Genius Brands International to Retire All Senior Secured Convertible Debt
June 23 2020 - 9:20AM
Genius Brands International, Inc. (“Genius Brands” or the
“Company”) (Nasdaq: GNUS), a global brand management company that
creates, licenses, and broadcasts, multimedia entertainment content
for children, today announced that it has come to an agreement with
all of its existing senior secured convertible noteholders to have
the noteholders pre-pay their Notes for an aggregate of $4 million,
three months early and then have the noteholders convert all of
their $13.75 million of debt to equity. The Company has agreed to
register for resale the shares issued upon conversion of the
Notes. The Notes, which were set to amortize over 12 equal
monthly payments beginning in September 2020, per terms of the
previous agreement negotiated in March, will all be converted into
equity shortly after the close. The result will leave the
company debt free and with $55 million of cash on the balance
sheet.
Andy Heyward, Chairman & CEO of Genius
Brands, commented, “This is a win-win for all parties. The
Company today is debt free and holding $55 million in cash.
The Company is uniquely positioned to take steps to build Kartoon
Channel! into the pre-eminent childrens’ broadcaster anywhere, and
produce, acquire, and license, the most compelling,
forward-thinking programming for children today. We are
delighted that our existing senior secured debt holders had the
confidence in the Company to pre-pay the $4,000,000 Note obligation
and to then convert their entire debt into equity right
away.
This is on top of the extremely strong reaction
to our all-new comedy-action-adventure animated series for
children, Stan Lee’s Superhero Kindergarten, starring Arnold
Schwarzenegger, and being co-produced with our partner Alibaba to
debut concurrently on Kartoon Channel! in the U.S. and Alibaba’s
kid’s platform in China. With these latest financing transactions,
we have significantly enhanced our balance sheet and have built a
solid foundation for growth. We look forward to providing
updates on a number of key operational milestones in the days
ahead.”
Additional details about the debt conversion are
available in the Company’s Form 8-K filed with the Securities and
Exchange Commission today, which is available on the Company’s
website and at: www.sec.gov.
The common stock to be issued pursuant to the
conversion of the Notes has not been registered under the
Securities Act of 1933 or any state securities laws and, until so
registered, may not be offered or sold in the United States or any
state absent registration or an applicable exemption from
registration requirements.
This news release shall not constitute an offer
to sell or the solicitation of an offer to buy, nor shall there be
any sale of these securities in any state or jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
About Genius Brands International
Genius Brands International, Inc. (Nasdaq: GNUS)
is a leading global kids media company developing, producing,
marketing and licensing branded children’s entertainment properties
and consumer products for media and retail distribution. The
Company’s award-winning ‘content with a purpose’ portfolio
includes the upcoming Stan Lee’s Superhero Kindergarten,
starring Arnold Schwarzenegger; Rainbow Rangers for Nick
Jr.; Llama Llama, starring Jennifer Garner, for Netflix;
award-winning toddler brand Baby Genius; adventure comedy
STEM series Thomas Edison's Secret Lab; entrepreneurship
series Warren Buffett's Secret Millionaires Club;
and Stan Lee's Cosmic Crusaders, created with Stan Lee's
Pow! Entertainment. Through licensing agreements with leading
partners, characters from Genius Brands’ IP also appear on a wide
range of consumer products for the worldwide retail marketplace.
The Company’s new Kartoon Channel! is available in over 100
million U.S. television households via a broad range of
distribution platforms, including Comcast, Cox, DISH, Amazon
Prime, Sling TV, Apple TV, Roku, Amazon Fire
and more. For additional information, please
visit www.gnusbrands.com.
Forward Looking Statements: Certain statements
in this press release constitute "forward-looking statements"
within the meaning of the federal securities laws. Words such as
"may," "might," "will," "should," "believe," "expect,"
"anticipate," "estimate," "continue," "predict," "forecast,"
"project," "plan," "intend" or similar expressions, or statements
regarding intent, belief, or current expectations, are
forward-looking statements. While the Company believes these
forward-looking statements are reasonable, undue reliance should
not be placed on any such forward-looking statements, which are
based on information available to us on the date of this release.
These forward looking statements are based upon current estimates
and assumptions and are subject to various risks and uncertainties,
including without limitation, our ability to generate revenue or
achieve profitability; our ability to obtain additional financing
on acceptable terms, if at all; our ability to repay our
outstanding debt; the potential issuance of a significant number of
shares to our convertible note holders which will dilute our equity
holders; fluctuations in the results of our operations from period
to period; general economic and financial conditions; our ability
to anticipate changes in popular culture, media and movies, fashion
and technology; competitive pressure from other distributors of
content and within the retail market; our reliance on and
relationships with third-party production and animation studios;
our ability to market and advertise our products; our reliance on
third-parties to promote our products; our ability to keep pace
with technological advances; our ability to protect our
intellectual property and those other risk factors set forth in the
“Risk Factors” section of the Company’s most recent Annual Report
on Form 10-K and in the Company's subsequent filings with the
Securities and Exchange Commission (the "SEC"). Thus, actual
results could be materially different. The Company expressly
disclaims any obligation to update or alter statements whether as a
result of new information, future events or otherwise, except as
required by law.
MEDIA CONTACT:pr@gnusbrands.com
INVESTOR RELATIONS
CONTACT:
ir@gnusbrands.com
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