Genius Brands International, Inc. "Genius Brands" (GNUS), the
global brand management company that creates and licenses
multimedia entertainment content for children, released a letter to
shareholders from Chairman & CEO Andy Heyward. The complete
letter follows:
Dear Friends and Shareholders, SpongeBob
SquarePants, in my opinion, is the most clever and
well-written children’s series of the last 20 years. I share this
because at Genius Brands (NASDAQ:GNUS), we hired that same head
writer of SpongeBob, Steven Banks, to be head
writer of STAN LEE’S SUPERHERO
KINDERGARTEN.
After reading the “Pilot Episode” of the series, I’m more
excited than ever about Superhero Kindergarten becoming a mega-hit
and pillar of enduring value for Genius Brands. In
fact, we are so excited, I’m sharing the ‘Pilot Script’ and
the ‘Series Bible’ for everyone to read and enjoy.
Studios generally don’t share their scripts or their work
products before they come out. In fact, it’s extremely
unusual. They don’t want to be ripped off, or tip their hands to
the competition. However, at Genius Brands, we think that
Stan Lee’s Superhero Kindergarten is so superior,
that it would be very, very, hard for anyone to catch this
fast-moving bullet train. The team crafting this show,
in my opinion, is the very best out there. Kartoon Channel!’s
Chief Content Officer, David Neuman, is personally giving script
notes and supervising a punch up of the scripts. (Previously, as
President of Walt Disney Television, and subsequently as VP of
Comedy at NBC, David rode shotgun on such major hits as Home
Improvement, Boy Meets World, Golden Girls, and The Wonderful World
of Disney.)
From our multi-Emmy Award-winning animation director,
Mike Maliani, to celebrated film director
John Landis—who will be directing Arnold
Schwarzenegger’s voice, and the best kids’ voices
anywhere—Stan Lee’s Superhero Kindergarten is one
of 5 tentpoles of value being built at Genius Brands (below), and
we are sure that when you read the Pilot Script
and the Series Bible, you will agree.
GENIUS BRANDS TENTPOLES—REVENUE DRIVERS FOR THE
FUTURE
Each of the below, we believe, will be powerful revenue and
earnings drivers going forward. Here is a quick update for you to
know why our team is so confident.
(Note: We will not see material revenues from these until Q4,
and reported in Q1 2021)
- Kartoon Channel!—We first announced Kartoon
Channel! as a viewing destination which would be a ‘Netflix for
Kids, but Free.’ Since we went live on June 25, we have
had tens of thousands of viewers sign up for the programming
service which is available in over 90% of U.S. TV households in
over 100 million homes and on over 200 million mobile
devices. We continue to grow every day. Within the
first 24 hours, the iOS app has had thousands of downloads and the
reviews in the APP STORE have been 5 Stars***** (even Disney+ has
only 4.7 Star reviews.) We are amidst migrating the iOS
interface to all of our other platforms, including Android and
Roku, among others. (Today,with that same User Experience,
KARTOONCHANNEL.COM WENT LIVE!!!) We continue to curate the
content, so parents know it will always be safe for their kids, and
we strive to put as much enriched content as possible on the air,
from which children can actually learn as they watch and are
entertained. No violence, no improper language, no negative
stereotypes. It is inclusive, it is diverse, and always with
positive messaging. The stars in our shows are diverse
and look like real-people. The shows we run on Kartoon
Channel! are proven hits like Baby Einstein, Yu-Gi-Oh, Babar, Angry
Birds, and Llama Llama, and we recently added Rainbow Rangers which
is currently our #1 show on the channel. We add new content
each week, and it is curated under the leadership of Margaret
Loesch, who has been responsible for more network hits than any
person in children’s broadcasting history. (She goes back to
Smurfs, Muppet Babies, Power Rangers, Spiderman, X-Men, My Little
Pony, and many, many, more).Kartoon Channel! is an AVOD channel,
which means it is fully on-demand, but we will also start adding a
linear segment as well for those who like to visit scheduled
series. We are more confident than ever that Kartoon Channel!
is going to change the face of kids broadcasting as we announce
innovative products that will soon appear on the channel.Especially
in these times, with more and more kids home from school and
viewership up, parents are looking for ways to save money and avoid
costly subscription fees.
- Stan Lee Universe—We are working
hard to make this the next Marvel. Having acquired the rights
to the name, the likeness, the signature, and IP of Stan
Lee, the visionary man behind all of Marvel, and the
creator of 5 of the top 12 biggest grossing movies of all time,
including the #1 biggest movie of all time, the Avengers
Endgame, we know we are sitting on a treasure chest of
huge creative wealth and we are carefully putting the pieces in
place to unlock it. Believe me, the industry has taken note,
and we have had multiple inquiries from the most important
companies in media and retail seeking to participate. Chairman of
the Walt Disney Company, Bob Iger, recently said, “Stan Lee was as
extraordinary as the characters he created. A superhero in his own
right to Marvel fans around the world.” Comic book guru, lifetime
friend of Stan Lee, and Executive Producer of all the Batman
movies, Michael Uslan, has been engaged to be
Creative Director of Stan Lee Universe. We consider the
STAN LEE asset the last huge treasure chest that
was available in Hollywood, and we are confident big things will be
coming forth.
- RAINBOW RANGERS—Rainbow Rangers is a series we
began developing five years ago when we were first told by
retailers that there would be a vacuum in pre-school girls’
products at this time. We brought on three of the most
successful creators in Hollywood— Rob Minkoff, Director of Disney’s
Lion King, Shane Morris, Co-Writer of Disney’s
Frozen, and Elise Allen, Head writer of Disney
Channel’s Lion Guard. Together, they created
a masterpiece for us as we pivoted away from girls shows
about princesses and instead went to empowered aspirational girls
who care about our planet and fixing it. The Rainbow Rangers
are a diverse group of girls who live on the other side of the
Rainbow and their mission is to protect the planet and its
animals. We describe it as a “Paw Patrol for girls.”
Paw Patrol became a multi-billion dollar business, and that is what
we are shooting for with Rainbow Rangers. Mattel/Fisher-Price is
our master toy licensee, and toys have just come into the market.
In fact, the small initial burst sold out immediately, and we are
waiting for replenishment to occur this month. The toy
commercials will start up immediately as soon as products are in
stock at Walmart and Amazon. In the meantime, we have products of
virtually all kinds licensed… over 375 SKUs, including publishing,
apparel, sleepwear, bikes, swimwear, party goods, costumes, games,
etc. We have moved the show on to Kartoon
Channel! as well as Nick Jr. and we have high hopes for
its performance. By the end of the Christmas season, we will have a
good idea if we have the hit we believe we do.
- CATALOG—The 4th tentpole of revenue for Genius
is our catalog. We have shows like Llama Llama on Netflix
starring Jennifer Garner, based on the NYT Best Selling children’s
books. We run the merchandise program for that as well, which
we share with the author and Penguin Books. There are over 30
million Llama Llama books in print, and we are confident that they
will drive continuous global catalog sales as well as consumer
products from which the company enjoys a robust royalty.
Llama Llama is joined by other shows like Warren Buffett’s Secret
Millionaires Club and Thomas Edison’s Secret Lab, shows where kids
learn lessons in financial literacy and in science
respectively. There are several hundred shows in our catalog
and taken together, they present a powerful asset which will be
continuously licensed to broadcasters around the world.
There is one last “Tentpole of Growth.”
- Our Balance Sheet and Our Cash PositionGenius
Brands is in an extraordinary financial position today. Our
balance sheet is pristine. We have ZERO debt, and over $50 million
in cash. We run an efficient and lean organization, and
we have low overhead. Particularly so vis a vis our
competitors. We have substantial receivables and substantial
assets which are poised to begin throwing off cash from global
program sales of shows already produced and painstakingly paid for
over the last few years, as well as a large number of consumer
products licensees who pay us royalties for our characters
appearing on their products. We expect to start seeing the
fruits of all of this in Q1 2021, as well as ad sales from the
growing Kartoon Channel! starting to now come online.
It is an exciting time for Genius Brands, but it is important
for our shareholders to recognize that we are not in a business
that reaps fruits overnight and to temper their expectations. We
are building animated intellectual property for children. The same
way that Disney, Marvel, or Warner Brothers has done. We have
accelerated the process, for sure, and are moving with tremendous
speed, but a 3-minute egg cannot be cooked in one minute, no matter
how many burners are cooking. We have now planted the seeds
and we have every confidence that they are going to pay off.
For now, please enjoy the Series Bible, Pilot Script,
and Trailer, of Stan Lee’s Superhero Kindergarten, and you will
have a taste of what is coming, and why we are
confident!
Sincerely,
Andy Heyward Chairman & CEO Genius Brands International,
Inc.
LINK TO STAN LEE’S SUPERHERO
KINDERGARTEN SERIES BIBLE, PILOT SCRIPT AND
TRAILER:
https://www.gnusbrands.com/shkbible
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.
INVESTOR RELATIONS
CONTACT:
ir@gnusbrands.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a0a61288-bb3e-420b-bb5c-f68b51aa257c
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