UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): ~~January~~May 26 9, 2007

SMALL WORLD KIDS, INC.

(Exact Name Of Registrant Specified In Charter)

NEVADA		333-68532		86-0678911
(State Of Incorporation)		(COMMISSION FILE NUMBER)		(IRS Employer Identification No.)

5711 Buckingham Parkway, Culver City, CA 90230

(Address Of Principal Executive Offices) (Zip Code)

(310) 645-9680

(Registrant’s Telephone Number, Including Area Code)

_________________________________________________________________

(Former Name or Former Address, is Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

⁪o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⁪o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⁪o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⁪o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement

OnEffective ~~January~~ May 269, 2007, ~~Small~~the ~~World~~Company ~~Kids~~entered into a Note Purchase Agreement with nine issuees (the “Purchasers”) pursuant to which the Company issued an aggregate of $1, ~~Inc.~~111,110 ain ~~Nevada~~principal ~~corporation~~amount of Secured Subordinated Convertible Notes (the “~~Company~~Notes”) ~~entered~~ with net proceeds of $1,000,000. The Notes will bear interest at the ~~into~~ rate anof ~~Omnibus~~10% ~~Amendment~~per Noannum, payable monthly in arrears.1 ~~with~~The ~~Laurus~~Notes are subordinated to the indebtedness owed by the Company and its wholly owned subsidiary to Laurus Master ~~Funds,~~Fund Ltd., St. Cloud Capital Partners, L.P. (“~~Laurus~~St. Cloud”) and Eddy ~~that~~ Goldwasser (acollectively, the “Senior Debt Holders”). ~~amended~~The ~~the~~Notes ~~Overadvance~~are ~~Side~~due ~~Letter~~and payable ~~dated~~on ~~October~~March 1931, ~~2006 by extending the~~2008, ~~maturity~~subject ofto the ~~Overadvance~~rights of upcertain toSenior ~~$1,500,000~~Debt ~~from~~Holders, ~~October~~ which ~~19,~~may ~~2007~~cause topayment ~~February~~of ~~28,~~the ~~2008~~Notes ~~and~~to ~~(b)~~be ~~amended~~extended past the ~~Security~~maturity ~~Agreement~~date. ~~dated~~ The Intercreditor ~~February~~and ~~28,~~Subordination ~~2006~~Agreement bywith ~~increasing~~St. Cloud does not permit any payment of principal under the ~~Concentration~~Notes ~~Limits~~unless ~~for~~and ~~accounts~~until St. Cloud has been on paid in ~~standard~~ full. ~~terms~~The ~~from~~obligations ~~15%~~of the Company to 32St.5% ~~and~~Cloud ~~deleting~~ have maturity dates extending into 2012. The Notes are convertible into shares of Class A-2 Convertible Preferred Stock (the ~~requirements~~“Class inA-2 Preferred Stock”) of the Company at $1.00 per ~~Security~~ share. ~~Agreement~~Each ~~for~~share of the ~~listing~~Class A-2 Preferred Stock is convertible into four shares of Common Stock of the Company’s (the “Note Shares”). Each Purchaser is also receiving a Class A-2 Convertible Preferred Stock Purchase Warrant that is exercisable into shares onof Class A-2 Preferred Stock (the ~~NASDAQ,~~“Warrant ~~OTC~~Shares”) at ~~Bulletin~~ an ~~Board~~exercise orprice ~~other~~of ~~Principal~~$1.00 ~~Market~~per ~~and~~share on the basis of one Warrant Share for $2.00 principal amount of the ~~timely~~Notes. ~~filing~~Holders ~~with~~of the shares of Common Stock issuable ~~SEC~~ upon conversion of ~~all~~the ~~reports~~Class ~~required~~A-2 toPreferred beStock ~~filed~~have certain piggyback registration rights pursuant to a Registration Rights Agreement with respect to the ~~Exchange~~Note ~~Act~~Shares and the Warrant Shares.

OnITEM ~~January 26, 2007, the Company also entered into the Second Amendment to~~ 3.02 ~~Registration Rights Agreement with Laurus, that amended the~~Unregistered ~~Registration~~ Sales ~~Rights~~of ~~Agreement~~Equity dated February 28, 2006 by deleting the requirement to file a Registration Statement. No default is incurred or penalties are owed if the Registration statement that was originally filed on June 15, 2006 and amended by Amendment No. 1 to the Registration Statement filed on October 4, 2006 is withdrawn.Securities

~~Item~~The 3 disclosure set forth in Item 1.~~02. Unregistered~~01 ~~Sales~~is ofincorporated ~~Equity~~herein by reference with ~~Securities~~ respect to the issuance of the Notes and Warrants.

OnAll ~~January~~ of the ~~26,~~securities ~~2007,~~were ~~the~~issued ~~Company~~to ~~issued~~accredited ainvestors ~~Warrant~~pursuant to ~~purchase~~ an ~~aggregate of~~exemption ~~685,185~~ from the ~~shares~~registration atrequirements anof ~~exercise~~the ~~price~~Securities Act of ~~$.01~~1933, ~~per~~as ~~share~~amended, pursuant to ~~Laurus.~~Section 4(2) ~~The~~thereof ~~Warrant was issued~~and inRegulation D ~~connection~~promulgated thereunder. ~~with~~The ~~the~~Purchasers ~~extension~~made ofcustomary ~~the~~investment ~~maturity~~representations ~~of the Overadvance~~with respect to ~~February~~ ~~28, 2008 and~~ the ~~increase~~Notes, ofWarrants, ~~the~~Note ~~Concentration~~Shares ~~Limits~~and onWarrant ~~standard terms from 15% to 32~~Shares.~~5%.~~

Item 9.01. Financial Statements and Exhibits.

Exhibits

4.1	Omnibus Amendment No. 1, dated as of January 26, 2007 by and between Small World Kids, Inc. and Small World Toys, Inc. and Laurus Master Fund, Ltd.
4.2	Second Amendment to Registration Rights Agreement, dated as of January 26, 2007 by and between Small World Kids, Inc. and Small World Toys, Inc. and Laurus Master Fund, Ltd.
4.3	Common Stock Purchase Warrant Agreement dated as of January 26, 2007 by and between Small World Kids, Inc. and Laurus Master Fund, Ltd.

4.1

Certificate of Designation of Class A-2 Convertible Preferred Stock.

4.2

Form of Secured Subordinated Convertible Note.

4.3

Form of Class A-2 Convertible Preferred Stock Purchase Warrant

10.1

Note Purchase Agreement dated as of April 23, 2007 among the Company and the purchasers of the Notes.

10.2

First Amended and Restated Registration Rights Agreement dated as of April 23, 2007 among the Company and the Purchasers.

10.3

Form of Amended and Restated Intercreditor and Subordination Agreement among the Purchasers, St. Cloud and SBI Advisers, LLC, as administrative agent.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	~~SMALL WORLD KIDS, INC.~~	SMALL WORLD KIDS, INC.
Date: January 30, 2007	By:	/s/ Debra Fine
Date: May 9, 2007		By /s/ Debra Fine
		Name: Debra Fine
		Name: Debra Fine Title: President and Chief Executive Officer
		Title: President and Chief Executive Officer

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