The Konami Bid, in the judgment of the Company, represented a qualified bid under the terms of the Bidding Procedures.

On June 5, 2012, the Company commenced an auction between the Saban Bidder and the Konami Bidder (together with the Saban Bidder, the “Purchasers”).  During the auction, each of the Purchasers made several improved bids. After several rounds of competitive bidding, the auction was adjourned to allow the Purchasers to consider an alternative transaction among the Company and the Purchasers pursuant to which each of the Purchasers would acquire certain assets of the Company. The proposed alternative transaction represented a substantial improvement in the proceeds payable to the Company over the last bid made prior to such adjournment.  The possible alternative transaction was conditioned upon the negotiation of definitive documentation among the Company and the Purchasers and the approval of such alternative transaction by the Bankruptcy Court.

On June 24, 2012, the Debtors entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), which contemplated the sale of substantially all of its assets to the Purchasers, for an aggregate purchase price of $15,000, subject to certain adjustments (the “Purchase Price”).  The transaction was a sale pursuant to Section 363 of the Bankruptcy Code.  On June 26, 2012, the Bankruptcy Court entered a final sale order approving the transactions contemplated by the Asset Purchase Agreement.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement.  In connection with the consummation of such transactions, the Konami Bidder paid the Debtors an aggregate amount equal to $14,997, representing a base purchase price of $15,000, less a $3 downward adjustment contemplated by the Asset Purchase Agreement.  In addition, in connection with the consummation of the transactions contemplated by the Asset Purchase Agreement, the following payments were made by or on behalf of the Debtors:

(a) $1,000 was delivered to the escrow agent under the escrow agreements provided for in the Asset Purchase Agreement, to be used to satisfy any indemnification obligations that the Debtors may have to either of the Purchasers pursuant to the provisions of the Asset Purchase Agreement; such amount was received by the Company in February 2013 upon the expiration of the escrow agreements;

(b) $3 was paid to the escrow agent as the Debtors’ portion of fees payable to it for its performance of services as escrow agent under the escrow agreements;

(c) $3,051 was paid to The CW Network, LLC (“The CW”) as a cure cost under the term sheet originally entered into with The CW as of October 1, 2007 and amended as of October 2, 2008 and June 23, 2010 (“The CW Agreement”);

13

(d) $429 was paid to Toei Animation as a cure cost;

(e) $28 was paid to Twenty Three R.P. Associates as a cure cost;

(f) approximately $21 was paid to satisfy cure costs under other agreements; and

(g) $504 was paid to the Saban Bidder in accordance with the terms of the Asset Purchase Agreement, with $476 representing an adjustment to the purchase price for the Saban Purchased Business (as defined below) and $28 representing the Debtors’ share of national advertising proceeds from the broadcast of commercials during the second calendar quarter of 2012 on the five hour Saturday morning block of programs telecast on The CW.

The assets sold by the Debtors to the Konami Bidder (the “Konami Purchased Assets”) included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise (the “Konami Purchased Business”), as well as other assets relating to the Konami Purchased Business.  The Company was party to an agreement with Konami Corporation, dated as of August 1, 2001, as amended by the First Amendment, dated September 12, 2007 (the “Konami Agreement”), which agreement related to, inter alia, sales of Yu-Gi-Oh! trading cards and videogames.  The Konami Agreement was included as part of the Konami Purchased Assets transferred to the Konami Bidder in connection with the closing of the transactions contemplated by the Asset Purchase Agreement on July 2, 2012.

The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors including The CW Agreement and certain television episodes and rights related thereto (the “Saban Purchased Business”), as well as other assets relating to the Saban Purchased Business.

On October 5, 2012, the Company filed (i) the Disclosure Statement with Respect to Debtors’ Proposed Joint Plan of Reorganization, (ii) the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code and (iii) a motion establishing deadlines and procedures with respect to the solicitation of votes on the Plan (the “Procedures Motion”).  On October 29, 2012, the Company filed (i) the Amended Disclosure Statement with Respect to Debtors’ Proposed Plan of Reorganization (the “Disclosure Statement”) and (ii) the Debtor’s Amended Joint Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code. (the “Plan”).  On October 31, 2012, the Bankruptcy Court approved the Procedures Motion and the Disclosure Statement and authorized the Debtors to solicit votes on the Plan.  The Debtors formally commenced solicitation in respect of the Plan in early November 2012.

On December 13, 2012, the Bankruptcy Court entered an order in the Bankruptcy Cases confirming the Plan.  On December 21, 2012, the effective date of the Plan, the Company (including the other Debtors) emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim.  In accordance with the Plan, 4Kids reincorporated in Delaware under the name “4Licensing Corporation.” On the effective date of the Plan, 4Kids’ common stock was cancelled and holders of 4Kids’ common stock were issued one (1) share of common stock of 4LC in exchange for each share of 4Kids’ common stock held by them.

Financial Reporting Considerations - The Company’s emergence from bankruptcy did not qualify for fresh start accounting in accordance with ASC Topic 852, Reorganization.

General

The Company receives revenues from licensing and product sales.  The Company historically has derived a substantial portion of its licensing revenues from a small number of Properties and brands, which usually generate revenues for only a limited period of time. The Company’s revenues are highly subject to changing trends in the youth oriented markets, sports and specialty brands, potentially causing dramatic increases and decreases from year to year due to the popularity of particular Properties or brands. It is not possible to accurately predict the length of time a Property or brand will be commercially successful and/or if a Property or brand will be commercially successful at all. The popularity of Properties or brands can vary from months to years. As a result, the Company’s revenues from particular Properties or brands may fluctuate significantly between comparable periods.

The Company expects to derive future product revenue from the sale of IsoBLOX™ related products, sold through its majority-owned subsidiary Pinwrest.  While the IsoBLOX™ technology continues to be developed and marketed, there is no certainty that these products will be commercially viable in the marketplace, that revenues will be derived from such products or how soon products will become available for sale, if at all. There can be no assurance that these products will generate revenue.

14

Pursuant to the Asset Purchase Agreement and the corresponding assets sold and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations 4Kids Music, 4Kids Home Video, 4Kids Production and 4Kids Ad Sales.  The closure of the business of these wholly-owned subsidiaries resulted in the Company being reduced to having operations in only the licensing business segment in 2012.

Effective September 30, 2012, the Company’s wholly-owned subsidiary, 4Kids International terminated its operations.  4Kids International, based in London, England, managed Properties represented by the Company in the United Kingdom (“UK”) and European marketplaces.  The closing of 4Kids International will enable the Company to further reduce costs and focus on its core licensing business.

The results of operations for the advertising media and broadcast segment, television and film production/distribution segment and the trading card and game distribution segment are reported as discontinued operations.

Critical Accounting Policies

The Company’s accounting policies are fully described in Note 2 of the notes to the Company’s consolidated financial statements. Below is a summary of the critical accounting policies, among others, that management believes involve significant judgments and estimates used in the preparation of its consolidated financial statements.

Reorganization Items -The Company’s costs relate to professional, consulting and trustee fees in conjunction with the filing of the Bankruptcy Cases.  These types of expenditures are expensed as incurred and reported as reorganization items.

Other Estimates- The Company estimates reserves for uncollectible receivables. The Company estimates the amount of uncollectible receivables by monitoring delinquent accounts and estimating a reserve based on contractual terms and other customer specific issues.

Revenue Recognition - The Company’s revenue recognition policies are appropriate to the circumstances of its business.  See Note 2 of the notes to the Company’s consolidated financial statements for a discussion of these revenue recognition policies.

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company continually evaluates the policies and estimates that it uses to prepare its consolidated financial statements.  In general, management’s estimates and assumptions are based on historical experience, known trends or events, information from third-party professionals and other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Recently Adopted Accounting Standards – We adopted recent amendments to authoritative guidance issued by FASB in February 2013 which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income   This update resulted in additional disclosure but had no effect on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Standards – In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in ASU 2013-11 require an entity to present an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward except when: (1) a NOL carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position; or (2) the entity does not intend to use the deferred tax asset for this purpose (provided that the tax law permits a choice). If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. The amendment does not affect the recognition or measurement of uncertain tax positions under ASC Topic 740, Income Taxes. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the effect this guidance will have on the Company’s consolidated financial position and results of operations. We do not expect this ASU to have a material impact to our consolidated financial statements.

15

Results of Operations

The following table sets forth our results of operations expressed as a percentage of total net revenues for each of the three years ended December 31, 2013, 2012, and 2011.

	2013			2012			2011
Net revenues		100	%		100	%		100	%
Costs and expenses:
Selling, general and administrative		442			200			98
Cost of product sales		4			—			—
Total costs and expenses		446			200			98
(Loss) income from operations		(346	)		(100	)		2
Other income (expense):
Interest (expense) income		—			—			1
Loss on sale of investment securities		—			—			(11	)
Total other expense		—			—			(10	)
Loss from continuing operations before reorganization and litigation items		(346	)		(100	)		(8	)
Reorganization items		(12	)		(122	)		(20	)
Gain on settlement of pre-petition liabilities		2			40			—
Gain on litigation		—			240			6
Gain on sale		—			533			—
(Loss) income from continuing operations before income taxes		(356	)		591			(22	)
Benefit from (provision for) income taxes		—			—			—
(Loss) income from continuing operations		(356	)		591			(22	)
Income (loss) from discontinued operations		96			(304	)		(189	)
Net income (loss)		(260	)		287			(211	)
Loss (income) attributable to noncontrolling interests, continuing operations		27			—			—
(Income) loss attributable to noncontrolling interests, discontinued operations		(33	)		—			23
Net (loss) income attributable to 4Licensing Corporation		(266	)%		287	%		(188	)%

Year Ended December 31, 2013 as compared to Year Ended December 31, 2012

Revenues

	2013		2012		$ Change			% Change
Revenues	$	1,214	$	3,325	$	(2,111	)		(63	)%

The decrease in consolidated net revenues for the year ended December 31, 2013, as compared to the same period in 2012, was primarily attributable to reduced licensing revenues on the “Yu-Gi-Oh!” Property, which was sold pursuant to the terms of the Asset Purchase Agreement,  of approximately $2,509 partially offset by an increase in the “Dinosaur King” Property of approximately $160.

Three Properties, “American Kennel Club”, “Dinosaur King” and “Huntik”, represented 45% of consolidated net revenues for fiscal 2013.  The “Yu-Gi-Oh!” Property, which was sold pursuant to the Asset Purchase Agreement, was the largest contributor in the year ended December 31, 2012, representing approximately 75% of the Company’s net revenues.

16

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 19%, or $1,275 to $5,364 for the year ended December 31, 2013, when compared to the same period in 2012.  The decrease was primarily attributable to broad cost-cutting initiatives implemented throughout the Company and included:

(i) decreased personnel costs of approximately $3,000; as well as

(ii) decreased general office expense of approximately $280; partially offset by

(iii) increased unallocated costs due to discontinued operations of approximately $1,560 and

(iv) increased professional fees of approximately $460.

Cost of Product Sales

Cost of product sales represents finished goods inventory costs primarily relating to IsoBLOX™ and sports products sold during the year ended December 31, 2013.

Interest (Expense) Income

Interest (expense) decreased 63%, or $5, to $(3) for the year ended December 31, 2013, as compared to the same period in 2012, primarily as a result of reduced interest payments on pre-petition bankruptcy claims to creditors.

Reorganization Items

The Company incurred reorganization costs of $151 and $4,071 for the years ended December 31, 2013 and 2012, respectively.  These costs included professional and consulting fees charged for services retained in connection with the Bankruptcy Cases, as well as fees paid to the Office of the United States Bankruptcy Trustee.

Gain on Settlement of Pre-Petition Liabilities

The Company has reconciled and paid all of the liabilities that were subject to compromise and, for the years ended December 31, 2013 and 2012, the Company realized a gain on liabilities subject to compromise of $26 and $1,331, respectively.

(Loss) Income From Continuing Operations Before Income Taxes

	2013			2012		$ Change			% Change
(Loss) Income From Continuing Operations Before Income Taxes	$	(4,331	)	$	19,652	$	(23,983	)		(122	)%

The decrease in income to a loss from continuing operations for the year ended 2013, as compared to the income in the same period in 2012, was primarily attributable to the receipt in 2012 of a payment to the Company in the amount of $8,000 based upon the order of the Bankruptcy Court approving the Settlement Agreement becoming a final order which resulted in the Company recognizing a gain on litigation settlement of $8,000, as well as the sale of certain of its assets in 2012 pursuant to the Asset Purchase Agreement that resulted in a gain of $17,714.

Income Tax Expense

The Company regularly reviews its deferred tax assets for recoverability taking into consideration such factors as historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. The Company records a valuation allowance when it is more likely than not that all or some portion of the deferred tax assets will not be realized. In view of the level of deferred tax assets as of December 31, 2013, and the Company’s historical losses from operations, the Company has determined that a full valuation allowance against its net deferred tax assets is required.

In the event that the Company earns pre-tax income in the future such that it will be able to use some or all of its deferred tax assets, the Company will reduce or eliminate the valuation allowance.  If the Company were to reverse the valuation allowance, in whole or in part, the Company’s income statement for such reporting period would record a reduction in income tax expense and an increase in net income, to the extent of the reversal of the valuation allowance.

The Company did not record a benefit from income taxes for the year ended December 31, 2013 as it is more likely than not that the Company will not be able to realize its deferred tax assets.

17

The Company did not record income tax expense for the year ended December 31, 2012 as it has available net operating loss carryforwards to offset any taxable income.  The Company did not reduce its valuation allowance against its deferred tax assets as it is more likely than not that the Company will not be able to realize its deferred tax assets.

The Company files in multiple tax jurisdictions and from time to time is subject to audit in certain tax jurisdictions.  The Company is no longer subject to examinations by income tax authorities in most jurisdictions for years prior to 2010.

Income (Loss) from Continuing Operations

As a result of the above, the Company had a loss from continuing operations for the year ended December 31, 2013 of $4,331, as compared to income from continuing operations in 2012 of $19,652.

Discontinued Operations

Pursuant to the Asset Purchase Agreement and the corresponding assets sold, and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, 4Kids Productions, 4Kids Music and 4Kids Home Video.  The closure of the business of these wholly-owned subsidiaries resulted in the Company having operations in only the licensing business segment in 2012.

Effective September 30, 2012, the Company’s wholly-owned subsidiary, 4Kids International terminated its operations.  4Kids International, based in London, England, managed Properties represented by the Company in the United Kingdom (“UK”) and European marketplaces.  The closing of 4Kids International has enabled the Company to further reduce costs and focus on its core licensing business.

The results of operations for the advertising media and broadcast segment, television and film production/distribution segment and the trading card and game distribution segment are reported as discontinued operations

Additionally, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites.  The results of operations of the following segments are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14).

The following are the summarized results of discontinued operations for the years ended December 31, 2013 and 2012:

	Years Ended December 31,
	2013		2012
Total net revenues	$	—	$	2,101
Total income (costs and expenses)		1,170		(12,210	)
Income (loss) from discontinued operations	$	1,170	$	(10,109	)

The income of $1,170 in 2013 is primarily the result of the reversal of various prior period expense accruals upon settlement of claims.

Year Ended December 31, 2012 as compared to Year Ended December 31, 2011

Revenues

	2012		2011		$ Change			% Change
Revenues	$	3,325	$	8,073	$	(4,748	)		(59	)%

The decrease in consolidated net revenues for the year ended December 31, 2012, as compared to the same periods in 2011, was primarily attributable to reduced licensing revenues on the “Yu-Gi-Oh!”, “Teenage Mutant Ninja Turtles”, “American Kennel Club”,  “Monster Jam” and “Cabbage Patch Kids” Properties of approximately $2,680, $850, $830, $190 and $140, respectively.

The “Yu-Gi-Oh!” Property, which was sold pursuant to the Asset Purchase Agreement, was the largest contributor in the year ended December 31, 2012 and 2011, representing approximately 75% and 64% of the Company’s revenues, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 16%, or $1,305 to $6,639 for the year ended December 31, 2012, when compared to the same period in 2011.  The decrease was primarily attributable to broad cost-cutting initiatives implemented throughout the Company and included:

(i) decreased professional fees of approximately $2,040; as well as

(ii) decreased personnel costs of approximately $640; partially offset by

(iii) increased unallocated costs due to discontinued operations of approximately $1,300.

18

Interest (Expense) Income

Interest income decreased 113%, or $71, to $(8) for the year ended December 31, 2012, as compared to the same period in 2011, primarily as a result of cash balances in 2012 held in non-interest bearing accounts and the liquidation of the Company’s investment portfolio in 2011. Interest expense of $(8) in 2012 related to interest paid on pre-petition bankruptcy claims to creditors.

Reorganization Items

The Company incurred reorganization costs of $4,071 and $1,628 for the years ended December 31, 2012 and 2011, respectively.  These costs included professional and consulting fees charged for services retained in connection with the Bankruptcy Cases, as well as fees paid to the Office of the United States Bankruptcy Trustee.

Gain on Settlement of Pre-Petition Liabilities

The Company has reconciled and paid a substantial amount of the liabilities that were subject to compromise and, for the year ended December 31, 2012, the Company realized a gain on liabilities subject to compromise of $1,331.

Gain on Litigation Settlement

On December 29, 2011, the Bankruptcy Court issued its decision ruling in favor of the Company in the first phase of the Yu-Gi-Oh! Litigation. In its 154 page decision, the Bankruptcy Court ruled that the Yu-Gi-Oh! Agreement was not effectively terminated by the Licensors prior to the Company’s bankruptcy filing on April 6, 2011. Rather, the Bankruptcy Court ruled that the Yu-Gi-Oh! Agreement remained in full force and effect and is property of the Company’s bankrupt estate. In addition, the Court’s opinion carefully considered each of the Licensors’ nine audit findings totaling over $4,700 and concluded that audit findings totaling approximately 99% of the amount claimed by the Licensors were "meritless". The remaining two audit claims totaling $48, which the Company does not dispute, were offset by the roughly $800 credit balance in favor of the Company as of March 24, 2011, the date that the Licensors sent the Company the purported notice of termination, and the $1,000 good-faith payment made by the Company on March 17, 2011 which was subsequently returned to the Company on January 24, 2012.  Based on the ruling and the conclusions on certain findings previously recorded, the Company recorded a gain of approximately $1,357.

On February 29, 2012, the Company and the Licensors entered into a Settlement Agreement, dated as of February 27, 2012 (the “Settlement Agreement”), settling all claims brought by Licensors against the Company and all counterclaims brought by the Company against the Licensors in the Yu-Gi-Oh! Litigation. The Settlement Agreement provides, among other things, for the Licensors to make a payment to the Company in the amount of $8,000 upon the order of the Bankruptcy Court approving the Settlement Agreement becoming a final order.  On March 9, 2012, the Bankruptcy Court issued an order approving the Settlement Agreement.  Under the Settlement Agreement, the Licensors acknowledged that the Yu-Gi-Oh! Agreement remained valid, binding and legally enforceable with the Company continuing to serve as the exclusive licensing agent for the merchandise licensing, television broadcast and home video rights to the Yu-Gi-Oh! Property throughout the world outside of Asia.  The Settlement Agreement further provided for each of the Company and the Licensors to release the other from all claims they may have against each other, other than certain indemnification claims and claims that may arise under the Settlement Agreement.  The Settlement Agreement also provided that the agreement does not constitute an admission by any party of any violation of any agreement or law.

The Company believes that Lehman Brothers, Inc., the securities broker-dealer that purchased the auction rate securities on behalf of the Company, violated its legal obligations to the Company.  As a result, the Company took various measures to obtain appropriate legal relief, including initiating an arbitration on April 3, 2008 against Lehman Brothers, Inc. and the brokers who had serviced the Company’s Lehman account with the Financial Industry Regulatory Authority.  On September 15, 2008, Lehman Brothers Holdings, Inc., the parent company of Lehman Brothers, Inc., filed for bankruptcy.  The Company’s arbitration proceeding was stayed by the Lehman bankruptcy.  On September 16, 2008, Barclays PLC announced that it had reached an agreement to purchase the assets of Lehman Brothers Holdings, Inc.’s North American operations, including substantial assets of Lehman Brothers, Inc.  The Lehman-Barclays transaction was approved by the United States Bankruptcy Court for the Southern District of New York on September 20, 2008.  On September 19, 2008, the Securities Investor Protection Corporation (“SIPC”) filed a proceeding, placing Lehman Brothers, Inc. in liquidation under the Securities Investor Protection Act (“SIPA”). SIPC, pursuant to its authority under SIPA, has acted to facilitate the transfer of Lehman Brothers, Inc.’s customer accounts (including the Company’s accounts) to Barclays, PLC.  In late September, 2009, the Company filed a proof of claim against Lehman Brothers, Inc. in the United States Bankruptcy Court for the Southern District of New York. The principal amount of the claim was approximately $31,500 plus interest. In addition, the proof of claim requested treble damages. The proof of claim is a general unsecured claim. The Company’s claim against Lehman Brothers, Inc. is still pending and there has been no determination made as to the validity or allowed amount of the claim.  On October 18, 2011, the Company entered into a settlement agreement and general release with the brokers who had serviced the Company’s account with Lehman Brothers, Inc. for approximately $489.

19

Gain on Sale

As a result of the Company’s sale of certain assets pursuant to the Asset Purchase Agreement completed July 2, 2012, the Company recorded a gain on sale of $17,714 for the year ended December 31, 2012.

Income (Loss) From Continuing Operations Before Income Taxes

	2012		2011			$ Change		% Change
Income (Loss) From Continuing Operations Before Income Taxes	$	19,652	$	(1,857	)	$	21,509		1,158	%

The increase in income from continuing operations for the year ended 2012, as compared to the loss in the same period in 2011, was primarily attributable to the receipt of the payment to the Company in the amount of $8,000 based upon the order of the Bankruptcy Court approving the Settlement Agreement becoming a final order which resulted in the Company recognizing a gain on litigation settlement of $8,000, as well as the sale of certain of its assets pursuant to the Asset Purchase Agreement that resulted in a gain of $17,714.

Income Tax Expense

The Company regularly reviews its deferred tax assets for recoverability taking into consideration such factors as historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. The Company records a valuation allowance when it is more likely than not that all or some portion of the deferred tax assets will not be realized. In view of the level of deferred tax assets as of December 31, 2012, and the Company’s historical losses from operations, the Company has determined that a full valuation allowance against its net deferred tax assets is required.

In the event that the Company earns pre-tax income in the future such that it will be able to use some or all of its deferred tax assets, the Company will reduce or eliminate the valuation allowance.  If the Company were to reverse the valuation allowance, in whole or in part, the Company’s income statement for such reporting period would record a reduction in income tax expense and an increase in net income, to the extent of the reversal of the valuation allowance.

The Company did not record a benefit from income taxes for the year ended December 31, 2011 as it was not able to carryback any of its 2011 net operating loss and it is more likely than not that the Company will not be able to realize its deferred tax assets.

The Company files in multiple tax jurisdictions and from time to time is subject to audit in certain tax jurisdictions.  The Company is no longer subject to examinations by income tax authorities in most jurisdictions for years prior to 2010.

Income (Loss) from Continuing Operations

As a result of the above, the Company had income from continuing operations for the year ended December 31, 2012 of $19,652, as compared to a loss from continuing operations in 2011 of $1,857.

Discontinued Operations

Pursuant to the Asset Purchase Agreement and the corresponding assets sold, and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, 4Kids Productions, 4Kids Music and 4Kids Home Video.  The closure of the business of these wholly-owned subsidiaries resulted in the Company having operations in only the licensing business segment in 2012.

Effective September 30, 2012, the Company’s wholly-owned subsidiary, 4Kids International terminated its operations.  4Kids International, based in London, England, managed Properties represented by the Company in the United Kingdom (“UK”) and European marketplaces.  The closing of 4Kids International has enabled the Company to further reduce costs and focus on its core licensing business.

The results of operations for the advertising media and broadcast segment, television and film production/distribution segment and the trading card and game distribution segment are reported as discontinued operations.

20

Additionally, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites.  The results of operations attributable to those entities are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14).

The following are the summarized results of discontinued operations for the years ended December 31, 2012 and 2011:

	Years Ended December 31,
	2012			2011
Total net revenues	$	2,101		$	4,284
Total costs and expenses		(12,210	)		(19,511	)
Loss from discontinued operations	$	(10,109	)	$	(15,227	)

Liquidity and Capital Resources

Financial Condition

Cash and cash equivalents for the years ended December 31, 2013 and 2012 were as follows:

	2013		2012		$ Change
Cash and cash equivalents	$	356	$	9,011	$	(8,655	)

In recent years, the Company has incurred substantial net losses and has used substantial amounts of cash in its operating activities.  Sales by the Company of certain assets have significantly contributed to the funding of these operating losses.  While the timing of these sales was not primarily motivated by then current cash needs, without these sales the Company would not have had sufficient cash to fund its operations. 

As disclosed above, on February 29, 2012, the Company and the Licensors entered into a Settlement Agreement which entitled the Company to a payment of $8,000 from the Licensors. On March 27, 2012, the Company received the payment pursuant to the Settlement Agreement. Also as disclosed above, 4Kids and its domestic wholly owned subsidiaries, as the Debtors in the Bankruptcy Cases, entered into an Asset Purchase Agreement with two affiliates of Konami and Saban Capital Group. On July 2, 2012 and February 8, 2013, the Company received $14,000 and $1,000, respectively, pursuant to the Asset Purchase Agreement.

The Company will consider all alternatives available to generate additional cash to fund its operations, including, but not limited to sales of assets, issuance of equity or debt securities, and third party arrangements. There can be no assurance that any of these alternatives will help the Company in generating additional cash.

Sources and Uses of Cash

Cash flows for the three years ended December 31, 2013, 2012, and 2011 were as follows:

Sources (Uses)	2013			2012			2011
Operating Activities	$	(8,316	)	$	(6,632	)	$	(8,834	)
Investing Activities		(1,126	)		13,997			6,239
Financing Activities		787			-			-

Working capital (deficiency), consisting of current assets less current liabilities, was $(1,661) as of December 31, 2013 and $3,683 as of December 31, 2012.

Operating Activities

2013

Net cash used in operating activities of $8,316 in 2013 primarily reflects the payments of accounts payable and accrued expenses mostly related to severance and professional fees, the settlement of liabilities subject to compromise and the funding of the operating loss for the year ended December 31, 2013.

2012

Net cash used in operating activities of $6,632 in 2012 primarily reflects the payments of liabilities subject to compromise.

21

2011

Net cash used in operating activities of $8,834 in 2011 primarily reflects the Company’s operating losses partially offset by cash collections of the Company’s trade receivables and the decrease of payments of liabilities arising prior to the commencement of the Bankruptcy Cases.

Investing Activities

2013

Net cash used in investing activities of $1,126 in 2013,  reflects $2,100 used in the purchase of IsoBLOX™ assets and $26 used in the purchase of property and equipment, offset by $1,000 of proceeds from the release of escrow related to the sale of certain assets.

2012

Net cash provided by investing activities of $13,997 in 2012, primarily reflects proceeds from the sale of certain of the Company’s assets pursuant to the Asset Purchase Agreement completed in July 2012.

2011

Net cash provided by investing activities of $6,239 in 2011, primarily reflects proceeds from the sale of the Company’s investment securities for $6,216.

Financing Activities

2013

Net cash provided by financing activities for the year ended December 31, 2013 of $787 reflects capital contributions from the noncontrolling interests in Pinwrest Development Group LLC.

2012

There was no net cash provided by, or used in, financing activities for the year ended December 31, 2012.

2011

There was no net cash provided by, or used in, financing activities for the year ended December 31, 2011.

During 2013, the decrease in the Company's cash flow from operations resulted from the diminished revenue generated by its reduced number of Properties, payment of severance and professional fees, the settlement of pre-petition liabilities as well as the funding of the operating loss for the year ended December 31, 2013.  While the Company strives to further diversify its revenue streams, management remains cognizant of changing trends in the toy, game and entertainment business and the difficulty in predicting the length of time a property will be commercially successful.  As a result, the Company's revenues, operating results and cash flow from operations may fluctuate significantly from year to year and present operating results are not necessarily indicative of future performance.

Contractual Commitments

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments for goods and services.  These firm commitments secure the future rights to various assets and services to be used in the normal course of operations.  The following table summarizes the Company’s material firm commitments as of December 31, 2013 and the impact that such obligations are expected to have on the Company’s liquidity and cash flows in future periods.  The Company expects to fund these commitments with operating cash flows generated in the normal course of business.

Year Ending December 31,	Operating Lease
2014	$	271
2015		211
2016 and after		—
Total	$	482

The Company’s contractual obligations and commitments are detailed in the Company’s consolidated financial statements. For additional information see Note 16 of the notes to the Company’s consolidated financial statements.

22

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Exchange Rate Fluctuations.

From time to time, the Company may be exposed to the risk of future currency exchange rate fluctuations, which is accounted for as an adjustment to stockholders’ equity and changes in the exchange rates between various foreign currencies and the U.S. dollar may, as a result, have an impact on the accumulated other comprehensive loss component of stockholders’ equity reported by the Company, and such effect may be material in any individual reporting period. The Company is currently not a party to any market risk sensitive instruments, or any derivative contracts or other arrangements that may reduce such market risk.

Item 8. Financial Statements and Supplementary Data.

The Report of Independent Registered Public Accounting Firm, the Company’s consolidated financial statements and notes to the Company’s consolidated financial statements appear in a separate section of this Form 10-K (beginning on Page F-1 following Part IV). The index to the Company’s consolidated financial statements is included in Item 15.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in our filings and submissions under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We completed an evaluation under the supervision and with participation of our management, including our executive and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  Based on this evaluation, our principal executive and principal financial officer has concluded that as of December 31, 2013, such disclosure controls and procedures were effective to provide the reasonable assurance described above.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), is a process designed by, or under the supervision of, our principal executive and principal financial officer and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The scope of management's assessment of the effectiveness of internal control over financial reporting includes all of our Company's consolidated subsidiaries.

23

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2012. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in "Internal Control-Integrated Framework." Based on this assessment, management believes that, as of December 31, 2013, our internal control over financial reporting was effective based on those criteria.

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934) during the period covered by this report that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors and Executive Officers of the Registrant.

Information concerning directors and officers of the Company is incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission within 120 days after the end of the Company’s fiscal year.

Item 11. Executive Compensation.

Information concerning executive and director compensation is incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission within 120 days after the end of the Company’s fiscal year.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information concerning security ownership of each person known by the Company to own beneficially more than 5% of the outstanding shares of Common Stock, of each director of the Company and all officers and directors as a group and of the Company’s equity compensation plans is incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission within 120 days after the end of the Company’s fiscal year.

Item 13. Certain Relationships and Related Transactions.

Information concerning certain relationships and related transactions is incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission within 120 days after the end of the Company’s fiscal year.

Item 14. Principal Accountant Fees and Services.

Information concerning principal accountant fees and services is incorporated by reference to the Company’s Definitive Proxy Statement on Schedule 14A to be filed with the Securities and Exchange Commission within 120 days after the end of the Company’s fiscal year.

24

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)(1) Financial Statements:

The following consolidated financial statements of 4Licensing Corporation (formerly known as 4Kids Entertainment, Inc.)and its subsidiaries are included in Item 8:

	Page Number
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets - December 31, 2013 and 2012	F-2
Consolidated Statements of Operations - Years Ended December 31, 2013, 2012, and 2011	F-3
Consolidated Statements of Comprehensive (Loss) Income - Years Ended December 31, 2013, 2012, and 2011	F-4
Consolidated Statements of Shareholders’ Equity (Deficit) Years Ended December 31, 2013, 2012, and 2011	F-5
Consolidated Statements of Cash Flows - Years Ended December 31, 2013, 2012, and 2011	F-6
Notes to Consolidated Financial Statements	F-7 to F-27

(a)(2)  Financial Statement Schedules

All schedules have been omitted because they are inapplicable, not required, or the information is included in the Company’s consolidated financial statements or the notes to the Company’s consolidated financial statements.

(a)(3) and (b) Exhibits.

 See Index of Exhibits annexed hereto.

25

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.)

Date:   March 31, 2014

/s/ Bruce R. Foster

Bruce R. Foster,

Chief Executive Officer

Executive Vice President

and Chief Financial Officer

(principal executive, financial and chief accounting officer )

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:   March 31, 2014

/s/ Bruce R. Foster

Bruce R. Foster,

Chief Executive Officer

Executive Vice President

and Chief Financial Officer

(principal executive, financial and chief accounting officer )

Date:   March 31, 2014

/s/ Jay Emmett

Jay Emmett,

(Director)

Date:   March 31, 2014

/s/ Wade Massad

Wade Massad,

(Director)

Date:    March 31, 2014

/s/ Duminda DeSilva

Duminda DeSilva

(Director)

26

Exhibit Number	Description
2.1	Asset Purchase Agreement, dated June 24, 2012 among 4Kids Entertainment, Inc. and its wholly owned subsidiaries, Kidsco Media Ventures LLC and 4K Acquisition Corp. (11)
2.2	Confirmation Order, dated December 13, 2012. (12)
2.3	Debtors’ Amended Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code. (12)
2.4	Plan Supplement. (12)
2.5	Asset Purchase Agreement, dated February 14, 2013, among Pinwrest Development Group, LLC, The Dodd Group LLC, Mark Dodd, Oak Stream Investors II, Ltd., Paramount Capital Investments (Private Equity), LLC, STELAC SPV VIII LLC, Greg S. Oliver and David B. Feldman. (17)
3.1	Certificate of Incorporation of 4Kids Entertainment, Inc. filed on April 28, 1970, as amended on October 12, 1971, as further amended on April 21, 1972, as further amended on July 17, 1979, as further amended on May 22, 1985, as further amended on July 30, 1986, as further amended on July 19, 1989, as further amended on November 16, 1995 (changing the name to 4Kids Entertainment, Inc.).   (1)
3.2	Certificate of Amendment to the Certificate of Incorporation of 4Kids Entertainment, Inc., dated April 29, 1999.  (2)
3.3	Certificate of Amendment to the Certificate of Incorporation of 4Kids Entertainment, Inc., dated May 18, 2000.   (3)
3.4	Certificate of Amendment to the Certificate of Incorporation of 4Kids Entertainment, Inc., dated August 15, 2007.   (4)
3.5	Amended and Restated By-Laws of 4Kids Entertainment, Inc. adopted by the Board of Directors on April 30, 2010 (10).
3.6	Second Amended and Restated By-Laws of 4Kids Entertainment, Inc. (13)
3.7	Certificate of Incorporation of 4Licensing Corporation. (15)
3.8	Certificate of Ownership and Merger. (15)
3.9	Certificate of Merger. (15)
3.10	By-Laws of 4Licensing Corporation. (15)
4.1	Form of Common Stock Certificate of 4Kids Entertainment, Inc. (5)
4.2	Form of Common Stock Certificate of 4Licensing Corporation. (16)
10.1	4Licensing Corporation Equity Incentive Plan. (*) (16)
10.2	Employment Agreement dated as of March 21, 2013, between 4Licensing Corporation and Bruce R. Foster.  (*)(18)
10.3	Operating Agreement of TC Digital Games LLC, dated as of December 11, 2006, between 4Kids Digital Games, Inc. and Chaotic USA Entertainment Digital Games LLC. (6)
10.4	Operating Agreement of TC Websites LLC, dated as of December 11, 2006, between 4Kids Websites, Inc. and Chaotic USA Entertainment Group, Inc. (6)
10.5	Operating Acquisition and Administration agreement dated June 28, 2002 between Cherry Lane Publishing Company, Inc. and 4Kids Entertainment Music, Inc. (7)
10.6	Membership Interest Purchase Agreement dated December 18, 2007 between TC Digital Games, LLC, Chaotic USA Entertainment Group, Inc. and 4Kids Digital, Inc. (7)
10.7	Membership Interest Purchase Agreement dated December 18, 2007 between TC Websites LLC, Chaotic USA Entertainment Group, Inc. and 4Kids Websites, Inc. (7)
10.8	First Amendment dated as of September 15, 2008 to the Operating Agreement of TC Websites LLC, between 4Kids Websites, Inc. and Chaotic USA Entertainment Group, Inc. (8)
10.9	Letter Agreement Supplement to the Termination, Assignment and Release Agreement, dated as of October 20, 2009, between 4Kids Entertainment, Inc. and its subsidiaries, Mirage Licensing, Inc and Mirage Studios, Inc.  (9)
10.10	Settlement Agreement and General Release, dated October 29, 2012, among 4Kids Entertainment, Inc., 4Kids Entertainment Licensing, Inc. and Samuel R. Newborn. (14)
10.11	Intellectual Property Agreement, dated February 14, 2013, between Pinwrest Development Group, LLC and Mark Dodd (17)

27

10.12	Nonstatutory Stock Option Agreement dated February 27, 2013, between 4Licensing Corporation and Bruce R. Foster.  (*) (16)
10.13	Nonstatutory Stock Option Agreement dated February 27, 2013, between 4Licensing Corporation and Jay Emmett.  (*) (16)
10.14	Nonstatutory Stock Option Agreement dated February 27, 2013, between 4Licensing Corporation and Wade Massad.  (*) (16)
10.15	Nonstatutory Stock Option Agreement dated February 27, 2013, between 4Licensing Corporation and Duminda DeSilva.  (*) (16)
21.1	List of Subsidiaries of the Registrant. (16)
23.1	Consent of EisnerAmper LLP, Independent Registered Public Accounting Firm. (16)
31.1	Certification of Interim Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Interim Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.DEF	XBRL Definition Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document

*	Denotes a management contract or compensatory plan, contract or arrangement.
(1)	Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1995 (File No. 000-07843).
(2)	Incorporated by reference to 1999 Proxy Statement for Annual Meeting of Shareholders held April 29, 1999 (File No. 000-07843).
(3)	Incorporated by reference to 2000 Proxy Statement for Annual Meeting of Shareholders held May 17, 2000 (File No. 000-07843).
(4)	Incorporated by reference to Current Report on Form 8-K dated August 16, 2007 (File No. 001-16117).
(5)	Incorporated by reference to Registration Statement on Form S-1 declared effective March 7, 1986 (File No. 33-3056).
(6)	Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 2006 (File No. 000-07843).
(7)	Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 2007 (File No. 000-07843).
(8)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (File No. 001-16117).
(9)	Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 001-16117).
(10)	Incorporated by reference to Current Report on Form 8-K April 30, 2010 (File No. 001-16117).
(11)	Incorporated by reference to Current Report on Form 8-K dated June 28, 2012.
(12)	Incorporated by reference to Current Report on Form 8-K dated December 19, 2012.
(13)	Incorporated by reference to Current Report on Form 8-K dated October 17, 2012.
(14)	Incorporated by reference to Current Report on Form 8-K dated November 02, 2012.

28

(15)	Incorporated by reference to Current Report on Form 8-K dated December 28, 2012.
(16)	Incorporated by reference to Registration Statement on Form S-8 dated March 8, 2013.
(17)	Incorporated by reference to Current Report on Form 8-K dated March 15, 2013.
(18)	Incorporated by reference to Current Report on Form 8-K dated March 28, 2013.
(19)	Incorporated by reference to Current Report on Form 8-K dated March 28, 2014.

29

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

4Licensing Corporation (formerly known as 4Kids Entertainment, Inc.)

We have audited the accompanying consolidated balance sheets of 4Licensing Corporation (formerly known as 4Kids Entertainment, Inc.) and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive (loss) income and shareholders’ equity (deficit), and cash flows for each of the three years in the period ended December 31, 2013.  The financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of 4Licensing Corporation (formerly known as 4Kids Entertainment, Inc.) and subsidiaries as of December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has suffered recurring losses from operations, does not generate significant revenues and at December 31, 2013 had a negative working capital.  As more fully described in Notes 1 and 16, the Company emerged from Chapter 11 bankruptcy proceedings on December 21, 2012and the costs of the bankruptcy proceedings and settlements of the bankruptcy claims have left the Company with only limited liquidity to funds its day-to-day operations.  The above conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Management’s plans in regard to this matter are also described in Notes 1 and 16.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ EisnerAmper LLP

New York, New York

March 28, 2014

F-1

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.) AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2013 AND 2012

(In thousands of dollars, except share data)

	December 31, 2013			December 31, 2012
ASSETS:
Current assets:
Cash and cash equivalents	$	356		$	9,011
Accounts receivable – net		308			479
Inventories		137			—
Prepaid expenses and other current assets		278			1,091
Current assets of discontinued operations		1			267
Total current assets		1,080			10,848
Property and equipment - net		37			82
Accounts receivable - noncurrent, net		1			36
Intangible assets - net		1,979			—
Other assets - net		471			573
Noncurrent assets of discontinued operations		—			1
Total assets	$	3,568		$	11,540
LIABILITIES AND EQUITY:
Liabilities not subject to compromise:
Current liabilities:
Due to licensors	$	327		$	457
Accounts payable and accrued expenses		1,789			4,840
Current liabilities of discontinued operations		618			1,859
Deferred revenue		7			9
Total current liabilities		2,741			7,165
Deferred rent		23			—
Total liabilities not subject to compromise		2,764			7,165
Liabilities subject to compromise		—			958
Total liabilities		2,764			8,123
Commitments and contingencies (Note 16)
4Licensing Corporation shareholders’ equity (deficit)
Preferred stock, $.01 par value – authorized 3,000,000 shares; none issued		—			—
Common stock, $.01 par value - authorized 40,000,000 shares; issued 15,838,879 shares; outstanding 13,714,992 shares, in both 2013 and 2012		158			158
Additional paid-in capital		69,629			69,524
Accumulated other comprehensive income		—			344
Accumulated deficit		(16,748	)		(13,519	)
		53,039			56,507
Less cost of 2,123,887 treasury shares in both 2013 and 2012		(36,488	)		(36,488	)
Total equity of 4Licensing Corporation shareholders		16,551			20,019
Noncontrolling interests, includes discontinued operations of $(16,203) and $(16,602) in 2013 and 2012, respectively		(15,747	)		(16,602	)
Total equity		804			3,417
Total liabilities and equity	$	3,568		$	11,540

See notes to consolidated financial statements.

F-2

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2013, 2012, AND 2011

(In thousands of dollars, except share data)

	2013			2012			2011
Net revenues:
Service revenue	$	1,087		$	3,325		$	7,191
Product Revenue		127			—			—
Other revenue		—			—			882
Total net revenues		1,214			3,325			8,073
Costs and expenses:
Selling, general and administrative		5,364			6,639			7,944
Cost of product sales		53
Total costs and expenses		5,417			6,639			7,944
(Loss) income from operations		(4,203	)		(3,314	)		129
Other income (expense):
Interest (expense) income		(3	)		(8	)		63
Loss on sale of investment securities		—			—			(910	)
Total other expense		(3	)		(8	)		(847	)
Loss from continuing operations before reorganization and litigation items		(4,206	)		(3,322	)		(718	)
Reorganization items		(151	)		(4,071	)		(1,628	)
Gain on settlement of pre-petition liabilities		26			1,331			—
Gain on litigation		—			8,000			489
Gain on sale		—			17,714			—
(Loss) income from continuing operations before income taxes		(4,331	)		19,652			(1,857	)
Benefit from (provision for) income taxes		—			—			—
(Loss) income from continuing operations		(4,331	)		19,652			(1,857	)
Income (loss) from discontinued operations		1,170			(10,109	)		(15,227	)
Net (loss) income		(3,161	)		9,543			(17,084	)
Loss (income) attributable to noncontrolling interests, continuing operations		331			—			—
(Income) loss attributable to noncontrolling interests, discontinued operations		(399	)		1			1,884
Net (loss) income attributable to 4Licensing Corporation	$	(3,229	)	$	9,544		$	(15,200	)
Per share amounts:
Basic and diluted (loss) income per share attributable to 4Licensing Corporation common shareholders
Continuing operations	$	(0.29	)	$	1.44		$	(0.14	)
Discontinued operations		0.06			(0.74	)		(0.98	)
Basic and diluted income (loss) per share attributable to 4Licensing Corporation common shareholders	$	(0.23	)	$	0.70		$	(1.12	)
Weighted average common shares outstanding – basic and diluted		13,714,992			13,690,998			13,605,148
Net income (loss) attributable to 4Licensing Corporation:
(Loss) income from continuing operations	$	(4,331	)	$	19,652		$	(1,857	)
Loss attributable to noncontrolling interests, continuing operations		331			—			—
Net (loss) income from continuing operations		(4,000	)		19,652			(1,857	)
Income (loss) from discontinued operations		1,170			(10,109	)		(15,227	)
(Income) loss attributable to noncontrolling interests, discontinued operations		(399	)		1			1,884
Net income (loss) from discontinued operations		771			(10,108	)		(13,343	)
Net (loss) income attributable to 4Licensing Corporation	$	(3,229	)	$	9,544		$	(15,200	)

See notes to consolidated financial statements.

F-3

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

YEARS ENDED DECEMBER 31, 2013, 2012, AND 2011

 (In thousands of dollars)

	2013			2012			2011
Net (loss) income	$	(3,161	)	$	9,543		$	(17,084	)
Other comprehensive income (loss): Translation adjustment		—			(157	)		31
Reclassification of translation adjustment related to liquidation of foreign subsidiary		(344	)		—			—
Other comprehensive (loss) income		(344	)		(157	)		31
Comprehensive (loss) income		(3,505	)		9,386			(17,053	)
Loss (income) attributable to noncontrolling interests, continuing operations		331			—			—
(Income) loss attributable to noncontrolling interests, discontinued operations		(399	)		1			1,884
Comprehensive (loss) income attributable to 4Licensing Corporation	$	(3,573	)	$	9,387		$	(15,169	)

See notes to consolidated financial statements.

F-4

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

(In thousands of dollars and shares)

	4Licensing Corporation Shareholders’
	Common Stock				Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive (Loss) Income			Less Treasury Stock			Total Equity of 4Licensing Corporation Shareholders			Non-controlling Interests			Total Equity (Deficit)
	Shares		Amount
BALANCE, DECEMBER 31, 2010		15,653	$	157	$	68,699	$	(7,863	)	$	470		$	(36,488	)	$	24,975		$	(14,717	)	$	10,258
Issuance of common stock		125		1		737		—			—			—			738			—			738
Comprehensive net loss		—		—		—		(15,200	)		31			—			(15,169	)		(1,884	)		(17,053	)
BALANCE, DECEMBER 31, 2011		15,778	$	158	$	69,436	$	(23,063	)	$	501		$	(36,488	)	$	10,544		$	(16,601	)	$	(6,057	)
Issuance of common stock		61		—		88		—			—			—			88			—			88
Comprehensive net income		—		—		—		9,544			(157	)		—			9,387			(1	)		9,386
BALANCE, DECEMBER 31, 2012		15,839	$	158	$	69,524	$	(13,519	)	$	344		$	(36,488	)	$	20,019		$	(16,602	)	$	3,417
Capital contribution from noncontrolling interest		—		—		—		—			—			—			—			787			787
Stock based compensation expense		—		—		105		—			—			—			105			—			105
Comprehensive net (loss) income		—		—		—		(3,229	)		(344	)		—			(3,573	)		68			(3,505	)
BALANCE, DECEMBER 31, 2013		15,839	$	158	$	69,629	$	(16,748	)	$	—		$	(36,488	)	$	16,551		$	(15,747	)	$	804

See notes to consolidated financial statements.

F-5

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2013, 2012 AND 2011

(In thousands of dollars)

	2013			2012			2011
Cash flows from operating activities:
Net (loss) income	$	(3,161	)	$	9,543		$	(17,084	)
(Income) loss from discontinued operations		(1,170	)		10,109			15,227
(Loss) income from continuing operations		(4,331	)		19,652			(1,857	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization		195			126			222
Gain on settlement of pre-petition liabilities		(26	)		(1,331	)		—
Gain on sale of certain assets		—			(17,714	)		—
Loss on disposal of property and equipment		—			164			—
Provision (recovery) for doubtful accounts		6			7			(93	)
Share-based compensation		105			21			32
Loss on sale of investment securities		—			—			910
Changes in operating assets and liabilities:
Inventories		(137	)		—			—
Accounts receivable		200			1,742			(296	)
Income taxes receivable		—			—			26
Prepaid expenses and other current assets		(187	)		851			(150	)
Other assets – net		99			(84	)		7
Due to licensors		(130	)		(546	)		(704	)
Accounts payable and accrued expenses		(3,051	)		1,302			2,082
Liabilities subject to compromise		(932	)		(5,218	)		7,507
Deferred revenue		(2	)		(2	)		(1,035	)
Deferred rent		23			—			—
Net cash (used in) provided by continuing operating activities		(8,168	)		(1,030	)		6,651
Net cash used in discontinued operating activities		(148	)		(5,602	)		(15,485	)
Net cash used in operating activities		(8,316	)		(6,632	)		(8,834	)
Cash flows from investing activities:
Proceeds from sale of investments		—			—			6,216
Proceeds from sale of certain assets		1,000			13,997			—
Acquisition of assets		(2,100	)		—			—
Purchase of property and equipment		(26	)		—			(2	)
Proceeds from disposal of property and equipment		—			—			25
Net cash (used in) provided by investing activities		(1,126	)		13,997			6,239
Cash flows from financing activities:
Capital contribution from noncontrolling interests		787			—			—
Net cash provided by financing activities		787			—			—
Effects of exchange rate changes on cash and cash equivalents		—			19			27
Net (decrease) increase in cash and cash equivalents		(8,655	)		7,384			(2,568	)
Cash and cash equivalents, beginning of period		9,011			1,627			4,195
Cash and cash equivalents, end of period	$	356		$	9,011		$	1,627
Supplemental schedule of non-cash investing and financing activities
Vesting of restricted shares	$	—		$	88		$	738

In conjunction with the sale of certain of the Company’s assets pursuant to the Asset Purchase Agreement:

Other assets–continuing, acquired by buyers	$	—	$	1,596	$	—
Film costs, accounts receivable, other assets–discontinued, acquired by buyers	$	—	$	2,329	$	—
Accounts payable and accrued expenses–discontinued, assumed by buyers	$	—	$	6,642	$	—

See notes to consolidated financial statements.

F-6

4LICENSING CORPORATION (formerly known as 4Kids Entertainment, Inc.) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2013, 2012, and 2011

(In thousands of dollars, except share and per share data)

1. DESCRIPTION OF BUSINESS

General Development and Narrative Description of Business - 4Licensing Corporation (“4LC”), formerly known as 4Kids Entertainment, Inc. (“4Kids”), together with the subsidiaries through which its business is conducted (the “Company”), is a licensing company specializing in the youth oriented markets, sports and specialty brands. The Company was originally organized as a New York corporation in 1970, and in December 2012 was reincorporated in Delaware.

The Company’s consolidated financial statements have been prepared assuming that it will be able to continue to operate as a going concern.  The Company’s limited liquidity as of December 31, 2013, the continuing costs in connection with its bankruptcy cases, and potential settlement of the remaining material unresolved claim taken together, raise doubt about the Company’s ability to continue as a going concern.

Emerging from Chapter 11 Bankruptcy Proceedings – On April 6, 2011 (the “Petition Date”), the Company and all of its domestic wholly-owned subsidiaries (the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Cases”) under Title 11 of Chapter 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which Bankruptcy Cases were jointly administered under Case No. 11-11607.  After filing the Bankruptcy Cases the Company and its subsidiaries continued to operate as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.  As debtors-in-possession, we were authorized under Chapter 11 of the Bankruptcy Code to continue to operate as an ongoing business. 4Kids Entertainment International, Ltd., (“4Kids International”), the Company’s subsidiary based in London, England, and TC Digital Games LLC (“TC Digital”) and TC Websites LLC (“TC Websites”), two domestic subsidiaries in each of which the Company holds a majority ownership, were not included in the filing and continued to operate outside the Bankruptcy Court’s jurisdiction.

After the filing of the Bankruptcy Cases, the United States Trustee for the Southern District of New York appointed an official committee of unsecured creditors (the “Creditors’ Committee”).

On February 29, 2012, the Company, and Nihon Ad Systems, Inc. and Tokyo Corporation (collectively, the “Licensors”) entered into a Settlement Agreement, dated as of February 27, 2012 (the “Settlement Agreement”), settling all claims brought by Licensors against the Company and all counterclaims brought by the Company against the Licensors in the Yu-Gi-Oh! Litigation (as hereinafter defined). The Settlement Agreement provided, among other things, for the Licensors to make a payment to the Company in the amount of $8,000 upon the order of the Bankruptcy Court approving the Settlement Agreement becoming a final order.  On March 9, 2012, the Bankruptcy Court issued an order approving the Settlement Agreement and, accordingly, the Company recognized a gain on litigation settlement of $8,000.  Under the Settlement Agreement, the Licensors acknowledged that the Yu-Gi-Oh! Agreement (hereinafter defined) remained valid, binding and legally enforceable with the Company continuing to serve as the exclusive licensing agent for the merchandise licensing, television broadcast and home video rights to the Yu-Gi-Oh! Property (as hereinafter defined) throughout the world outside of Asia.  The Settlement Agreement further provided for each of the Company and the Licensors to release the other from all claims they may have had against each other, other than certain indemnification claims and claims that may arise under the Settlement Agreement.  The Settlement Agreement also provided that the agreement does not constitute an admission by any party of any violation of any agreement or law.  On March 27, 2012, the Company received the payment in the amount of $8,000 pursuant to the Settlement Agreement.

On April 26, 2012, the Debtors entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), which contemplated the sale of substantially all of its assets to Kidsco Media Ventures LLC (“Kidsco”), a Delaware limited liability company, and an affiliate of Saban Capital Group (“Saban Bidder”) for a purchase price of $10,000, subject to certain adjustments (the “Purchase Price”).  The transaction was proposed as a sale of the Debtors’ assets pursuant to Section 363 of the Bankruptcy Code.  The transaction was subject to, among other things, (i) competitive bidding pursuant to sale procedures approved by the Bankruptcy Court at a hearing on April 27, 2012 (the “Bidding Procedures”), and (ii) approval of the transaction by the Bankruptcy Court.

In May 2012, the Company received a competing bid (the “Konami Bid”) from 4K Acquisition Corp. (the “Konami Bidder”), an indirect subsidiary of Konami Corporation, a Japanese corporation (“Konami”). In the competing bid, the Konami Bidder offered to purchase substantially all of the assets of the Company in a transaction under Section 363 of the Bankruptcy Code. The Konami Bid, in the judgment of the Company, represented a Qualified Bid under the terms of the Bidding Procedures.

F-7

On June 5, 2012, the Company commenced an auction between the Saban Bidder and the Konami Bidder (together with the Saban Bidder, the “Purchasers”).  During the auction, each of the Purchasers made several improved bids. After several rounds of competitive bidding, the auction was adjourned to allow the Purchasers to consider an alternative transaction among the Company and the Purchasers pursuant to which each of the Purchasers would acquire certain assets of the Company. The proposed alternative transaction represented a substantial improvement in the proceeds payable to the Company over the last bid made prior to such adjournment.  The possible alternative transaction was conditioned upon the negotiation of definitive documentation among the Company and the Purchasers and the approval of such alternative transaction by the Bankruptcy Court.

On June 24, 2012, the Debtors entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), which contemplated the sale of substantially all of its assets to the Purchasers, for an aggregate purchase price of $15,000, subject to certain adjustments (the “Purchase Price”).  The transaction was a sale pursuant to Section 363 of the Bankruptcy Code.  On June 26, 2012, the Bankruptcy Court entered a final sale order approving the transactions contemplated by the Asset Purchase Agreement.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement, among 4Kids and the Purchasers.  In connection with the consummation of such transactions, the Konami Bidder paid the Debtors an aggregate amount equal to $14,997, representing a base purchase price of $15,000, less a $3 downward adjustment contemplated by the Asset Purchase Agreement.  In addition, in connection with the consummation of the transactions contemplated by the Asset Purchase Agreement, the following payments were made by or on behalf of the Debtors:

(a) $1,000 was delivered to the escrow agent under the escrow agreements provided for in the Asset Purchase Agreement, to be used to satisfy any indemnification obligations that the Debtors may have to either of the Purchasers pursuant to the provisions of the Asset Purchase Agreement; such amount was received by the Company in February 2013 upon the expiration of the escrow agreements;

(b) $3 was paid to the escrow agent as the Debtors’ portion of fees payable to it for its performance of services as escrow agent under the escrow agreements;

(c) $3,051 was paid to The CW Network, LLC (“The CW”) as a cure cost under the term sheet originally entered into with The CW as of October 1, 2007 and amended as of October 2, 2008 and June 23, 2010 (“The CW Agreement”);

(d) $429 was paid to Toei Animation as a cure cost;

(e) $28 was paid to Twenty Three R.P. Associates as a cure cost;

(f) approximately $21 was paid to satisfy cure costs under other agreements; and

(g) $504 was paid to the Saban Bidder in accordance with the terms of the Asset Purchase Agreement, with $476 representing an adjustment to the purchase price for the Saban Purchased Business and $28 representing the Debtors’ share of national advertising proceeds from the broadcast of commercials during the second calendar quarter of 2012 on the five hour Saturday morning block of programs telecast on The CW.

The assets sold by the Debtors to the Konami Bidder (the “Konami Purchased Assets”) included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to and commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise (the “Konami Purchased Business”), as well as other assets relating to the Konami Purchased Business.  The Company was party to an agreement with Konami Corporation, dated as of August 1, 2001, as amended by the First Amendment, dated September 12, 2007 (the “Konami Agreement”), which agreement related to, inter alia, sales of Yu-Gi-Oh! trading cards and videogames.  The Konami Agreement was included as part of the Konami Purchased Assets transferred to the Konami Bidder in connection with the closing of the transactions contemplated by the Asset Purchase Agreement on July 2, 2012.

The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors including The CW Agreement and certain television episodes and rights related thereto (the “Saban Purchased Business”), as well as other assets relating to the Saban Purchased Business.  While the consummation of the Settlement Agreement and the completion of the asset sale pursuant to the Asset Purchase Agreement represent significant steps in the process of resolving the Bankruptcy Cases, the timing of any resolution of the Bankruptcy Cases will depend on the timing and outcome of numerous other ongoing matters therein, and it is not possible at this time to accurately predict when such other matters will be resolved.  We have incurred and will continue to incur significant costs associated with the Bankruptcy Cases.  The amount of these costs, which began in April 2011 and are being expensed as incurred, are expected to significantly affect our results of operations and financial position.  The Bankruptcy Cases have also presented challenges to our ability to generate additional revenues.

F-8

On October 5, 2012, the Company filed (i) the Disclosure Statement with Respect to Debtors’ Proposed Joint Plan of Reorganization (as may be amended, the “Disclosure Statement”), (ii) the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code (as may be amended, the “Plan”) and a motion establishing deadlines and procedures with respect to the solicitation of votes on the Plan (the “Procedures Motion”).  On October 29, 2012, the Company filed (i) the Amended Disclosure Statement with Respect to Debtors’ Proposed Plan of Reorganization and (ii) the Debtor’s Amended Joint Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code.  On October 31, 2012, the Bankruptcy Court approved the Procedures Motion and the Disclosure Statement and authorized the Debtors to solicit votes on the Plan.  The Debtors formally commenced solicitation in respect of the Plan in early November 2012.

On December 13, 2012, the Bankruptcy Court entered an order in the Bankruptcy Cases confirming the Plan.  On December 21, 2012, the effective date of the Plan, the Company emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  As of December 31, 2013, all of the allowed claims have been paid.  In accordance with the Plan, 4Kids reincorporated in Delaware under the name “4Licensing Corporation.” On the effective date of the Plan, 4Kids’ common stock was cancelled and holders of 4Kids’ common stock were issued one (1) share of common stock of 4LC in exchange for each share of 4Kids’ common stock held by them.

Financial Reporting Considerations - The Company’s emergence from bankruptcy did not qualify for fresh start accounting in accordance with ASC Topic 852, Reorganization.

Liquidity - In recent years, the Company has incurred substantial net losses and has used substantial amounts of cash in its operating activities.  Sales by the Company of certain securities held in its investment portfolio as well as certain other assets have significantly contributed to the funding of these operating losses.  While the timing of these sales was not primarily motivated by then current cash needs, without these sales the Company would not have had sufficient cash to fund its operations. 

As discussed above, the Company has recently emerged from Chapter 11 bankruptcy proceedings pursuant to the Plan (as defined above).  On December 21, 2012, the effective date of the Plan, the Company (including the other Debtors) emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  The Company is obliged to pay all allowed administrative claims, priority and unsecured claims.  As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim.  Despite the $8,000 cash received from the Yu-Gi-Oh! Settlement (as defined above) and the $14,997 received on the sale of certain of the Company’s assets under the Asset Purchase Agreement (as defined above) during the bankruptcy proceedings, the Company’s overall cash position as of December 31, 2013, together with the costs and settlement of the related claims in connection with the bankruptcy proceedings, provides only limited liquidity to fund the Company’s day-to-day operations. The Company will consider all alternatives available to generate additional cash to fund its operations, including, but not limited to sales of assets, issuance of equity or debt securities, and other third party arrangements.  There can be no assurance that any of these alternatives will generate additional cash.

The Company will consider all alternatives available to generate additional cash to fund its operations, including, but not limited to sales of assets, issuance of equity or debt securities, and other third party arrangements.  There can be no assurance that any of these alternatives will generate additional cash.

The Company’s business consists of the following two segments:

IsoBLOX™ and Sports Licensing/Distribution - The IsoBLOX™and Sports Licensing/Distribution business segment consists of the following wholly owned subsidiaries of the Company: 4LC Sports & Entertainment, Inc. (“4LC Sports”), formerly known as 4Kids Ad Sales, Inc., and 4LC Technology, Inc. (“4LC Technology”), formerly known as 4Kids Technology, Inc., which in February 2013, acquired, through Pinwrest Development Group, LLC (“Pinwrest”), of which 70% of the membership interests are owned by 4LC Technology, a patent for the IsoBLOX™ technology (the “Patent”) from The Dodd Group, LLC (“TDG”), a Texas limited liability company (see Note 6). The Patent covers a protective shin guard for use in products in the athletic, recreational, police/military, medical and industrial sectors consisting of an elastomeric sleeve within which is deposited protective plastic material consisting of rigid plates joined together by living hinges. The protective plastic material is solid enough to provide protection, flexible enough to better fit the wearer of the shin guard and is lightweight.

In December 2013, Pinwrest filed a provisional patent application (the “Provisional Patent”) with the U.S. Patent Office covering its newly developed body protection systems and devices that can be used to prevent or limit serious injuries from impacts or collisions during an activity.  The products covered by this Provisional Patent provide body protection systems and devices that can be incorporated into articles of clothing, materials or articles such as seats, linings, or walls of vehicles to reduce the effect of impact.  These body protection devices can form part of headgear, gear, or clothing that is designed to cover and protect one or more parts of a person, such as a military or law enforcement individual, or a professional or recreational athlete.

The protective material uses a combination of energy dispersion and absorption to diffuse impact on the wearer of the protective gear. The technology covered by the Patent is hereinafter referred to as “IsoBLOX™” technology.

F-9

After further development, Pinwrest intends to license and distribute the IsoBLOX™ technology in protective gear within the youth, teen and adult markets.

The operations of Pinwrest constitute the “IsoBLOX™ and Sports Licensing/Distribution” business segment of the Company. The Company will report its financial operations from this entity under the new “IsoBLOX™ and Sports Licensing/Distribution” business segment in its consolidated financial statements.

Entertainment and Brand Licensing - The Entertainment and Brand Licensing business segment consists of the operations of the following wholly-owned subsidiaries of the Company: 4Kids Entertainment Licensing, Inc. (“4Kids Licensing”) and 4Sight Licensing Solutions, Inc. (“4Sight Licensing”).  4Kids Licensing is engaged in the business of licensing the merchandising rights to popular children’s television series, properties and product concepts (individually, the “Property” or collectively the “Properties”). 4Kids Licensing typically acts as exclusive merchandising agent in connection with the grant to third parties of licenses to manufacture and sell all types of merchandise, including toys, videogames, trading cards, apparel, housewares, footwear, books and other published materials, based on such Properties. 4Sight Licensing is engaged in the business of licensing properties and product concepts to adults, teens and “tweens”.  4Sight Licensing focuses on brand building through licensing.

Discontinued Operations -On August 16, 2012, the Company’s Board of Directors determined to discontinue the operations of its UK Subsidiary, 4Kids International, effective September 30, 2012.  The results of operations for the international segment is reported as a discontinued operation.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement.  The assets sold by the Debtors to the Konami Bidder included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to and commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise, as well as other assets relating to the Konami Purchased Business.  The Company was party to the Konami Agreement, which agreement related to, inter alia, sales of Yu-Gi-Oh! trading cards and videogames.  The Konami Agreement was included as part of the Konami Purchased Assets transferred to the Konami Bidder in connection with the closing of the transactions contemplated by the Asset Purchase Agreement on July 2, 2012.

The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors, including The CW Agreement and the television episodes and rights related thereto, as well as other assets relating to the Saban Purchased Business.

Pursuant to the Asset Purchase Agreement and the corresponding assets sold, and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, Inc. (“4Kids Ad Sales”), 4Kids Productions, Inc. (“4Kids Productions”), 4Kids Entertainment Music, Inc. (“4Kids Music”) and 4Kids Entertainment Home Video, Inc. (“4Kids Home Video”).  Additionally, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites.  The results of operations attributable to those segments are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of 4Licensing Corporation and its wholly-owned subsidiaries and investments of more than 50% in subsidiaries in which it has a controlling financial interest after elimination of significant intercompany transactions and balances.  Investments in affiliated companies over which the Company has a significant influence or ownership of more than 20% but less than or equal to 50% are accounted for using the equity method.  These consolidated financial statements reflect the use of significant accounting policies, as described below and elsewhere in the notes to the consolidated financial statements.

Revenue Recognition –

Service revenues, which consists of licensing revenues: Licensing revenues, net of licensor participations, are recognized when the underlying royalties from the sales of the related products are earned and determinable.  The Company recognizes guaranteed royalties, net of licensor participations, at the time the arrangement becomes effective if the Company has met all of the following: (1) no significant direct continuing involvement with the underlying Property or obligation to the licensee, (2) the license period has commenced; and (3) collectability is reasonably assured.  Licensing advances and guaranteed payments collected but not yet earned by the Company are classified as deferred revenue in the accompanying consolidated balance sheets.

F-10

Product revenues: Product revenues are recognized when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. The Company records shipping and handling billed to a customer in a sales transaction as revenue, while the costs incurred for shipping and handling are recorded in cost of product sales in the accompanying consolidated statement of operations.

Property and Equipment - Property and equipment are carried at cost, net of accumulated depreciation and amortization. Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 to 10 years. Costs associated with the repair and maintenance of property are expensed as incurred.

Impairment Of Long-Lived And Intangible Assets - The Company assesses the recoverability of long-lived assets for which an indication of impairment exists. The recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Fair value of long-lived assets is determined using the expected cash flows discounted at a rate commensurate with the risk involved.  At December 31, 2013, the Company believes that the future cash flows to be received from the remaining long-lived assets will exceed the respective assets’ carrying value, and accordingly has not recorded any additional impairment losses.

Cash and Cash Equivalents - The Company considers all highly liquid assets, having an original maturity of less than three months, to be cash equivalents.  Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits.  The Company believes it is not exposed to any significant credit risk of cash and cash equivalents.  All of our non-interest bearing cash balances are insured at December 31, 2013 up to $250 per depositor at each financial institution, and our non-interest bearing cash balances may exceed federally insured limits.

Fair Value Measurements-The fair values of the Company’s financial instruments reflect the estimates of amounts that would be received from selling an asset in an orderly transaction between market participants at the measurement date.  The fair value estimates presented in this report are based on information available to the Company as of December 31, 2013 and December 31, 2012.

The carrying values of cash and cash equivalents, accounts receivable, due to licensors, accounts payable, accrued expenses and deferred revenue approximate fair value. The authoritative guidance issued by the FASB includes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last of which is considered unobservable, that may be used to measure fair value. The three levels are the following:

· Level 1 - Quoted prices in active markets for identical assets or liabilities.

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Inventories - Inventories are stated at the lower of cost or market. The $137 inventory balance at December 31, 2013 consists of finished goods related to the IsoBLOX™ and Sports Licensing/Distributionsegment.

Stock-based compensation - The Company accounts for all share-based payments to employees and directors based on their grant date fair values. Compensation for share-based payments to non-employees is based on the fair value at the measurement date, which is generally the performance completion date. The fair value is initially measured at the grant date and subsequently measured at each reporting period until the final measurement date. The fair value of the Company’s stock option awards is expensed over the vesting life of the underlying stock options using the straight-line method.

Participation Advances – Participation advances as of December 31, 2013 and 2012 were $287 and were included in “other assets” on the balance sheet.

Reorganization Items - The Company’s costs related to professional, consulting and trustee fees, as the case may be, in conjunction with the Bankruptcy Cases are expensed as incurred and reported as reorganization items in the accompanying consolidated statements of operations.

F-11

Operating Leases -The Company accounts for all operating leases on a straight-line basis over the term of the lease.  In accordance with authoritative guidance issued by the FASB, any incentives or rent escalations are recorded as deferred rent and are included as a component of rent expense over the respective lease term.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are used in, but not limited to, certain areas of revenue recognition, the amortization of television and film costs, the amortization of 4Kids TV broadcast fees, valuation of our investment securities and inventory reserves.  Actual results could differ materially from those estimates.

Translation of Foreign Currency The Company classifies items as other comprehensive income by their nature in the financial statements and displays the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the consolidated balance sheet. The assets and liabilities of the Company’s foreign subsidiary, 4Kids International have been recorded in their local currency and translated to U.S. dollars using period-end exchange rates. Income and expense items have been translated at the average rate of exchange prevailing during the period. Any adjustment resulting from translating the financial statements of the foreign subsidiary is reflected as “other comprehensive income”, net of related tax.  The changes in cumulative translation adjustment during the year ended December 31, 2013 included a reclassification of $344 in cumulative translation adjustment to earnings as a result of the liquidation of the Company’s UK subsidiary.  This change has been reported as income from discontinued operations in the accompanying consolidated statements of operations.

Concentration Of Credit Risk - Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of accounts receivable. The majority of the cash and cash equivalents are maintained with major financial institutions in the United States of America. Credit risk on accounts receivable is minimized by the Company by performing ongoing credit evaluations of its customers’ financial condition and monitoring its exposure for credit losses and maintaining allowances for anticipated losses.

Income Taxes - Income tax expense (benefit) is provided for using the asset and liability method. Deferred income taxes are recognized at currently enacted tax rates for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial reporting purposes. Deferred taxes are provided for the undistributed earnings as if they were to be distributed. The Company regularly reviews its deferred tax assets for recoverability taking into consideration such factors as recurring operating losses, projected future taxable income and the expected timing of the reversals of existing temporary differences.  The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Our assessment of the valuation allowance on the deferred tax assets could change in the future based on our levels of pre-tax income and other tax-related adjustments. A change in estimate of the valuation allowance, in whole or in part, would result in a non-cash reduction in income tax expense during the period of the change. Due to the continued losses incurred by the Company in 2013 and prior years, the Company believes that it is more likely than not that the deferred tax asset related to these net operating losses will not be realized and therefore recorded a full valuation allowance.  If, in the future, the Company determines that the utilization of these net operating losses becomes more likely than not, the Company will reduce the valuation allowance at that time.

The discontinued operations of TC Digital and TC Websites are limited liability companies and have elected to be treated as partnerships for income tax purposes. As such, U.S. federal and state income taxes (in the states which tax limited liability companies as partnerships) are the direct responsibility of its members. We own 55% of the membership interests in both entities. Thus, our respective portion of their activity is reported in our consolidated tax returns.

Recently Adopted Accounting Standards – We adopted recent amendments to authoritative guidance issued by FASB in February 2013 which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income   This update resulted in additional disclosure but had no effect on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Standards – In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)  2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in ASU 2013-11 require an entity to present an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward except when: (1) a NOL carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position; or (2) the entity does not intend to use the deferred tax asset for this purpose (provided that the tax law permits a choice). If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. The amendment does not affect the recognition or measurement of uncertain tax positions under ASC Topic 740, Income Taxes. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the effect this guidance will have on the Company’s consolidated financial position and results of operations. We do not expect this ASU to have a material impact to our consolidated financial statements.

F-12

3. FAIR VALUE OF FINANCIAL ASSETS

The carrying values and estimated fair values of the Company’s financial instruments for the periods presented are as follows:

	Estimated Fair Value Measurements
	Carrying Value		Quoted Prices in Active Markets  (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013:
Financial Assets
Cash and cash equivalents	$	356	$	356	$	—	$	—
Total Financial Assets	$	356	$	356	$	—	$	—
December 31, 2012:
Financial Assets
Cash and cash equivalents	$	9,011	$	9,011	$	—	$	—
Total Financial Assets	$	9,011	$	9,011	$	—	$	—

4. ACCOUNTS RECEIVABLE/DUE TO LICENSORS

Generally, licensing contracts provide for the Company to collect royalties from the licensees on behalf of the licensors.  The Company records as accounts receivable only its proportionate share of such earned royalties.

Due to licensors represents amounts collected by the Company on behalf of licensors, which are generally payable to such licensors after the close of each calendar quarter.

Accounts receivable consisted of the following as of:

	December 31,
	2013			2012
Gross accounts receivable	$	316		$	539
Allowance for doubtful accounts		(7	)		(24	)
		309			515
Less: long-term portion		(1	)		(36	)
	$	308		$	479

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of:

	December 31,
	2013			2012
Computer equipment and software	$	1,386		$	1,366
Website development		87			87
Office furniture and fixtures		247			297
		1,720			1,750
Less: accumulated depreciation and amortization		(1,683	)		(1,668	)
	$	37		$	82

F-13

6. INTANGIBLE ASSETS

Intangible assets consist of a patent for the IsoBLOX™ technology, which was acquired in February 2013 for a purchase price of $2,100.  The intangible asset is being amortized over a fifteen year period on a straight line basis.  For the year ended December 31, 2013, $121 of amortization expense has been recorded and the net carrying value of the intangible assets was $1,979.

7. STOCK-BASED EMPLOYEE COMPENSATION

Effective December 21, 2012, in conjunction with the Company’s plan of reorganization and emergence from its bankruptcy proceeding all existing restricted stock and option plans were terminated.

On February 27, 2013, the Board of Directors authorized the Company’s 2013 Equity Incentive Plan (the “Incentive Plan”), which provides for the grant of non-statutory stock options and restricted shares to eligible employees and directors of the Company.  The Incentive Plan authorizes the Company to issue up to 2,600,000 shares of Company’s common stock.  The Company issues new shares upon the exercise of stock options.  Options granted under the Plan generally expire no later than 10 years from the date of grant.  The exercise price of any option granted to a 10% stockholder may be no less than 110% of the fair value of the Company’s common stock on the date of grant. As of December 31, 2013, 1,695,000 shares of the Company were available for issuance under the Incentive Plan.

Stock Options

The Company granted stock options to purchase approximately 850,000 shares of its common stock on February 27, 2013 under the Incentive Plan.   The stock options were granted to an executive officer and members of the Board of Directors, at an exercise price of $0.26 per share (determined by the Board of Directors based upon the range of bid prices for the Company’s common stock on the grant date), and a grant date fair value of $151.  These options become fully exercisable over a two year period (1/3 exercisable on the grant date, 1/3 exercisable 1 year after the grant date and the remaining 1/3 exercisable 2 years after the grant date, respectively) and expire on February 27, 2023.

The Company granted stock options to purchase approximately 69,000 shares of its common stock on August 29, 2013 under the Incentive Plan.  These stock options were granted to certain employees, at an exercise price of $0.54 per share and a grant date fair value of $26.  These stock options become fully exercisable over a two year period (1/3 exercisable on the grant date, 1/3 exercisable 1 year after the grant date and the remaining 1/3 exercisable 2 years after the grant date, respectively) and expire on August 29, 2023.

The fair values of options granted were estimated on the date of grant using the Black-Scholes Merton option pricing model based on the assumptions included in the table below. The fair value of the Company’s stock option awards is charged to expense over the vesting life of the underlying stock options using the straight line method. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate for periods within the contractual life of the stock option award is based on the yield of U.S. Treasury bonds on the grant date with a maturity equal to the expected term of the stock option. The expected life of stock option awards granted to employees and non-employee directors is based upon the “simplified” method for “plain vanilla” options described in SEC Staff Accounting Bulletin No. 107, as amended by SEC Staff Accounting Bulletin No. 110. Forfeiture rates are based on management’s estimates.

	Year ended December 31, 2013
Expected volatility		84%
Expected dividend yield		0.00%
Weighted average risk-free interest rate		1.05%
Expected life	5.50 years
Forfeiture rate		0%

F-14

The following table summarizes activity under the Company’s stock option plans for the years ended December 31, 2013, 2012, and 2011:

	Shares (In thousands)			Weighted Average Exercise Price			Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2011		290		$	14.29
Granted		—			—
Exercised		—			—
Forfeited, cancelled or expired		(290	)		14.29
Outstanding at December 31, 2011		—		$	—
Granted		—			—
Exercised		—			—
Forfeited, cancelled or expired		—			—
Outstanding at December 31, 2012		—		$	—
Granted		919			0.28
Exercised		—			—
Forfeited, cancelled or expired		(14	)		(0.54	)
Outstanding at December 31, 2013		905		$	0.28			9.1		$	374
Exercisable at December 31, 2013		306		$	0.28			9.1		$	124

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of our common stock on the date of determination for those awards that have an exercise price currently below the closing price.

Total stock-based compensation recorded for the year ended December 31, 2013 was $105 and is included in selling, general and administrative expenses.  There was no stock-based compensation expense related to stock options recorded during the years ended December 31, 2012 and 2011.  As of December 31, 2013, the Company has approximately $68 of unrecognized stock compensation expense which will be recognized over a period of approximately 1.23 years.

Restricted Stock Awards

The Company granted restricted stock awards of approximately 378,000 shares on May 22, 2009 under its 2008 long-term incentive compensation plan (“LTICP”), 311,000 shares on May 23, 2008 under its 2007 LTICP, 162,000 shares on May 25, 2007 under its 2006 LTICP and 145,000 and 4,000 shares on May 23, 2006 and June 15, 2006, respectively, under its 2005 LTICP. The restricted stock awards were granted to certain employees, including officers and members of the Board of Directors, at grant prices of $1.46, $7.85, $16.79, $16.52 and $15.78 (in each case, the average of the high and low stock price from the previous day of trading) for the May 22, 2009, May 23, 2008, May 25, 2007, May 23, 2006 and the June 15, 2006 grants, respectively.  The restricted stock awards vest annually over a period of three years from the date of grant for the awards made under the 2008 and 2007 LTICPs and over a period of four years for the awards made under the 2006 and 2005 LTICPs, with accelerated vesting upon a change of control of the Company (as defined in the applicable plan).  During the restriction period, award holders do not have the rights of stockholders and cannot transfer ownership. Additionally, nonvested shares of award holders are subject to forfeiture.  These awards are forfeited and revert to the Company in the event of employment termination, except in the case of death, disability, retirement or other specified events.

The following table summarizes restricted stock activity under the Company’s long-term incentive compensation plans for the years ended December 31, 2013, 2012, and 2011:

F-15

	Number of Shares (in thousands)			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2011		252		$	4.60
Granted		—			—
Vested		(125	)		5.90
Forfeited		(66	)		5.03
Outstanding at December 31, 2011		61		$	1.46
Granted		—			—
Vested		(61	)		1.46
Forfeited		—			—
Outstanding at December 31, 2012 and 2013		—		$	—

The Company recognized approximately $0, $21, and $32 of compensation costs related to the LTICPs during the years ended December 31, 2013, 2012, and 2011, respectively.  Additionally, as of December 31, 2013, there was no unrecognized compensation cost related to restricted stock awards granted under the Company’s 2008, 2007, and 2006 LTICPs, respectively.

8. REVENUES/MAJOR CUSTOMERS

Net revenues included in the accompanying consolidated statements of operations are net of licensor participations of $1,174, $666 and $2,871 during fiscal years 2013, 2012, and 2011, respectively. The percentages of revenue from major Properties and customers/licensees are as follows:

	December 31,
	2013			2012			2011
Percentage of revenue derived from major Properties (revenue in excess of 10 percent of total revenue)		45	%		85	%		88	%
Number of major Properties		3			2			3
Percentage of revenue derived from major customers/licensees  (revenue in excess of 10 percent of total revenue)		37	%		85	%		64	%
Number of major customers/licensees		3			2			1

Three Properties, “American Kennel Club”, “Dinosaur King” and “Huntik”, represented more than 10% of consolidated net revenue for fiscal 2013; “American Kennel Club”, “Dinosaur King” and  “Huntik” represented 21%, 14% and 10%, respectively, for a total of 45% of consolidated net revenues for fiscal 2013.  One Property, “Yu-Gi-Oh!”, which was sold pursuant to the terms of the Asset Purchase Agreement, represented 75% and 64% of consolidated net revenues for fiscal 2012 and 2011, respectively.  Two Properties, “Yu-Gi-Oh!” and “Cabbage Patch Kids”  represented 75% and 10% respectively, for a total of 85% of consolidated net revenues for fiscal 2012, or $2,853.  Three Properties, “Yu-Gi-Oh!”, “American Kennel Club”, and “Teenage Mutant Ninja Turtles” represented 64%, 13%, and 11% respectively, for a total of 88%, of consolidated net revenues for fiscal 2011, or $7,088.  Three licensees represented 37% of consolidated net revenues for fiscal 2013.  Two licensees, Konami and JAKKS Pacific, represented 85% of consolidated net revenues for fiscal 2012.  One licensee, Konami, represented 64% of consolidated net revenues for fiscal 2011.  As of December 31, 2013 and 2012, accounts receivable due from four major customer/licensees represented 63% and three major customers/licensees represented 74%, respectively, of the Company’s gross accounts receivable for each such year.

9. INCOME TAXES

Income tax expense (benefit) is determined using the asset and liability method. Deferred income taxes are recognized at currently enacted tax rates for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial reporting purposes. Deferred taxes are provided for the undistributed earnings as if they were to be distributed. The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has not recorded any liability for unrecognized tax benefits.

The Company is no longer subject to examinations by income tax authorities in most jurisdictions for years prior to 2010.

F-16

Due to its losses and the valuation allowance recorded against it deferred tax assets related to its net operating losses carryforwards, the Company has not recorded any income tax benefit or expense for the years ended December 31, 2013, 2012 and 2011.

The domestic and foreign components of pre-tax (loss) income, including discontinued operations, are as follows:

	Years Ended December 31,
	2013			2012			2011
Domestic	$	(3,161	)	$	11,425		$	(15,790	)
Foreign		—			(1,882	)		(1,294	)
Pre-tax (loss) income	$	(3,161	)	$	9,543		$	(17,084	)

				Years Ended December 31,
	2013			% of Pretax			2012			% of Pretax			2011			% of Pretax
Tax at Federal statutory rate	$	(1,106	)		(35.0	)%	$	3,340			35.0	%	$	(5,979	)		(35.0	)%
Increase (decrease) in: Valuation allowances		1,281			40.5			3,179			33.3			6,353			37.2
Capital loss carryforward		—			—			(7,086	)		(74.2	)		—			—
Permanent differences		8			0.3			11			0.1			16			0.1
State and local taxes - net		(183	)		(5.8	)		556			5.8			(390	)		(2.3	)
Income tax (benefit) provision	$	—			—	%	$	—			—	%	$	—			—	%

The components of the net deferred tax assets (liabilities) are as follows:

	December 31,
	2013			2012
Deferred Tax Assets:
Accounts receivable allowances	$	91		$	87
Net operating loss carryforwards		44,926			48,046
Capital loss carryforwards		—			2,428
Restricted stock/Stock options		42			—
Contributions		102			102
Deferred rent		17			—
Property and equipment		59			48
Gross deferred tax assets	$	45,237		$	50,711
Valuation allowance	$	(45,237	)	$	(50,711	)
Net deferred tax asset	$	—		$	—

A reconciliation of activity for the Company’s deferred tax asset valuation allowance is provided as follows:

	Years Ended December 31,
	2013			2012			2011
Beginning balance	$	50,711		$	57,282		$	51,046
(Reductions) additions to provision		(5,474	)		(6,571	)		6,236
Ending balance	$	45,237		$	50,711		$	57,282

F-17

The expiration terms and amounts for which an allowance has been provided with respect to the loss and credit carryforwards reflected in the gross deferred tax assets above are comprised as follows:

Loss Carryforwards	Expiration	Gross Amount
Federal	2032	$	114,623
State and local	2016-2032		79,902

The Company records U.S. taxes on undistributed earnings of subsidiaries to the extent such earnings are planned to be remitted and not permanently reinvested.  On August 16, 2012, the Company’s Board of Directors determined to discontinue the operations of its UK subsidiary, 4Kids International, effective September 30, 2012.

The Company has no unrecognized tax benefits recorded for the years ended December 31, 2013 and 2012.

When and if the Company were to recognize interest or penalties related to unrecognized tax benefits, they would be reported net of federal tax benefit in tax expense.

It is difficult to predict what would occur to change the Company’s unrecognized tax benefits over the next twelve months.  The Company believes, however, that there should be no change during the next twelve months.

10. EARNINGS (LOSS) PER SHARE

The Company computes basic EPS based solely on the weighted average number of common shares outstanding during the period. Diluted EPS reflects all potential dilution of common stock.  For the year ended December 31, 2013, 905 shares attributable to outstanding options were excluded from the calculation of diluted EPS because the effect was antidilutive.  No shares were excluded from the calculation for the years ended December 31, 2012 and 2011.

11. LIABILITIES SUBJECT TO COMPROMISE

Liabilities subject to compromise refers to unsecured obligations that will be accounted for under any bankruptcy plan. Generally, actions to enforce or otherwise effect payment of liabilities arising prior to the commencement of the Bankruptcy Cases (“Pre-Petition Liabilities”) are stayed.  Pre-Petition liabilities that are subject to compromise are reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.  These liabilities represent the estimated amount expected to be allowed on known or potential claims to be resolved through the Bankruptcy Cases, and remain subject to future adjustments arising from negotiated settlements, actions of the Bankruptcy Court, rejection of executory contracts and unexpired leases, the determination as to the value of collateral securing the claims, proofs of claim, or other events.  Liabilities subject to compromise also include certain items that may be assumed under a plan of reorganization, and as such, may be subsequently reclassified to liabilities not subject to compromise.  Unless otherwise provided for in the Bankruptcy Code or any “claims bar date order” entered in the Bankruptcy Cases, holders of pre-petition claims are required to file proofs of claims by the “bar date”, which will be established with approval of the Bankruptcy Court.

The Bankruptcy Court established a claims barred date of April 18, 2012 by which certain claims against the Debtors had to be filed if the claimants wish to receive any distribution in this Bankruptcy Case.  When the bar date was established, the creditors were notified of the bar date and the requirement to file a proof of claim with the Bankruptcy Court.  Differences between liability amounts estimated by the Debtors and claims filed by creditors are being investigated and, if necessary, the Bankruptcy Court will make a final determination of the amount of any allowable claim.  On December 13, 2012 the Bankruptcy Court approved the bankruptcy plan whereby all valid creditor claims would be fully paid by the Debtors.  The Company has reconciled and paid all of the liabilities that were subject to compromise, and for the years ended December 31, 2013 and 2012 the Company realized a gain on liabilities subject to compromise of $26 and $1,331, respectively, which is reflected in the Company’s consolidated statement of operations.

Liabilities subject to compromise consisted of the following:

	December 31, 2013		December 31, 2012
Due to licensors	$	—	$	337
Accounts payable and accrued expenses		—		621
Total	$	—	$	958

F-18

Liabilities subject to compromise included trade accounts payable related to pre-petition purchases, all of which were paid as of December 31, 2013

12.  SEVERANCE AND EXIT COSTS

In connection with the discontinued operations, the Company recorded income in the amount of approximately $(421) during the year ended December 31, 2013, mostly from the settlement of certain exit costs.

A summary of the actions taken for severance and other exit costs have been recorded in loss from discontinued operations and the estimated remaining liability associated with such costs are as follows:

	Total Expenses (Income)			Remaining Liability as of December 31, 2013
Severance and related costs	$	(3	)	$	—
Other professional fees		18			—
Termination of contracts and leases		(436	)		42
Total	$	(421	)	$	42

The remaining liability for exit costs, which are included in current liabilities of discontinued operations, will be paid in accordance with the provisions of the contractual agreements and payments are expected to be completed at various times through 2014.

13. GAIN ON SALE

As a result of the Company’s sale of certain assets pursuant to the Asset Purchase Agreement completed July 2, 2012 (see Note 1), the Company recorded a gain on sale for the year ended December 31, 2012 in the accompanying consolidated statement of operations as follows:

	Year Ended December 31, 2012
Gross Proceeds (including $1,000 received in February 2013)	$	15,000
Add:
Liabilities assumed by buyers – discontinued operations		6,642
Adjusted sales price		21,642
Less:
Expenses of sale		3
Carrying value of assets sold – continuing operations		1,596
Carrying value of assets sold – discontinued operations		2,329
		3,928
Gain on sale	$	17,714

14. DISCONTINUED OPERATIONS

In connection with its on-going evaluation of each of its business units, the management of the Company recommended to the Board of Directors of the Company that based upon the substantial operational losses and declining revenues being incurred by the Company’s international operations, such operations should be discontinued. Accordingly, on August 16, 2012, the Company’s Board of Directors determined to discontinue the operations of its UK Subsidiary, 4Kids International, effective September 30, 2012.  Pursuant to the Asset Purchase Agreement and the corresponding assets sold and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, 4Kids Productions, 4Kids Music and 4Kids Home Video. Additionally, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites. The results of operations for the international, advertising media and broadcast segment, television and film production/distribution segment and the trading card and game distribution segment are reported as a discontinued operation and the accompanying consolidated financial statements have been reclassified for all prior periods to report the assets, liabilities and operating results of this business.

F-19

The following are the summarized results of discontinued operations for the years ended December 31, 2013, 2012, and 2011:

	Years Ended December 31,
	2013		2012			2011
Total net revenues	$	—	$	2,101		$	4,284
Total income (costs and expenses)		1,170		(12,210	)		(19,511	)
Income (loss) from discontinued operations	$	1,170	$	(10,109	)	$	(15,227	)

The major classes of assets and liabilities of the discontinued operations on the balance sheet are as follows:

	December 31, 2013		December 31, 2012
ASSETS
Accounts receivable – net	$	1	$	230
Prepaid and other current assets		—		37
Current assets of discontinued operations	$	1	$	267
Property and equipment - net	$	—	$	1
Non-current assets of discontinued operations	$	—	$	1
LIABILITIES
Accounts payable and accrued expenses	$	618	$	1,859
Current liabilities of discontinued operations	$	618	$	1,859

15. DEFINED CONTRIBUTION PLAN

The Company sponsors a 401(k) plan covering substantially all employees. Company contributions vest based on number of years of service. The Company’s policy is to match 25% of the first 6% of the covered employee’s annual salary, as defined by the plan. Contributions to the plan by the Company amounted to $27, $24 and $46 for the years ended December 31, 2013, 2012 and 2011, respectively.

16. COMMITMENTS AND CONTINGENCIES

Commitments

a. Bonus Plan - Key officers and employees are eligible for bonuses in an amount, if any, to be determined in the sole discretion of the Compensation Committee of the Board of Directors in consultation with the management of the Company.  No bonuses were awarded in 2013, 2012, and 2011.

b. Claim Payment – On December 21, 2012, a key officer received a payment of $350 in accordance with the Plan for a claim granted by the Company in satisfaction of all claims  and obligations under his prior  severance agreement.

c. Leases - On January 2, 2013, the Company entered into a sublease agreement for certain office and administrative space expiring October 31, 2015.  Commitments for minimum rentals, not including common charges, under this non-cancelable lease at the end of 2013 are as follows:

Year Ending December 31,	Amount
2014	$	271
2015		211
2016 and after		—
Total	$	482

Rent expense for all operating leases charged against earnings amounted to $242, $336 and $459 during fiscal years 2013, 2012, and 2011, respectively.

F-20

d. Employment Contracts - As of December 31, 2013, one executive officer had agreed to enter into an employment agreement with the Company. The agreement was formally executed on March 21, 2013, with an effective date of December 21, 2012.  The agreement generally continues until terminated by the employee or the Company, and provides for severance payments under certain circumstances.  The agreement includes a covenant against competition with the Company which extends for a period of time after termination for any reason. As of December 31, 2013, if the employee under contract were terminated by the Company without good cause, under these contracts, the Company’s liability would be approximately $150.

e. Contractual Arrangements - During the normal course of business, the Company may enter into various agreements with third parties to license, acquire, distribute, broadcast, develop and/or promote Properties. The terms of these agreements will vary based on the services and/or Properties included within the agreements, as each of these agreements also have specific provisions relating to rights granted, territory and contractual term.

Contingencies

TCD International, Ltd. - On February 12, 2010, Home Focus Development, Ltd., a British Virgin Islands Corporation, (“Home Focus”) filed suit against the Company in the United States District Court for the Southern District of New York. Home Focus alleged that the Company owed Home Focus $1,075 under an Interest Purchase Agreement among the Company, Home Focus and TC Digital entered into on March 2, 2009, pursuant to which the Company acquired a 25% ownership interest in TCD International, Ltd. (“TDI”).

On April 26, 2010, the Company filed an answer and asserted various counterclaims against Home Focus and its owners, in their individual capacities. In its counterclaims, the Company has alleged that Home Focus failed to make its contractually required initial capital contribution of $250 to TDI necessary to acquire the 25% ownership interest in TDI it purported to sell to the Company and also failed to contribute its 50% share of the expenses. The Company has further asserted counterclaims of fraud and misrepresentation.

The parties have not proceeded with the litigation in light of the filing of the Bankruptcy Cases on April 6, 2011, which had the effect of automatically staying such litigation. The parties have had substantive discussions and have exchanged draft agreements regarding the possible resolution of the claims and counterclaims. There can be no assurance that the parties will conclude their settlement discussions satisfactorily. The Home Focus claim is currently a disputed claim in the Bankruptcy Cases. If the Home Focus claim is not settled, it may need to be litigated by the Company either in the Bankruptcy Court or in the United States District Court for the Southern District of New York should the Bankruptcy Court cede jurisdiction of this dispute.

Lehman Brothers, Inc. Claim - The Company believes that Lehman Brothers, Inc., the securities broker-dealer that purchased the auction rate securities on behalf of the Company violated its legal obligations to the Company.  As a result, the Company took various measures to obtain appropriate legal relief, including initiating an arbitration on April 3, 2008 against Lehman Brothers, Inc. and the brokers who had serviced the Company’s Lehman account with the Financial Industry Regulatory Authority.  On September 15, 2008, Lehman Brothers Holdings, Inc., the parent company of Lehman Brothers, Inc., filed for bankruptcy.  The Company’s arbitration proceeding was stayed by the Lehman bankruptcy.  On September 16, 2008, Barclays PLC announced that it had reached an agreement to purchase the assets of Lehman Brothers Holdings, Inc.’s North American operations, including substantial assets of Lehman Brothers, Inc.  The Lehman-Barclays transaction was approved by the United States Bankruptcy Court for the Southern District of New York on September 20, 2008.  On September 19, 2008, the Securities Investor Protection Corporation (“SIPC”) filed a proceeding, placing Lehman Brothers, Inc. in liquidation under the Securities Investor Protection Act (“SIPA”).  SIPC, pursuant to its authority under SIPA, has acted to facilitate the transfer of Lehman Brothers, Inc.’s customer accounts (including the Company’s accounts) to Barclays, PLC.  In late September, 2009, the Company filed a proof of claim against Lehman Brothers, Inc. in the United States Bankruptcy Court for the Southern District of New York. The principal amount of the claim was approximately $31,500 plus interest. In addition, the proof of claim requested treble damages. The proof of claim is a general unsecured claim. The Company’s claim against Lehman Brothers, Inc. is still pending and there has been no determination made as to the validity or allowed amount of the claim.  On October 18, 2011, the Company entered into a settlement agreement and general release with the brokers who had serviced the Company’s account with Lehman Brothers, Inc. in exchange for a payment to the Company of approximately $489. The Trustee in the Lehman Brothers, Inc. bankruptcy proceeding is expected to begin the claims resolution process with respect to the unsecured claims at some point in 2014.

F-21

Cornerstone Patent Technologies, LLC – On April 25, 2011, Cornerstone Patent Technologies, LLC (“Cornerstone”) filed proof of claim No. 20 (the “Cornerstone Claim”) in the Bankruptcy Court against the Debtors in the Bankruptcy Cases in the amount of $3,300.  Other than filing the Cornerstone Claim, Cornerstone has not commenced litigation against the Debtors.  The Cornerstone Claim alleges (i) breach of a Patent License Agreement dated September 10, 2007 by non-Debtors TC Digital and TC Websites; (ii) breach of Patent Purchase Agreement dated by September 7, 2007, by 4Kids Technology for failing to notify Cornerstone of alleged wrongdoing by TC Digital and TC Websites; (iii) unfair competition; (iv) tortious interference with contract; (v) unjust enrichment; and (vi) piercing the corporate veil.  The Company disputes the Cornerstone Claim in its entirety.  On November 12, 2012, the Company filed a motion with the Bankruptcy Court to estimate the Cornerstone Claim at $0 or in the alternative disallow the claim.  On December 5, 2012, the Bankruptcy Court entered an agreed order between the Company and Cornerstone providing that on the effective date of the Plan, the Debtors would establish a disputed claims reserve on account of the Cornerstone Claim in the amount of $228, without prejudice to (i) Cornerstone’s rights to pursue an allowed claim or judgment against the Debtors in an amount greater than the reserve, with such allowed claim or judgment to be paid pursuant to the Plan and (ii) the Debtors’ rights to defend, contest or otherwise oppose on any grounds, the Cornerstone Claim or any other claims or litigation asserted by or on behalf of Cornerstone or any other party.  On August 29, 2013, the Bankruptcy Court entered an order disallowing and expunging the Cornerstone Claim.  As a result, a gain of $443 from the reversal of a liability was recognized during the year ended December 31, 2013 in the income from discontinued operations.

The Bankruptcy Cases – The Bankruptcy Cases were initially filed by the Debtors with the Bankruptcy Court on April 6, 2011.  On October 5, 2012, the Company filed the Plan and Disclosure Statement.    On October 29, 2012, the Debtors filed an amended version of the Plan and Disclosure Statement.  On October 31, 2012, the Bankruptcy Court entered a solicitation procedures order permitting the Debtors to send the Plan and Disclosure Statement to the parties entitled to vote on the Plan.  On December 13, 2012, the Bankruptcy Court held a confirmation hearing with respect to the Plan. After a hearing and consideration by the Bankruptcy Court of the provisions of the Plan, including consideration of support for the Plan by a vote of approximately 99.93% of shareholders who voted their shares, and there being only one objector to the Plan, the Bankruptcy Court issued an order confirming the Plan.  The Plan became effective on December 21, 2012.

On the effective date of the Plan, the Company commenced paying creditors holding undisputed, allowed claims the full amount of such allowed claims. The Company and its counsel have also negotiated various settlement agreements with creditors holding disputed claims. As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim, which if not satisfactorily resolved, may need to be litigated in the Bankruptcy Court or in other courts or administrative bodies. The cost and expense to litigate the disputed claim as well as any damages which may be awarded to the holder of such disputed claim may have a material adverse effect on the Company’s financial position or the results of its operations or cash flows.

17. NONCONTROLLING INTEREST

On January 17, 2013, 4LC Technology and certain other investors entered into an operating agreement of Pinwrest, with 4LC Technology owning 70% of Pinwrest’s membership interests and the minority members owning 30% of Pinwrest’s membership interests.  Pinwrest is treated as a consolidated subsidiary of the Company as a result of its majority ownership.

Noncontrolling interest of membership units in Pinwrest represents the minority members’ proportionate share of the equity in the entity. Income is allocated to the membership units’ minority interest based on the ownership percentage throughout the year.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in Pinwrest:

	Year Ended
	December 31, 2013
Pinwrest net loss before common units’ noncontrolling interest	$	(1,105	)
Noncontrolling interest percentage		30	%
Loss attributable to noncontrolling interest	$	(331	)

18. NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS

As of January 1, 2009, all earnings and losses of a subsidiary are attributed to both the parent and the noncontrolling interest, even if the losses attributable to the noncontrolling interest result in a deficit noncontrolling interest balance.  Previously, any losses exceeding the noncontrolling interest’sinvestment in the subsidiaries were attributed to the parent.

Effective September 30, 2010, the Company has terminated the operations of TC Digital and TC Websites due to their continued lack of profitability.  As a consequence of the termination of their operations, TC Digital and TC Websites ceased supporting the Chaotic trading card game and website, effective October 1, 2010 (see Note 14, Discontinued Operations).

F-22

a) TC Digital Games LLC - TC Digital was formed inDecember 2006.  4Kids Digital has owned 55% of TC Digital’s membership interests, and Chaotic USA Entertainment Group, Inc. (“CUSA”) has owned the remaining 45% of TC Digital’s membership interests,since December 2007.   TC Digital is treated as a consolidated subsidiary of the Company as a result of its majority ownership and its right to break any deadlocks within the TC Digital Management Committee.

Noncontrolling interest of membership units in TC Digital represents the noncontrolling members’ proportionate share of the equity in the entity. Income is allocated to the membership units’ noncontrolling interest based on the ownership percentage throughout the year. As of December 31, 2013, the noncontrolling member continued to hold 45% of the equity in the entity.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in TC Digital:

	Year Ended December 31,
	2013			2012			2011
TC Digital net income (loss) before common units noncontrolling interest	$	888		$	(3	)	$	(4,181	)
Noncontrolling interest percentage		45	%		45	%		45	%
Income (loss) attributable to noncontrolling interest	$	399		$	(1	)	$	(1,882	)

Included in the TC Digital net loss for the year ended December 31, 2011 is interest expense of $4,137 which has been eliminated in consolidation.  No interest expense was charged for the years ended December 31, 2013 and 2012.  As of December 31, 2013, Home Focus has not made a required capital contribution to TDI.

As of December 31, 2013, the loss in excess of noncontrolling interest for TC Digital absorbed by 4Kids Digital, in the aggregate, since the formation of such entity is $21,548.

b) TC Websites LLC - Under the terms of the TC Websites operating agreement, 4Kids Websites and CUSA are each entitled to elect two managers to TC Websites’ Management Committee, with 4Kids Websites having the right to break any deadlocks on TC Websites' Management Committee with respect to operational matters.  TC Websites is treated as a consolidated subsidiary of the Company as a result of its majority ownership and its right to break any deadlocks within the TC Websites Management Committee.

As of December 31, 2013, the noncontrolling member held 45% of the equity in the entity.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in TC Websites:

	Year Ended December 31,
	2013			2012			2011
TC Websites net loss before common units noncontrolling interest	$	—		$	—		$	(4	)
Noncontrolling interest percentage		45	%		45	%		45	%
Loss attributable to noncontrolling interest	$	—		$	—		$	(2	)

As of December 31, 2013, the loss in excess of noncontrolling interest for TC Websites absorbed by 4Kids Websites in the aggregate since the formation of such entity is $6,038.

19. RELATED PARTY TRANSACTIONS

Chaotic USA Entertainment Group, Inc. (“CUSA”) - On December 11, 2006, 4Kids Digital and CUSA LLC formed TC Digital as a joint venture, with 4Kids Digital now owning 55% of TC Digital’s membership interests and CUSA LLC now owning 45% of TC Digital’s membership interests.  TC Digital is treated as a consolidated subsidiary of the Company as a result of its majority ownership in TC Digital and its right to break any dead-locks within the TC Digital Management Committee. Effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites due to their continued lack of profitability.  The termination of the business of TC Digital and TC Websites will enable the Company to further reduce costs and focus on its core businesses.  As a consequence of the termination of their operations, TC Digital and TC Websites ceased supporting the Chaotic trading card game and website, effective October 1, 2010.  The results of operations of TC Digital and TC Websites are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14), subject to a noncontrolling interest.  Bryan Gannon (“Gannon”), President and Chief Executive Officer of CUSA and John Milito (“Milito”), Executive Vice President and Chief Operating Officer of CUSA, each own an interest of approximately 32% in CUSA and became officers of TC Digital in 2006.  Milito’s employment with TC Digital was terminated on December 31, 2009.   Gannon’s employment with TC Digital was terminated on October 15, 2010.

F-23

As of December 31, 2013, the Company had entered into the following transactions with CUSA and CUSA LLC, or parties related to Gannon and Milito that are summarized below:

° Chaotic Property Representation Agreement - On December 11, 2006, 4Kids Licensing, CUSA and Apex Marketing, Inc. (“Apex”), a corporation in which Gannon holds 60% of the outstanding capital stock and Milito owns 39% of the outstanding capital stock, entered into an amended and restated Chaotic Property Representation Agreement (“CPRA”) replacing the original Chaotic Property Representation Agreement entered into by the parties in April 2005. Under the terms of the CPRA, 4Kids Licensing is granted exclusive television broadcast and production, merchandising licensing, and home video rights to the “Chaotic” Property worldwide in perpetuity, subject to certain limited exceptions. Under the terms of the CPRA, all “Chaotic” related income less approved merchandising and other expenses shall be distributed 50% to the Company and 50% to CUSA and Apex, excluding trading card royalties which are distributed 55% to 4Kids Digital and 45% to CUSA. Additionally, all approved production expenses for television episodes based on the “Chaotic” property are allocated 50% to 4Kids Licensing and 50% to CUSA and Apex. As of December 31, 2013, 2012, and 2011 there were no distributions and approximately $8,273, 8,292, and $8,364, respectively, of production, merchandising and other general expenses were owed to 4Kids Licensing by CUSA and Apex, collectively, which were fully reserved on the Company’s consolidated financial statements.

° Patent License Agreements - On December 11, 2006, TC Digital and TC Websites each entered into an agreement (the “Patent License Agreements”) with Cornerstone Patent Technologies, LLC (“Cornerstone”), a limited liability company, in which Gannon and Milito each hold a 25% membership interest. Pursuant to the Patent License Agreements, TC Digital and TC Websites obtained exclusive licenses (subject to certain exceptions) to use certain patent rights in connection with “Chaotic” and other trading card games which are uploaded to websites owned and operated by each such entity. Additionally, each of TC Digital and TC Websites agreed to pay Cornerstone a royalty of 1.5% of the Manufacturer’s Suggested Retail Price for the sale of trading cards.  On September 10, 2007, the Company purchased a 25% interest in such patents from Cornerstone for $750. During the years ended December 31, 2013, 2012, and 2011, the Company earned no royalties associated with its portion of the patents, related to the sales of “Chaotic” trading cards, which such royalties are eliminated in the Company’s consolidated financial statements.

° Operating Agreement of TC Digital LLC - Under the terms of the TC Digital operating agreement (“TCD Agreement”), TC Digital is obligated to pay the following fees and/or royalties to: (i) 4Kids Digital equal to 3% of TC Digital’s gross revenues up to $350 per year for management services performed; (ii) 4Kids Digital and CUSA equal to 3% of net sales of each pack of trading cards sold; and  (iii) the Company equal to (x) 10% of the net sales of “Chaotic” trading cards and (y) an additional 1% of net sales of “Chaotic” trading cards above $50 million during a calendar year.  The Company acquired its rights to receive royalties of 10% in respect to net sales of “Chaotic” trading cards under the TCD Agreement through purchases from Dracco Company Ltd. (“Dracco”) of a 5% royalty stream on October 17, 2007, a 1% royalty stream, previously allocated to CUSA from Dracco, on December 18, 2007, a 4% royalty stream on March 17, 2008 in exchange for one-time payments of $2,250, $450 and $1,100, respectively.  The consideration for the purchase of the 1% royalty stream for $450 was satisfied through the settlement of certain capital contributions required to be made by CUSA to TC Websites under the TCW Agreement.  During the years ended December 31, 2013, 2012, and 2011, the Company and CUSA earned no royalties and or fees relating to the sales of “Chaotic” trading cards under the TCD agreement.  The Company’s portion of royalties and its management fee are eliminated in its consolidated financial statements.

° Chaotic Merchandise License Agreement - On December 11, 2006, 4Kids Licensing, CUSA and TC Digital entered into a merchandise licensing agreement pursuant to which 4Kids Licensing and CUSA granted TC Digital exclusive rights to manufacture, produce and license “Chaotic” trading cards and related accessories through December 31, 2016. Under the terms of the agreement, TC Digital is obligated to pay a royalty on trading cards and all related accessories equal to (i) 4% of net sales to 4Kids Licensing while any amounts are outstanding to 4Kids Digital under the loan agreement or line of credit agreement or (ii) if no amounts are outstanding to 4Kids Digital under the loan agreement or line of credit agreement, 8% of net sales of such cards and accessories, 55% of which will be paid to 4Kids Licensing and 45% of which will be paid to CUSA.  For the years ended December 31, 2013, 2012, and 2011, no royalties had been earned under this agreement.

° Operating Agreement of TC Websites LLC - On December 11, 2006, 4Kids Websites entered into the TC Websites Operating Agreement (“TCW Agreement”) with CUSA to purchase a 50% membership interest in TC Websites, which was amended on December 18, 2007 in connection with 4Kids Websites’ acquisition of an additional 5% ownership interest in TC Websites.   Under the terms of the TCW Agreement, each member of TC Websites is obligated to make capital contributions on a pro-rata basis to the extent determined by its Management Committee to be necessary to fund the operation of the Website. Any transaction resulting in the sale of more than 50% of TC Websites’ membership interests or in the sale of all or substantially all of TC Digital’s assets requires the consent of members of TC Websites holding two-thirds of its membership interests (as opposed to a majority of its membership interests).

F-24

° Interest Purchase Agreement - On March 2, 2009, TC Digital, the Company and Home Focus entered into various agreements pursuant to which TC Digital and Home Focus agreed to form TDI and the Company agreed to purchase the TDI interest from Home Focus.  The purchase price for the TDI interest is an initial price of $1,575 with an obligation to pay up to an additional $1,000 (the “Conditional Payments”) conditioned upon the “Chaotic” television series being telecast in the five largest European television markets (the United Kingdom, France, Germany, Spain and Italy) and/or TDI selling in excess of $10,000 of “Chaotic” trading cards. To date, the Company has entered into agreements for the telecast of the “Chaotic” television series in the UK, France and Germany, requiring the Company to make $600 of the Conditional Payments. The Company has paid Home Focus the following consideration for the TDI interest: the Company paid $475 upon execution of the various agreements and has paid the monthly installments of $125 for each of April, May, June, July and August of 2009.  The Company ceased paying Home Focus additional amounts under the Interest Purchase Agreement due to the failure by Home Focus to make the required capital contributions to TDI required under the Shareholders Agreement, dated March 2, 2009, entered into by the Company and Home Focus with respect to TDI (the “TDI Agreement”).

° TDI Shareholders Agreement - Under the TDI Agreement, the Board of Directors of TDI consists of four directors. TC Digital has the right to elect two directors and the Company and Home Focus each have the right to elect one director. There are a number of extraordinary actions that require the consent by shareholders holding at least 80% of the voting stock of TDI in addition to approval of the Board of Directors. The TDI Agreement requires the shareholders to provide TDI with additional capital on a pro rata basis in exchange for additional equity. Under the TDI Agreement, TDI is required to pay or reimburse TC Digital for the costs and expenses associated with the printing, advertising, marketing and promotion of the “Chaotic” trading card game in the TDI Territory (as defined in the TDI Agreement). In addition, TDI is responsible for reimbursing TC Digital and TC Websites for the cost of translating the “Chaotic” trading cards and “Chaotic” website into the European languages and for bandwidth and equipment charges associated with making the “Chaotic” website operational in the TDI Territory. TDI is also required to pay TC Digital and TC Websites a design fee equal to 3% and 1.5%, respectively, of net sales of “Chaotic” trading cards in the TDI  Territory.   For the years ended December 31, 2013, 2012, and 2011, TC Digital and TC Websites earned no royalties, under this agreement arising from the net sales of “Chaotic” trading cards in the TDI Territory.  The royalties earned by TC Digital and TC Websites are eliminated in the Company’s consolidated financial statements.

20.  SUBSEQUENT EVENTS

As of December 31, 2013 the Company owned the copyright and trademark to the “Charlie Chan” live action television series.  On January 22, 2014 the Company sold its rights to “Charlie Chan” to Twentieth Century Fox for $225.

On March 25, 2014, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) among the Company, Cleveland Capital, L.P. (“Cleveland Capital”) and Prescott Group Aggressive Small Cap Masterfund, GP (“Prescott Group”, and together with Cleveland Capital, the “Purchasers”), and the guarantors party thereto, each of which is a wholly-owned subsidiary of the Company (each a “Guarantor” and collectively, the “Guarantors”), pursuant to which the Company agreed to issue to the Purchasers (i) up to an aggregate principal amount of $1,650 of promissory notes (each a “Note” and collectively, the “Notes”), to be guaranteed by the Guarantors, and (ii) warrants (each a “Warrant” and collectively, the “Warrants”) to purchase up to an aggregate of 1,683,673 shares (the “Warrant Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), for an aggregate purchase price of approximately $1,650 (the “Offering”).

On March 25, 2014, the Offering closed and the Company (i) issued and sold to Cleveland Capital a Note in the principal amount of $150 and a Warrant to purchase up to 153,061 Warrant Shares and received $150, and (ii) issued and sold to Prescott Group a Note in the principal amount of $1,500 and a Warrant to purchase up to 1,530,612 Warrant Shares and received $1,500.

The Notes accrue interest at a rate of 5.0% per year from and after the date of issuance of such Note.  The Notes provide for customary events of default, including nonpayment, certain events of bankruptcy or failure to comply with covenants or other agreements.  The Notes will mature on March 25, 2016.  The Warrants have an initial exercise price of $0.98 per Warrant Share. The Warrants are exercisable immediately and expire ten years from the date of issuance.

Wade Massad, one of the Company’s directors, is the Co-Founder and Co-Managing Member of Cleveland Capital Management, L.L.C., which is the General Partner of Cleveland Capital. Cleveland Capital beneficially owns more than 5% of the Common Stock of the Company.  Duminda DeSilva, one of the Company’s directors, is the Managing Director at Prescott Group Capital Management, L.L.C., an affiliate of Prescott Group, which beneficially owns more than 17% of the Common Stock of the Company.

F-25

21. SEGMENT AND RELATED INFORMATION

The Company has two reportable segments: (i) Entertainment and Brand Licensing and (ii) IsoBLOX™and Sports Licensing/Distribution.  The Company’s reportable segments are strategic business units, which, while managed separately, work together as a vertically integrated entertainment company.  The Company’s management regularly evaluates the performance of each segment based on its net revenues, profit and loss after all expenses, including interest income. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  All inter-segment transactions have been eliminated in consolidation.

Years Ended December 31,	Entertainment and Brand Licensing			IsoBLOX™ and Sports Licensing/ Distribution			Total
2013:
Net revenues from external customers	$	1,039		$	175		$	1,214
Reorganization items		(151	)		—			(151	)
Gain on settlement of pre-petition liabilities		26			—			26
Segment loss		(2,982	)		(1,349	)		(4,331	)
Segment assets		1,243			2,325			3,568
2012:
Net revenues from external customers	$	3,325		$	—		$	3,325
Reorganization items		(4,071	)		—			(4,071	)
Gain on settlement of pre-petition liabilities		1,331			—			1,331
Gain on litigation		8,000			—			8,000
Gain on sale		17,714			—			17,714
Segment income		19,652			—			19,652
Segment assets		11,272			—			11,272
2011:
Net revenues from external customers	$	8,073		$	—		$	8,073
Interest income		63			—			63
Loss on sale of investment securities		(910	)		—			(910	)
Reorganization items		(1,628	)		—			(1,628	)
Gain on litigation		489			—			489
Segment loss		(1,857	)		—			(1,857	)
Segment assets		7,276			—			7,276

Net revenues from external customers and segment profit from discontinued operations have been excluded and are disclosed in Note 14.  Additionally, segment assets relating to discontinued operations of $1, $268, and $8,668 as of December 31, 2013, 2012, and 2011, respectively, have also been excluded in segment reporting.

F-26

22. SUMMARIZED QUARTERLY DATA (UNAUDITED)

Following is a summary of the quarterly results of operations for the years ended December 31, 2013 and 2012:

	Fiscal Quarters
2013	First			Second			Third			Fourth
	(In thousands, except per share amounts)
Revenues	$	257		$	236		$	296		$	425
Loss from continuing operations		(1,288	)		(1,275	)		(1,069	)		(699	)
Net income from discontinued operations		279			454			436			1
Net loss attributable to 4Licensing Corporation	$	(935	)	$	(979	)	$	(735	)	$	(580	)
Basic and diluted (loss) earnings per share attributable to
4Licensing Corporation common shareholders
Continuing operations	$	(0.09	)	$	(0.09	)	$	(0.08	)	$	(0.04	)
Discontinued operations		0.02			0.02			0.03			—
Basic and diluted lossper share attributable to 4Licensing Corporation common shareholders	$	(0.07	)	$	(0.07	)	$	(0.05	)	$	(0.04	)

	Fiscal Quarters
2012	First			Second			Third			Fourth
	(In thousands, except per share amounts)
Revenues	$	1,262		$	1,483		$	263		$	317
Income (loss) from continuing operations		7,519			(666	)		13,589			(790	)
Net (loss) income from discontinued operations		(3,496	)		(5,521	)		(1,705	)		614
Net income (loss) attributable to 4Licensing Corporation	$	4,023		$	(6,187	)	$	11,884		$	(176	)
Basic and diluted earnings (loss) per share attributable to
4Licensing Corporation common shareholders
Continuing operations	$	0.55		$	(0.05	)	$	0.99		$	(0.05	)
Discontinued operations		(0.26	)		(0.40	)		(0.12	)		0.04
Basic and diluted income (loss) per share attributable to 4Licensing Corporation common shareholders	$	0.29		$	(0.45	)	$	0.87		$	(0.01	)

Quarterly amounts for income (loss) per share may not agree to annual amount due to rounding.

******

F-27

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement of 4Licensing Corporation (formerly known as 4Kids Entertainment, Inc.) (the "Company") on Form S-8 (No: 333-187121)of our report dated March 28, 2014, on our audits of the consolidated financial statements as of December 31, 2013 and 2012 and for each of the years in the three-year period ended December 31, 2013, which report is included in this Annual Report on Form 10-K to be filedon or about March 31, 2014.  Our report includes an explanatory paragraph about the existence of substantial doubt concerning the Company's ability to continue as a going concern.

/s/ EisnerAmper LLP

New York, New York

March 28, 2014

EX-31.1

Exhibit 31.1

Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Bruce R. Foster, Chief Executive Officer, Executive Vice President and Chief Financial Officer of 4Licensing Corporation, certify that:

1. I have reviewed this annual report on Form 10-K for the period ended December 31, 2013 of 4Licensing Corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 31, 2014
	By: /s/ Bruce R. Foster
	Bruce R. Foster
	Chief Executive Officer
	Executive Vice President and
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of 4Licensing Corporation (the “Company”), that the Annual Report of the Company on Form 10-K for the period ended December 31, 2013, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 31, 2014
	By: /s/ Bruce R. Foster
	Bruce R. Foster
	Chief Executive Officer
	Executive Vice President and
	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to 4Licensing Corporation and will be retained by 4Licensing Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

GAIN ON SALE (Tables)

12 Months Ended

Dec. 31, 2013

GAIN ON SALE [Abstract]

Gains recorded on sale of assets

As a result of the Company’s sale of certain assets pursuant to the Asset Purchase Agreement completed July 2, 2012 (see Note 1), the Company recorded a gain on sale for the year ended December 31, 2012 in the accompanying consolidated statement of operations as follows:

	Year Ended December 31, 2012
Gross Proceeds (including $1,000 received in February 2013)	$	15,000
Add:
Liabilities assumed by buyers – discontinued operations		6,642
Adjusted sales price		21,642
Less:
Expenses of sale		3
Carrying value of assets sold – continuing operations		1,596
Carrying value of assets sold – discontinued operations		2,329
		3,928
Gain on sale	$	17,714

XML

INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Domestic and foreign components of pre-tax loss (including discontinued operations) [Abstract]
Tax at Federal statutory rate, Amount	$ (1,106)	$ 3,340	$ (5,979)
Federal statutory Tax rate (in hundredths)	(35.00%)	35.00%	(35.00%)
Increase (decrease) in [Abstract]
Valuation allowances	1,281	3,179	6,353
Capital loss carryforward	0	(7,086)	0
Permanent differences	8	11	16
State and local taxes - net	(183)	556	(390)
Income tax (benefit) provision	0	0	0
Increase (decrease) in, rate [Abstract]
Valuation allowances, rate (in hundredths)	40.50%	33.30%	37.20%
Capital loss carryforward, rate (in hundredths)	0.00%	(74.20%)	0.00%
Permanent differences, rate (in hundredths)	0.30%	0.10%	0.10%
State and local taxes - net, rate (in hundredths)	(5.80%)	5.80%	(2.30%)
Income tax (benefit) provision, rate (in hundredths)	0.00%	0.00%	0.00%
Deferred Tax Assets [Abstract]
Accounts receivable allowances	91	87
Net operating loss carryforwards	44,926	48,046
Capital loss carryforwards	0	2,428
Restricted stock/Stock options	42	0
Contributions	102	102
Deferred rent	17	0
Property and equipment	59	48
Gross deferred tax assets	45,237	50,711
Valuation allowance	(45,237)	(50,711)	(57,282)
Net deferred tax asset	0	0
Reconciliation of activity for the Company's deferred tax asset valuation allowance [Abstract]
Beginning balance	50,711	57,282	51,046
(Reductions) additions to provision	(5,474)	(6,571)	6,236
Ending balance	45,237	50,711	57,282
Operating Loss Carryforwards [Line Items]
Pre-tax (loss) income	(3,161)	9,543	(17,084)
Unrecognized tax benefits	0	0
Domestic [Member]
Operating Loss Carryforwards [Line Items]
Pre-tax (loss) income	(3,161)	11,425	(15,790)
Federal [Member]
Operating Loss Carryforwards [Line Items]
Loss Carryforwards, Expiration	2032
Loss Carryforwards, Gross Amount	114,623
State and local [Member]
Operating Loss Carryforwards [Line Items]
Loss Carryforwards, Expiration	2016-2032
Loss Carryforwards, Gross Amount	79,902
Foreign [Member]
Operating Loss Carryforwards [Line Items]
Pre-tax (loss) income	$ 0	$ (1,882)	$ (1,294)

XML

FAIR VALUE OF FINANCIAL ASSETS (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Quoted Prices in Active Markets (Level 1) [Member]
Financial Assets [Abstract]
Cash and cash equivalents	$ 356	$ 9,011
Total Financial Assets	356	9,011
Significant Other Observable Inputs (Level 2) [Member]
Financial Assets [Abstract]
Cash and cash equivalents	0	0
Total Financial Assets	0	0
Significant Unobservable Inputs (Level 3) [Member]
Financial Assets [Abstract]
Cash and cash equivalents	0	0
Total Financial Assets	0	0
Carrying Value [Member]
Financial Assets [Abstract]
Cash and cash equivalents	356	9,011
Total Financial Assets	$ 356	$ 9,011

XML

EARNING (LOSS) PER SHARE (Details)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
EARNING (LOSS) PER SHARE [Abstract]
Shares excluded from calculation of diluted EPS (in shares)	905	0	0

XML

DESCRIPTION OF BUSINESS (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended						0 Months Ended	12 Months Ended
	Dec. 31, 2013 Segment Subsidiary	Dec. 31, 2012	Dec. 31, 2011	Jun. 24, 2012	Dec. 31, 2013 Toei Animation [Member]	Dec. 31, 2013 R. P. Animation [Member]	Jan. 17, 2013 Pinwrest Development Group LLC [Member]	Dec. 31, 2013 Asset Purchase Agreement [Member]	Dec. 31, 2013 CW Agreement [Member]	Dec. 31, 2013 Saban Purchaser [Member]	Apr. 26, 2012 Saban Bidder [Member]	Jul. 02, 2012 Konami Bidder [Member]
Chapter 11 Bankruptcy Proceedings [Abstract]
Number of domestic Subsidiaries	2
Amount of consideration under settlement agreement		$ 8,000
Gain on litigation settlement	0	8,000	489
Proceeds from settlements		8,000
Purchase price under asset purchase agreement				15,000						504	10,000	14,997
Downward adjustment contemplated												3
Amount to be deposited in escrow account								1,000
Amount paid to escrow agent as the Seller's portion								3
Obligations towards cure costs	21				429	28			3,051
Asset purchase agreement	476
Proceeds from adjustment to purchase price										28
Percentage of ownership (in hundredths)							70.00%
Purchase price for the Patent and the other assets							2,100
Proceeds from sale of certain assets		$ 14,997
Number of business segments	2

XML

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2013

PROPERTY AND EQUIPMENT [Abstract]

Summary of property and equipment

Property and equipment consisted of the following as of:

	December 31,
	2013			2012
Computer equipment and software	$	1,386		$	1,366
Website development		87			87
Office furniture and fixtures		247			297
		1,720			1,750
Less: accumulated depreciation and amortization		(1,683	)		(1,668	)
	$	37		$	82

XML

SEVERANCE AND EXIT COSTS (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Remaining liability of severance and exit costs [Abstract]
Business Exit Costs	$ (421)
Total Expenses	(421)
Remaining Liability	42
Severance and Related Costs [Member]
Remaining liability of severance and exit costs [Abstract]
Total Expenses	(3)
Remaining Liability	0
Other Professional Fees [Member]
Remaining liability of severance and exit costs [Abstract]
Total Expenses	18
Remaining Liability	0
Termination of contracts and leases [Member]
Remaining liability of severance and exit costs [Abstract]
Total Expenses	(436)
Remaining Liability	$ 42

XML

NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2013

NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS [Abstract]

NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS

18. NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS

As of January 1, 2009, all earnings and losses of a subsidiary are attributed to both the parent and the noncontrolling interest, even if the losses attributable to the noncontrolling interest result in a deficit noncontrolling interest balance.  Previously, any losses exceeding the noncontrolling interest’sinvestment in the subsidiaries were attributed to the parent.

Effective September 30, 2010, the Company has terminated the operations of TC Digital and TC Websites due to their continued lack of profitability.  As a consequence of the termination of their operations, TC Digital and TC Websites ceased supporting the Chaotic trading card game and website, effective October 1, 2010 (see Note 14, Discontinued Operations).

a) TC Digital Games LLC - TC Digital was formed inDecember 2006.  4Kids Digital has owned 55% of TC Digital’s membership interests, and Chaotic USA Entertainment Group, Inc. (“CUSA”) has owned the remaining 45% of TC Digital’s membership interests,since December 2007.   TC Digital is treated as a consolidated subsidiary of the Company as a result of its majority ownership and its right to break any deadlocks within the TC Digital Management Committee.

Noncontrolling interest of membership units in TC Digital represents the noncontrolling members’ proportionate share of the equity in the entity. Income is allocated to the membership units’ noncontrolling interest based on the ownership percentage throughout the year. As of December 31, 2013, the noncontrolling member continued to hold 45% of the equity in the entity.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in TC Digital:

	Year Ended December 31,
	2013			2012			2011
TC Digital net income (loss) before common units noncontrolling interest	$	888		$	(3	)	$	(4,181	)
Noncontrolling interest percentage		45	%		45	%		45	%
Income (loss) attributable to noncontrolling interest	$	399		$	(1	)	$	(1,882	)

Included in the TC Digital net loss for the year ended December 31, 2011 is interest expense of $4,137 which has been eliminated in consolidation.  No interest expense was charged for the years ended December 31, 2013 and 2012.  As of December 31, 2013, Home Focus has not made a required capital contribution to TDI.

As of December 31, 2013, the loss in excess of noncontrolling interest for TC Digital absorbed by 4Kids Digital, in the aggregate, since the formation of such entity is $21,548.

b) TC Websites LLC - Under the terms of the TC Websites operating agreement, 4Kids Websites and CUSA are each entitled to elect two managers to TC Websites’ Management Committee, with 4Kids Websites having the right to break any deadlocks on TC Websites' Management Committee with respect to operational matters.  TC Websites is treated as a consolidated subsidiary of the Company as a result of its majority ownership and its right to break any deadlocks within the TC Websites Management Committee.

As of December 31, 2013, the noncontrolling member held 45% of the equity in the entity.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in TC Websites:

	Year Ended December 31,
	2013			2012			2011
TC Websites net loss before common units noncontrolling interest	$	—		$	—		$	(4	)
Noncontrolling interest percentage		45	%		45	%		45	%
Loss attributable to noncontrolling interest	$	—		$	—		$	(2	)

As of December 31, 2013, the loss in excess of noncontrolling interest for TC Websites absorbed by 4Kids Websites in the aggregate since the formation of such entity is $6,038.

XML

PROPERTY AND EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Property and equipment [Line Items]
Property and equipment - gross	$ 1,720	$ 1,750
Less: accumulated depreciation and amortization	(1,683)	(1,668)
Property and equipment - net	37	82
Computer equipment and software [Member]
Property and equipment [Line Items]
Property and equipment - gross	1,386	1,366
Website development [Member]
Property and equipment [Line Items]
Property and equipment - gross	87	87
Office furniture and fixtures [Member]
Property and equipment [Line Items]
Property and equipment - gross	$ 247	$ 297

XML

NONCONTROLLING INTEREST (Tables)

12 Months Ended

Dec. 31, 2013

NONCONTROLLING INTEREST [Abstract]

Noncontrolling Interest Loss Attributable to the Noncontrolling Equity Interest

Noncontrolling interest of membership units in Pinwrest represents the minority members’ proportionate share of the equity in the entity. Income is allocated to the membership units’ minority interest based on the ownership percentage throughout the year.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in Pinwrest:

	Year Ended
	December 31, 2013
Pinwrest net loss before common units’ noncontrolling interest	$	(1,105	)
Noncontrolling interest percentage		30	%
Loss attributable to noncontrolling interest	$	(331	)

XML

LIABILITIES SUBJECT TO COMPROMISE (Tables)

12 Months Ended

Dec. 31, 2013

LIABILITIES SUBJECT TO COMPROMISE [Abstract]

Schedule of liabilities subject to compromise

Liabilities subject to compromise consisted of the following:

	December 31, 2013		December 31, 2012
Due to licensors	$	—	$	337
Accounts payable and accrued expenses		—		621
Total	$	—	$	958

XML

STOCK-BASED EMPLOYEE COMPENSATION (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended						1 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended		1 Months Ended	12 Months Ended		1 Months Ended		12 Months Ended			12 Months Ended					0 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 Selling, General and Administrative Expenses [Member]	Dec. 31, 2013 Stock Options [Member]	Dec. 31, 2013 Restricted Stock Awards [Member]	May 31, 2009 2008 LTICP [Member] Restricted Stock Awards [Member]	Dec. 31, 2013 2008 LTICP [Member] Restricted Stock Awards [Member]	May 22, 2009 2008 LTICP [Member] Restricted Stock Awards [Member]	May 31, 2008 2007 LTCIP [Member] Restricted Stock Awards [Member]	Dec. 31, 2013 2007 LTCIP [Member] Restricted Stock Awards [Member]	May 23, 2008 2007 LTCIP [Member] Restricted Stock Awards [Member]	May 31, 2007 2006 LTICP [Member] Restricted Stock Awards [Member]	Dec. 31, 2013 2006 LTICP [Member] Restricted Stock Awards [Member]	May 25, 2007 2006 LTICP [Member] Restricted Stock Awards [Member]	Jun. 30, 2006 2005 LTICP [Member] Restricted Stock Awards [Member]	May 31, 2006 2005 LTICP [Member] Restricted Stock Awards [Member]	Dec. 31, 2013 2005 LTICP [Member] Restricted Stock Awards [Member]	Jun. 15, 2006 2005 LTICP [Member] Restricted Stock Awards [Member]	May 23, 2006 2005 LTICP [Member] Restricted Stock Awards [Member]	Dec. 31, 2013 All LTICPs [Member] Restricted Stock Awards [Member]	Dec. 31, 2012 All LTICPs [Member] Restricted Stock Awards [Member]	Dec. 31, 2011 All LTICPs [Member] Restricted Stock Awards [Member]	Dec. 31, 2013 2013 Equity Incentive Plan [Member]	Feb. 27, 2013 2013 Equity Incentive Plan [Member]	Aug. 29, 2013 2013 Equity Incentive Plan [Member] Stock Options [Member]	Feb. 27, 2013 2013 Equity Incentive Plan [Member] Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized for issuance (in shares)																									2,600,000
Common stock available for future issuance (in shares)					0	0																		1,695,000
Common stock granted (in shares)	919,000	0	0																							69,000	850,000
Common stock granted, exercise price (in dollars per share)	$ 0.28	$ 0	$ 0																							$ 0.54	$ 0.26
Common stock, grant date fair value																										$ 26	$ 151
Common stock options, expiration date																											Aug. 29, 2023
Option awards vesting on the date of issuance, 1 year after issuance and 2 years after issuance, respectively (in hundredths)																										33.33%	33.33%
Stockholder ownership classification, for exercise price conditions (in hundredths)																											10.00%
10% Stockholder exercise price of any option to fair value of common shares (in hundredths)																											110.00%
Options granted exercise right period																								10 years
Assumptions used in estimating fair values of options granted [Abstract]
Expected volatility (in hundredths)					84.00%
Expected dividend yield (in hundredths)					0.00%
Weighted average risk-free interest rate (in hundredths)					1.05%
Expected life					5 years 6 months
Forfeiture rate (in hundredths)					0.00%
Number of Shares [Roll Forward]
Outstanding, Beginning balance (in shares)	0	0	290,000
Granted (in shares)	919,000	0	0																							69,000	850,000
Exercised (in shares)	0	0	0
Forfeited, cancelled or expired (in shares)	(14,000)	0	(290,000)
Outstanding, Ending balance (in shares)	905,000	0	0
Exercisable (in shares)	306,000
Weighted Average Exercise Price [Roll Forward]
Outstanding, Beginning balance (in dollars per share)	$ 0	$ 0	$ 14.29
Granted (in dollars per share)	$ 0.28	$ 0	$ 0																							$ 0.54	$ 0.26
Exercised (in dollars per share)	$ 0	$ 0	$ 0
Forfeited, cancelled or expired (in dollars per share)	$ (0.54)	$ 0	$ 14.29
Outstanding, Ending balance (in dollars per share)	$ 0.28	$ 0	$ 0
Exercisable (in dollars per share)	$ 0.28
Options, Additional Disclosures [Abstract]
Outstanding, Remaining Contractual Life (in years)	9 years 1 month 6 days
Exercisable, Remaining Contractual Life (in years)	9 years 1 month 6 days
Outstanding, Aggregate Intrinsic Value	$ 374
Exercisable, Aggregate Intrinsic Value	124
Grant price of stock awards (in dollars per share)									$ 1.46			$ 7.85			$ 16.79				$ 15.78	$ 16.52	$ 0	$ 0	$ 1.46
Vesting period of stock awards								3 years			3 years			4 years				4 years						2 years
Number of shares (in thousands) [Roll Forward]
Outstanding at beginning of period (in shares)																					0	61,000	252,000
Granted (in shares)							378,000			311,000			162,000			4,000	145,000					0	0
Vested (in shares)																						(61,000)	(125,000)
Forfeited (in shares)																						0	(66,000)
Outstanding at end of period (in shares)																					0	0	61,000
Weighted-Average Grant Date Fair Value [Roll Forward]
Outstanding at beginning of period (in dollars per share)									$ 1.46			$ 7.85			$ 16.79				$ 15.78	$ 16.52	$ 0	$ 1.46	$ 4.60
Granted (in dollars per share)																						$ 0	$ 0
Vested (in dollars per share)																						$ 1.46	$ 5.90
Forfeited (in dollars per share)																						$ 0	$ 5.03
Outstanding at end of period (in dollars per share)									$ 1.46			$ 7.85			$ 16.79				$ 15.78	$ 16.52	$ 0	$ 0	$ 1.46
Stock-based compensation recorded		0	0
Unrecognized stock compensation expense	68
Period of stock compensation expense recognition	1 year 2 months 23 days
Share-based Compensation Expense				105																	0	21	32
Unrecognized compensation costs								$ 0			$ 0			$ 0

XML

SUMMARIZED QUARTERLY DATA (UNAUDITED) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
SUMMARIZED QUARTERLY DATA (UNAUDITED) [Abstract]
Revenues	$ 425	$ 296	$ 236	$ 257	$ 317	$ 263	$ 1,483	$ 1,262	$ 1,214	$ 3,325	$ 8,073
Income (loss) from continuing operations	(699)	(1,069)	(1,275)	(1,288)	(790)	13,589	(666)	7,519	(4,331)	19,652	(1,857)
Net (loss) income from discontinued operations	1	436	454	279	614	(1,705)	(5,521)	(3,496)	771	(10,108)	(13,343)
Net income (loss) attributable to 4Licensing Corporation	$ (580)	$ (735)	$ (979)	$ (935)	$ (176)	$ 11,884	$ (6,187)	$ 4,023	$ (3,229)	$ 9,544	$ (15,200)
Basic and diluted earnings (loss) per share attributable to 4Licensing Corporation common shareholders [Abstract]
Continuing operations (in dollars per share)	$ (0.04)	$ (0.08)	$ (0.09)	$ (0.09)	$ (0.05)	$ 0.99	$ (0.05)	$ 0.55	$ (0.29)	$ 1.44	$ (0.14)
Discontinued operations (in dollars per share)	$ 0	$ 0.03	$ 0.02	$ 0.02	$ 0.04	$ (0.12)	$ (0.40)	$ (0.26)	$ 0.06	$ (0.74)	$ (0.98)
Basic and diluted income (loss) per share attributable to 4Licensing Corporation common shareholders (in dollars per share)	$ (0.04)	$ (0.05)	$ (0.07)	$ (0.07)	$ (0.01)	$ 0.87	$ (0.45)	$ 0.29	$ (0.23)	$ 0.70	$ (1.12)

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended							12 Months Ended
	Mar. 31, 2010	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 21, 2012	Apr. 26, 2010	Apr. 26, 2010 TCD International, Ltd. [Member]	Mar. 02, 2009 TCD International, Ltd. [Member]	Dec. 31, 2013 Lehman Brothers, Inc. [Member]	Dec. 31, 2012 Cornerstone Patent Technologies, LLC [Member] Shareholder
COMMITMENTS AND CONTINGENCIES [Abstract]
Bonus awarded		$ 0	$ 0	$ 0
Claim Payment - Officer severance agreements					350
Commitments for minimum lease rental under operating lease [Abstract]
2014		271
2015		211
2016 and after		0
Total		482
Sublease expiration date		Oct. 31, 2015
Operating lease rent expense		242	336	459
Employment Contracts [Abstract]
Liability for employees under contract terminated without good cause		150
Improper deductions and underpayments	1,075
Ownership interest (in hundredths)							25.00%	25.00%
Contractually required initial capital contribution							250
Share of expenses (in hundredths)						50.00%
Bankruptcy court approving settlement agreement			8,000						489
Principal amount of claim									31,500
Bankruptcy Cases [Abstract]
Debtors in Bankruptcy Cases, proof of claim file										3,300
Estimated proof of claim file, Debtors in Bankruptcy claim										0
Bankruptcy disputed claim reserve										228
Recognized gain from reversal of liability		$ 443
Shareholders voting shares (in hundredths)										99.93%
Shareholder objector to bankruptcy plan										1

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Principles of Consolidation [Abstract]
Minimum percentage of ownership interest in subsidiaries (in hundredths)	50.00%
Minimum percentage of ownership interest in affiliated companies (in hundredths)	20.00%
Maximum percentage of ownership interest in affiliated companies (in hundredths)	50.00%
Cash and Cash Equivalents [Abstract]
Insurance coverage per depositor	$ 250
Inventory [Abstract]
Inventory	137	0
Participation Advances [Abstract]
Participation advances	287	287
Other comprehensive income (loss):
Cumulative translation adjustment income	$ (344)	$ 0	$ 0
TC Digital [Member]
Noncontrolling Interest [Line Items]
Percentage of ownership in subsidiaries (in hundredths)	55.00%
TC Websites LLC [Member]
Noncontrolling Interest [Line Items]
Percentage of ownership in subsidiaries (in hundredths)	55.00%
Minimum [Member]
Property and Equipment [Line Items]
Estimated useful lives of the assets	3 years
Maximum [Member]
Property and Equipment [Line Items]
Estimated useful lives of the assets	10 years

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of 4Licensing Corporation and its wholly-owned subsidiaries and investments of more than 50% in subsidiaries in which it has a controlling financial interest after elimination of significant intercompany transactions and balances.  Investments in affiliated companies over which the Company has a significant influence or ownership of more than 20% but less than or equal to 50% are accounted for using the equity method.  These consolidated financial statements reflect the use of significant accounting policies, as described below and elsewhere in the notes to the consolidated financial statements.

Revenue Recognition –

Service revenues, which consists of licensing revenues: Licensing revenues, net of licensor participations, are recognized when the underlying royalties from the sales of the related products are earned and determinable.  The Company recognizes guaranteed royalties, net of licensor participations, at the time the arrangement becomes effective if the Company has met all of the following: (1) no significant direct continuing involvement with the underlying Property or obligation to the licensee, (2) the license period has commenced; and (3) collectability is reasonably assured.  Licensing advances and guaranteed payments collected but not yet earned by the Company are classified as deferred revenue in the accompanying consolidated balance sheets.

Product revenues: Product revenues are recognized when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. The Company records shipping and handling billed to a customer in a sales transaction as revenue, while the costs incurred for shipping and handling are recorded in cost of product sales in the accompanying consolidated statement of operations.

Property and Equipment - Property and equipment are carried at cost, net of accumulated depreciation and amortization. Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 to 10 years. Costs associated with the repair and maintenance of property are expensed as incurred.

Impairment Of Long-Lived And Intangible Assets - The Company assesses the recoverability of long-lived assets for which an indication of impairment exists. The recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Fair value of long-lived assets is determined using the expected cash flows discounted at a rate commensurate with the risk involved.  At December 31, 2013, the Company believes that the future cash flows to be received from the remaining long-lived assets will exceed the respective assets’ carrying value, and accordingly has not recorded any additional impairment losses.

Cash and Cash Equivalents - The Company considers all highly liquid assets, having an original maturity of less than three months, to be cash equivalents.  Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits.  The Company believes it is not exposed to any significant credit risk of cash and cash equivalents.  All of our non-interest bearing cash balances are insured at December 31, 2013 up to $250 per depositor at each financial institution, and our non-interest bearing cash balances may exceed federally insured limits.

Fair Value Measurements-The fair values of the Company’s financial instruments reflect the estimates of amounts that would be received from selling an asset in an orderly transaction between market participants at the measurement date.  The fair value estimates presented in this report are based on information available to the Company as of December 31, 2013 and December 31, 2012.

The carrying values of cash and cash equivalents, accounts receivable, due to licensors, accounts payable, accrued expenses and deferred revenue approximate fair value. The authoritative guidance issued by the FASB includes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last of which is considered unobservable, that may be used to measure fair value. The three levels are the following:

· Level 1 - Quoted prices in active markets for identical assets or liabilities.

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Inventories - Inventories are stated at the lower of cost or market. The $137 inventory balance at December 31, 2013 consists of finished goods related to the IsoBLOX™ and Sports Licensing/Distributionsegment.

Stock-based compensation - The Company accounts for all share-based payments to employees and directors based on their grant date fair values. Compensation for share-based payments to non-employees is based on the fair value at the measurement date, which is generally the performance completion date. The fair value is initially measured at the grant date and subsequently measured at each reporting period until the final measurement date. The fair value of the Company’s stock option awards is expensed over the vesting life of the underlying stock options using the straight-line method.

Participation Advances – Participation advances as of December 31, 2013 and 2012 were $287 and were included in “other assets” on the balance sheet.

Reorganization Items - The Company’s costs related to professional, consulting and trustee fees, as the case may be, in conjunction with the Bankruptcy Cases are expensed as incurred and reported as reorganization items in the accompanying consolidated statements of operations.

Operating Leases -The Company accounts for all operating leases on a straight-line basis over the term of the lease.  In accordance with authoritative guidance issued by the FASB, any incentives or rent escalations are recorded as deferred rent and are included as a component of rent expense over the respective lease term.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are used in, but not limited to, certain areas of revenue recognition, the amortization of television and film costs, the amortization of 4Kids TV broadcast fees, valuation of our investment securities and inventory reserves.  Actual results could differ materially from those estimates.

Translation of Foreign Currency The Company classifies items as other comprehensive income by their nature in the financial statements and displays the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the consolidated balance sheet. The assets and liabilities of the Company’s foreign subsidiary, 4Kids International have been recorded in their local currency and translated to U.S. dollars using period-end exchange rates. Income and expense items have been translated at the average rate of exchange prevailing during the period. Any adjustment resulting from translating the financial statements of the foreign subsidiary is reflected as “other comprehensive income”, net of related tax.  The changes in cumulative translation adjustment during the year ended December 31, 2013 included a reclassification of $344 in cumulative translation adjustment to earnings as a result of the liquidation of the Company’s UK subsidiary.  This change has been reported as income from discontinued operations in the accompanying consolidated statements of operations.

Concentration Of Credit Risk - Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of accounts receivable. The majority of the cash and cash equivalents are maintained with major financial institutions in the United States of America. Credit risk on accounts receivable is minimized by the Company by performing ongoing credit evaluations of its customers’ financial condition and monitoring its exposure for credit losses and maintaining allowances for anticipated losses.

Income Taxes - Income tax expense (benefit) is provided for using the asset and liability method. Deferred income taxes are recognized at currently enacted tax rates for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial reporting purposes. Deferred taxes are provided for the undistributed earnings as if they were to be distributed. The Company regularly reviews its deferred tax assets for recoverability taking into consideration such factors as recurring operating losses, projected future taxable income and the expected timing of the reversals of existing temporary differences.  The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Our assessment of the valuation allowance on the deferred tax assets could change in the future based on our levels of pre-tax income and other tax-related adjustments. A change in estimate of the valuation allowance, in whole or in part, would result in a non-cash reduction in income tax expense during the period of the change. Due to the continued losses incurred by the Company in 2013 and prior years, the Company believes that it is more likely than not that the deferred tax asset related to these net operating losses will not be realized and therefore recorded a full valuation allowance.  If, in the future, the Company determines that the utilization of these net operating losses becomes more likely than not, the Company will reduce the valuation allowance at that time.

The discontinued operations of TC Digital and TC Websites are limited liability companies and have elected to be treated as partnerships for income tax purposes. As such, U.S. federal and state income taxes (in the states which tax limited liability companies as partnerships) are the direct responsibility of its members. We own 55% of the membership interests in both entities. Thus, our respective portion of their activity is reported in our consolidated tax returns.

Recently Adopted Accounting Standards – We adopted recent amendments to authoritative guidance issued by FASB in February 2013 which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income   This update resulted in additional disclosure but had no effect on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Standards – In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)  2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in ASU 2013-11 require an entity to present an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward except when: (1) a NOL carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position; or (2) the entity does not intend to use the deferred tax asset for this purpose (provided that the tax law permits a choice). If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. The amendment does not affect the recognition or measurement of uncertain tax positions under ASC Topic 740, Income Taxes. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the effect this guidance will have on the Company’s consolidated financial position and results of operations. We do not expect this ASU to have a material impact to our consolidated financial statements.

XML

NONCONTROLLING INTEREST (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended				12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jan. 17, 2013 4Licencing Corp [Member]	Dec. 31, 2013 Pinwrest [Member]
Noncontrolling Interest [Line Items]
Percentage of ownership (in hundredths)												70.00%
Pinwrest net loss before common units' noncontrolling interest	$ (580)	$ (735)	$ (979)	$ (935)	$ (176)	$ 11,884	$ (6,187)	$ 4,023	$ (3,229)	$ 9,544	$ (15,200)		$ (1,105)
Ownership interest (in hundredths)													30.00%
Loss attributable to noncontrolling interest									$ (331)	$ 0	$ 0		$ (331)

XML

NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2013

NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS [Abstract]

Noncontrolling interest's loss attributable to the noncontrolling equity interest

Noncontrolling interest of membership units in TC Digital represents the noncontrolling members’ proportionate share of the equity in the entity. Income is allocated to the membership units’ noncontrolling interest based on the ownership percentage throughout the year. As of December 31, 2013, the noncontrolling member continued to hold 45% of the equity in the entity.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in TC Digital:

	Year Ended December 31,
	2013			2012			2011
TC Digital net income (loss) before common units noncontrolling interest	$	888		$	(3	)	$	(4,181	)
Noncontrolling interest percentage		45	%		45	%		45	%
Income (loss) attributable to noncontrolling interest	$	399		$	(1	)	$	(1,882	)

As of December 31, 2013, the noncontrolling member held 45% of the equity in the entity.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in TC Websites:

	Year Ended December 31,
	2013			2012			2011
TC Websites net loss before common units noncontrolling interest	$	—		$	—		$	(4	)
Noncontrolling interest percentage		45	%		45	%		45	%
Loss attributable to noncontrolling interest	$	—		$	—		$	(2	)

XML

SUMMARIZED QUARTERLY DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2013

SUMMARIZED QUARTERLY DATA (UNAUDITED) [Abstract]

SUMMARIZED QUARTERLY DATA (UNAUDITED)

22. SUMMARIZED QUARTERLY DATA (UNAUDITED)

Following is a summary of the quarterly results of operations for the years ended December 31, 2013 and 2012:

	Fiscal Quarters
2013	First			Second			Third			Fourth
	(In thousands, except per share amounts)
Revenues	$	257		$	236		$	296		$	425
Loss from continuing operations		(1,288	)		(1,275	)		(1,069	)		(699	)
Net income from discontinued operations		279			454			436			1
Net loss attributable to 4Licensing Corporation	$	(935	)	$	(979	)	$	(735	)	$	(580	)
Basic and diluted (loss) earnings per share attributable to
4Licensing Corporation common shareholders
Continuing operations	$	(0.09	)	$	(0.09	)	$	(0.08	)	$	(0.04	)
Discontinued operations		0.02			0.02			0.03			—
Basic and diluted lossper share attributable to 4Licensing Corporation common shareholders	$	(0.07	)	$	(0.07	)	$	(0.05	)	$	(0.04	)

	Fiscal Quarters
2012	First			Second			Third			Fourth
	(In thousands, except per share amounts)
Revenues	$	1,262		$	1,483		$	263		$	317
Income (loss) from continuing operations		7,519			(666	)		13,589			(790	)
Net (loss) income from discontinued operations		(3,496	)		(5,521	)		(1,705	)		614
Net income (loss) attributable to 4Licensing Corporation	$	4,023		$	(6,187	)	$	11,884		$	(176	)
Basic and diluted earnings (loss) per share attributable to
4Licensing Corporation common shareholders
Continuing operations	$	0.55		$	(0.05	)	$	0.99		$	(0.05	)
Discontinued operations		(0.26	)		(0.40	)		(0.12	)		0.04
Basic and diluted income (loss) per share attributable to 4Licensing Corporation common shareholders	$	0.29		$	(0.45	)	$	0.87		$	(0.01	)

Quarterly amounts for income (loss) per share may not agree to annual amount due to rounding.

XML

SEGMENT AND RELATED INFORMATION

12 Months Ended

Dec. 31, 2013

SEGMENT AND RELATED INFORMATION [Abstract]

SEGMENT AND RELATED INFORMATION

21. SEGMENT AND RELATED INFORMATION

The Company has two reportable segments: (i) Entertainment and Brand Licensing and (ii) IsoBLOX™and Sports Licensing/Distribution.  The Company’s reportable segments are strategic business units, which, while managed separately, work together as a vertically integrated entertainment company.  The Company’s management regularly evaluates the performance of each segment based on its net revenues, profit and loss after all expenses, including interest income. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  All inter-segment transactions have been eliminated in consolidation.

Years Ended December 31,	Entertainment and Brand Licensing			IsoBLOX™ and Sports Licensing/ Distribution			Total
2013:
Net revenues from external customers	$	1,039		$	175		$	1,214
Reorganization items		(151	)		—			(151	)
Gain on settlement of pre-petition liabilities		26			—			26
Segment loss		(2,982	)		(1,349	)		(4,331	)
Segment assets		1,243			2,325			3,568
2012:
Net revenues from external customers	$	3,325		$	—		$	3,325
Reorganization items		(4,071	)		—			(4,071	)
Gain on settlement of pre-petition liabilities		1,331			—			1,331
Gain on litigation		8,000			—			8,000
Gain on sale		17,714			—			17,714
Segment income		19,652			—			19,652
Segment assets		11,272			—			11,272
2011:
Net revenues from external customers	$	8,073		$	—		$	8,073
Interest income		63			—			63
Loss on sale of investment securities		(910	)		—			(910	)
Reorganization items		(1,628	)		—			(1,628	)
Gain on litigation		489			—			489
Segment loss		(1,857	)		—			(1,857	)
Segment assets		7,276			—			7,276

Net revenues from external customers and segment profit from discontinued operations have been excluded and are disclosed in Note 14.  Additionally, segment assets relating to discontinued operations of $1, $268, and $8,668 as of December 31, 2013, 2012, and 2011, respectively, have also been excluded in segment reporting.

XML

LIABILITIES SUBJECT TO COMPROMISE (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
LIABILITIES SUBJECT TO COMPROMISE [Abstract]
Gain on settlement of pre-petition liabilities	$ 26	$ 1,331	$ 0
Due to Licensors	0	337
Accounts Payable and Accrued Expenses	0	621
Total	$ 0	$ 958

XML

SEGMENT AND RELATED INFORMATION (Tables)

12 Months Ended

Dec. 31, 2013

SEGMENT AND RELATED INFORMATION [Abstract]

Segment reporting information, by segment

The Company has two reportable segments: (i) Entertainment and Brand Licensing and (ii) IsoBLOX™and Sports Licensing/Distribution.  The Company’s reportable segments are strategic business units, which, while managed separately, work together as a vertically integrated entertainment company.  The Company’s management regularly evaluates the performance of each segment based on its net revenues, profit and loss after all expenses, including interest income. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  All inter-segment transactions have been eliminated in consolidation.

Years Ended December 31,	Entertainment and Brand Licensing			IsoBLOX™ and Sports Licensing/ Distribution			Total
2013:
Net revenues from external customers	$	1,039		$	175		$	1,214
Reorganization items		(151	)		—			(151	)
Gain on settlement of pre-petition liabilities		26			—			26
Segment loss		(2,982	)		(1,349	)		(4,331	)
Segment assets		1,243			2,325			3,568
2012:
Net revenues from external customers	$	3,325		$	—		$	3,325
Reorganization items		(4,071	)		—			(4,071	)
Gain on settlement of pre-petition liabilities		1,331			—			1,331
Gain on litigation		8,000			—			8,000
Gain on sale		17,714			—			17,714
Segment income		19,652			—			19,652
Segment assets		11,272			—			11,272
2011:
Net revenues from external customers	$	8,073		$	—		$	8,073
Interest income		63			—			63
Loss on sale of investment securities		(910	)		—			(910	)
Reorganization items		(1,628	)		—			(1,628	)
Gain on litigation		489			—			489
Segment loss		(1,857	)		—			(1,857	)
Segment assets		7,276			—			7,276

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Principles of Consolidation

Principles of Consolidation – The accompanying consolidated financial statements include the accounts of 4Licensing Corporation and its wholly-owned subsidiaries and investments of more than 50% in subsidiaries in which it has a controlling financial interest after elimination of significant intercompany transactions and balances.  Investments in affiliated companies over which the Company has a significant influence or ownership of more than 20% but less than or equal to 50% are accounted for using the equity method.  These consolidated financial statements reflect the use of significant accounting policies, as described below and elsewhere in the notes to the consolidated financial statements.

Revenue Recognition

Revenue Recognition –

Service revenues, which consists of licensing revenues: Licensing revenues, net of licensor participations, are recognized when the underlying royalties from the sales of the related products are earned and determinable.  The Company recognizes guaranteed royalties, net of licensor participations, at the time the arrangement becomes effective if the Company has met all of the following: (1) no significant direct continuing involvement with the underlying Property or obligation to the licensee, (2) the license period has commenced; and (3) collectability is reasonably assured.  Licensing advances and guaranteed payments collected but not yet earned by the Company are classified as deferred revenue in the accompanying consolidated balance sheets.

Product revenues: Product revenues are recognized when delivery has occurred and the risk of loss has passed to the customer. This is generally upon shipment of goods to customers, except when shipping terms dictate otherwise. The Company records shipping and handling billed to a customer in a sales transaction as revenue, while the costs incurred for shipping and handling are recorded in cost of product sales in the accompanying consolidated statement of operations.

Property and Equipment

Property and Equipment - Property and equipment are carried at cost, net of accumulated depreciation and amortization. Depreciation is calculated on the straight-line method based on the estimated useful lives of the assets, which range from 3 to 10 years. Costs associated with the repair and maintenance of property are expensed as incurred.

Impairment Of Long-Lived And Intangible Assets

Impairment Of Long-Lived And Intangible Assets - The Company assesses the recoverability of long-lived assets for which an indication of impairment exists. The recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If an asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Fair value of long-lived assets is determined using the expected cash flows discounted at a rate commensurate with the risk involved.  At December 31, 2013, the Company believes that the future cash flows to be received from the remaining long-lived assets will exceed the respective assets’ carrying value, and accordingly has not recorded any additional impairment losses.

Cash and Cash Equivalents

Cash and Cash Equivalents - The Company considers all highly liquid assets, having an original maturity of less than three months, to be cash equivalents.  Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits.  The Company believes it is not exposed to any significant credit risk of cash and cash equivalents.  All of our non-interest bearing cash balances are insured at December 31, 2013 up to $250 per depositor at each financial institution, and our non-interest bearing cash balances may exceed federally insured limits.

Fair Value Measurements

Fair Value Measurements-The fair values of the Company’s financial instruments reflect the estimates of amounts that would be received from selling an asset in an orderly transaction between market participants at the measurement date.  The fair value estimates presented in this report are based on information available to the Company as of December 31, 2013 and December 31, 2012.

The carrying values of cash and cash equivalents, accounts receivable, due to licensors, accounts payable, accrued expenses and deferred revenue approximate fair value. The authoritative guidance issued by the FASB includes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last of which is considered unobservable, that may be used to measure fair value. The three levels are the following:

· Level 1 - Quoted prices in active markets for identical assets or liabilities.

· Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

· Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Inventories

Inventories - Inventories are stated at the lower of cost or market. The $137 inventory balance at December 31, 2013 consists of finished goods related to the IsoBLOX™ and Sports Licensing/Distributionsegment.

Stock-based compensation

Stock-based compensation - The Company accounts for all share-based payments to employees and directors based on their grant date fair values. Compensation for share-based payments to non-employees is based on the fair value at the measurement date, which is generally the performance completion date. The fair value is initially measured at the grant date and subsequently measured at each reporting period until the final measurement date. The fair value of the Company’s stock option awards is expensed over the vesting life of the underlying stock options using the straight-line method.

Participation Advances

Participation Advances – Participation advances as of December 31, 2013 and 2012 were $287 and were included in “other assets” on the balance sheet.

Reorganization Items

Reorganization Items - The Company’s costs related to professional, consulting and trustee fees, as the case may be, in conjunction with the Bankruptcy Cases are expensed as incurred and reported as reorganization items in the accompanying consolidated statements of operations.

Operating Leases

Operating Leases -The Company accounts for all operating leases on a straight-line basis over the term of the lease.  In accordance with authoritative guidance issued by the FASB, any incentives or rent escalations are recorded as deferred rent and are included as a component of rent expense over the respective lease term.

Use of Estimates

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are used in, but not limited to, certain areas of revenue recognition, the amortization of television and film costs, the amortization of 4Kids TV broadcast fees, valuation of our investment securities and inventory reserves.  Actual results could differ materially from those estimates.

Translation of Foreign Currency

Translation of Foreign Currency The Company classifies items as other comprehensive income by their nature in the financial statements and displays the accumulated balance of other comprehensive income separately from retained earnings and additional paid-in capital in the equity section of the consolidated balance sheet. The assets and liabilities of the Company’s foreign subsidiary, 4Kids International have been recorded in their local currency and translated to U.S. dollars using period-end exchange rates. Income and expense items have been translated at the average rate of exchange prevailing during the period. Any adjustment resulting from translating the financial statements of the foreign subsidiary is reflected as “other comprehensive income”, net of related tax.  The changes in cumulative translation adjustment during the year ended December 31, 2013 included a reclassification of $344 in cumulative translation adjustment to earnings as a result of the liquidation of the Company’s UK subsidiary.  This change has been reported as income from discontinued operations in the accompanying consolidated statements of operations.

Concentration Of Credit Risk

Concentration Of Credit Risk - Financial instruments, which potentially subject the Company to concentration of credit risk, consist primarily of accounts receivable. The majority of the cash and cash equivalents are maintained with major financial institutions in the United States of America. Credit risk on accounts receivable is minimized by the Company by performing ongoing credit evaluations of its customers’ financial condition and monitoring its exposure for credit losses and maintaining allowances for anticipated losses.

Income Taxes

Income Taxes - Income tax expense (benefit) is provided for using the asset and liability method. Deferred income taxes are recognized at currently enacted tax rates for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial reporting purposes. Deferred taxes are provided for the undistributed earnings as if they were to be distributed. The Company regularly reviews its deferred tax assets for recoverability taking into consideration such factors as recurring operating losses, projected future taxable income and the expected timing of the reversals of existing temporary differences.  The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Our assessment of the valuation allowance on the deferred tax assets could change in the future based on our levels of pre-tax income and other tax-related adjustments. A change in estimate of the valuation allowance, in whole or in part, would result in a non-cash reduction in income tax expense during the period of the change. Due to the continued losses incurred by the Company in 2013 and prior years, the Company believes that it is more likely than not that the deferred tax asset related to these net operating losses will not be realized and therefore recorded a full valuation allowance.  If, in the future, the Company determines that the utilization of these net operating losses becomes more likely than not, the Company will reduce the valuation allowance at that time.

The discontinued operations of TC Digital and TC Websites are limited liability companies and have elected to be treated as partnerships for income tax purposes. As such, U.S. federal and state income taxes (in the states which tax limited liability companies as partnerships) are the direct responsibility of its members. We own 55% of the membership interests in both entities. Thus, our respective portion of their activity is reported in our consolidated tax returns.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards – We adopted recent amendments to authoritative guidance issued by FASB in February 2013 which requires disclosure of significant amounts reclassified out of accumulated other comprehensive income by component and their corresponding effect on the respective line items of net income   This update resulted in additional disclosure but had no effect on the Company’s consolidated financial position and results of operations.

Recently Issued Accounting Standards

Recently Issued Accounting Standards – In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)  2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The amendments in ASU 2013-11 require an entity to present an unrecognized tax benefit in the financial statements as a reduction to a deferred tax asset for a net operating loss ("NOL") carryforward, a similar tax loss, or a tax credit carryforward except when: (1) a NOL carryforward, a similar tax loss, or a tax credit carryforward is not available as of the reporting date under the governing tax law to settle taxes that would result from the disallowance of the tax position; or (2) the entity does not intend to use the deferred tax asset for this purpose (provided that the tax law permits a choice). If either of these conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. The amendment does not affect the recognition or measurement of uncertain tax positions under ASC Topic 740, Income Taxes. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The Company is currently evaluating the effect this guidance will have on the Company’s consolidated financial position and results of operations. We do not expect this ASU to have a material impact to our consolidated financial statements.

XML

FAIR VALUE OF FINANCIAL ASSETS (Tables)

12 Months Ended

Dec. 31, 2013

FAIR VALUE OF FINANCIAL ASSETS [Abstract]

Carrying values and estimated fair values of financial instruments

The carrying values and estimated fair values of the Company’s financial instruments for the periods presented are as follows:

	Estimated Fair Value Measurements
	Carrying Value		Quoted Prices in Active Markets  (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013:
Financial Assets
Cash and cash equivalents	$	356	$	356	$	—	$	—
Total Financial Assets	$	356	$	356	$	—	$	—
December 31, 2012:
Financial Assets
Cash and cash equivalents	$	9,011	$	9,011	$	—	$	—
Total Financial Assets	$	9,011	$	9,011	$	—	$	—

XML

DESCRIPTION OF BUSINESS

12 Months Ended

Dec. 31, 2013

DESCRIPTION OF BUSINESS [Abstract]

DESCRIPTION OF BUSINESS

1. DESCRIPTION OF BUSINESS

General Development and Narrative Description of Business - 4Licensing Corporation (“4LC”), formerly known as 4Kids Entertainment, Inc. (“4Kids”), together with the subsidiaries through which its business is conducted (the “Company”), is a licensing company specializing in the youth oriented markets, sports and specialty brands. The Company was originally organized as a New York corporation in 1970, and in December 2012 was reincorporated in Delaware.

The Company’s consolidated financial statements have been prepared assuming that it will be able to continue to operate as a going concern.  The Company’s limited liquidity as of December 31, 2013, the continuing costs in connection with its bankruptcy cases, and potential settlement of the remaining material unresolved claim taken together, raise doubt about the Company’s ability to continue as a going concern.

Emerging from Chapter 11 Bankruptcy Proceedings – On April 6, 2011 (the “Petition Date”), the Company and all of its domestic wholly-owned subsidiaries (the “Debtors”) filed voluntary petitions for relief (the “Bankruptcy Cases”) under Title 11 of Chapter 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”), which Bankruptcy Cases were jointly administered under Case No. 11-11607.  After filing the Bankruptcy Cases the Company and its subsidiaries continued to operate as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.  As debtors-in-possession, we were authorized under Chapter 11 of the Bankruptcy Code to continue to operate as an ongoing business. 4Kids Entertainment International, Ltd., (“4Kids International”), the Company’s subsidiary based in London, England, and TC Digital Games LLC (“TC Digital”) and TC Websites LLC (“TC Websites”), two domestic subsidiaries in each of which the Company holds a majority ownership, were not included in the filing and continued to operate outside the Bankruptcy Court’s jurisdiction.

After the filing of the Bankruptcy Cases, the United States Trustee for the Southern District of New York appointed an official committee of unsecured creditors (the “Creditors’ Committee”).

On February 29, 2012, the Company, and Nihon Ad Systems, Inc. and Tokyo Corporation (collectively, the “Licensors”) entered into a Settlement Agreement, dated as of February 27, 2012 (the “Settlement Agreement”), settling all claims brought by Licensors against the Company and all counterclaims brought by the Company against the Licensors in the Yu-Gi-Oh! Litigation (as hereinafter defined). The Settlement Agreement provided, among other things, for the Licensors to make a payment to the Company in the amount of $8,000 upon the order of the Bankruptcy Court approving the Settlement Agreement becoming a final order.  On March 9, 2012, the Bankruptcy Court issued an order approving the Settlement Agreement and, accordingly, the Company recognized a gain on litigation settlement of $8,000.  Under the Settlement Agreement, the Licensors acknowledged that the Yu-Gi-Oh! Agreement (hereinafter defined) remained valid, binding and legally enforceable with the Company continuing to serve as the exclusive licensing agent for the merchandise licensing, television broadcast and home video rights to the Yu-Gi-Oh! Property (as hereinafter defined) throughout the world outside of Asia.  The Settlement Agreement further provided for each of the Company and the Licensors to release the other from all claims they may have had against each other, other than certain indemnification claims and claims that may arise under the Settlement Agreement.  The Settlement Agreement also provided that the agreement does not constitute an admission by any party of any violation of any agreement or law.  On March 27, 2012, the Company received the payment in the amount of $8,000 pursuant to the Settlement Agreement.

On April 26, 2012, the Debtors entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), which contemplated the sale of substantially all of its assets to Kidsco Media Ventures LLC (“Kidsco”), a Delaware limited liability company, and an affiliate of Saban Capital Group (“Saban Bidder”) for a purchase price of $10,000, subject to certain adjustments (the “Purchase Price”).  The transaction was proposed as a sale of the Debtors’ assets pursuant to Section 363 of the Bankruptcy Code.  The transaction was subject to, among other things, (i) competitive bidding pursuant to sale procedures approved by the Bankruptcy Court at a hearing on April 27, 2012 (the “Bidding Procedures”), and (ii) approval of the transaction by the Bankruptcy Court.

In May 2012, the Company received a competing bid (the “Konami Bid”) from 4K Acquisition Corp. (the “Konami Bidder”), an indirect subsidiary of Konami Corporation, a Japanese corporation (“Konami”). In the competing bid, the Konami Bidder offered to purchase substantially all of the assets of the Company in a transaction under Section 363 of the Bankruptcy Code. The Konami Bid, in the judgment of the Company, represented a Qualified Bid under the terms of the Bidding Procedures.

On June 5, 2012, the Company commenced an auction between the Saban Bidder and the Konami Bidder (together with the Saban Bidder, the “Purchasers”).  During the auction, each of the Purchasers made several improved bids. After several rounds of competitive bidding, the auction was adjourned to allow the Purchasers to consider an alternative transaction among the Company and the Purchasers pursuant to which each of the Purchasers would acquire certain assets of the Company. The proposed alternative transaction represented a substantial improvement in the proceeds payable to the Company over the last bid made prior to such adjournment.  The possible alternative transaction was conditioned upon the negotiation of definitive documentation among the Company and the Purchasers and the approval of such alternative transaction by the Bankruptcy Court.

On June 24, 2012, the Debtors entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), which contemplated the sale of substantially all of its assets to the Purchasers, for an aggregate purchase price of $15,000, subject to certain adjustments (the “Purchase Price”).  The transaction was a sale pursuant to Section 363 of the Bankruptcy Code.  On June 26, 2012, the Bankruptcy Court entered a final sale order approving the transactions contemplated by the Asset Purchase Agreement.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement, among 4Kids and the Purchasers.  In connection with the consummation of such transactions, the Konami Bidder paid the Debtors an aggregate amount equal to $14,997, representing a base purchase price of $15,000, less a $3 downward adjustment contemplated by the Asset Purchase Agreement.  In addition, in connection with the consummation of the transactions contemplated by the Asset Purchase Agreement, the following payments were made by or on behalf of the Debtors:

(a) $1,000 was delivered to the escrow agent under the escrow agreements provided for in the Asset Purchase Agreement, to be used to satisfy any indemnification obligations that the Debtors may have to either of the Purchasers pursuant to the provisions of the Asset Purchase Agreement; such amount was received by the Company in February 2013 upon the expiration of the escrow agreements;

(b) $3 was paid to the escrow agent as the Debtors’ portion of fees payable to it for its performance of services as escrow agent under the escrow agreements;

(c) $3,051 was paid to The CW Network, LLC (“The CW”) as a cure cost under the term sheet originally entered into with The CW as of October 1, 2007 and amended as of October 2, 2008 and June 23, 2010 (“The CW Agreement”);

(d) $429 was paid to Toei Animation as a cure cost;

(e) $28 was paid to Twenty Three R.P. Associates as a cure cost;

(f) approximately $21 was paid to satisfy cure costs under other agreements; and

(g) $504 was paid to the Saban Bidder in accordance with the terms of the Asset Purchase Agreement, with $476 representing an adjustment to the purchase price for the Saban Purchased Business and $28 representing the Debtors’ share of national advertising proceeds from the broadcast of commercials during the second calendar quarter of 2012 on the five hour Saturday morning block of programs telecast on The CW.

The assets sold by the Debtors to the Konami Bidder (the “Konami Purchased Assets”) included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to and commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise (the “Konami Purchased Business”), as well as other assets relating to the Konami Purchased Business.  The Company was party to an agreement with Konami Corporation, dated as of August 1, 2001, as amended by the First Amendment, dated September 12, 2007 (the “Konami Agreement”), which agreement related to, inter alia, sales of Yu-Gi-Oh! trading cards and videogames.  The Konami Agreement was included as part of the Konami Purchased Assets transferred to the Konami Bidder in connection with the closing of the transactions contemplated by the Asset Purchase Agreement on July 2, 2012.

The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors including The CW Agreement and certain television episodes and rights related thereto (the “Saban Purchased Business”), as well as other assets relating to the Saban Purchased Business.  While the consummation of the Settlement Agreement and the completion of the asset sale pursuant to the Asset Purchase Agreement represent significant steps in the process of resolving the Bankruptcy Cases, the timing of any resolution of the Bankruptcy Cases will depend on the timing and outcome of numerous other ongoing matters therein, and it is not possible at this time to accurately predict when such other matters will be resolved.  We have incurred and will continue to incur significant costs associated with the Bankruptcy Cases.  The amount of these costs, which began in April 2011 and are being expensed as incurred, are expected to significantly affect our results of operations and financial position.  The Bankruptcy Cases have also presented challenges to our ability to generate additional revenues.

On October 5, 2012, the Company filed (i) the Disclosure Statement with Respect to Debtors’ Proposed Joint Plan of Reorganization (as may be amended, the “Disclosure Statement”), (ii) the Debtors’ Joint Plan of Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code (as may be amended, the “Plan”) and a motion establishing deadlines and procedures with respect to the solicitation of votes on the Plan (the “Procedures Motion”).  On October 29, 2012, the Company filed (i) the Amended Disclosure Statement with Respect to Debtors’ Proposed Plan of Reorganization and (ii) the Debtor’s Amended Joint Plan of Reorganization pursuant to Chapter 11 of the United States Bankruptcy Code.  On October 31, 2012, the Bankruptcy Court approved the Procedures Motion and the Disclosure Statement and authorized the Debtors to solicit votes on the Plan.  The Debtors formally commenced solicitation in respect of the Plan in early November 2012.

On December 13, 2012, the Bankruptcy Court entered an order in the Bankruptcy Cases confirming the Plan.  On December 21, 2012, the effective date of the Plan, the Company emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  As of December 31, 2013, all of the allowed claims have been paid.  In accordance with the Plan, 4Kids reincorporated in Delaware under the name “4Licensing Corporation.” On the effective date of the Plan, 4Kids’ common stock was cancelled and holders of 4Kids’ common stock were issued one (1) share of common stock of 4LC in exchange for each share of 4Kids’ common stock held by them.

Financial Reporting Considerations - The Company’s emergence from bankruptcy did not qualify for fresh start accounting in accordance with ASC Topic 852, Reorganization.

Liquidity - In recent years, the Company has incurred substantial net losses and has used substantial amounts of cash in its operating activities.  Sales by the Company of certain securities held in its investment portfolio as well as certain other assets have significantly contributed to the funding of these operating losses.  While the timing of these sales was not primarily motivated by then current cash needs, without these sales the Company would not have had sufficient cash to fund its operations. 

As discussed above, the Company has recently emerged from Chapter 11 bankruptcy proceedings pursuant to the Plan (as defined above).  On December 21, 2012, the effective date of the Plan, the Company (including the other Debtors) emerged from bankruptcy and commenced paying creditors in full in respect of each such creditor’s allowed claims.  The Company is obliged to pay all allowed administrative claims, priority and unsecured claims.  As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim.  Despite the $8,000 cash received from the Yu-Gi-Oh! Settlement (as defined above) and the $14,997 received on the sale of certain of the Company’s assets under the Asset Purchase Agreement (as defined above) during the bankruptcy proceedings, the Company’s overall cash position as of December 31, 2013, together with the costs and settlement of the related claims in connection with the bankruptcy proceedings, provides only limited liquidity to fund the Company’s day-to-day operations. The Company will consider all alternatives available to generate additional cash to fund its operations, including, but not limited to sales of assets, issuance of equity or debt securities, and other third party arrangements.  There can be no assurance that any of these alternatives will generate additional cash.

The Company will consider all alternatives available to generate additional cash to fund its operations, including, but not limited to sales of assets, issuance of equity or debt securities, and other third party arrangements.  There can be no assurance that any of these alternatives will generate additional cash.

The Company’s business consists of the following two segments:

IsoBLOX™ and Sports Licensing/Distribution - The IsoBLOX™and Sports Licensing/Distribution business segment consists of the following wholly owned subsidiaries of the Company: 4LC Sports & Entertainment, Inc. (“4LC Sports”), formerly known as 4Kids Ad Sales, Inc., and 4LC Technology, Inc. (“4LC Technology”), formerly known as 4Kids Technology, Inc., which in February 2013, acquired, through Pinwrest Development Group, LLC (“Pinwrest”), of which 70% of the membership interests are owned by 4LC Technology, a patent for the IsoBLOX™ technology (the “Patent”) from The Dodd Group, LLC (“TDG”), a Texas limited liability company (see Note 6). The Patent covers a protective shin guard for use in products in the athletic, recreational, police/military, medical and industrial sectors consisting of an elastomeric sleeve within which is deposited protective plastic material consisting of rigid plates joined together by living hinges. The protective plastic material is solid enough to provide protection, flexible enough to better fit the wearer of the shin guard and is lightweight.

In December 2013, Pinwrest filed a provisional patent application (the “Provisional Patent”) with the U.S. Patent Office covering its newly developed body protection systems and devices that can be used to prevent or limit serious injuries from impacts or collisions during an activity.  The products covered by this Provisional Patent provide body protection systems and devices that can be incorporated into articles of clothing, materials or articles such as seats, linings, or walls of vehicles to reduce the effect of impact.  These body protection devices can form part of headgear, gear, or clothing that is designed to cover and protect one or more parts of a person, such as a military or law enforcement individual, or a professional or recreational athlete.

The protective material uses a combination of energy dispersion and absorption to diffuse impact on the wearer of the protective gear. The technology covered by the Patent is hereinafter referred to as “IsoBLOX™” technology.

After further development, Pinwrest intends to license and distribute the IsoBLOX™ technology in protective gear within the youth, teen and adult markets.

The operations of Pinwrest constitute the “IsoBLOX™ and Sports Licensing/Distribution” business segment of the Company. The Company will report its financial operations from this entity under the new “IsoBLOX™ and Sports Licensing/Distribution” business segment in its consolidated financial statements.

Entertainment and Brand Licensing - The Entertainment and Brand Licensing business segment consists of the operations of the following wholly-owned subsidiaries of the Company: 4Kids Entertainment Licensing, Inc. (“4Kids Licensing”) and 4Sight Licensing Solutions, Inc. (“4Sight Licensing”).  4Kids Licensing is engaged in the business of licensing the merchandising rights to popular children’s television series, properties and product concepts (individually, the “Property” or collectively the “Properties”). 4Kids Licensing typically acts as exclusive merchandising agent in connection with the grant to third parties of licenses to manufacture and sell all types of merchandise, including toys, videogames, trading cards, apparel, housewares, footwear, books and other published materials, based on such Properties. 4Sight Licensing is engaged in the business of licensing properties and product concepts to adults, teens and “tweens”.  4Sight Licensing focuses on brand building through licensing.

Discontinued Operations -On August 16, 2012, the Company’s Board of Directors determined to discontinue the operations of its UK Subsidiary, 4Kids International, effective September 30, 2012.  The results of operations for the international segment is reported as a discontinued operation.

On July 2, 2012, the Company completed the sale of certain of its assets pursuant to the Asset Purchase Agreement.  The assets sold by the Debtors to the Konami Bidder included, inter alia, all of Debtors’ right, title and interest in and to the business of Debtors relating to and commercial use of Yu-Gi-Oh!, the Japanese manga (also known as cartoon or comic) created by Kazuki Takahashi and the related brand and franchise, as well as other assets relating to the Konami Purchased Business.  The Company was party to the Konami Agreement, which agreement related to, inter alia, sales of Yu-Gi-Oh! trading cards and videogames.  The Konami Agreement was included as part of the Konami Purchased Assets transferred to the Konami Bidder in connection with the closing of the transactions contemplated by the Asset Purchase Agreement on July 2, 2012.

The assets sold by the Debtors to the Saban Bidder included, inter alia, all of Debtors’ right, title and interest in and to the television business of the Debtors, including The CW Agreement and the television episodes and rights related thereto, as well as other assets relating to the Saban Purchased Business.

Pursuant to the Asset Purchase Agreement and the corresponding assets sold, and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, Inc. (“4Kids Ad Sales”), 4Kids Productions, Inc. (“4Kids Productions”), 4Kids Entertainment Music, Inc. (“4Kids Music”) and 4Kids Entertainment Home Video, Inc. (“4Kids Home Video”).  Additionally, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites.  The results of operations attributable to those segments are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14).

XML

ACCOUNTS RECEIVABLE/DUE TO LICENSORS (Tables)

12 Months Ended

Dec. 31, 2013

ACCOUNTS RECEIVABLE/DUE TO LICENSORS [Abstract]

Summary of accounts receivable

Accounts receivable consisted of the following as of:

	December 31,
	2013			2012
Gross accounts receivable	$	316		$	539
Allowance for doubtful accounts		(7	)		(24	)
		309			515
Less: long-term portion		(1	)		(36	)
	$	308		$	479

XML

DISCONTINUED OPERATIONS (Tables)

12 Months Ended

Dec. 31, 2013

DISCONTINUED OPERATIONS [Abstract]

Summary of results of operations and balance sheet position of the discontinued operations

The following are the summarized results of discontinued operations for the years ended December 31, 2013, 2012, and 2011:

	Years Ended December 31,
	2013		2012			2011
Total net revenues	$	—	$	2,101		$	4,284
Total income (costs and expenses)		1,170		(12,210	)		(19,511	)
Income (loss) from discontinued operations	$	1,170	$	(10,109	)	$	(15,227	)

The major classes of assets and liabilities of the discontinued operations on the balance sheet are as follows:

	December 31, 2013		December 31, 2012
ASSETS
Accounts receivable – net	$	1	$	230
Prepaid and other current assets		—		37
Current assets of discontinued operations	$	1	$	267
Property and equipment - net	$	—	$	1
Non-current assets of discontinued operations	$	—	$	1
LIABILITIES
Accounts payable and accrued expenses	$	618	$	1,859
Current liabilities of discontinued operations	$	618	$	1,859

XML

REVENUES/MAJOR CUSTOMERS (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
REVENUES/MAJOR CUSTOMERS [Abstract]
Licensor participations	$ 1,174	$ 666	$ 2,871
Revenue, Major Customer [Line Items]
Entity-Wide Revenue, Major Customer, Amount	$ 0	$ 2,853	$ 7,088
Percentage of accounts receivable due from major customer/licensee (in hundredths)	37.00%	8.00%
Major Properties [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)	45.00%	85.00%	88.00%
Number of major customer segregated by business segment	3	2	3
Major Customers/Licensees [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)	37.00%	85.00%	64.00%
Number of major customer segregated by business segment	3	2	1
Four Major Customers or Licensees [Member]
Revenue, Major Customer [Line Items]
Percentage of accounts receivable due from major customer/licensee (in hundredths)	63.00%
Three Major Customers or Licensees [Member]
Revenue, Major Customer [Line Items]
Percentage of accounts receivable due from major customer/licensee (in hundredths)		74.00%
Yu-Gi-Oh! [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)		75.00%	64.00%
Teenage Mutant Ninja Turtles [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)			11.00%
American Kennel Club [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)	21.00%		13.00%
Cabbage Patch Kids [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)		10.00%
Dinosaur King [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)	14.00%
Huntik [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)	10.00%
Konami [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)			64.00%
Konami and JAKKS Pacific [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue (revenue in excess of 10 percent of total revenue) (in hundredths)		85.00%

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 356	$ 9,011
Accounts receivable - net	308	479
Inventories	137	0
Prepaid expenses and other current assets	278	1,091
Current assets of discontinued operations	1	267
Total current assets	1,080	10,848
Property and equipment - net	37	82
Accounts receivable - noncurrent, net	1	36
Intangible assets - net	1,979	0
Other assets - net	471	573
Noncurrent assets of discontinued operations	0	1
Total assets	3,568	11,540
Current liabilities:
Due to licensors	327	457
Accounts payable and accrued expenses	1,789	4,840
Current liabilities of discontinued operations	618	1,859
Deferred revenue	7	9
Total current liabilities	2,741	7,165
Deferred rent	23	0
Total liabilities not subject to compromise	2,764	7,165
Liabilities subject to compromise	0	958
Total liabilities	2,764	8,123
Commitments and contingencies (Note 16)
4Licensing Corporation shareholders' equity (deficit)
Preferred stock, $.01 par value - authorized 3,000,000 shares; none issued	0	0
Common stock, $.01 par value - authorized 40,000,000 shares; issued 15,838,879 shares; outstanding 13,714,992 shares, in both 2013 and 2012	158	158
Additional paid-in capital	69,629	69,524
Accumulated other comprehensive income	0	344
Accumulated deficit	(16,748)	(13,519)
Shareholders' equity before treasury stock	53,039	56,507
Less cost of 2,123,887 treasury shares in both 2013 and 2012	(36,488)	(36,488)
Total equity of 4Licensing Corporation shareholders	16,551	20,019
Noncontrolling interests, includes discontinued operations of $(16,203) and $(16,602) in 2013 and 2012, respectively	(15,747)	(16,602)
Total equity	804	3,417
Total liabilities and equity	$ 3,568	$ 11,540

XML

SUMMARIZED QUARTERLY DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2013

SUMMARIZED QUARTERLY DATA (UNAUDITED) [Abstract]

Summary of quarterly results of operations

Following is a summary of the quarterly results of operations for the years ended December 31, 2013 and 2012:

	Fiscal Quarters
2013	First			Second			Third			Fourth
	(In thousands, except per share amounts)
Revenues	$	257		$	236		$	296		$	425
Loss from continuing operations		(1,288	)		(1,275	)		(1,069	)		(699	)
Net income from discontinued operations		279			454			436			1
Net loss attributable to 4Licensing Corporation	$	(935	)	$	(979	)	$	(735	)	$	(580	)
Basic and diluted (loss) earnings per share attributable to
4Licensing Corporation common shareholders
Continuing operations	$	(0.09	)	$	(0.09	)	$	(0.08	)	$	(0.04	)
Discontinued operations		0.02			0.02			0.03			—
Basic and diluted lossper share attributable to 4Licensing Corporation common shareholders	$	(0.07	)	$	(0.07	)	$	(0.05	)	$	(0.04	)

	Fiscal Quarters
2012	First			Second			Third			Fourth
	(In thousands, except per share amounts)
Revenues	$	1,262		$	1,483		$	263		$	317
Income (loss) from continuing operations		7,519			(666	)		13,589			(790	)
Net (loss) income from discontinued operations		(3,496	)		(5,521	)		(1,705	)		614
Net income (loss) attributable to 4Licensing Corporation	$	4,023		$	(6,187	)	$	11,884		$	(176	)
Basic and diluted earnings (loss) per share attributable to
4Licensing Corporation common shareholders
Continuing operations	$	0.55		$	(0.05	)	$	0.99		$	(0.05	)
Discontinued operations		(0.26	)		(0.40	)		(0.12	)		0.04
Basic and diluted income (loss) per share attributable to 4Licensing Corporation common shareholders	$	0.29		$	(0.45	)	$	0.87		$	(0.01	)

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive (Loss) Income [Member]	Less Treasury Stock [Member]	Total Equity of 4Licensing Corporation Shareholders [Member]	Non-controlling Interests [Member]	Total
BALANCE at Dec. 31, 2010	$ 157	$ 68,699	$ (7,863)	$ 470	$ (36,488)	$ 24,975	$ (14,717)	$ 10,258
BALANCE (in shares) at Dec. 31, 2010	15,653,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock	1	737	0	0	0	738	0	738
Issuance of common stock (in shares)	125,000							0
Comprehensive net (loss) income	0	0	(15,200)	31	0	(15,169)	(1,884)	(17,053)
BALANCE at Dec. 31, 2011	158	69,436	(23,063)	501	(36,488)	10,544	(16,601)	(6,057)
BALANCE (in shares) at Dec. 31, 2011	15,778,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock	0	88	0	0	0	88	0	88
Issuance of common stock (in shares)	61,000							0
Comprehensive net (loss) income	0	0	9,544	(157)	0	9,387	(1)	9,386
BALANCE at Dec. 31, 2012	158	69,524	(13,519)	344	(36,488)	20,019	(16,602)	3,417
BALANCE (in shares) at Dec. 31, 2012	15,839,000							15,838,879
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock (in shares)								0
Capital contribution from noncontrolling interest	0	0	0	0	0	0	787	787
Stock-based compensation expense	0	105	0	0	0	105	0	105
Comprehensive net (loss) income	0	0	(3,229)	(344)	0	(3,573)	68	(3,505)
BALANCE at Dec. 31, 2013	$ 158	$ 69,629	$ (16,748)	$ 0	$ (36,488)	$ 16,551	$ (15,747)	$ 804
BALANCE (in shares) at Dec. 31, 2013	15,839,000							15,838,879

XML

DISCONTINUED OPERATIONS (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summarized results of discontinued operations [Abstract]
Total net revenues	$ 0	$ 2,101	$ 4,284
Total income (costs and expenses)	1,170	(12,210)	(19,511)
Income (loss) from discontinued operations	1,170	(10,109)	(15,227)
ASSETS [Abstract]
Accounts receivable - net	1	230
Prepaid and other current assets	0	37
Current assets of discontinued operations	1	267
Property and equipment - net	0	1
Noncurrent assets of discontinued operations	0	1
LIABILITIES [Abstract]
Accounts payable and accrued expenses	618	1,859
Current liabilities of discontinued operations	$ 618	$ 1,859

XML

REVENUES/MAJOR CUSTOMERS (Tables)

12 Months Ended

Dec. 31, 2013

REVENUES/MAJOR CUSTOMERS [Abstract]

Percentages of revenue from major Properties and customers/licensees

Net revenues included in the accompanying consolidated statements of operations are net of licensor participations of $1,174, $666 and $2,871 during fiscal years 2013, 2012, and 2011, respectively. The percentages of revenue from major Properties and customers/licensees are as follows:

	December 31,
	2013			2012			2011
Percentage of revenue derived from major Properties (revenue in excess of 10 percent of total revenue)		45	%		85	%		88	%
Number of major Properties		3			2			3
Percentage of revenue derived from major customers/licensees  (revenue in excess of 10 percent of total revenue)		37	%		85	%		64	%
Number of major customers/licensees		3			2			1

XML

SUBSEQUENT EVENTS (Details) (USD $) In Thousands, except Share data, unless otherwise specified			0 Months Ended	3 Months Ended			3 Months Ended				3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Jan. 22, 2014 Subsequent Event [Member]	Mar. 25, 2014 Subsequent Event [Member]	Mar. 25, 2014 Subsequent Event [Member] Purchasers [Member] Maximum [Member]	Mar. 25, 2014 Subsequent Event [Member] Purchasers [Member] Warrant [Member] Maximum [Member]	Mar. 25, 2014 Subsequent Event [Member] Prescott Group [Member]	Mar. 25, 2014 Subsequent Event [Member] Cleveland Capital Management [Member]	Mar. 25, 2014 Subsequent Event [Member] Cleveland Capital Management [Member] Director - Wade Massad [Member]	Mar. 25, 2014 Subsequent Event [Member] Cleveland Capital Management [Member] Director - Duminda DeSilva [Member]	Mar. 25, 2014 Subsequent Event [Member] Cleveland Capital Management [Member] Warrant [Member]
Subsequent Event [Line Items]
Subsequent event, date			Jan. 22, 2014
Proceeds from sale of copyright and trademark			$ 225
Securities Purchase Agreement [Abstract]
Debt issuance, promissory note, principal					1,650
Warrant issuance, to purchase shares (in shares)						1,683,673
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01				$ 0.01
Aggregate purchase price amount					1,650
Closed offering [Abstract]
Debt instrument, principal							150	150
Warrant issuance, to purchase shares (in shares)							153,061				153,061
Proceeds from debt issuance							$ 150	$ 150
Debt Instrument [Abstract]
Debt Instrument, interest rate (in hundredths)				5.00%
Debt Instrument, maturity date				Mar. 25, 2013
Exercise price of warrants (per share)				$ 0.98
Term of warrants				10 years
Beneficial ownership of common shares in excess of (in hundredths)									5.00%	17.00%

XML

DEFINED CONTRIBUTION PLAN

12 Months Ended

Dec. 31, 2013

DEFINED CONTRIBUTION PLAN [Abstract]

DEFINED CONTRIBUTION PLAN

15. DEFINED CONTRIBUTION PLAN

The Company sponsors a 401(k) plan covering substantially all employees. Company contributions vest based on number of years of service. The Company’s policy is to match 25% of the first 6% of the covered employee’s annual salary, as defined by the plan. Contributions to the plan by the Company amounted to $27, $24 and $46 for the years ended December 31, 2013, 2012 and 2011, respectively.

XML

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

Domestic and foreign components of pre-tax loss (including discontinued operations)

The domestic and foreign components of pre-tax (loss) income, including discontinued operations, are as follows:

	Years Ended December 31,
	2013			2012			2011
Domestic	$	(3,161	)	$	11,425		$	(15,790	)
Foreign		—			(1,882	)		(1,294	)
Pre-tax (loss) income	$	(3,161	)	$	9,543		$	(17,084	)

Schedule of effective income tax rate reconciliation

				Years Ended December 31,
	2013			% of Pretax			2012			% of Pretax			2011			% of Pretax
Tax at Federal statutory rate	$	(1,106	)		(35.0	)%	$	3,340			35.0	%	$	(5,979	)		(35.0	)%
Increase (decrease) in: Valuation allowances		1,281			40.5			3,179			33.3			6,353			37.2
Capital loss carryforward		—			—			(7,086	)		(74.2	)		—			—
Permanent differences		8			0.3			11			0.1			16			0.1
State and local taxes - net		(183	)		(5.8	)		556			5.8			(390	)		(2.3	)
Income tax (benefit) provision	$	—			—	%	$	—			—	%	$	—			—	%

Components of the net deferred tax assets (liabilities)

The components of the net deferred tax assets (liabilities) are as follows:

	December 31,
	2013			2012
Deferred Tax Assets:
Accounts receivable allowances	$	91		$	87
Net operating loss carryforwards		44,926			48,046
Capital loss carryforwards		—			2,428
Restricted stock/Stock options		42			—
Contributions		102			102
Deferred rent		17			—
Property and equipment		59			48
Gross deferred tax assets	$	45,237		$	50,711
Valuation allowance	$	(45,237	)	$	(50,711	)
Net deferred tax asset	$	—		$	—

Reconciliation of activity for deferred tax asset valuation allowance

A reconciliation of activity for the Company’s deferred tax asset valuation allowance is provided as follows:

	Years Ended December 31,
	2013			2012			2011
Beginning balance	$	50,711		$	57,282		$	51,046
(Reductions) additions to provision		(5,474	)		(6,571	)		6,236
Ending balance	$	45,237		$	50,711		$	57,282

Expiration terms and amounts of loss and credit carryforwards reflected in the gross deferred tax assets

The expiration terms and amounts for which an allowance has been provided with respect to the loss and credit carryforwards reflected in the gross deferred tax assets above are comprised as follows:

Loss Carryforwards	Expiration	Gross Amount
Federal	2032	$	114,623
State and local	2016-2032		79,902

XML

NONCONTROLLING INTEREST

12 Months Ended

Dec. 31, 2013

NONCONTROLLING INTEREST [Abstract]

NONCONTROLLING INTEREST

17. NONCONTROLLING INTEREST

On January 17, 2013, 4LC Technology and certain other investors entered into an operating agreement of Pinwrest, with 4LC Technology owning 70% of Pinwrest’s membership interests and the minority members owning 30% of Pinwrest’s membership interests.  Pinwrest is treated as a consolidated subsidiary of the Company as a result of its majority ownership.

Noncontrolling interest of membership units in Pinwrest represents the minority members’ proportionate share of the equity in the entity. Income is allocated to the membership units’ minority interest based on the ownership percentage throughout the year.  The following table summarizes the noncontrolling interest’s loss attributable to the noncontrolling equity interest in Pinwrest:

	Year Ended
	December 31, 2013
Pinwrest net loss before common units’ noncontrolling interest	$	(1,105	)
Noncontrolling interest percentage		30	%
Loss attributable to noncontrolling interest	$	(331	)

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net (loss) income	$ (3,161)	$ 9,543	$ (17,084)
(Income) loss from discontinued operations	(1,170)	10,109	15,227
(Loss) income from continuing operations	(4,331)	19,652	(1,857)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	195	126	222
Gain on settlement of pre-petition liabilities	(26)	(1,331)	0
Gain on sale of certain assets	0	(17,714)	0
Loss on disposal of property and equipment	0	164	0
Provision (recovery) for doubtful accounts	6	7	(93)
Share-based compensation	105	21	32
Loss on sale of investment securities	0	0	910
Changes in operating assets and liabilities:
Inventories	(137)	0	0
Accounts receivable	200	1,742	(296)
Income taxes receivable	0	0	26
Prepaid expenses and other current assets	(187)	851	(150)
Other assets - net	99	(84)	7
Due to licensors	(130)	(546)	(704)
Accounts payable and accrued expenses	(3,051)	1,302	2,082
Liabilities subject to compromise	(932)	(5,218)	7,507
Deferred revenue	(2)	(2)	(1,035)
Deferred rent	23	0	0
Net cash (used in) provided by continuing operating activities	(8,168)	(1,030)	6,651
Net cash used in discontinued operating activities	(148)	(5,602)	(15,485)
Net cash used in operating activities	(8,316)	(6,632)	(8,834)
Cash flows from investing activities:
Proceeds from sale of investments	0	0	6,216
Proceeds from sale of certain assets	1,000	13,997	0
Acquisition of assets	(2,100)	0	0
Purchase of property and equipment	(26)	0	(2)
Proceeds from disposal of property and equipment	0	0	25
Net cash (used in) provided by investing activities	(1,126)	13,997	6,239
Cash flows from financing activities:
Capital contribution from noncontrolling interests	787	0	0
Net cash provided by financing activities	787	0	0
Effects of exchange rate changes on cash and cash equivalents	0	19	27
Net (decrease) increase in cash and cash equivalents	(8,655)	7,384	(2,568)
Cash and cash equivalents, beginning of period	9,011	1,627	4,195
Cash and cash equivalents, end of period	356	9,011	1,627
Supplemental schedule of non-cash investing and financing activities
Vesting of restricted shares	0	88	738
In conjunction with the sale of certain of the Company's assets pursuant to the Asset Purchase Agreement
Other assets - continuing, acquired by buyers	0	1,596	0
Film costs, accounts receivable, other assets - discontinued, acquired by buyers	0	2,329	0
Accounts payable and accrued expenses-discontinued, assumed by buyers	$ 0	$ 6,642	$ 0

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
4Licensing Corporation shareholders' equity (deficit)
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	15,838,879	15,838,879
Common stock, shares outstanding (in shares)	13,714,992	13,714,992
Treasury shares (in shares)	2,123,887	2,123,887
Discontinued operations included in non-controlling interests	$ (16,203)	$ (16,202)

XML

EARNING (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2013

EARNING (LOSS) PER SHARE [Abstract]

EARNINGS (LOSS) PER SHARE

10. EARNINGS (LOSS) PER SHARE

The Company computes basic EPS based solely on the weighted average number of common shares outstanding during the period. Diluted EPS reflects all potential dilution of common stock.  For the year ended December 31, 2013, 905 shares attributable to outstanding options were excluded from the calculation of diluted EPS because the effect was antidilutive.  No shares were excluded from the calculation for the years ended December 31, 2012 and 2011.

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 31, 2014	Jun. 28, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	4Licensing Corp
Entity Central Index Key	0000058592
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 3,640,089
Entity Common Stock, Shares Outstanding		13,714,992
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013

XML

LIABILITIES SUBJECT TO COMPROMISE

12 Months Ended

Dec. 31, 2013

LIABILITIES SUBJECT TO COMPROMISE [Abstract]

LIABILITIES SUBJECT TO COMPROMISE

11. LIABILITIES SUBJECT TO COMPROMISE

Liabilities subject to compromise refers to unsecured obligations that will be accounted for under any bankruptcy plan. Generally, actions to enforce or otherwise effect payment of liabilities arising prior to the commencement of the Bankruptcy Cases (“Pre-Petition Liabilities”) are stayed.  Pre-Petition liabilities that are subject to compromise are reported at the amounts expected to be allowed, even if they may be settled for lesser amounts.  These liabilities represent the estimated amount expected to be allowed on known or potential claims to be resolved through the Bankruptcy Cases, and remain subject to future adjustments arising from negotiated settlements, actions of the Bankruptcy Court, rejection of executory contracts and unexpired leases, the determination as to the value of collateral securing the claims, proofs of claim, or other events.  Liabilities subject to compromise also include certain items that may be assumed under a plan of reorganization, and as such, may be subsequently reclassified to liabilities not subject to compromise.  Unless otherwise provided for in the Bankruptcy Code or any “claims bar date order” entered in the Bankruptcy Cases, holders of pre-petition claims are required to file proofs of claims by the “bar date”, which will be established with approval of the Bankruptcy Court.

The Bankruptcy Court established a claims barred date of April 18, 2012 by which certain claims against the Debtors had to be filed if the claimants wish to receive any distribution in this Bankruptcy Case.  When the bar date was established, the creditors were notified of the bar date and the requirement to file a proof of claim with the Bankruptcy Court.  Differences between liability amounts estimated by the Debtors and claims filed by creditors are being investigated and, if necessary, the Bankruptcy Court will make a final determination of the amount of any allowable claim.  On December 13, 2012 the Bankruptcy Court approved the bankruptcy plan whereby all valid creditor claims would be fully paid by the Debtors.  The Company has reconciled and paid all of the liabilities that were subject to compromise, and for the years ended December 31, 2013 and 2012 the Company realized a gain on liabilities subject to compromise of $26 and $1,331, respectively, which is reflected in the Company’s consolidated statement of operations.

Liabilities subject to compromise consisted of the following:

	December 31, 2013		December 31, 2012
Due to licensors	$	—	$	337
Accounts payable and accrued expenses		—		621
Total	$	—	$	958

Liabilities subject to compromise included trade accounts payable related to pre-petition purchases, all of which were paid as of December 31, 2013.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Net revenues:
Service revenue	$ 1,087	$ 3,325	$ 7,191
Product revenue	127	0	0
Other revenue	0	0	882
Total net revenues	1,214	3,325	8,073
Costs and expenses:
Selling, general and administrative	5,364	6,639	7,944
Cost of product sales	53
Total costs and expenses	5,417	6,639	7,944
(Loss) income from operations	(4,203)	(3,314)	129
Other income (expense):
Interest (expense) income	(3)	(8)	63
Loss on sale of investment securities	0	0	(910)
Total other expense	(3)	(8)	(847)
Loss from continuing operations before reorganization and litigation items	(4,206)	(3,322)	(718)
Reorganization items	(151)	(4,071)	(1,628)
Gain on settlement of pre-petition liabilities	26	1,331	0
Gain on litigation	0	8,000	489
Gain on sale	0	17,714	0
(Loss) income from continuing operations before income taxes	(4,331)	19,652	(1,857)
Benefit from (provision for) income taxes	0	0	0
(Loss) income from continuing operations	(4,331)	19,652	(1,857)
Income (loss) from discontinued operations	1,170	(10,109)	(15,227)
Net (loss) income	(3,161)	9,543	(17,084)
Loss (income) attributable to noncontrolling interests, continuing operations	331	0	0
(Income) loss attributable to noncontrolling interests, discontinued operations	(399)	1	1,884
Net (loss) income attributable to 4Licensing Corporation	(3,229)	9,544	(15,200)
Basic and diluted (loss) income per share attributable to 4Licensing Corporation common shareholders
Continuing operations (in dollars per share)	$ (0.29)	$ 1.44	$ (0.14)
Discontinued operations (in dollars per share)	$ 0.06	$ (0.74)	$ (0.98)
Basic and diluted income (loss) per share attributable to 4Licensing Corporation common shareholders (in dollars per share)	$ (0.23)	$ 0.70	$ (1.12)
Weighted average common shares outstanding - basic and diluted (in shares)	13,714,992	13,690,998	13,605,148
Net income (loss) attributable to 4Licensing Corporation:
(Loss) income from continuing operations	(4,331)	19,652	(1,857)
Loss attributable to noncontrolling interests, continuing operations	331	0	0
Net (loss) income from continuing operations	(4,000)	19,652	(1,857)
Income (loss) from discontinued operations	1,170	(10,109)	(15,227)
(Income) loss attributable to noncontrolling interests, discontinued operations	(399)	1	1,884
Net income (loss) from discontinued operations	771	(10,108)	(13,343)
Net (loss) income attributable to 4Licensing Corporation	$ (3,229)	$ 9,544	$ (15,200)

XML

PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2013

PROPERTY AND EQUIPMENT [Abstract]

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of:

	December 31,
	2013			2012
Computer equipment and software	$	1,386		$	1,366
Website development		87			87
Office furniture and fixtures		247			297
		1,720			1,750
Less: accumulated depreciation and amortization		(1,683	)		(1,668	)
	$	37		$	82

XML

ACCOUNTS RECEIVABLE/DUE TO LICENSORS

12 Months Ended

Dec. 31, 2013

ACCOUNTS RECEIVABLE/DUE TO LICENSORS [Abstract]

ACCOUNTS RECEIVABLE/DUE TO LICENSORS

4. ACCOUNTS RECEIVABLE/DUE TO LICENSORS

Generally, licensing contracts provide for the Company to collect royalties from the licensees on behalf of the licensors.  The Company records as accounts receivable only its proportionate share of such earned royalties.

Due to licensors represents amounts collected by the Company on behalf of licensors, which are generally payable to such licensors after the close of each calendar quarter.

Accounts receivable consisted of the following as of:

	December 31,
	2013			2012
Gross accounts receivable	$	316		$	539
Allowance for doubtful accounts		(7	)		(24	)
		309			515
Less: long-term portion		(1	)		(36	)
	$	308		$	479

XML

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

16. COMMITMENTS AND CONTINGENCIES

Commitments

a. Bonus Plan - Key officers and employees are eligible for bonuses in an amount, if any, to be determined in the sole discretion of the Compensation Committee of the Board of Directors in consultation with the management of the Company.  No bonuses were awarded in 2013, 2012, and 2011.

b. Claim Payment – On December 21, 2012, a key officer received a payment of $350 in accordance with the Plan for a claim granted by the Company in satisfaction of all claims  and obligations under his prior  severance agreement.

c. Leases - On January 2, 2013, the Company entered into a sublease agreement for certain office and administrative space expiring October 31, 2015.  Commitments for minimum rentals, not including common charges, under this non-cancelable lease at the end of 2013 are as follows:

Year Ending December 31,	Amount
2014	$	271
2015		211
2016 and after		—
Total	$	482

Rent expense for all operating leases charged against earnings amounted to $242, $336 and $459 during fiscal years 2013, 2012, and 2011, respectively.

d. Employment Contracts - As of December 31, 2013, one executive officer had agreed to enter into an employment agreement with the Company. The agreement was formally executed on March 21, 2013, with an effective date of December 21, 2012.  The agreement generally continues until terminated by the employee or the Company, and provides for severance payments under certain circumstances.  The agreement includes a covenant against competition with the Company which extends for a period of time after termination for any reason. As of December 31, 2013, if the employee under contract were terminated by the Company without good cause, under these contracts, the Company’s liability would be approximately $150.

e. Contractual Arrangements - During the normal course of business, the Company may enter into various agreements with third parties to license, acquire, distribute, broadcast, develop and/or promote Properties. The terms of these agreements will vary based on the services and/or Properties included within the agreements, as each of these agreements also have specific provisions relating to rights granted, territory and contractual term.

Contingencies

TCD International, Ltd. - On February 12, 2010, Home Focus Development, Ltd., a British Virgin Islands Corporation, (“Home Focus”) filed suit against the Company in the United States District Court for the Southern District of New York. Home Focus alleged that the Company owed Home Focus $1,075 under an Interest Purchase Agreement among the Company, Home Focus and TC Digital entered into on March 2, 2009, pursuant to which the Company acquired a 25% ownership interest in TCD International, Ltd. (“TDI”).

On April 26, 2010, the Company filed an answer and asserted various counterclaims against Home Focus and its owners, in their individual capacities. In its counterclaims, the Company has alleged that Home Focus failed to make its contractually required initial capital contribution of $250 to TDI necessary to acquire the 25% ownership interest in TDI it purported to sell to the Company and also failed to contribute its 50% share of the expenses. The Company has further asserted counterclaims of fraud and misrepresentation.

The parties have not proceeded with the litigation in light of the filing of the Bankruptcy Cases on April 6, 2011, which had the effect of automatically staying such litigation. The parties have had substantive discussions and have exchanged draft agreements regarding the possible resolution of the claims and counterclaims. There can be no assurance that the parties will conclude their settlement discussions satisfactorily. The Home Focus claim is currently a disputed claim in the Bankruptcy Cases. If the Home Focus claim is not settled, it may need to be litigated by the Company either in the Bankruptcy Court or in the United States District Court for the Southern District of New York should the Bankruptcy Court cede jurisdiction of this dispute.

Lehman Brothers, Inc. Claim - The Company believes that Lehman Brothers, Inc., the securities broker-dealer that purchased the auction rate securities on behalf of the Company violated its legal obligations to the Company.  As a result, the Company took various measures to obtain appropriate legal relief, including initiating an arbitration on April 3, 2008 against Lehman Brothers, Inc. and the brokers who had serviced the Company’s Lehman account with the Financial Industry Regulatory Authority.  On September 15, 2008, Lehman Brothers Holdings, Inc., the parent company of Lehman Brothers, Inc., filed for bankruptcy.  The Company’s arbitration proceeding was stayed by the Lehman bankruptcy.  On September 16, 2008, Barclays PLC announced that it had reached an agreement to purchase the assets of Lehman Brothers Holdings, Inc.’s North American operations, including substantial assets of Lehman Brothers, Inc.  The Lehman-Barclays transaction was approved by the United States Bankruptcy Court for the Southern District of New York on September 20, 2008.  On September 19, 2008, the Securities Investor Protection Corporation (“SIPC”) filed a proceeding, placing Lehman Brothers, Inc. in liquidation under the Securities Investor Protection Act (“SIPA”).  SIPC, pursuant to its authority under SIPA, has acted to facilitate the transfer of Lehman Brothers, Inc.’s customer accounts (including the Company’s accounts) to Barclays, PLC.  In late September, 2009, the Company filed a proof of claim against Lehman Brothers, Inc. in the United States Bankruptcy Court for the Southern District of New York. The principal amount of the claim was approximately $31,500 plus interest. In addition, the proof of claim requested treble damages. The proof of claim is a general unsecured claim. The Company’s claim against Lehman Brothers, Inc. is still pending and there has been no determination made as to the validity or allowed amount of the claim.  On October 18, 2011, the Company entered into a settlement agreement and general release with the brokers who had serviced the Company’s account with Lehman Brothers, Inc. in exchange for a payment to the Company of approximately $489. The Trustee in the Lehman Brothers, Inc. bankruptcy proceeding is expected to begin the claims resolution process with respect to the unsecured claims at some point in 2014.

Cornerstone Patent Technologies, LLC– On April 25, 2011, Cornerstone Patent Technologies, LLC (“Cornerstone”) filed proof of claim No. 20 (the “Cornerstone Claim”) in the Bankruptcy Court against the Debtors in the Bankruptcy Cases in the amount of $3,300.  Other than filing the Cornerstone Claim, Cornerstone has not commenced litigation against the Debtors.  The Cornerstone Claim alleges (i) breach of a Patent License Agreement dated September 10, 2007 by non-Debtors TC Digital and TC Websites; (ii) breach of Patent Purchase Agreement dated by September 7, 2007, by 4Kids Technology for failing to notify Cornerstone of alleged wrongdoing by TC Digital and TC Websites; (iii) unfair competition; (iv) tortious interference with contract; (v) unjust enrichment; and (vi) piercing the corporate veil.  The Company disputes the Cornerstone Claim in its entirety.  On November 12, 2012, the Company filed a motion with the Bankruptcy Court to estimate the Cornerstone Claim at $0 or in the alternative disallow the claim.  On December 5, 2012, the Bankruptcy Court entered an agreed order between the Company and Cornerstone providing that on the effective date of the Plan, the Debtors would establish a disputed claims reserve on account of the Cornerstone Claim in the amount of $228, without prejudice to (i) Cornerstone’s rights to pursue an allowed claim or judgment against the Debtors in an amount greater than the reserve, with such allowed claim or judgment to be paid pursuant to the Plan and (ii) the Debtors’ rights to defend, contest or otherwise oppose on any grounds, the Cornerstone Claim or any other claims or litigation asserted by or on behalf of Cornerstone or any other party.  On August 29, 2013, the Bankruptcy Court entered an order disallowing and expunging the Cornerstone Claim.  As a result, a gain of $443 from the reversal of a liability was recognized during the year ended December 31, 2013 in the income from discontinued operations.

The Bankruptcy Cases – The Bankruptcy Cases were initially filed by the Debtors with the Bankruptcy Court on April 6, 2011.  On October 5, 2012, the Company filed the Plan and Disclosure Statement.    On October 29, 2012, the Debtors filed an amended version of the Plan and Disclosure Statement.  On October 31, 2012, the Bankruptcy Court entered a solicitation procedures order permitting the Debtors to send the Plan and Disclosure Statement to the parties entitled to vote on the Plan.  On December 13, 2012, the Bankruptcy Court held a confirmation hearing with respect to the Plan. After a hearing and consideration by the Bankruptcy Court of the provisions of the Plan, including consideration of support for the Plan by a vote of approximately 99.93% of shareholders who voted their shares, and there being only one objector to the Plan, the Bankruptcy Court issued an order confirming the Plan.  The Plan became effective on December 21, 2012.

On the effective date of the Plan, the Company commenced paying creditors holding undisputed, allowed claims the full amount of such allowed claims. The Company and its counsel have also negotiated various settlement agreements with creditors holding disputed claims. As of December 31, 2013, the Company has paid all allowed claims and filed an objection to the remaining disputed claim, which if not satisfactorily resolved, may need to be litigated in the Bankruptcy Court or in other courts or administrative bodies. The cost and expense to litigate the disputed claim as well as any damages which may be awarded to the holder of such disputed claim may have a material adverse effect on the Company’s financial position or the results of its operations or cash flows.

XML

SEVERANCE AND EXIT COSTS

12 Months Ended

Dec. 31, 2013

SEVERANCE AND EXIT COSTS [Abstract]

SEVERANCE AND EXIT COSTS

12.  SEVERANCE AND EXIT COSTS

In connection with the discontinued operations, the Company recorded income in the amount of approximately $(421) during the year ended December 31, 2013, mostly from the settlement of certain exit costs.

A summary of the actions taken for severance and other exit costs have been recorded in loss from discontinued operations and the estimated remaining liability associated with such costs are as follows:

	Total Expenses (Income)			Remaining Liability as of December 31, 2013
Severance and related costs	$	(3	)	$	—
Other professional fees		18			—
Termination of contracts and leases		(436	)		42
Total	$	(421	)	$	42

The remaining liability for exit costs, which are included in current liabilities of discontinued operations, will be paid in accordance with the provisions of the contractual agreements and payments are expected to be completed at various times through 2014.

XML

REVENUES/MAJOR CUSTOMERS

12 Months Ended

Dec. 31, 2013

REVENUES/MAJOR CUSTOMERS [Abstract]

REVENUES/MAJOR CUSTOMERS

8. REVENUES/MAJOR CUSTOMERS

Net revenues included in the accompanying consolidated statements of operations are net of licensor participations of $1,174, $666 and $2,871 during fiscal years 2013, 2012, and 2011, respectively. The percentages of revenue from major Properties and customers/licensees are as follows:

	December 31,
	2013			2012			2011
Percentage of revenue derived from major Properties (revenue in excess of 10 percent of total revenue)		45	%		85	%		88	%
Number of major Properties		3			2			3
Percentage of revenue derived from major customers/licensees  (revenue in excess of 10 percent of total revenue)		37	%		85	%		64	%
Number of major customers/licensees		3			2			1

Three Properties, “American Kennel Club”, “Dinosaur King” and “Huntik”, represented more than 10% of consolidated net revenue for fiscal 2013; “American Kennel Club”, “Dinosaur King” and  “Huntik” represented 21%, 14% and 10%, respectively, for a total of 45% of consolidated net revenues for fiscal 2013.  One Property, “Yu-Gi-Oh!”, which was sold pursuant to the terms of the Asset Purchase Agreement, represented 75% and 64% of consolidated net revenues for fiscal 2012 and 2011, respectively.  Two Properties, “Yu-Gi-Oh!” and “Cabbage Patch Kids”  represented 75% and 10% respectively, for a total of 85% of consolidated net revenues for fiscal 2012, or $2,853.  Three Properties, “Yu-Gi-Oh!”, “American Kennel Club”, and “Teenage Mutant Ninja Turtles” represented 64%, 13%, and 11% respectively, for a total of 88%, of consolidated net revenues for fiscal 2011, or $7,088.  Three licensees represented 37% of consolidated net revenues for fiscal 2013.  Two licensees, Konami and JAKKS Pacific, represented 85% of consolidated net revenues for fiscal 2012.  One licensee, Konami, represented 64% of consolidated net revenues for fiscal 2011.  As of December 31, 2013 and 2012, accounts receivable due from four major customer/licensees represented 63% and three major customers/licensees represented 74%, respectively, of the Company’s gross accounts receivable for each such year.

XML

DEFINED CONTRIBUTION PLAN (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
DEFINED CONTRIBUTION PLAN [Abstract]
Employers matching contribution (in hundredths)	25.00%
Defined contribution plan, covered employee's annual salary (in hundredths)	6.00%
Contributions to the plan	$ 27	$ 24	$ 46

XML

INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2013

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

6. INTANGIBLE ASSETS

Intangible assets consist of a patent for the IsoBLOX™ technology, which was acquired in February 2013 for a purchase price of $2,100.  The intangible asset is being amortized over a fifteen year period on a straight line basis.  For the year ended December 31, 2013, $121 of amortization expense has been recorded and the net carrying value of the intangible assets was $1,979.

XML

STOCK-BASED EMPLOYEE COMPENSATION

12 Months Ended

Dec. 31, 2013

STOCK-BASED EMPLOYEE COMPENSATION [Abstract]

STOCK-BASED EMPLOYEE COMPENSATION

7. STOCK-BASED EMPLOYEE COMPENSATION

Effective December 21, 2012, in conjunction with the Company’s plan of reorganization and emergence from its bankruptcy proceeding all existing restricted stock and option plans were terminated.

On February 27, 2013, the Board of Directors authorized the Company’s 2013 Equity Incentive Plan (the “Incentive Plan”), which provides for the grant of non-statutory stock options and restricted shares to eligible employees and directors of the Company.  The Incentive Plan authorizes the Company to issue up to 2,600,000 shares of Company’s common stock.  The Company issues new shares upon the exercise of stock options.  Options granted under the Plan generally expire no later than 10 years from the date of grant.  The exercise price of any option granted to a 10% stockholder may be no less than 110% of the fair value of the Company’s common stock on the date of grant. As of December 31, 2013, 1,695,000 shares of the Company were available for issuance under the Incentive Plan.

Stock Options

The Company granted stock options to purchase approximately 850,000 shares of its common stock on February 27, 2013 under the Incentive Plan.   The stock options were granted to an executive officer and members of the Board of Directors, at an exercise price of $0.26 per share (determined by the Board of Directors based upon the range of bid prices for the Company’s common stock on the grant date), and a grant date fair value of $151.  These options become fully exercisable over a two year period (1/3 exercisable on the grant date, 1/3 exercisable 1 year after the grant date and the remaining 1/3 exercisable 2 years after the grant date, respectively) and expire on February 27, 2023.

The Company granted stock options to purchase approximately 69,000 shares of its common stock on August 29, 2013 under the Incentive Plan.  These stock options were granted to certain employees, at an exercise price of $0.54 per share and a grant date fair value of $26.  These stock options become fully exercisable over a two year period (1/3 exercisable on the grant date, 1/3 exercisable 1 year after the grant date and the remaining 1/3 exercisable 2 years after the grant date, respectively) and expire on August 29, 2023.

The fair values of options granted were estimated on the date of grant using the Black-Scholes Merton option pricing model based on the assumptions included in the table below. The fair value of the Company’s stock option awards is charged to expense over the vesting life of the underlying stock options using the straight line method. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate for periods within the contractual life of the stock option award is based on the yield of U.S. Treasury bonds on the grant date with a maturity equal to the expected term of the stock option. The expected life of stock option awards granted to employees and non-employee directors is based upon the “simplified” method for “plain vanilla” options described in SEC Staff Accounting Bulletin No. 107, as amended by SEC Staff Accounting Bulletin No. 110. Forfeiture rates are based on management’s estimates.

	Year ended December 31, 2013
Expected volatility		84%
Expected dividend yield		0.00%
Weighted average risk-free interest rate		1.05%
Expected life	5.50 years
Forfeiture rate		0%

The following table summarizes activity under the Company’s stock option plans for the years ended December 31, 2013, 2012, and 2011:

	Shares (In thousands)			Weighted Average Exercise Price			Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2011		290		$	14.29
Granted		—			—
Exercised		—			—
Forfeited, cancelled or expired		(290	)		14.29
Outstanding at December 31, 2011		—		$	—
Granted		—			—
Exercised		—			—
Forfeited, cancelled or expired		—			—
Outstanding at December 31, 2012		—		$	—
Granted		919			0.28
Exercised		—			—
Forfeited, cancelled or expired		(14	)		(0.54	)
Outstanding at December 31, 2013		905		$	0.28			9.1		$	374
Exercisable at December 31, 2013		306		$	0.28			9.1		$	124

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of our common stock on the date of determination for those awards that have an exercise price currently below the closing price.

Total stock-based compensation recorded for the year ended December 31, 2013 was $105 and is included in selling, general and administrative expenses.  There was no stock-based compensation expense related to stock options recorded during the years ended December 31, 2012 and 2011.  As of December 31, 2013, the Company has approximately $68 of unrecognized stock compensation expense which will be recognized over a period of approximately 1.23 years.

Restricted Stock Awards

The Company granted restricted stock awards of approximately 378,000 shares on May 22, 2009 under its 2008 long-term incentive compensation plan (“LTICP”), 311,000 shares on May 23, 2008 under its 2007 LTICP, 162,000 shares on May 25, 2007 under its 2006 LTICP and 145,000 and 4,000 shares on May 23, 2006 and June 15, 2006, respectively, under its 2005 LTICP. The restricted stock awards were granted to certain employees, including officers and members of the Board of Directors, at grant prices of $1.46, $7.85, $16.79, $16.52 and $15.78 (in each case, the average of the high and low stock price from the previous day of trading) for the May 22, 2009, May 23, 2008, May 25, 2007, May 23, 2006 and the June 15, 2006 grants, respectively.  The restricted stock awards vest annually over a period of three years from the date of grant for the awards made under the 2008 and 2007 LTICPs and over a period of four years for the awards made under the 2006 and 2005 LTICPs, with accelerated vesting upon a change of control of the Company (as defined in the applicable plan).  During the restriction period, award holders do not have the rights of stockholders and cannot transfer ownership. Additionally, nonvested shares of award holders are subject to forfeiture.  These awards are forfeited and revert to the Company in the event of employment termination, except in the case of death, disability, retirement or other specified events.

The following table summarizes restricted stock activity under the Company’s long-term incentive compensation plans for the years ended December 31, 2013, 2012, and 2011:

	Number of Shares (in thousands)			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2011		252		$	4.60
Granted		—			—
Vested		(125	)		5.90
Forfeited		(66	)		5.03
Outstanding at December 31, 2011		61		$	1.46
Granted		—			—
Vested		(61	)		1.46
Forfeited		—			—
Outstanding at December 31, 2012 and 2013		—		$	—

The Company recognized approximately $0, $21, and $32 of compensation costs related to the LTICPs during the years ended December 31, 2013, 2012, and 2011, respectively.  Additionally, as of December 31, 2013, there was no unrecognized compensation cost related to restricted stock awards granted under the Company’s 2008, 2007, and 2006 LTICPs, respectively.

XML

INCOME TAXES

12 Months Ended

Dec. 31, 2013

INCOME TAXES [Abstract]

INCOME TAXES

9. INCOME TAXES

Income tax expense (benefit) is determined using the asset and liability method. Deferred income taxes are recognized at currently enacted tax rates for the expected future tax consequences attributable to temporary differences between amounts reported for income tax purposes and financial reporting purposes. Deferred taxes are provided for the undistributed earnings as if they were to be distributed. The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company has not recorded any liability for unrecognized tax benefits.

The Company is no longer subject to examinations by income tax authorities in most jurisdictions for years prior to 2010.

Due to its losses and the valuation allowance recorded against it deferred tax assets related to its net operating losses carryforwards, the Company has not recorded any income tax benefit or expense for the years ended December 31, 2013, 2012 and 2011.

The domestic and foreign components of pre-tax (loss) income, including discontinued operations, are as follows:

	Years Ended December 31,
	2013			2012			2011
Domestic	$	(3,161	)	$	11,425		$	(15,790	)
Foreign		—			(1,882	)		(1,294	)
Pre-tax (loss) income	$	(3,161	)	$	9,543		$	(17,084	)

				Years Ended December 31,
	2013			% of Pretax			2012			% of Pretax			2011			% of Pretax
Tax at Federal statutory rate	$	(1,106	)		(35.0	)%	$	3,340			35.0	%	$	(5,979	)		(35.0	)%
Increase (decrease) in: Valuation allowances		1,281			40.5			3,179			33.3			6,353			37.2
Capital loss carryforward		—			—			(7,086	)		(74.2	)		—			—
Permanent differences		8			0.3			11			0.1			16			0.1
State and local taxes - net		(183	)		(5.8	)		556			5.8			(390	)		(2.3	)
Income tax (benefit) provision	$	—			—	%	$	—			—	%	$	—			—	%

The components of the net deferred tax assets (liabilities) are as follows:

	December 31,
	2013			2012
Deferred Tax Assets:
Accounts receivable allowances	$	91		$	87
Net operating loss carryforwards		44,926			48,046
Capital loss carryforwards		—			2,428
Restricted stock/Stock options		42			—
Contributions		102			102
Deferred rent		17			—
Property and equipment		59			48
Gross deferred tax assets	$	45,237		$	50,711
Valuation allowance	$	(45,237	)	$	(50,711	)
Net deferred tax asset	$	—		$	—

A reconciliation of activity for the Company’s deferred tax asset valuation allowance is provided as follows:

	Years Ended December 31,
	2013			2012			2011
Beginning balance	$	50,711		$	57,282		$	51,046
(Reductions) additions to provision		(5,474	)		(6,571	)		6,236
Ending balance	$	45,237		$	50,711		$	57,282

The expiration terms and amounts for which an allowance has been provided with respect to the loss and credit carryforwards reflected in the gross deferred tax assets above are comprised as follows:

Loss Carryforwards	Expiration	Gross Amount
Federal	2032	$	114,623
State and local	2016-2032		79,902

The Company records U.S. taxes on undistributed earnings of subsidiaries to the extent such earnings are planned to be remitted and not permanently reinvested.  On August 16, 2012, the Company’s Board of Directors determined to discontinue the operations of its UK subsidiary, 4Kids International, effective September 30, 2012.

The Company has no unrecognized tax benefits recorded for the years ended December 31, 2013 and 2012.

When and if the Company were to recognize interest or penalties related to unrecognized tax benefits, they would be reported net of federal tax benefit in tax expense.

It is difficult to predict what would occur to change the Company’s unrecognized tax benefits over the next twelve months.  The Company believes, however, that there should be no change during the next twelve months.

XML

RELATED PARTY TRANSACTIONS (Details) (USD $)														12 Months Ended				0 Months Ended		12 Months Ended							12 Months Ended					0 Months Ended	12 Months Ended	1 Months Ended					12 Months Ended		12 Months Ended
	Dec. 11, 2006 4Kids Digital [Member]	Dec. 11, 2006 CUSA LLC [Member]	Dec. 31, 2006 CUSA LLC [Member] Gannon [Member]	Dec. 31, 2006 CUSA LLC [Member] Milito [Member]	Dec. 31, 2013 TC Digital [Member]	Dec. 31, 2013 TC Websites LLC [Member]	Dec. 31, 2013 Chaotic Property Representation Agreement [Member]	Dec. 31, 2012 Chaotic Property Representation Agreement [Member]	Dec. 31, 2011 Chaotic Property Representation Agreement [Member]	Dec. 11, 2006 Chaotic Property Representation Agreement [Member] Gannon [Member]	Dec. 11, 2006 Chaotic Property Representation Agreement [Member] Milito [Member]	Dec. 31, 2013 Chaotic Property Representation Agreement [Member] 4Kids Digital [Member]	Dec. 31, 2013 Chaotic Property Representation Agreement [Member] CUSA LLC [Member]	Dec. 31, 2013 Patent License Agreements [Member]	Dec. 31, 2012 Patent License Agreements [Member]	Dec. 31, 2011 Patent License Agreements [Member]	Sep. 10, 2007 Patent License Agreements [Member]	Dec. 11, 2006 Patent License Agreements [Member] Gannon [Member]	Dec. 11, 2006 Patent License Agreements [Member] Milito [Member]	Dec. 31, 2013 Operating Agreement of TC Digital LLC [Member]	Dec. 31, 2012 Operating Agreement of TC Digital LLC [Member]	Dec. 31, 2011 Operating Agreement of TC Digital LLC [Member]	Dec. 31, 2013 Operating Agreement of TC Digital LLC [Member] Dracco Company Ltd [Member]	Mar. 17, 2008 Operating Agreement of TC Digital LLC [Member] Dracco Company Ltd [Member]	Dec. 18, 2007 Operating Agreement of TC Digital LLC [Member] Dracco Company Ltd [Member]	Oct. 17, 2007 Operating Agreement of TC Digital LLC [Member] Dracco Company Ltd [Member]	Dec. 31, 2013 Chaotic Merchandise License Agreement [Member]	Dec. 31, 2012 Chaotic Merchandise License Agreement [Member]	Dec. 31, 2011 Chaotic Merchandise License Agreement [Member]	Dec. 31, 2013 Chaotic Merchandise License Agreement [Member] 4Kids Digital [Member]	Dec. 31, 2013 Chaotic Merchandise License Agreement [Member] CUSA LLC [Member]	Dec. 11, 2006 Operating Agreement of TC Websites LLC [Member]	Dec. 31, 2013 Operating Agreement of TC Websites LLC [Member]	Aug. 31, 2009 Interest Purchase Agreement [Member]	Jul. 31, 2009 Interest Purchase Agreement [Member]	Jun. 30, 2009 Interest Purchase Agreement [Member]	May 31, 2009 Interest Purchase Agreement [Member]	Apr. 30, 2009 Interest Purchase Agreement [Member]	Dec. 31, 2013 Interest Purchase Agreement [Member] TelevisionMarket	Dec. 31, 2009 Interest Purchase Agreement [Member]	Dec. 31, 2013 TDI Shareholders Agreement [Member] Director	Dec. 31, 2012 TDI Shareholders Agreement [Member]	Dec. 31, 2011 TDI Shareholders Agreement [Member]	Dec. 31, 2013 TDI Shareholders Agreement [Member] 4 Kids and Home Focus [Member] Director	Dec. 31, 2013 TDI Shareholders Agreement [Member] TC Digital [Member] Director	Dec. 31, 2013 TDI Shareholders Agreement [Member] TC Websites LLC [Member]
Related Party Transaction [Line Items]
Percentage of ownership (in hundredths)	55.00%	45.00%			55.00%	55.00%
Percentage of ownership on outstanding capital stock (in hundredths)			32.00%	32.00%						60.00%	39.00%
Distribution percentage of related party income (in hundredths)												50.00%	50.00%
Distribution percentage of trading card royalties (in hundredths)												55.00%	45.00%
Percentage of allocation of approved production expenses for television episodes (in hundredths)												50.00%	50.00%
Production, merchandising and other general expenses due							$ 8,273,000	$ 8,292,000	$ 8,364,000
Membership interest (in hundredths)																		25.00%	25.00%													50.00%
Percentage of royalty (in hundredths)														1.50%
Ownership percentage in patents (in hundredths)																	25.00%
Patents																	750,000
Earned from royalty														0	0	0				0	0	0					0	0	0												0	0	0
Terms of obligation to pay fees and/or royalties																				(i) 4Kids Digital equal to 3% of TC Digital's gross revenues up to $350 per year for management services performed; (ii) 4Kids Digital and CUSA equal to 3% of net sales of each pack of trading cards sold; and (iii) the Company equal to (x) 10% of the net sales of "Chaotic" trading cards and (y) an additional 1% of net sales of "Chaotic" trading cards above $50 million during a calendar year.
Percentage of gross revenues paid for management services performed (in hundredths)																				3.00%
Maximum gross revenues paid for management services performed																				350,000
Percentage of net sales of each pack of trading cards sold (in hundredths)																				3.00%
Percentage of sales of Chaotic trading cards (in hundredths)																				10.00%
Percentage of additional net sales of Chaotic trading cards on specified amount (in hundredths)																				1.00%
Specified amount over which a percentage of net sales is given as fees																				50,000,000
Percentage of royalty in respect to net sales (in hundredths)																							10.00%	4.00%	1.00%	5.00%
One-time payment of royalty stream in respect to net sales																								1,100,000	450,000	2,250,000
Terms of agreement relating to Payment of royalty on trading cards and all related accessories																											(i) 4% of net sales to 4Kids Licensing while any amounts are outstanding to 4Kids Digital under the loan agreement or line of credit agreement or (ii) if no amounts are outstanding to 4Kids Digital under the loan agreement or line of credit agreement, 8% of net sales of such cards and accessories, 55% of which will be paid to 4Kids Licensing and 45% of which will be paid to CUSA.
Percentage of net sales paid if amount is outstanding under loan agreement (in hundredths)																											4.00%
Percentage of net sales paid as royalty if no amount is outstanding under loan agreement (in hundredths)																											8.00%
Proportion of percentage paid to each company for royalty (in hundredths)																														55.00%	45.00%
Percentage of additional ownership interest (in hundredths)																																5.00%
Portion of membership interest																																	two-thirds
Initial price on interest purchase agreement																																								1,575,000
Additional conditional payments																																								1,000,000
Number of largest European television markets																																							5
Maximum limit of selling on interest purchase agreement																																							10,000,000
Conditional payments on agreement for telecast in specified countries																																							600,000
Payment for execution of various agreements																																							475,000
Monthly installments on interest purchase agreement																																		$ 125,000	$ 125,000	$ 125,000	$ 125,000	$ 125,000
Number of directors																																									4			1	2
Percentage of voting stock (in hundredths)																																									80.00%
Payment portion as percentage of net sales (in hundredths)																																													3.00%	1.50%

XML

SEGMENT AND RELATED INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013 Segment	Dec. 31, 2012	Dec. 31, 2011
SEGMENT AND RELATED INFORMATION [Abstract]
Number of reportable segments									2
Segment Reporting Information [Line Items]
Net revenues from external customers	$ 425	$ 296	$ 236	$ 257	$ 317	$ 263	$ 1,483	$ 1,262	$ 1,214	$ 3,325	$ 8,073
Loss on sale of investment securities									0	0	(910)
Reorganization items									(151)	(4,071)	(1,628)
Gain on settlement of pre-petition liabilities									26	1,331	0
Gain on litigation									0	8,000	489
Gain on sale									0	17,714	0
Segment (loss) income									(4,331)	19,652	(1,857)
Segment assets	3,568				11,540				3,568	11,540
Segment, Continuing Operations [Member]
Segment Reporting Information [Line Items]
Net revenues from external customers									1,214	3,325	8,073
Interest income											63
Loss on sale of investment securities											(910)
Reorganization items									(151)	(4,071)	(1,628)
Gain on settlement of pre-petition liabilities									26	1,331
Gain on litigation										8,000	489
Gain on sale										17,714
Segment (loss) income									(4,331)	19,652	(1,857)
Segment assets	3,567				11,272				3,567	11,272	7,276
Segment, Discontinued Operations [Member]
Segment Reporting Information [Line Items]
Segment assets	1				268				1	268	8,668
Entertainment and Brand Licensing [Member] | Segment, Continuing Operations [Member]
Segment Reporting Information [Line Items]
Net revenues from external customers									1,039	3,325	8,073
Interest income											63
Loss on sale of investment securities											(910)
Reorganization items									(151)	(4,071)	(1,628)
Gain on settlement of pre-petition liabilities									26	1,331
Gain on litigation										8,000	489
Gain on sale										17,714
Segment (loss) income									(2,982)	19,652	(1,857)
Segment assets	1,242				11,272				1,242	11,272	7,276
IsoBLOX(TM) and Sports Distribution/ Licensing [Member] | Segment, Continuing Operations [Member]
Segment Reporting Information [Line Items]
Net revenues from external customers									175	0	0
Interest income											0
Loss on sale of investment securities											0
Reorganization items									0	0	0
Gain on settlement of pre-petition liabilities									0	0
Gain on litigation										0	0
Gain on sale										0
Segment (loss) income									(1,349)	0	0
Segment assets	$ 2,325				$ 0				$ 2,325	$ 0	$ 0

XML

NONCONTROLLING INTEREST RELATED TO DISCONTINUED OPERATIONS (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Noncontrolling interest's loss attributable to noncontrolling equity interest [Abstract]
Net income (loss) before common units noncontrolling interest	$ 1,170	$ (10,109)	$ (15,227)
Interest expense	3	8	(63)
TC Digital Games LLC [Member]
Noncontrolling Interest [Line Items]
Percentage of ownership in subsidiaries (in hundredths)	55.00%
TC Digital Games LLC [Member] | Discontinued Operations [Member]
Noncontrolling interest's loss attributable to noncontrolling equity interest [Abstract]
Interest expense	0	0	4,137
Loss in excess of noncontrolling interest absorbed	21,548
TC Digital International [Member] | Discontinued Operations [Member]
Noncontrolling interest's loss attributable to noncontrolling equity interest [Abstract]
Net income (loss) before common units noncontrolling interest	888	(3)	(4,181)
Noncontrolling interest percentage (in hundredths)	45.00%	45.00%	45.00%
Income (loss) attributable to noncontrolling interest	399	(1)	(1,882)
TC Websites LLC [Member]
Noncontrolling Interest [Line Items]
Percentage of ownership in subsidiaries (in hundredths)	55.00%
TC Websites LLC [Member] | Discontinued Operations [Member]
Noncontrolling interest's loss attributable to noncontrolling equity interest [Abstract]
Net income (loss) before common units noncontrolling interest	0	0	(4)
Noncontrolling interest percentage (in hundredths)	45.00%	45.00%	45.00%
Income (loss) attributable to noncontrolling interest	0	0	(2)
Loss in excess of noncontrolling interest absorbed	$ 6,038
Number of managers entitled to be elected	2

XML

STOCK-BASED EMPLOYEE COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2013

STOCK-BASED EMPLOYEE COMPENSATION [Abstract]

Assumptions used in estimating fair values of options granted

The fair values of options granted were estimated on the date of grant using the Black-Scholes Merton option pricing model based on the assumptions included in the table below. The fair value of the Company’s stock option awards is charged to expense over the vesting life of the underlying stock options using the straight line method. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate for periods within the contractual life of the stock option award is based on the yield of U.S. Treasury bonds on the grant date with a maturity equal to the expected term of the stock option. The expected life of stock option awards granted to employees and non-employee directors is based upon the “simplified” method for “plain vanilla” options described in SEC Staff Accounting Bulletin No. 107, as amended by SEC Staff Accounting Bulletin No. 110. Forfeiture rates are based on management’s estimates.

	Year ended December 31, 2013
Expected volatility		84%
Expected dividend yield		0.00%
Weighted average risk-free interest rate		1.05%
Expected life	5.50 years
Forfeiture rate		0%

Summary of activity under stock option plans

The following table summarizes activity under the Company’s stock option plans for the years ended December 31, 2013, 2012, and 2011:

	Shares (In thousands)			Weighted Average Exercise Price			Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2011		290		$	14.29
Granted		—			—
Exercised		—			—
Forfeited, cancelled or expired		(290	)		14.29
Outstanding at December 31, 2011		—		$	—
Granted		—			—
Exercised		—			—
Forfeited, cancelled or expired		—			—
Outstanding at December 31, 2012		—		$	—
Granted		919			0.28
Exercised		—			—
Forfeited, cancelled or expired		(14	)		(0.54	)
Outstanding at December 31, 2013		905		$	0.28			9.1		$	374
Exercisable at December 31, 2013		306		$	0.28			9.1		$	124

Restricted stock award activity under the Company's LTICPs

The following table summarizes restricted stock activity under the Company’s long-term incentive compensation plans for the years ended December 31, 2013, 2012, and 2011:

	Number of Shares (in thousands)			Weighted- Average Grant Date Fair Value
Outstanding at January 1, 2011		252		$	4.60
Granted		—			—
Vested		(125	)		5.90
Forfeited		(66	)		5.03
Outstanding at December 31, 2011		61		$	1.46
Granted		—			—
Vested		(61	)		1.46
Forfeited		—			—
Outstanding at December 31, 2012 and 2013		—		$	—

XML

INTANGIBLE ASSETS (Details) (Patent for IsoBLOX [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Feb. 28, 2013
Patent for IsoBLOX [Member]
Finite-Lived Intangible Assets [Line Items]
Acquisition purchase price		$ 2,100
Amortization period of intangible asset	15 years
Amortization expense	1,221
Net carrying value of intangible asset	$ 1,979

XML

DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2013

DISCONTINUED OPERATIONS [Abstract]

DISCONTINUED OPERATIONS

14. DISCONTINUED OPERATIONS

In connection with its on-going evaluation of each of its business units, the management of the Company recommended to the Board of Directors of the Company that based upon the substantial operational losses and declining revenues being incurred by the Company’s international operations, such operations should be discontinued. Accordingly, on August 16, 2012, the Company’s Board of Directors determined to discontinue the operations of its UK Subsidiary, 4Kids International, effective September 30, 2012.  Pursuant to the Asset Purchase Agreement and the corresponding assets sold and due to their continued lack of profitability, effective June 30, 2012, the Company terminated the operations of 4Kids Ad Sales, 4Kids Productions, 4Kids Music and 4Kids Home Video. Additionally, effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites. The results of operations for the international, advertising media and broadcast segment, television and film production/distribution segment and the trading card and game distribution segment are reported as a discontinued operation and the accompanying consolidated financial statements have been reclassified for all prior periods to report the assets, liabilities and operating results of this business.

The following are the summarized results of discontinued operations for the years ended December 31, 2013, 2012, and 2011:

	Years Ended December 31,
	2013		2012			2011
Total net revenues	$	—	$	2,101		$	4,284
Total income (costs and expenses)		1,170		(12,210	)		(19,511	)
Income (loss) from discontinued operations	$	1,170	$	(10,109	)	$	(15,227	)

The major classes of assets and liabilities of the discontinued operations on the balance sheet are as follows:

	December 31, 2013		December 31, 2012
ASSETS
Accounts receivable – net	$	1	$	230
Prepaid and other current assets		—		37
Current assets of discontinued operations	$	1	$	267
Property and equipment - net	$	—	$	1
Non-current assets of discontinued operations	$	—	$	1
LIABILITIES
Accounts payable and accrued expenses	$	618	$	1,859
Current liabilities of discontinued operations	$	618	$	1,859

XML

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

19. RELATED PARTY TRANSACTIONS

Chaotic USA Entertainment Group, Inc. (“CUSA”) - On December 11, 2006, 4Kids Digital and CUSA LLC formed TC Digital as a joint venture, with 4Kids Digital now owning 55% of TC Digital’s membership interests and CUSA LLC now owning 45% of TC Digital’s membership interests.  TC Digital is treated as a consolidated subsidiary of the Company as a result of its majority ownership in TC Digital and its right to break any dead-locks within the TC Digital Management Committee. Effective September 30, 2010, the Company terminated the operations of TC Digital and TC Websites due to their continued lack of profitability.  The termination of the business of TC Digital and TC Websites will enable the Company to further reduce costs and focus on its core businesses.  As a consequence of the termination of their operations, TC Digital and TC Websites ceased supporting the Chaotic trading card game and website, effective October 1, 2010.  The results of operations of TC Digital and TC Websites are reported in the Company’s consolidated financial statements as discontinued operations (see Note 14), subject to a noncontrolling interest.  Bryan Gannon (“Gannon”), President and Chief Executive Officer of CUSA and John Milito (“Milito”), Executive Vice President and Chief Operating Officer of CUSA, each own an interest of approximately 32% in CUSA and became officers of TC Digital in 2006.  Milito’s employment with TC Digital was terminated on December 31, 2009.   Gannon’s employment with TC Digital was terminated on October 15, 2010.

As of December 31, 2013, the Company had entered into the following transactions with CUSA and CUSA LLC, or parties related to Gannon and Milito that are summarized below:

° Chaotic Property Representation Agreement - On December 11, 2006, 4Kids Licensing, CUSA and Apex Marketing, Inc. (“Apex”), a corporation in which Gannon holds 60% of the outstanding capital stock and Milito owns 39% of the outstanding capital stock, entered into an amended and restated Chaotic Property Representation Agreement (“CPRA”) replacing the original Chaotic Property Representation Agreement entered into by the parties in April 2005. Under the terms of the CPRA, 4Kids Licensing is granted exclusive television broadcast and production, merchandising licensing, and home video rights to the “Chaotic” Property worldwide in perpetuity, subject to certain limited exceptions. Under the terms of the CPRA, all “Chaotic” related income less approved merchandising and other expenses shall be distributed 50% to the Company and 50% to CUSA and Apex, excluding trading card royalties which are distributed 55% to 4Kids Digital and 45% to CUSA. Additionally, all approved production expenses for television episodes based on the “Chaotic” property are allocated 50% to 4Kids Licensing and 50% to CUSA and Apex. As of December 31, 2013, 2012, and 2011 there were no distributions and approximately $8,273, 8,292, and $8,364, respectively, of production, merchandising and other general expenses were owed to 4Kids Licensing by CUSA and Apex, collectively, which were fully reserved on the Company’s consolidated financial statements.

° Patent License Agreements - On December 11, 2006, TC Digital and TC Websites each entered into an agreement (the “Patent License Agreements”) with Cornerstone Patent Technologies, LLC (“Cornerstone”), a limited liability company, in which Gannon and Milito each hold a 25% membership interest. Pursuant to the Patent License Agreements, TC Digital and TC Websites obtained exclusive licenses (subject to certain exceptions) to use certain patent rights in connection with “Chaotic” and other trading card games which are uploaded to websites owned and operated by each such entity. Additionally, each of TC Digital and TC Websites agreed to pay Cornerstone a royalty of 1.5% of the Manufacturer’s Suggested Retail Price for the sale of trading cards.  On September 10, 2007, the Company purchased a 25% interest in such patents from Cornerstone for $750. During the years ended December 31, 2013, 2012, and 2011, the Company earned no royalties associated with its portion of the patents, related to the sales of “Chaotic” trading cards, which such royalties are eliminated in the Company’s consolidated financial statements.

° Operating Agreement of TC Digital LLC - Under the terms of the TC Digital operating agreement (“TCD Agreement”), TC Digital is obligated to pay the following fees and/or royalties to: (i) 4Kids Digital equal to 3% of TC Digital’s gross revenues up to $350 per year for management services performed; (ii) 4Kids Digital and CUSA equal to 3% of net sales of each pack of trading cards sold; and  (iii) the Company equal to (x) 10% of the net sales of “Chaotic” trading cards and (y) an additional 1% of net sales of “Chaotic” trading cards above $50 million during a calendar year.  The Company acquired its rights to receive royalties of 10% in respect to net sales of “Chaotic” trading cards under the TCD Agreement through purchases from Dracco Company Ltd. (“Dracco”) of a 5% royalty stream on October 17, 2007, a 1% royalty stream, previously allocated to CUSA from Dracco, on December 18, 2007, a 4% royalty stream on March 17, 2008 in exchange for one-time payments of $2,250, $450 and $1,100, respectively.  The consideration for the purchase of the 1% royalty stream for $450 was satisfied through the settlement of certain capital contributions required to be made by CUSA to TC Websites under the TCW Agreement.  During the years ended December 31, 2013, 2012, and 2011, the Company and CUSA earned no royalties and or fees relating to the sales of “Chaotic” trading cards under the TCD agreement.  The Company’s portion of royalties and its management fee are eliminated in its consolidated financial statements.

° Chaotic Merchandise License Agreement - On December 11, 2006, 4Kids Licensing, CUSA and TC Digital entered into a merchandise licensing agreement pursuant to which 4Kids Licensing and CUSA granted TC Digital exclusive rights to manufacture, produce and license “Chaotic” trading cards and related accessories through December 31, 2016. Under the terms of the agreement, TC Digital is obligated to pay a royalty on trading cards and all related accessories equal to (i) 4% of net sales to 4Kids Licensing while any amounts are outstanding to 4Kids Digital under the loan agreement or line of credit agreement or (ii) if no amounts are outstanding to 4Kids Digital under the loan agreement or line of credit agreement, 8% of net sales of such cards and accessories, 55% of which will be paid to 4Kids Licensing and 45% of which will be paid to CUSA.  For the years ended December 31, 2013, 2012, and 2011, no royalties had been earned under this agreement.

° Operating Agreement of TC Websites LLC - On December 11, 2006, 4Kids Websites entered into the TC Websites Operating Agreement (“TCW Agreement”) with CUSA to purchase a 50% membership interest in TC Websites, which was amended on December 18, 2007 in connection with 4Kids Websites’ acquisition of an additional 5% ownership interest in TC Websites.   Under the terms of the TCW Agreement, each member of TC Websites is obligated to make capital contributions on a pro-rata basis to the extent determined by its Management Committee to be necessary to fund the operation of the Website. Any transaction resulting in the sale of more than 50% of TC Websites’ membership interests or in the sale of all or substantially all of TC Digital’s assets requires the consent of members of TC Websites holding two-thirds of its membership interests (as opposed to a majority of its membership interests).

° Interest Purchase Agreement - On March 2, 2009, TC Digital, the Company and Home Focus entered into various agreements pursuant to which TC Digital and Home Focus agreed to form TDI and the Company agreed to purchase the TDI interest from Home Focus.  The purchase price for the TDI interest is an initial price of $1,575 with an obligation to pay up to an additional $1,000 (the “Conditional Payments”) conditioned upon the “Chaotic” television series being telecast in the five largest European television markets (the United Kingdom, France, Germany, Spain and Italy) and/or TDI selling in excess of $10,000 of “Chaotic” trading cards. To date, the Company has entered into agreements for the telecast of the “Chaotic” television series in the UK, France and Germany, requiring the Company to make $600 of the Conditional Payments. The Company has paid Home Focus the following consideration for the TDI interest: the Company paid $475 upon execution of the various agreements and has paid the monthly installments of $125 for each of April, May, June, July and August of 2009.  The Company ceased paying Home Focus additional amounts under the Interest Purchase Agreement due to the failure by Home Focus to make the required capital contributions to TDI required under the Shareholders Agreement, dated March 2, 2009, entered into by the Company and Home Focus with respect to TDI (the “TDI Agreement”).

° TDI Shareholders Agreement - Under the TDI Agreement, the Board of Directors of TDI consists of four directors. TC Digital has the right to elect two directors and the Company and Home Focus each have the right to elect one director. There are a number of extraordinary actions that require the consent by shareholders holding at least 80% of the voting stock of TDI in addition to approval of the Board of Directors. The TDI Agreement requires the shareholders to provide TDI with additional capital on a pro rata basis in exchange for additional equity. Under the TDI Agreement, TDI is required to pay or reimburse TC Digital for the costs and expenses associated with the printing, advertising, marketing and promotion of the “Chaotic” trading card game in the TDI Territory (as defined in the TDI Agreement). In addition, TDI is responsible for reimbursing TC Digital and TC Websites for the cost of translating the “Chaotic” trading cards and “Chaotic” website into the European languages and for bandwidth and equipment charges associated with making the “Chaotic” website operational in the TDI Territory. TDI is also required to pay TC Digital and TC Websites a design fee equal to 3% and 1.5%, respectively, of net sales of “Chaotic” trading cards in the TDI  Territory.   For the years ended December 31, 2013, 2012, and 2011, TC Digital and TC Websites earned no royalties, under this agreement arising from the net sales of “Chaotic” trading cards in the TDI Territory.  The royalties earned by TC Digital and TC Websites are eliminated in the Company’s consolidated financial statements.

XML

ACCOUNTS RECEIVABLE/DUE TO LICENSORS (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Accounts receivable [Abstract]
Gross accounts receivable	$ 316	$ 539
Allowance for doubtful accounts	(7)	(24)
Accounts receivable, net	309	515
Less: long-term portion	(1)	(36)
Accounts receivable, current	$ 308	$ 479

XML

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2013

COMMITMENTS AND CONTINGENCIES [Abstract]

Commitments for minimum rentals, not including common charges, under non-cancelable leases

Commitments for minimum rentals, not including common charges, under this non-cancelable lease at the end of 2013 are as follows:

Year Ending December 31,	Amount
2014	$	271
2015		211
2016 and after		—
Total	$	482

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net (loss) income	$ (3,161)	$ 9,543	$ (17,084)
Other comprehensive income (loss):
Translation adjustment	0	(157)	31
Reclassification of translation adjustment related to liquidation of foreign subsidiary	(344)	0	0
Other comprehensive (loss) income	(344)	(157)	31
Comprehensive (loss) income	(3,505)	9,386	(17,053)
Loss (income) attributable to noncontrolling interests, continuing operations	331	0	0
(Income) loss attributable to noncontrolling interests, discontinued operations	(399)	1	1,884
Comprehensive (loss) income attributable to 4Licensing Corporation	$ (3,573)	$ 9,387	$ (15,169)

XML

FAIR VALUE OF FINANCIAL ASSETS

12 Months Ended

Dec. 31, 2013

FAIR VALUE OF FINANCIAL ASSETS [Abstract]

FAIR VALUE OF FINANCIAL ASSETS

3. FAIR VALUE OF FINANCIAL ASSETS

The carrying values and estimated fair values of the Company’s financial instruments for the periods presented are as follows:

	Estimated Fair Value Measurements
	Carrying Value		Quoted Prices in Active Markets  (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2013:
Financial Assets
Cash and cash equivalents	$	356	$	356	$	—	$	—
Total Financial Assets	$	356	$	356	$	—	$	—
December 31, 2012:
Financial Assets
Cash and cash equivalents	$	9,011	$	9,011	$	—	$	—
Total Financial Assets	$	9,011	$	9,011	$	—	$	—

XML

GAIN ON SALE (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Feb. 28, 2013
GAIN ON SALE [Abstract]
Gross Proceeds (including $1,000 received in February 2013)		$ 15,000		$ 1,000
Add [Abstract]
Liabilities assumed by buyers - discontinued operations		6,642
Adjusted sales price		21,642
Less [Abstract]
Expenses of sale		3
Carrying value of assets sold - continuing operations		1,596
Carrying value of assets sold - discontinued operations		2,329
Net Proceeds		3,928
Gain on sale	$ 0	$ 17,714	$ 0

XML

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2013

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

20.  SUBSEQUENT EVENTS

As of December 31, 2013 the Company owned the copyright and trademark to the “Charlie Chan” live action television series.  On January 22, 2014 the Company sold its rights to “Charlie Chan” to Twentieth Century Fox for $225.

On March 25, 2014, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) among the Company, Cleveland Capital, L.P. (“Cleveland Capital”) and Prescott Group Aggressive Small Cap Masterfund, GP (“Prescott Group”, and together with Cleveland Capital, the “Purchasers”), and the guarantors party thereto, each of which is a wholly-owned subsidiary of the Company (each a “Guarantor” and collectively, the “Guarantors”), pursuant to which the Company agreed to issue to the Purchasers (i) up to an aggregate principal amount of $1,650 of promissory notes (each a “Note” and collectively, the “Notes”), to be guaranteed by the Guarantors, and (ii) warrants (each a “Warrant” and collectively, the “Warrants”) to purchase up to an aggregate of 1,683,673 shares (the “Warrant Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), for an aggregate purchase price of approximately $1,650 (the “Offering”).

On March 25, 2014, the Offering closed and the Company (i) issued and sold to Cleveland Capital a Note in the principal amount of $150 and a Warrant to purchase up to 153,061 Warrant Shares and received $150, and (ii) issued and sold to Prescott Group a Note in the principal amount of $1,500 and a Warrant to purchase up to 1,530,612 Warrant Shares and received $1,500.

The Notes accrue interest at a rate of 5.0% per year from and after the date of issuance of such Note.  The Notes provide for customary events of default, including nonpayment, certain events of bankruptcy or failure to comply with covenants or other agreements.  The Notes will mature on March 25, 2016.  The Warrants have an initial exercise price of $0.98 per Warrant Share. The Warrants are exercisable immediately and expire ten years from the date of issuance.

Wade Massad, one of the Company’s directors, is the Co-Founder and Co-Managing Member of Cleveland Capital Management, L.L.C., which is the General Partner of Cleveland Capital. Cleveland Capital beneficially owns more than 5% of the Common Stock of the Company.  Duminda DeSilva, one of the Company’s directors, is the Managing Director at Prescott Group Capital Management, L.L.C., an affiliate of Prescott Group, which beneficially owns more than 17% of the Common Stock of the Company.

XML

SEVERANCE AND EXIT COSTS (Tables)

12 Months Ended

Dec. 31, 2013

SEVERANCE AND EXIT COSTS [Abstract]

Severance and other exit-costs, estimated liability associated with such costs

A summary of the actions taken for severance and other exit costs have been recorded in loss from discontinued operations and the estimated remaining liability associated with such costs are as follows:

	Total Expenses (Income)			Remaining Liability as of December 31, 2013
Severance and related costs	$	(3	)	$	—
Other professional fees		18			—
Termination of contracts and leases		(436	)		42
Total	$	(421	)	$	42

XML

GAIN ON SALE

12 Months Ended

Dec. 31, 2013

GAIN ON SALE [Abstract]

GAIN ON SALE

13. GAIN ON SALE

As a result of the Company’s sale of certain assets pursuant to the Asset Purchase Agreement completed July 2, 2012 (see Note 1), the Company recorded a gain on sale for the year ended December 31, 2012 in the accompanying consolidated statement of operations as follows:

	Year Ended December 31, 2012
Gross Proceeds (including $1,000 received in February 2013)	$	15,000
Add:
Liabilities assumed by buyers – discontinued operations		6,642
Adjusted sales price		21,642
Less:
Expenses of sale		3
Carrying value of assets sold – continuing operations		1,596
Carrying value of assets sold – discontinued operations		2,329
		3,928
Gain on sale	$	17,714