Genius Brands International Issues Statement in Connection With Second Quarter 10-Q Filing - Seite 2

Genius Brands has an impressive list of corporate initiatives, some of which are noted here, others that have been announced over the past few months, and more still that will made public in the weeks and months ahead. This is particularly meaningful at a time when the global pandemic has forced many companies into survival mode and others still into bankruptcy.

Regarding the 10-Q we filed today, I would like to clarify some potentially confusing elements related to the reduction of the conversion price/exercise price of our 2020 Convertible Notes and the associated Warrants. To be clear, the re-valuation of these options and warrants, which is partially a result of fluctuations in our stock price, is a non-cash event. The revaluation adjustments appear as expense charges in our statements of operations for the three and six months ended June 30, 2020. We must emphasize that these line items, which show charges amounting to approximately $383 million for the second quarter, do not reflect a cash loss.

Allowing our investors to convert their notes was important to improving our balance sheet. In fact, in doing this we added approximately $4 million of new and additional cash to our balance sheet. We now have over $52 million in cash. We also eliminated all corporate debt. The $13.75 million of our senior convertible notes were converted into shares of common stock.”

Andy Heyward continued:

“As I have frequently communicated to our shareholders, the steps we have taken over the past few months to shore up our capital position are being done with one goal in mind: providing Genius Brands with the continued financial flexibility to take advantage of the many value-creating opportunities in the sector.

We have already seen how the ability to take advantage of opportunities when they present themselves is helping us grow the company and position us for even greater success. For example, last month we announced an agreement for Stan Lee Universe to be distributed by Archie Comic Publications, the #1 most widely distributed comic book company in the United States. Concurrently, we announced that Oscar winning producer (Batman), long-time Stan Lee friend and collaborator, Michael Uslan, has been appointed as Creative Director of the Stan Lee Universe brand, for comic books, motion pictures, and television. With Stan Lee Universe, we are building the next MARVEL, based on the creations of the man who built the original Marvel – Stan Lee.