Kartoon Studios, Inc. Blog


June 26, 2020 Posted By: Andy Heyward

Last night, we filed a Form 4 document which pertains to transactions of company officers.  You may have noticed that I converted notes (debt) that otherwise sit at the top of the cap table, into common stock (equity) as part of the debt conversion deal that was announced last Tuesday (June 23rd). This transaction reflects my strong confidence in the company and our future. It also reflects that as the largest shareholder in Genius Brands, myself, my interests are fully aligned with my fellow shareholders. (It was wrongly reported that I sold shares in the company, which I did not do.  In fact, it was a cashless exercise redeeming debt for equity. I should also point out that I have never sold a single share in the company, and I have no intention to do so.)

I also want to take this opportunity to provide a little color around last week’s debt conversion deal, and its benefit to the company:

  • By registering our shares and allowing investors to convert their notes, we added approximately $4 million of new and additional cash to our balance sheet. We now have over $55 million in cash.
  • We also removed all our debt. The $13.75 million of previous debt is now gone.
  • Our balance sheet is now pristine and powerful, and we are in a position to be opportunistic. It’s no secret that we are determined to grow Genius Brands into the dominant force in children’s entertainment, and we have both the manpower and creative capital to do so. Now we also have taken the first step towards having the financial capital to do so. In this business, those windows of opportunity can appear quickly, and we need to be nimble to meet them.

Genius Brands is a long-term story. As my friend Warren Buffett has said, "Someone's sitting in the shade today because someone planted a tree a long time ago."

I have been in the children’s entertainment business my whole career. Along with the top-tier executives we have hired, we have an extraordinary team that knows how to create successful products and programming that will last for many years. For those who are patient investors, the reward will come.

It begins with the very best talent. That means, creators, writers, directors, marketers, and broadcasters. That is where hits come from. And when those hits are put on a powerful distribution platform, they are seen wide, and that's when magic happens, because the toys and all the myriad products for kids, will come forth from that ground

Please enjoy the attached trailer of STAN LEE'S SUPERHERO KINDERGARTEN, and the dream team that is now working for us, and you will see what we are talking about. Coming to Kartoon Channel!


Andy Heyward
Chairman & CEO
Genius Brands International, Inc.

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.

© 2020 Genius Brands International, Inc. All rights reserved.

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