Rivenrock Capital and Kallina Corp. Acquire Small World Toys, Inc.

CULVER CITY, CA, October 15, 2007 - FocalPoint represented Small World Toys, Inc. (“Small World”) as financial advisor in its Chapter 11 bankruptcy proceedings. Small World, based in Southern California, is a manufacturer, marketer and distributor of high-quality specialty toys and educational products for children. After several failed attempts to complete acquisitions, the company depleted its cash resources and became working capital constrained.

FocalPoint worked rapidly with the parties-in-interest to develop cash flow projections in order to support debtor-in-possession financing provided by its existing senior lender. The financing allowed its products to be manufactured, shipped and delivered in time for the holiday season. Utilizing the strength of its relationships with the financial buyer community, FocalPoint was able to generate initial indications of interest and proposals from a number of parties within several weeks of the bankruptcy filing.

Under the umbrella firm, SWT Acquisition, LLC, Rivenrock Capital LLC fashioned a successful bid to help the company emerge from bankruptcy better capitalized and healthier than it was before. John Nelson, former President and COO of Small World Toys, who left the company 2 years ago, will be CEO of the new company; and other key team members are former COO John Matise, who will return as COO; David Adams will serve as CFO; and Howard Bennett, a 26-year veteran of the company, has been promoted from Senior Vice President of Sales to the new President.

David Adams and Nelson co-founded Rivenrock Capital, a private equity firm in 2004. Rivenrock will hold a significant equity stake in the company, Nelson said. Matise advised Rivenrock Capital and structured the financing with Kallina Corporation who provided the banking facility to complete the deal.

“The timing of the bankruptcy filing, just prior to the beginning of the holiday season, had the potential to cause a dramatic deterioration in the value of the company’s assets. FocalPoint worked to conduct an expeditious yet thorough auction to maximize the value of the business. In the end, the company realized over a 100% increase from initial bids to the final acquisition price,” noted Rajesh Sood, managing director at FocalPoint.

“FocalPoint moved quickly to support our efforts in the administration of the bankruptcy case to preserve and maximize stakeholder value,” added Ron Bender of Levene, Neale, Bender, Rankin & Brill L.L.P., which served as bankruptcy counsel to Small World.

About FocalPoint
FocalPoint is an independent investment bank, specializing in mergers and acquisitions, private placements (both debt and equity), and financial restructurings/distressed M&A. In distressed situations, FocalPoint works with companies inside or outside of bankruptcy to formulate and then execute creative strategies that address complex issues by combining its M&A and capital raising expertise.

Please contact Rajesh Sood at (310) 405-7050 with any questions about this transaction.

www.focalpointllc.com

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