Genius Brands International, Inc. (“Genius Brands” or the
“Company”) (NASDAQ:GNUS), the global brand management company that
creates and licenses multimedia entertainment content for children,
today filed a definitive proxy statement in connection with a
special meeting of stockholders that will be held via live webcast
at 10:00 a.m. Pacific Daylight Time, on Thursday, August 27, 2020.
Genius Brands Chairman & CEO, Andy Heyward,
sent the following letter to stockholders in connection with this
filing:
Dear Shareholders,
Today we filed a
definitive proxy for a special meeting of stockholders to be
held on Thursday, August 27, 2020. The purpose of this meeting
is to amend our Articles of Incorporation to increase the
authorized number of shares of Genius Brands International, Inc.
common stock from 233 million to 400 million shares, and to adopt
our 2020 Incentive Plan.
Let me explain why we are doing this –
and why your vote is important.
I want to make sure that all our shareholders
understand exactly why we have proposed this amendment and
Incentive Plan, and why we are confident it is in the shareholders’
interests. The purpose of these new shares will be to take
advantage of unusual current opportunities to acquire assets in the
consolidating entertainment space, which will be
accretive to the company. It will
additionally, enable us to attract, motivate, and retain qualified
individuals upon whom our business and accretive growth strategy to
create value, depends.
Normally, people associate the issuance of
shares with dilution, however when the dilution is accretive, the
benefit to the company is exceeded by the acquisition of the asset,
and is greater than the dilutive effect. That is the primary
purpose of having these new shares available.
I speak not only as your Chairman and CEO, but
as one of the largest shareholders in the company, whose interests
are fully aligned with those of our shareholders of common stock to
create value. We have only one class of voting stock, it is
common stock and mine is the exact same as all other
shareholders.
Today, there is great consolidation going on in
the entertainment industry. There are valuable program and
distribution assets available and a smart company able to be
nimble, can acquire them on extremely attractive terms, and may
witness values that might not be available for a long
time. The Genius common stock is a valuable currency that I
believe will enable us to do that.
One only needs to look at The Walt Disney
Company’s ‘playbook’, to see the value changing transformation of
important assets….all acquired through issuance of new
stock.
- Pixar
- Lucasfilm/Star Wars
- Marvel Entertainment
Imagine what the Walt Disney Company would have
been today without having moved to acquire Pixar, LucasFilm, or
Marvel. We believe there are opportunities today for
Genius Brands as well, which can be equally as important for our
own growing company. The preponderance of the proposed
authorized shares are targeted to fuel growth.
Separately, the 2020 Incentive Plan will enable
us to retain and motivate the qualified individuals upon whom our
business and accretive growth strategy depend, as well as attract
new employees with accomplished pedigrees, to further support our
growth strategy. I have often spoken about the caliber of our
management team, and its pedigree from the top of the most
successful companies in Hollywood. I also want to draw
attention to the pedigree of your Board of Directors. We have
the former Managing Director of Entertainment at J.P. Morgan, one
of the largest banks in the world, with a leading global media
mergers and acquisitions practice. We have the former Governor
of California, the former President of ABC Entertainment, and the
former Head of Entertainment for Bear Stearns.
Margaret Loesch, the former President of Marvel Entertainment and
Founder of FOX Kids, which was eventually sold to the Walt Disney
Company for $5.5 Billion dollars, David Neuman, the former
President of Walt Disney Television, and Caroline Tyre, who
launched Cartoon Network Canada, is the leadership team that
recently has brought Kartoon Channel! into the marketplace. Just a
week ago we announced the launch of Kartoon Channel! on iOS with
the debut of an all-new dedicated Kartoon Channel! app, available
free on Apple iOS – to a stunning reception. In just the first 24
hours of availability, our app reached the Top 10 for kids and
received thousands of 5-star ratings. This is the kind
of talent that is joining Genius Brands to lead our growth strategy
going forward. Having them motivated with common stock like us all,
is the best tool for talent acquisition and retention.
We are focused and determined to grow Genius
Brands into the leader in children’s and family entertainment. As
Genius Brand’s largest shareholder, I can say wholeheartedly that
my interests are aligned with our shareholders to create value, and
all of us in management and your board are committed to doing
what’s in our shareholders’ best interests.
We urge you to vote in favor of all proposals at
the special meeting. If you have any questions, please contact the
Company’s proxy solicitor, Morrow Sodali:
509 Madison Avenue, Suite 1608New York, NY
10022Stockholders Call Toll Free: (800) 662-5200
E-mail: GNUS@investor.morrowsodali.com
Stay Tuned…
Andy Heyward
Chairman & CEO
Genius Brands International, Inc.
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 and in
partnership with Alibaba; 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; and entrepreneurship series
Warren Buffett's Secret Millionaires Club. 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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