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Item 9A. Controls and Procedures

2023-04-13 compared with 2022-04-06 · 1677 added, 2601 removed, 598 unchanged (88% of the section changed)

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Internal Control over Financial Reporting

Our management is responsible

for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated

under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial

officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies

and procedures that:

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive officer and principal financial officer and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts

and expenditures are being made only in accordance with authorizations of our management and directors;

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of our inherent limitations,

our internal control over financial reporting may not prevent or detect misstatements.

Therefore, even those systems determined to be

effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the

effectiveness of our internal control over financial reporting as of December 31, 2021.

In making this assessment, management used the

criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control –

Integrated Framework (2013 Framework).

Based on this

assessment, our management, with the participation of our Chief Executive Officer (principal executive officer) and our Chief

Financial Officer (principal financial and accounting officer), has concluded that, as of December 31, 2021, our internal control

over financial reporting was not effective based on those criteria.

material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a

reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on

a timely basis.

ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are observed in many

small companies with a small number of accounting and financial reporting staff:

Because of our inherent limitations, our internal control over financial reporting may not prevent or detect misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013 Framework).

Based on this assessment, our management, with the participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial and accounting officer), has concluded that, as of December 31, 2022, our internal controls over financial reporting were not effective based on those criteria.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are observed in many small companies with a small number of accounting and financial reporting staff:

• Insufficient segregation of duties on certain controls or processes;

• Limited resources to design and implement internal control procedures to support financial reporting objectives;

Lack of risk assessment procedures on internal controls to detect financial reporting risks on a timely manner;

Insufficient documentation related to review type controls and information technology controls.

• The Company did not appropriately evaluate revenue recognition under ASC 606 for their AVOD/SVOD revenue streams for contracts with streaming platforms;

• Lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner;

• Insufficient procedures and documentation related to review type controls and information technology controls including complex transactions such as business combinations.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation,

under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer,

of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)

under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’).

Disclosure controls and procedures

include, without limitation, controls and procedures that are designed to ensure that information required to be disclosed by an issuer

in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including

its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions

regarding required disclosure.

Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure

controls and procedures were effective for the year ended December 31, 2021, in ensuring that information that we are required to

disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods

specified in the SEC rules and forms.

Plan to Remediate the Material Weaknesses

Management had been implementing

and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated,

such that these controls are designed, implemented, and operating effectively.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’).

Disclosure controls and procedures include, without limitation, controls and procedures that are designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective for the year ended December 31, 2022, in ensuring that information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

Management’s Plan to Remediate the Material Weaknesses

Management had been implementing and continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively.

Such measures include the following:

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• Continue to develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures.

Changes in Internal Control over Financial

the year ended December 31, 2021, we continued to execute upon our planned remediation actions which are all intended to strengthen our

overall control environment.

This included hiring additional accounting personnel during the year at our corporate headquarters

and other locations.

We are committed to maintaining a strong internal control environment and believe that these remediation efforts

will represent significant improvements in our control environment.

Our management will continue to monitor and evaluate the relevance

of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis

and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2022, we continued to execute upon our planned remediation actions which are all intended to strengthen our overall control environment.

This included hiring additional accounting personnel during the year at our corporate headquarters and other locations.

We are committed to maintaining a strong internal control environment and believe that these remediation efforts will represent significant improvements in our control environment.

Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Inherent Limitations over Internal Controls

Internal control over financial

reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including

the possibility of human error and circumvention by collusion or overriding of controls.

Accordingly, even an effective internal control

system may not prevent or detect material misstatements on a timely basis.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance

with the policies or procedures may deteriorate.

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls.

Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Other Information

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Directors, Executive Officers and Corporate Governance

Board of Directors,

Executive Officers, Promoters and Control Persons

following table sets forth information about our directors and executive officers as of April 4, 2022:

Chief Executive Officer and Chairman of the Board of Directors

Chief Financial Officer

Chief Operating Officer and Corporate Secretary

Joseph “Gray” Davis *

Clark Hallren *

Michael Klein *

Margaret Loesch

Lynne Segall*

Anthony Thomopoulos *

Cynthia Turner-Graham*

Board of Directors, Executive Officers, Promoters and Control Persons

The following table sets forth information about our directors and executive officers as of March 28, 2023:

Name Age Position

Andy Heyward 74 Chief Executive Officer and Chairman of the Board of Directors

Denton 63 Chief Financial Officer

Jaffa 57 Chief Operating Officer and Corporate Secretary

Michael Hirsh (1) 75 Director, Chief Executive Officer of Mainframe Studios

Joseph “Gray” Davis * 80 Director

Clark Hallren * 61 Director

Margaret Loesch* 76 Director

Lynne Segall* 70 Director

Anthony Thomopoulos* 85 Director

Cynthia Turner-Graham* 68 Director

Stefan Piëch (1) 52 Director

__________________

* Denotes directors who are “independent”

under applicable SEC and Nasdaq rules.

Our directors hold office

until the earlier of their death, resignation or removal or until their successors have been elected and qualified.

Our Board of Directors has

reviewed the materiality of any relationship that each of our directors has with the Company, either directly or indirectly.

this review, our Board of Directors has determined that the following members of the Board of Directors are “independent directors”

as defined by the Nasdaq Marketplace Rules:

* Denotes directors who are “independent” under applicable SEC and Nasdaq rules.

(1) Effective June 23, 2022, Michael Hirsh and Dr.

Stefan Piëch were elected as members of our Board of Directors

Our directors hold office until the earlier of their death, resignation or removal or until their successors have been elected and qualified.

Our Board of Directors has reviewed the materiality of any relationship that each of our directors has with the Company, either directly or indirectly.

Based upon this review, our Board of Directors has determined that the following members of the Board of Directors are “independent directors” as defined by the Nasdaq Marketplace Rules:

Joseph “Gray” Davis, P.

Clark Hallren, Michael Klein, Lynne Segall,

Anthony Thomopoulos and Dr.

Clark Hallren, Lynne Segall, Margaret Loesch, Anthony Thomopoulos and Dr.

Cynthia Turner-Graham.

Andy Heyward, 73, has

been the Company’s Chief Executive Officer since November 2013 and the Company’s Chairman of the Board since December 2013.

Heyward co-founded DIC Animation City in 1983 and served as its Chief Executive Officer until its sale in 1993 to Capital Cities/

Andy Heyward, 74, has been the Company’s Chief Executive Officer since November 2013 and the Company’s Chairman of the Board since December 2013.

Heyward co-founded DIC Animation City in 1983 and served as its Chief Executive Officer until its sale in 1993 to Capital Cities/ ABC, Inc.

which was eventually bought by The Walt Disney Company in 1995.

Heyward ran the company while it was owned by The Walt Disney

Company until 2000 when Mr.

Heyward ran the company while it was owned by The Walt Disney Company until 2000 when Mr.

Heyward purchased DIC Entertainment L.P.

and DIC Productions L.P, corporate successors to the DIC Animation

City business, with the assistance of Bain Capital and served as the Chairman and Chief Executive Officer of their acquiring company DIC

Entertainment Corporation, until he took the company public on the AIM.

and DIC Productions L.P.

corporate successors to the DIC Animation City business, with the assistance of Bain Capital and served as the Chairman and Chief Executive Officer of their acquiring company DIC Entertainment Corporation, until he took the company public on the AIM.

He sold the company in 2008.

Heyward co-founded A Squared

Entertainment LLC in 2009 and has served as its Co-President since inception.

Heyward earned a Bachelor of Arts degree in Philosophy

from UCLA and is a member of the Producers Guild of America, the National Academy of Television Arts and the Paley Center (formerly the

Museum of Television and Radio).

Heyward gave the Commencement address in 2011 for the UCLA College of Humanities and was awarded

the 2002 UCLA Alumni Association’s Professional Achievement Award.

He has received multiple Emmys and other awards for Children’s

Entertainment.

Heyward co-founded A Squared Entertainment LLC in 2009 and has served as its Co-President since inception.

Heyward earned a Bachelor of Arts degree in Philosophy from UCLA and is a member of the Producers Guild of America, the National Academy of Television Arts and the Paley Center (formerly the Museum of Television and Radio).

Heyward gave the Commencement address in 2011 for the UCLA College of Humanities and was awarded the 2002 UCLA Alumni Association’s Professional Achievement Award.

He has received multiple Emmys and other awards for Children’s Entertainment.

He serves on the Board of Directors of the Cedars Sinai Medical Center.

Heyward has produced over 5,000 half hour episodes

of award-winning entertainment, among them Inspector Gadget;

Heyward has produced over 5,000 half hour episodes of award-winning entertainment, among them Inspector Gadget;

The Real Ghostbusters;

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The Adventures of Sonic the Hedgehog;

Sabrina The Animated

Sabrina The Animated Series;

Captain Planet and the Planeteers;

Liberty’s Kids, and many others.

Heyward was chosen as a director because of his

extensive experience in children’s entertainment and as co-founder of A Squared Entertainment.

Robert Denton, 62 ,

has been the Company’s Chief Financial Officer since March 2022 and previously served as the Company’s Executive Vice President

of Finance and Accounting from December 14, 2021 through March 2022 and as Chief Financial Officer from April 2018 through December 13,

Heyward was chosen as a director because of his extensive experience in children’s entertainment and as co-founder of A Squared Entertainment.

Robert Denton, 63 , has been the Company’s Chief Financial Officer since March 2022 and previously served as the Company’s Executive Vice President of Finance and Accounting from December 14, 2021 through March 2022 and as Chief Financial Officer from April 2018 through December 13, 2021.

He served as the Chief Financial Officer of Atlys, Inc.

a next-gen media technology company from 2011 to 2018.

He has over 30 years

of experience as a financial executive, specifically in the entertainment industry.

He began his career in 1982 with Ernst & Young

handling filings with the SEC, including initial public offerings.

He left Ernst & Young in 1990 to work as Vice President and Chief

Accounting Officer for LIVE Entertainment, Inc.

He has over 30 years of experience as a financial executive, specifically in the entertainment industry.

He began his career in 1982 with Ernst & Young handling filings with the SEC, including initial public offerings.

He left Ernst & Young in 1990 to work as Vice President and Chief Accounting Officer for LIVE Entertainment, Inc.

In 1996, LIVE was acquired by Artisan Entertainment, Inc., and, in December 2000, Mr.

Denton was promoted to Executive Vice President of Finance and CAO.

Denton also served as the COO of Artisan Home Entertainment, where

he directed all financial reporting, budgeting and forecasting, manufacturing and distribution of the Home Entertainment Division.

Denton also served as the COO of Artisan Home Entertainment, where he directed all financial reporting, budgeting and forecasting, manufacturing and distribution of the Home Entertainment Division.

Denton left Artisan at the end of 2003 and joined DIC Entertainment Corporation to serve as their Chief Financial Officer.

directed the three-year financial audit, due diligence and preparation of the company’s Admission Documents, and he was responsible

for all monthly financial reporting to the Board of Directors as well as the semi-annual reporting to the AIM Exchange of the London Stock

At DIC, he directed the three-year financial audit, due diligence and preparation of the company’s Admission Documents, and he was responsible for all monthly financial reporting to the Board of Directors as well as the semi-annual reporting to the AIM Exchange of the London Stock Exchange.

Denton left DIC in February 2009 after completing the acquisition and transition of DIC to the Cookie Jar Company.

served as the Chief Financial Officer of Gold Circle Films from 2009 to 2011.

Denton served as the Chief Financial Officer of Gold Circle Films from 2009 to 2011.

From 2009 to 2014, Mr.

Denton also owned and operated three

Assisted Living Facilities for the Elderly, to help better care for his mother.

Denton is a Certified Public Accountant and a member

of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants.

Michael Jaffa , 56 ,

was promoted to Chief Operating Officer and General Counsel on December 7, 2020.

Previously he served as the General Counsel and Corporate

Secretary of the Company since April 2018.

From January 2017 through April 2018, Mike served as Thoughtful Media Group’s (TMG) General

Counsel and Global Head of Business Affairs.

Denton also owned and operated three Assisted Living Facilities for the Elderly, to help better care for his mother.

Denton is a Certified Public Accountant and a member of the American Institute of Certified Public Accountants and the California Society of Certified Public Accountants.

Michael Jaffa , 57, was promoted to Chief Operating Officer and General Counsel on December 7, 2020.

Previously he served as the General Counsel and Corporate Secretary of the Company since April 2018.

From January 2017 through April 2018, Mike served as Thoughtful Media Group’s (TMG) General Counsel and Global Head of Business Affairs.

TMG is a multichannel network focused on Asian markets.

Jaffa oversaw all of

TMG’s legal matters, established the framework for TMG’s continued growth in international markets, including a franchise

plan, the formation of a regional headquarters in Southeast Asia and assisted with M&A transactions.

From September 2013 through

December 2016, Mr.

Jaffa worked as the Head of Business Affairs for DreamWorks Animation Television, and before that served in a similar

role at Hasbro Studios from December 2009 through September 2013.

Jaffa has over 20 years of experience handling licensing, production,

merchandising, complex international transactions and employment issues for large and small entertainment companies and technology startups.

Joseph “Gray”

Davis, 78, has been a Director of the Company since December 2013.

Davis served as the 37th governor of California from 1998

Jaffa oversaw all of TMG’s legal matters, established the framework for TMG’s continued growth in international markets, including a franchise plan, the formation of a regional headquarters in Southeast Asia and assisted with M&A transactions.

From September 2013 through December 2016, Mr.

Jaffa worked as the Head of Business Affairs for DreamWorks Animation Television, and before that served in a similar role at Hasbro Studios from December 2009 through September 2013.

Jaffa has over 20 years of experience handling licensing, production, merchandising, complex international transactions and employment issues for large and small entertainment companies and technology startups.

Michael Hirsh, 75 , has been a Director of the Company since 2022 and has served as Chief Executive Officer of Mainframe Studios, a Canadian-related entity of the Company since April 2022.

Hirsh served as Chief Executive Officer from December 2016 until April 2022, when the Company acquired Wow.

Prior to Wow, Mr.

Hirsh founded and was CEO of Cookie Jar which he merged with DHX Media (now Wild Brain) where he served as Executive Chairman from 2012 to 2015.

Hirsh was also a co-founder and CEO of Nelvana from 1971 to 2002 where he developed and

produced numerous award-winning productions including, The Magic School Bus, Care Bears, Babar, Rupert, Beetlejuice, The Adventures of Tintin and created the first Star Wars animated series with George Lucas.

Hirsh has won Daytime Emmy Awards, Gemini Awards, the Joe Shuster Award and a Golden Reel Award.

Hirsh was chosen as a director of the Company based on his experience launching hit productions including the first Star Wars animated programs, The Magic School Bus, Care Bears and Beetlejuice.

Joseph “Gray” Davis, 80, has been a Director of the Company since December 2013.

Davis served as the 37th governor of California from 1998 until 2003.

Davis currently serves as “Of Counsel” in the Los Angeles, California office of Loeb & Loeb LLP.

has served on the Board of Directors of DIC Entertainment and is a member of the bipartisan Think Long Committee, a Senior Fellow at the

UCLA School of Public Affairs and Co-Chair of the Southern California Leadership Counsel.

Davis received his undergraduate degree

from Stanford University and received his Juris Doctorate from Columbia Law School.

Davis served as lieutenant governor of California

from 1995-1998, California State Controller from 1987-1995 and California State Assemblyman from 1982-1986.

Davis was chosen as a

director of the Company based on his knowledge of corporate governance.

Clark Hallren, 59, has

been a Director of the Company since May 2014.

Davis has served on the Board of Directors of DIC Entertainment and is a member of the bipartisan Think Long Committee, a Senior Fellow at the UCLA School of Public Affairs and Co-Chair of the Southern California Leadership Counsel.

Davis received his undergraduate degree from Stanford University and received his Juris Doctorate from Columbia Law School.

Davis served as lieutenant governor of California from 1995-1998, California State Controller from 1987-1995 and California State Assemblyman from 1982-1986.

Davis was chosen as a director of the Company based on his knowledge of corporate governance.

Clark Hallren, 61, has been a Director of the Company since May 2014.

Since August 2013, Mr.

Hallren has been a realtor with HK Lane/Christie’s International

Real Estate and since August 2012, Mr.

Hallren has served as an outside consultant to individuals and entities investing or operating

in the entertainment industry.

Hallren has been a realtor with HK Lane/Christie’s International Real Estate and since August 2012, Mr.

Hallren has served as an outside consultant to individuals and entities investing or operating in the entertainment industry.

From August 2012 to August 2014, Mr.

Hallren was a realtor with Keller Williams Realty and from August

2009 to August 2012, Mr.

Hallren was a realtor with Keller Williams Realty and from August 2009 to August 2012, Mr.

Hallren founded and served as managing partner of Clear Scope Partners, an entertainment advisory company.

1986 to August 2009, Mr.

From 1986 to August 2009, Mr.

Hallren was employed by JP Morgan Securities Inc.

in various capacities, including as Managing Director of the

Entertainment Industries Group.

in various capacities, including as Managing Director of the Entertainment Industries Group.

In his roles with JP Morgan Securities, Mr.

Hallren was responsible for marketing certain products to

his clients, including but not limited to, syndicated senior debt, public and private subordinated debt, public and private equity, securitized

and credit enhanced debt, interest rate derivatives, foreign currency and treasury products.

Hallren holds Finance, Accounting and

Economics degrees from Oklahoma State University.

Hallren was responsible for marketing certain products to his clients, including but not limited to, syndicated senior debt, public and private subordinated debt, public and private equity, securitized and credit enhanced debt, interest rate derivatives, foreign currency and treasury products.

Hallren holds Finance, Accounting and Economics degrees from Oklahoma State University.

He also currently holds Series 7, 24 and 63 securities licenses.

Hallren was chosen

as a director of the Company based on his knowledge and experience in the entertainment industry as well as in banking and finance.

Michael Klein , 73 ,

has been a Director of the Company since March 2019.

Klein is an accomplished executive, entrepreneur, and financier with substantial

experience in media and entertainment, investment banking, professional sports, venture capital funding, and real estate.

Prior to starting

Camden Capital Management, LLC (CCM), Mr.

Klein, since 1996, has led Klein Investment Group after assuming 100% ownership of (and renaming)

Iacocca Capital Partners, L.P., where he was Managing Partner from 1994 to 1996.

From 1984 to 1993, Mr.

Klein was a managing director

at Bear Stearns & Company, where he founded and co-directed the Media-Entertainment Group, and Gruntal & Company, where he was

Senior Managing Director and a member of the Executive Committee.

From 1974 to 1982, Mr.

Klein supplied prime time and mini-series content

to the major television networks through his company, Michael Klein Productions.

Also, during that time, he was an owner and a senior

executive officer of the San Diego Chargers, an NFL Football franchise.

Klein has significant experience in the area of corporate

He has executed and participated in financing deals, both public and private, ranging from $5 million to over $2 billion.

His real estate ventures in Southern California include a 600-acre development in North San Diego, which he sold in various stages.

also has led several real estate ventures in Southern California including the Water Gardens phase two in Santa Monica.

chosen as a director of the Company based on his knowledge and experience in the entertainment industry as well as in banking and finance.

Margaret Loesch, 75, has

been the Executive Chairman of the Kartoon Channel!

since June 2020, a Director of the Company since March 2015 and the Executive Chairman

of the Genius Brands Network since December 2016.

Hallren was chosen as a director of the Company based on his knowledge and experience in the entertainment industry as well as in banking and finance.

Margaret Loesch, 76, has been the Executive Chairman of the Kartoon Channel!

since June 2020, a Director of the Company since March 2015 and the Executive Chairman of the Genius Brands Network since December 2016.

Beginning in 2009 through 2014, Ms.

Loesch, served as Chief Executive Officer and President

of The Hub Network, a cable channel for children and families, including animated features.

The Company has, in the past, provided The

Hub Network with certain children’s programming.

Loesch, served as Chief Executive Officer and President of The Hub Network, a cable channel for children and families, including animated features.

The Company has, in the past, provided The Hub Network with certain children’s programming.

From 2003 through 2009 Ms.

Loesch served as Co-Chief Executive Officer of The Hatchery,

a family entertainment and consumer product company.

Loesch served as Co-Chief Executive Officer of The Hatchery, a family entertainment and consumer product company.

From 1998 through 2001 Ms.

Loesch served as Chief Executive Officer of the Hallmark

Channel, a family related cable channel.

Loesch served as Chief Executive Officer of the Hallmark Channel, a family related cable channel.

From 1990 through 1997 Ms.

Loesch served as the Chief Executive Officer of Fox Kids Network,

a children’s programming block and from 1984 through 1990 served as the Chief Executive Officer of Marvel Productions, a television

and film studio subsidiary of Marvel Entertainment Group.

Loesch obtained her Bachelor of Science from the University of Southern

Loesch was chosen to be a director based on her 40 years of experience at the helm of major children and family programming

and consumer product channels.

Lynne Segall, 68, has

been a Director of the Company since December 2013.

Segall has served as the Senior Vice President and Publisher of The Hollywood

Reporter since June 2011.

Loesch served as the Chief Executive Officer of Fox Kids Network, a children’s programming block and from 1984 through 1990 served as the Chief Executive Officer of Marvel Productions, a television and film studio subsidiary of Marvel Entertainment Group.

Loesch obtained her Bachelor of Science from the University of Southern Mississippi.

Loesch was chosen to be a director based on her 40 years of experience at the helm of major children and family programming and consumer product channels.

Lynne Segall, 70, has been a Director of the Company since December 2013.

Segall has served as the Senior Vice President and Publisher of The Hollywood Reporter since June 2011.

From 2010 to 2011, Ms.

Segall was the Senior Vice President of Deadline Hollywood.

From June 2006 to May 2010,

From June 2006 to May 2010, Ms.

Segall served as the Vice President of Entertainment, Fashion & Luxury advertising at the Los Angeles Times.

received the Women of Achievement Award from The Hollywood Chamber of Commerce and the Women in Excellence Award from the Century City

Chamber of Commerce.

Segall received the Women of Achievement Award from The Hollywood Chamber of Commerce and the Women in Excellence Award from the Century City Chamber of Commerce.

Segall was recognized by the National Association of Women with its Excellence in Media Award.

was chosen to be a director based on her expertise in the entertainment industry.

Anthony Thomopoulos, 83, has

been a Director of the Company since February 2014.

Thomopoulos served as the Chairman of United Artist Pictures from 1986 to 1989

and formed Thomopoulos Pictures, an independent production company of both motion pictures and television programs in 1989 and has served

as its Chief Executive Officer since 1989.

Segall was chosen to be a director based on her expertise in the entertainment industry.

Anthony Thomopoulos, 85, has been a Director of the Company since February 2014.

Thomopoulos served as the Chairman of United Artist Pictures from 1986 to 1989 and formed Thomopoulos Pictures, an independent production company of both motion pictures and television programs in 1989 and has served as its Chief Executive Officer since 1989.

From 1991 to 1995, Mr.

Thomopoulos was the President of Amblin Television, a division of Amblin

Entertainment.

Thomopoulos was the President of Amblin Television, a division of Amblin Entertainment.

Thomopoulos served as the President of International Family Entertainment, Inc.

from 1995 to 1997.

From June 2001 to

January 2004, Mr.

From June 2001 to January 2004, Mr.

Thomopoulos served as the Chairman and Chief Executive Officer of Media Arts Group, a NYSE listed company.

served as a state commissioner of the California Service Corps.

Thomopoulos served as a state commissioner of the California Service Corps.

under Governor Schwarzenegger from 2005 to 2008.

Thomopoulos is also

a founding partner of Morning Light Productions.

Thomopoulos is also a founding partner of Morning Light Productions.

Since he founded it in 2008, Mr.

Thomopoulos has operated Thomopoulos Productions and

has served as a consultant to BKSems, USA, a digital signage company.

Thomopoulos is an advisor and a member of the National Hellenic

Society and holds a degree in Foreign Service from Georgetown University and sat on its Board of Directors from 1978 to 1988.

was chosen as a director of the Company based on his entertainment industry experience.

Cynthia Turner-Graham,

67, has been a Director of the Company since June 15, 2021.

Turner-Graham is a board-certified psychiatrist and Distinguished

Life Fellow of the American Psychiatric Association, who brings over 40 years of experience in the healthcare industry as a practicing

psychiatrist, healthcare administrator and community leader.

Thomopoulos has operated Thomopoulos Productions and has served as a consultant to BKSems, USA, a digital signage company.

Thomopoulos is an advisor and a member of the National Hellenic Society and holds

a degree in Foreign Service from Georgetown University and sat on its Board of Directors from 1978 to 1988.

Thomopoulos was chosen as a director of the Company based on his entertainment industry experience.

Cynthia Turner-Graham, 68, has been a Director of the Company since June 2021.

Turner-Graham is a board-certified psychiatrist and Distinguished Life Fellow of the American Psychiatric Association, who brings over 40 years of experience in the healthcare industry as a practicing psychiatrist, healthcare administrator and community leader.

Since 1988, Dr.

Turner-Graham has been a practicing psychiatrist at an outpatient

psychiatry practice.

Turner-Graham has been a practicing psychiatrist at an outpatient psychiatry practice.

Since 2004, Dr.

Turner-Graham has served as President and Chief Executive Officer of ForSoundMind Enterprises, Inc.,

a provider of outpatient psychiatric services and developer of educational workshop experiences focused on promotion of emotional and

mental health.

Turner-Graham has served as President and Chief Executive Officer of ForSoundMind Enterprises, Inc., a provider of outpatient psychiatric services and developer of educational workshop experiences focused on promotion of emotional and mental health.

From February 2014 until November 2019, she served as Medical Director for Inner City Family Services in Washington, DC.

Among her accomplishments, Dr.

Turner-Graham is the immediate past president of the Suburban Maryland Psychiatric Society, served as

a Director of the Washington Psychiatric Society and will take the helm of Black Psychiatrists of America as President in 2022.

previously served as Clinical Assistant Professor of Psychiatry at both Vanderbilt University and Howard University Schools of Medicine.

Turner-Graham was chosen as a director of the Company based on her career as a distinguished psychiatrist and her expertise with

On March 17, 2022, Karen McTier

notified the Company of her intention to resign from the Board of Directors effective as of March 31, 2022.

Turner-Graham is the immediate past president of the Suburban Maryland Psychiatric Society, served as a Director of the Washington Psychiatric Society and has taken the helm of Black Psychiatrists of America, Inc.

She has previously served as Clinical Assistant Professor of Psychiatry at both Vanderbilt University and Howard University Schools of Medicine.

Turner-Graham was chosen as a director of the Company based on her career as a distinguished psychiatrist and her expertise with children.

Stefan Piëch, 52, has been a Director of the Company since June 23 2022.

Since October 2006, Dr.

Stefan Piëch has served as Chief Executive Officer of Your Family Entertainment AG (“YFE”) and Managing Partner of F&M Film und Medien Beteiligungs GmbH (“F&M”) since 2005.

Piëch was a founding member and the CEO of Openpictures AG from 2000 to 2005.

Piëch also serves on the board of several companies, including on the supervisory board of SEAT S.A.

since 2015, on the supervisory board of Porsche Automobil Holding SE since 2018, on the supervisory board of Siemens Aktiengesellschaft Österreich since 2020 and is Member of the board of the German Chamber of Commerce in Austria since 2020.

Piëch obtained his Bachelor of Arts degree in Film & Media from the University of Stirling and his Ph.D.

in Media from the University of Klagenfurt.

Piëch was chosen to be a director based on his experience with YFE and his deep expertise in creating children’s content.

Family Relationships

are no family relationships between any of our directors and our executive officers.

We believe that good corporate

governance is important to ensure that the Company is managed for the long-term benefit of our stockholders.

This section describes key

corporate governance practices that we have adopted.

Board Leadership Structure and Role in Risk

The Board of Directors has

responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations.

primary responsibility of our Board of Directors is to oversee the management of our company and, in doing so, serve the best interests

of the company and our stockholders.

The Board of Directors selects, evaluates and provides for the succession of executive officers and,

subject to stockholder election, directors.

It reviews and approves corporate objectives and strategies and evaluates significant policies

and proposed major commitments of corporate resources.

Our Board of Directors also participates in decisions that have a potential major

economic impact on our company.

Management keeps the directors informed of company activity through regular communication, including written

reports and presentations at Board of Directors and committee meetings.

Although we have not adopted

a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, we have traditionally determined

that it is in the best interest of the Company and its shareholders to partially combine these roles.

Due to the small size of the Company,

we believe it is currently most effective to have the Chairman and Chief Executive Officers positions combined.

The Company currently has

nine directors, including Mr.

There are no family relationships between any of our directors and our executive officers.

We believe that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stockholders.

This section describes key corporate governance practices that we have adopted.

Board Leadership Structure and Role in Risk Oversight

The Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations.

The primary responsibility of our Board of Directors is to oversee the management of our company and, in doing so, serve the best interests of the company and our stockholders.

The Board of Directors selects, evaluates and provides for the succession of executive officers and, subject to stockholder election, directors.

It reviews and approves corporate objectives and strategies and evaluates significant policies and proposed major commitments of corporate resources.

Our Board of Directors also participates in decisions that have a potential major economic impact on our company.

Management keeps the directors informed of company activity through regular communication, including written reports and presentations at Board of Directors and committee meetings.

Although we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, we have traditionally determined that it is in the best interest of the Company and its shareholders to partially combine these roles.

Due to the small size of the Company, we believe it is currently most effective to have the Chairman and Chief Executive Officers positions combined.

The Company currently has nine directors, including Mr.

Heyward, its Chairman, who also serves as the Company’s Chief Executive Officer.

The Chairman and

the Board are actively involved in the oversight of the Company’s day to day activities.

The Chairman and the Board are actively involved in the oversight of the Company’s day to day activities.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange

Act requires our officers, directors and any persons who own more than 10% of common stock, to file reports of ownership of, and transactions

in, our common stock with the SEC and furnish copies of such reports to us.

Based solely on our reviews of the copies of such forms and

amendments thereto furnished to us and on written representations from officers, directors, and any other person whom we understand owns

more than 10% or our common stock, we found that during 2021, all Section 16(a) filings were made with the SEC on a timely basis except

that one report covering one transaction was filed late by Joseph “Gray” Davis, one report covering one transaction was filed

Clark Hallren, one report covering one transaction was filed late by Michael Klein, one report covering one transaction was

filed late by Lynne Segall, one report covering one transaction was filed late by Karen McTier, one report covering one transaction was

filed late by Anthony Thomopoulos, one report covering one transaction was filed late by Dr.

Cynthia Turner-Graham, one report covering

one transaction relating to RSU vesting was filed late by Andy Heyward, one report covering one transaction relating to RSU vesting was

filed late by Michael Jaffa, one report covering one transaction relating to RSU vesting was filed late by Robert Denton, one Form 3 was

filed late by Harold Chizick, and a Form 3 and one report covering one transaction was filed late by Zrinka Dekic.

Section 16(a) of the Exchange Act requires our officers, directors and any persons who own more than 10% of common stock, to file reports of ownership of, and transactions in, our common stock with the SEC and furnish copies of such reports to us.

Based solely on our reviews of the copies of such forms and amendments thereto furnished to us and on

written representations from officers, directors, and any other person whom we understand owns more than 10% or our common stock, we found that during 2022, all Section 16(a) filings were made with the SEC on a timely basis except that one Form 3 was filed late by Dr.

Stefan Piëch, one Form 3 was filed late by Michael Hirsh, one Form 4 covering two transactions was filed late by Michael Hirsh and one Form 4 covering two transactions was filed late by Michael Hirsh.

Code of Conduct and Ethics

We have adopted a Corporate

Code of Conduct and Ethics and Whistleblower Policy that applies to all of our officers, directors and employees.

A copy of the Code of

Conduct and Ethics and Whistleblower Policy can be obtained, free of charge by submitting a written request to the Company or on our website

at www.gnusbrands.com.

Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that

apply to our directors, principal executive and financial officers will be posted on the “Investor Relations-Corporate Governance”

section of our website at www.gnusbrands.com or included in a Current Report on Form 8-K within four business days following the

date of the amendment or waiver.

We have adopted a Corporate Code of Conduct and Ethics and Whistleblower Policy that applies to all of our officers, directors and employees.

A copy of the Code of Conduct and Ethics and Whistleblower Policy can be obtained, free of charge by submitting a written request to the Company or on our website at www.gnusbrands.com.

Disclosure regarding any amendments to, or waivers from, provisions of the code of conduct and ethics that apply to our directors, principal executive and financial officers will be posted on the “Investor Relations-Corporate Governance” section of our website at www.gnusbrands.com or included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver.

Board Committees

During 2021, our Board of

Directors held 4 meetings.

The following table sets forth

the three standing committees of our Board and the members of each committee and the number of meetings held by our Board of Directors

and the committees during 2021:

Nominating Committee

Investment Committee

Joseph “Gray” Davis

Clark Hallren

Margaret Loesch

Anthony Thomopoulos

Michael Klein

Cynthia Turner-Graham (1)

During 2022, our Board of Directors held four meetings.

The following table sets forth the four standing committees of our Board and the members of each committee and the number of meetings held by our Board of Directors and the committees during 2022:

Director Board Audit

Committee Compensation

Committee Nominating Committee Investment Committee

Andy Heyward Chair

Joseph “Gray” Davis (3) X X X X

Clark Hallren X Chair X X

Margaret Loesch X

Lynne Segall (2) X X Chair

Anthony Thomopoulos (3) Vice Chair Chair

Cynthia Turner-Graham X

Michael Hirsh (1) X

Stefan Piëch (1)

Meetings in 2022:

___________________

Effective June 15, 2021, Dr.

Turner-Graham was elected as a member of our Board of Directors.

The Board of Directors has

adopted a policy under which each member of the Board of Directors makes every effort, but is not required, to attend each annual meeting

of our stockholders.

To assist it in carrying out

its duties, the Board of Directors has delegated certain authority to an Audit Committee, a Compensation Committee, a Nominating Committee and an Investment Committee as the functions of each are described below.

(1) Effective June 23, 2022, Michael Hirsh and Dr.

Stefan Piëch were elected as members of our Board of Directors

(2) Effective July 18, 2022, Lynne Segall replaced Michael Klein on the Audit Committee.

(3) Effective September 1, 2022, Joseph "Gray" Davis replaced Anthony Thomopoulos on the Audit Committee.

The Board of Directors has adopted a policy under which each member of the Board of Directors makes every effort, but is not required, to attend each annual meeting of our stockholders.

To assist it in carrying out its duties, the Board of Directors has delegated certain authority to an Audit Committee, a Compensation Committee, a Nominating Committee and an Investment Committee as the functions of each are described below.

Audit Committee

Hallren, Klein, and Thomopoulos serve on our Audit Committee.

Our Audit Committee’s main function is to oversee our accounting and

financial reporting processes, internal systems of control, independent auditor relationships and the audits of our financial statements.

Davis and Hallren and Ms.

Segall serve on our Audit Committee.

Our Audit Committee’s main function is to oversee our accounting and financial reporting processes, internal systems of control, independent auditor relationships and the audits of our financial statements.

The Audit Committee’s responsibilities include:

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• preparing the report that the SEC requires in our annual proxy statement.

The Board of Directors has

adopted an Audit Committee Charter and the Audit Committee reviews and reassesses the adequacy of the Charter on an annual basis.

Audit Committee members meet Nasdaq’s financial literacy requirements and are independent under applicable SEC and Nasdaq rules,

and the board has further determined that Mr.

Hallren (i) is an “audit committee financial expert” as such term is defined

in Item 407(d) of Regulation S-K promulgated by the SEC and (ii) also meets Nasdaq’s financial sophistication requirements.

A copy of the Audit Committee’s

written charter is publicly available on our website at www.gnusbrands.com .

The Board of Directors has adopted an Audit Committee Charter and the Audit Committee reviews and reassesses the adequacy of the Charter on an annual basis.

The Audit Committee members meet Nasdaq’s financial literacy requirements and are independent under applicable SEC and Nasdaq rules, and the board has further determined that Mr.

Hallren (i) is an “audit committee financial expert” as such term is defined in Item 407(d) of Regulation S-K promulgated by the SEC and (ii) also meets Nasdaq’s financial sophistication requirements.

A copy of the Audit Committee’s written charter is publicly available on our website at www.gnusbrands.com .

Compensation Committee

Thomopoulos and Hallren serve on the Compensation Committee and are independent under the applicable SEC and Nasdaq rules.

Our Compensation

Committee’s main functions are assisting our Board of Directors in discharging its responsibilities relating to the compensation

of outside directors, the Chief Executive Officer and other executive officers, as well as administering any stock incentive plans, we

Our Compensation Committee’s main functions are assisting our Board of Directors in discharging its responsibilities relating to the compensation of outside directors, the Chief Executive Officer and other executive officers, as well as administering any stock incentive plans, we may adopt.

The Compensation Committee’s responsibilities include the following:

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• if required, preparing the report of the Compensation Committee for inclusion in our annual proxy statement.

The Board of Directors has

adopted a Compensation Committee Charter and the Compensation Committee reviews and reassesses the adequacy of the Charter on an annual

The Compensation Committee’s

policy is to offer our executive officers competitive compensation packages that will permit us to attract and retain highly qualified

individuals and to motivate and reward these individuals in an appropriate fashion aligned with the long-term interests of our Company

and our stockholders.

The Board of Directors has adopted a Compensation Committee Charter and the Compensation Committee reviews and reassesses the adequacy of the Charter on an annual basis.

The Compensation Committee’s policy is to offer our executive officers competitive compensation packages that will permit us to attract and retain highly qualified individuals and to motivate and reward these individuals in an appropriate fashion aligned with the long-term interests of our Company and our stockholders.

Compensation Committee Risk Assessment

We have assessed our compensation

programs and concluded that our compensation practices do not create risks that are reasonably likely to have a material adverse effect

A copy of the Compensation

Committee’s written charter is publicly available on our website at www.gnusbrands.com .

We have assessed our compensation programs and concluded that our compensation practices do not create risks that are reasonably likely to have a material adverse effect on us.

A copy of the Compensation Committee’s written charter is publicly available on our website at www.gnusbrands.com .

Nominating Committee

Segall and Messrs.

Davis and Klein serve on our Nominating Committee.

Segall and Mr.

Davis serve on our Nominating Committee.

The Nominating Committee’s responsibilities include:

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• review considerations relating to board composition, including size of the board, term and age limits, and the criteria for membership of the board.

The Board of Directors has

adopted a nominating committee charter and the Nominating Committee reviews and reassesses the adequacy of the Charter on an annual basis.

For all potential candidates, the Nominating Committee may consider all factors it deems relevant, such as a candidate’s personal

integrity and sound judgment, business and professional skills and experience, independence, knowledge of the industry in which we operate,

possible conflicts of interest, diversity, the extent to which the candidate would fill a present need on the Board of Directors, and

concern for the long-term interests of our stockholders.

The Nominating Committee considers

issues of diversity among its members in identifying and considering nominees for director, and strives, where appropriate, to achieve

a diverse balance of backgrounds, perspectives and experience on the board and its committees.

A copy of the Nominating Committee’s

written charter is publicly available on our website at www.gnusbrands.com .

The Board of Directors has adopted a nominating committee charter and the Nominating Committee reviews and reassesses the adequacy of the Charter on an annual basis.

For all potential candidates, the Nominating Committee may consider all factors it deems relevant, such as a candidate’s personal integrity and sound judgment, business and professional skills and experience, independence, knowledge of the industry in which we operate, possible conflicts of interest, diversity, the extent to which the candidate would fill a present need on the Board of Directors, and concern for the long-term interests of our stockholders.

The Nominating Committee considers issues of diversity among its members in identifying and considering nominees for director, and strives, where appropriate, to achieve a diverse balance of backgrounds, perspectives and experience on the board and its committees.

A copy of the Nominating Committee’s written charter is publicly available on our website at www.gnusbrands.com .

Investment Committee

Davis, Hallren and Klein serve on our Investment Committee.

The primary purpose of the Investment Committee is to assist the Board in

reviewing our Investment Policy and strategies and in overseeing our capital and financial resources.

A material investment on behalf

of the Company may not be made without the Committee’s approval or the approval of a delegate of the Committee pursuant to an appropriate

delegation of the Committee’s authority.

In order to carry out its mission and function, and subject to the terms of the Company’s

Certificate of Incorporation, the Committee has the authority to:

· review the investment policy, strategies, transactions

and programs of the Company and its subsidiaries to ensure they are consistent with the goals and objectives of the Company;

· evaluate and approve or disapprove each proposed

material investment on behalf of the Company;

· determine whether the investment policy is consistently

followed and that procedures are in place to ensure that the Company’s investment portfolio is managed in compliance with its policies;

· review the performance of the investment portfolios

of the Company and its subsidiaries;

· approve and revise as appropriate, the Company’s

investment policies and guidelines.

Davis and Hallren serve on our Investment Committee.

The primary purpose of the Investment Committee is to assist the Board in reviewing our Investment Policy and strategies and in overseeing our capital and financial resources.

A material investment on behalf of the Company may not be made without the Committee’s approval or the approval of a delegate of the Committee pursuant to an appropriate delegation of the Committee’s authority.

In order to carry out its mission and function, and subject to the terms of the Company’s Articles of Incorporation, the Committee has the authority to:

• review the investment policy, strategies, transactions and programs of the Company and its subsidiaries to ensure they are consistent with the goals and objectives of the Company;

• evaluate and approve or disapprove each proposed material investment on behalf of the Company;

• determine whether the investment policy is consistently followed and that procedures are in place to ensure that the Company’s investment portfolio is managed in compliance with its policies;

• review the performance of the investment portfolios of the Company and its subsidiaries;

• approve and revise as appropriate, the Company’s investment policies and guidelines.

Stockholder Communications to the Board

Generally, stockholders who

have questions or concerns should contact our Investor Relations department at 212-564-4700.

However, any stockholders who wish to address

questions regarding our business directly with the Board of Directors, or any individual director, should direct his or her questions

in writing to Genius Brands International, Inc., at 190 N.

Generally, stockholders who have questions or concerns should contact our Investor Relations department at 212-564-4700.

However, any stockholders who wish to address questions regarding our business directly with the Board of Directors, or any individual director, should direct his or her questions in writing to Genius Brands International, Inc., at 190 N.

Canon Drive, 4th Floor, Beverly Hills, California 90210, Attn:

Corporate Secretary

or by using the “Contact” page of our website www.gnusbrands.com/contact-us.

Communications will be distributed to the Board,

or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications.

that are unrelated to the duties and responsibilities of the Board may be excluded, such as:

Corporate Secretary or by using the “Contact” page of our website www.gnusbrands.com/contact-us.

Communications will be distributed to the Board, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications.

Items that are unrelated to the duties and responsibilities of the Board may be excluded, such as:

• junk mail and mass mailings;

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• solicitations or advertisements.

In addition, any material

that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be

made available to any outside director upon request.

In addition, any material that is unduly hostile, threatening, or illegal in nature may be excluded, provided that any communication that is filtered out will be made available to any outside director upon request.

EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

This section describes the

material elements of compensation awarded to, earned by or paid to each of our named executive officers.

Our compensation committee will

review and approve the compensation of our executive officers and oversee our executive compensation programs and initiatives.

This section describes the material elements of compensation awarded to, earned by or paid to each of our named executive officers.

Our compensation committee will review and approve the compensation of our executive officers and oversee our executive compensation programs and initiatives.

Summary Compensation Table

The following table provides

information regarding the total compensation for services rendered in all capacities that was earned during the fiscal year indicated

by our named officers for fiscal year 2021 and 2020.

Name and Principal Position

The following table provides information regarding the total compensation for services rendered in all capacities that was earned during the fiscal year indicated by our named officers for fiscal year 2022 and 2021.

Name and Principal Position Year Salary ($) Bonus ($) Stock

($) (1) Option

($) (1) All Other

($) Total ($)

Andy Heyward (2) 2022 440,000 220,000 – – 775,000 1,435,000

Chief Executive Officer 2021 440,000 212,987 – – 543,750 1,196,737

Chief Financial Officer

Jaffa (3) 2022 374,871 150,000 – – – 524,871

Chief Operating Officer, General Counsel and Corporate Secretary 2021 326,326 25,000 – – – 351,326

Michael Hirsh (4) 2022 323,512 – 390,000 316,481 * – 1,029,993

Chief Executive Officer of Mainframe Studios.

______________________

* Excluded from the Option Awards granted to Mr.

Hirsh is the fair value of the replacement options granted upon the acquisition of Wow that were previously earned and vested prior to the acquisition of $341,152.

(1) The aggregate fair value of the stock awards and stock option awards on the date of grant was computed in accordance with FASB ASC Topic 718.

Heyward entered into a five-year employment agreement on November 16, 2018.

Under such employment agreement, Mr.

Heyward was entitled to an annual salary of $300,000.

Heyward entered into a new five-year employment agreement on December 7, 2020.

Under his new employment agreement, Mr.

Heyward is entitled to an annual salary of $440,000.

Heyward entered into a five-year employment agreement on December 7, 2020, pursuant to which is entitled to an annual salary of $440,000.

During 2022, Mr.

Heyward was paid $543,750 in producer fees.

Effective April 18, 2018, the Company entered

into an employment agreement with Mr.

Denton, whereby Mr.

Denton agreed to serve as the Company’s Chief Financial Officer (“CFO”)

for a period of two years, with a mutual option for an additional one-year period, in consideration for an annual salary of $225,000.

On December 7, 2020, Mr.

Denton entered into a new one-year employment agreement, with a mutual option for two additional one-year periods.

Under his new employment agreement, Mr.

Denton is entitled to an annual salary of $300,000 the first year, $325,000 the second year and

$350,000 the third year and an annual signing bonus of $50,000 each year.

On March 7, 2022, Mr.

Denton entered into an amendment

to his employment agreement which extends the term until December 20, 2023 and increased his annual salary to $350,000 for year two and

$375,000 for year three.

On December 7, 2020, the Company granted 950,000

stock options to Mr.

Denton with a strike price of $1.39 and a term of 10 years.

380,000 of the options vested on the grant date with

the remaining options vesting 190,000 each of the next three years.

On December 7, 2020, the Company also granted 475,000 RSUs to Mr.

The RSUs vest 155,000 on the first anniversary, 158,000 on the second anniversary and 162,000 on the third anniversary.

Effective April 16, 2018, the Company entered

into an employment agreement with Mr.

Jaffa, whereby Mr.

Jaffa agreed to serve as the Company’s General Counsel and Senior Vice

President of Business Affairs for a period of year in consideration for an annual salary of $225,000.

On June 7, 2018, Mr.

Jaffa was elected

as the Company’s Corporate Secretary.

Jaffa entered into a new three-year employment agreement on December 7, 2020.

new employment agreement, Mr.

Jaffa is entitled to an annual salary of $325,000 the first year, $350,000 the second year and $375,000

the third year and an annual signing bonus of $50,000 each year.

On December 7, 2020, the Company granted

1,000,000 stock options to Mr.

Heyward was paid $775,000 in producer fees and earned $220,000 in discretionary bonuses.

Jaffa entered into a three-year employment agreement on December 7, 2020.

Under his employment agreement, Mr.

Jaffa is entitled to an annual salary of $325,000 the first year, $350,000 the second year and $375,000 the third year and an annual signing bonus of $50,000 each year.

On December 7, 2020, the Company granted 100,000 stock options to Mr.

Jaffa with a strike price of $13.90 and a term of 10 years.

400,000 of the options vested on the grant

date with the remaining options vesting 200,000 each of the next three years.

On December 7, 2020, the Company also granted 500,000 RSUs

40,000 of the options vested on the grant date with the remaining options vesting 20,000 each of the next three years.

On December 7, 2020, the Company also granted 50,000 RSUs to Mr.

The RSUs vest 16,667 on the first anniversary, 16,667 on the second anniversary and 16,667 on the third anniversary.

(4) Effective April 7, 2022, the Company entered into an employment agreement with Mr.

Hirsh, whereby Mr.

Hirsh agreed to serve as the Chief Executive Officer of the Company's wholly owned subsidiaries WOW Unlimited Inc.

and its subsidiaries Mainframe Studios and Frederator for a period of three years in consideration for an annual salary of $440,000.

Hirsh is also entitled to earn $12,400 as an executive producer fee per 30 minute broadcast episode.

In addition, on June 23, 2022, Mr.

Hirsh was granted 50,000 RSUs with a fair value of $390,000 that vest evenly on each six month anniversary of the grant date and 50,000 options with an exercise price of $7.80 per share, with a fair value of $316,481 on the grant date, that vest 16,666 on the first anniversary, 16,666 on the second anniversary and 16,667 on the third anniversary.

Narrative Disclosure to Summary Compensation

2021, the Company paid $440,000 to Andy Heyward, $300,663 to Robert L.

Denton and $326,326 to Michael A.

In 2020, the Company paid

$311,717 to Mr.

Heyward, $261,158 to Mr.

Denton and $261,880 to Mr.

Base salaries are used to recognize experience, skills, knowledge

and responsibilities required of all of our employees, including our executive officers.

In 2022, the Company paid $440,000 to Andy Heyward, $374,871 to Michael A.

Jaffa and $323,512 to Michael Hirsh.

In 2021, the Company paid $440,000 to Mr.

Heyward and $326,326 to Mr.

Base salaries are used to recognize experience, skills, knowledge and responsibilities required of all of our employees, including our executive officers.

All Other Compensation.

to his employment agreement dated December 7, 2020, Mr.

Heyward is entitled to an Executive Producer fee of $12,500 per one-half hour

episode for each episode for which he provides services as an executive producer.

Pursuant to his employment agreement dated December 7, 2020, Mr.

Heyward is entitled to an Executive Producer fee of $12,500 per one-half hour episode for each episode for which he provides services as an executive producer.

During 2022, Mr.

Heyward was paid $543,750 in producer

Heyward was paid $775,000 in producer fees.

Bonus Compensation.

named executive officers are expected to be eligible to receive an annual bonus award in accordance with their employment agreements and/or

management incentive program then in effect with respect to such executive officer and based on an annualized target of base salary, as

specified in their respective employment agreements, if applicable.

Our named executive officers are expected to be eligible to receive an annual bonus award in accordance with their employment agreements and/or management incentive program then in effect with respect to such executive officer and based on an annualized target of base salary, as specified in their respective employment agreements, if applicable.

In fiscal 2022, Mr.

Heyward was paid a bonus of $73,528 and Mr.

Jaffa were each paid two bonuses totaling $150,000.

Heyward was paid bonuses of $220,000 and Mr.

Jaffa was paid a bonus of $150,000.

In fiscal 2021, Mr.

Heyward was paid a bonus of $212,978 and Mr.

Jaffa were each paid a bonus of $25,000.

Equity Based Incentive

We believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership

culture and help to align the interests of our executives and our stockholders.

In addition, we believe that equity grants with a time-based

vesting feature promote executive retention because this feature incentivizes our named executive officers to remain in our employment

during the vesting period.

Accordingly, our compensation committee and Board periodically review the equity incentive compensation of

our named executive officers and from time to time may grant additional equity incentive awards to them in the form of stock options or

other awards.

As of December 31, 2020, no options granted to our named executive officers have been modified or repriced.

On December 7, 2020, Mr.

received 5,000,000 options with a value of $5,750,000 and 7,500,000 RSUs with a value of $10,425,000.

Heyward also received 7,500,000

performance-based RSUs, however, the performance conditions, therefore a grant date were not yet established on December 7, 2020.

7,500,000 performance-based RSUs were not yet earned as of December 31, 2021.

On December 7, 2020, Mr.

received 950,000 options with a value of $1,092,500 and 475,000 RSUs with a value of $660,250.

On December 7, 2020, Mr.

received 1,000,000 options with a value of $1,150,000 and 500,000 RSUs with a value of $695,000.

Heyward was paid bonuses of $212,987 and Mr.

Jaffa was paid a bonus of $25,000.

Equity Based Incentive Awards .

We believe that equity grants provide our executives with a strong link to our long-term performance, create an ownership culture and help to align the interests of our executives and our stockholders.

In addition, we believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our named executive officers to remain in our employment during the vesting period.

Accordingly, our compensation committee and Board periodically review the equity incentive compensation of our named executive officers and from time to time may grant additional equity incentive awards to them in the form of stock options or other awards.

During the year ended, December 31, 2022, no awards granted to our named executive officers have been modified or repriced.

See Outstanding Equity Awards at Fiscal Year-End below for details.

Employment Agreements

CEO Employment Agreement

On November 16, 2020, the

Company entered into an amended and restated employment agreement with Andy Heyward (the “CEO Employment Agreement”), whereby

Heyward agreed to serve as the Company’s Chief Executive Officer for a period of five years, subject to renewal, in consideration

for an annual salary of $440,000, and an award of 5,000,000 stock options and 15,000,000 RSUs.

Heyward is also eligible to be paid

a producing fee equal to $12,500 per one-half hour episode for each series produced, controlled and distributed by the Company, and for

which he provides material production services provided as the executive producer for up to 52 one-half hour episodes.

Additionally, under

the terms of the CEO Employment Agreement, Mr.

Heyward shall be eligible for a quarterly discretionary bonus of $55,000 per fiscal quarter

if the Company meets certain criteria, as established by the Board of Directors.

Heyward shall be entitled to reimbursement of reasonable

expenses incurred in connection with his employment and the Company may take out and maintain during the term of his tenure a life insurance

policy in the amount of $1,000,000.

On November 16, 2020, the Company entered into an amended and restated employment agreement, as further amended on each of February 22, 2021, June 23, 2021, November 22, 2021, August 25, 2022 and February 27, 2023 (the “CEO Employment Agreement”) with Andy Heyward, whereby Mr.

Heyward agreed to serve as the Company’s Chief Executive Officer for a period of five years, subject to renewal, in consideration for an annual salary of $440,000, and an award of 500,000 stock options and 1,500,000 RSUs.

Heyward is also eligible to be paid a producing fee equal to $12,500 per one-half hour episode for each series produced, controlled and distributed by the Company, and for which he provides material production services provided as the executive producer for up to 52 one-half hour episodes.

Additionally, under the terms of the CEO Employment Agreement, Mr.

Heyward shall be eligible for a quarterly discretionary bonus of $55,000 per fiscal quarter if the Company meets certain criteria, as established by the Board of Directors.

Heyward shall be entitled to reimbursement of reasonable expenses incurred in connection with his employment and the Company may take out and maintain during the term of his tenure a life insurance policy in the amount of $1,000,000.

During the term of his employment and under the terms of the CEO Employment Agreement, Mr.

shall be entitled to be designated as composer on all music contained in the programming produced by the Company and to receive composer’s

royalties from applicable performing rights societies.

Heyward shall be entitled to be designated as composer on all music contained in the programming produced by the Company and to receive composer’s royalties from applicable performing rights societies.

The CEO Employment Agreement provides for the assignment of music royalties to Mr.

Heyward for all musical compositions in which he provides services as a composer for or on behalf of the Company, in the event that the Company acquires up to 50% of the writer's share of the royalties for that musical composition.

If the Company acquires more than 50% of the writer's share of the royalties on musical compositions Mr.

Heyward provided services for, he has the option to purchase the additional royalties from the Company at the price the Company paid to acquire the additional royalties.

The CEO Employment Agreement also makes Mr.

Heyward eligible to receive Executive Producer Fees for up to 52 half-hour episodes per year and provides that Mr.

Heyward shall receive a bonus of $100,000 per quarter for services rendered to the Company’s subsidiary Wow Unlimited Media.

The options granted to Mr.

Heyward were fully vested on the date of grant.

of the RSUs granted to Mr.

One-half of the RSUs granted to Mr.

Heyward vest over time subject to Mr.

Heyward’s continued employment, and one-half vest in equal installments

on the first, second, third and fourth anniversaries of the date of grant, subject to the achievement of certain performance criteria,

to be determined by the Compensation Committee, and subject to Mr.

Heyward’s continued employment, and one-half vest in equal installments on the first, second, third and fourth anniversaries of the date of grant, subject to the achievement of certain performance criteria, to be determined by the Compensation Committee, and subject to Mr.

Heyward’s continued employment.

In the event of Mr.

death or resignation, all compensation then currently due would be payable to his estate.

The CEO Employment Agreement

also entitles Mr.

Heyward’s death or resignation, all compensation then currently due would be payable to his estate.

The CEO Employment Agreement also entitles Mr.

Heyward to separation payments in certain circumstances.

In the event Mr.

Heyward’s employment terminates due

to his death or retirement, in addition to accrued amounts, he is entitled to receive (i) any unpaid quarterly bonus for the fiscal quarter

preceding the fiscal quarter in which such termination occurs and (ii) if earned, a pro-rated quarterly bonus for the fiscal quarter in

which such termination occurs.

In the event Mr.

Heyward’s employment terminates due to his permanent disability, in addition to

accrued amounts, he is entitled to receive (i) any unpaid quarterly bonus for the fiscal quarter preceding the fiscal quarter in which

such termination occurs, (ii) if earned, a pro-rated quarterly bonus for the fiscal quarter in which such termination occurs and (iii)

six monthly payments equal to the amount, if any, of his monthly base salary in excess of any disability benefits being received by Mr.

On June 23, 2021, the Compensation

Committee of the Board of Directors amended such RSU awards so that 3,750,000 of such RSUs shall continue to vest in four equal installments

on the first, second, third and fourth anniversaries of December 7, 2020, subject to his continued employment and the remaining 11,250,000

RSUs shall vest as follows:

(i) 3,750,000 RSUs vest when the Company’s common stock closing sale price equals or exceeds $3.00 per

share or the Company’s market capitalization equals or exceeds $903,000,000 for 20 consecutive trading days;

(ii) 3,750,000 RSUs

vest when the Company’s common stock closing sale price equals or exceeds $3.50 per share or the Company’s market capitalization

equals or exceeds $1,053,500,000 for 20 consecutive trading days, and (iii) 3,750,000 RSUs vest when the Company’s common stock

closing sale price equals or exceeds $3.75 per share or the Company’s market capitalization equals or exceeds $1,128,750,000 for

20 consecutive trading days.

In addition to the stock price and market capitalization vesting conditions set forth above, such 11,250,000

RSUs may also vest in four equal installments on the first, second, third and fourth anniversaries of December 7, 2020, based on achievement

of certain operating performance-based vesting conditions established by the Compensation Committee and subject to his continued employment

and also subject to pro rata adjustment for vesting pursuant to the stock price or market capitalization vesting conditions.

CFO Employment Agreement

On December 7, 2020, the Company

entered into an amended and restated agreement with Robert L.

Denton (as amended, the “CFO Employment Agreement”), whereby

Denton agreed to serve as the Company’s Chief Financial Officer, effective as of December 7, 2020, for a period of one year

with a mutual option for two additional one-year periods.

Under the terms of the CFO Employment Agreement, Mr.

Denton shall be entitled

to an annual discretionary bonus based on his performance.

The CFO Employment Agreement may be terminated either (i) upon the end of the

term, (ii) at any time by the Company for “Cause” (as defined in the CFO Employment Agreement) or (iii) upon an event of retirement,

death or disability.

Upon the termination or expiration of Mr.

Denton’s employment with the Company and for a period of three years

thereafter, certain amounts paid to Mr.

Denton, including any discretionary bonus and stock-based compensation, but excluding his base

salary and reimbursement of certain expenses, will be subject to the Company’s claw back right upon the occurrence of certain events

which are adverse to the Company, including a restatement of financial statements.

In the event of Mr.

Denton’s death or resignation,

all compensation then currently due would be payable to his estate.

The CFO Employment Agreement provides Mr.

with, during the three-year term of the CFO Employment Agreement (i) an annualized base salary of $300,000 for the first year of the term,

$350,000 for the second year of the term, and $375,000 for the third year of the term;

(ii) discretionary annual bonuses determined in

the sole discretion of the Compensation Committee;

and (iii) eligibility to receive renewal bonuses of $50,000 beginning within 60 days

following the effective date of the Amended Employment Agreement and continuing on each anniversary thereafter during the term, subject

Denton’s continued employment.

The agreement granted Mr.

Denton 975,000 stock options and 475,000 RSUs.

The Options granted

Denton were partially vested on the date of grant, and vest with respect to the unvested amounts in substantially equal installments

on the first three anniversaries of the grant date, subject to continued employment.

The RSUs granted to Mr.

Denton vest in three equal

installments on the first three anniversaries of the date of grant, subject to continued employment.

Only unvested Options or RSUs that

would have otherwise vested during the then current term of the CFO Employment Agreement will vest upon Mr.

Denton’s termination

of employment without Cause or resignation for Good Reason, each as defined in the Form Option Grant and Form RSU Grant.

The CFO Employment Agreement

also entitles Mr.

Denton to separation payments in certain circumstances.

In the event Mr.

Denton’s employment terminates due to

his death or retirement, in addition to accrued amounts, he is entitled to receive any unpaid annual bonus for the fiscal year preceding

the fiscal year in which such termination occurs.

Heyward’s employment terminates due to his death or retirement after the age of 65, in addition to accrued base salary and vacation and expense reimbursement, he is entitled to receive (i) any unpaid quarterly bonus for the fiscal quarter preceding the fiscal quarter in which such termination occurs and (ii) if earned, a pro-rated quarterly bonus for the fiscal quarter in which such termination occurs.

In the event Mr.

Denton’s employment terminates due to his permanent disability,

in addition to accrued amounts, he is entitled to receive (i) any unpaid annual bonus for the fiscal year preceding the fiscal year in

which such termination occurs, and (ii) two monthly payments equal to the amount, if any, of his monthly base salary in excess of any

disability benefits being received by Mr.

On March 7, 2022, Mr.

entered into an amendment to his employment agreement which extends the term until December 20, 2023 and increased his annual salary to

$350,000 for year two and $375,000 for year three.

Heyward’s employment terminates due to his permanent disability, in addition to accrued base salary and expense reimbursement, he is entitled to receive (i) any unpaid quarterly

bonus for the fiscal quarter preceding the fiscal quarter in which such termination occurs, (ii) if earned, a pro-rated quarterly bonus for the fiscal quarter in which such termination occurs and (iii) for a period of six months (or for the remaining months of the term of his employment, if less than six months), monthly payments equal to the amount, if any, of his monthly base salary in excess of any disability benefits being received by Mr.

Heyward, provided that he will not be entitled to any compensation under (i), (ii) or (iii) unless he signs a release of claims against the Company.

On June 23, 2021, the Compensation Committee amended 375,000 unvested service-based awards and 750,000 unvested performance-based awards previously issued to Mr.

Heyward, such that the RSUs shall vest based on performance or market conditions.

The total unvested RSUs of 1,125,000 were modified to vest as follows:

(i) 375,000 RSUs vest when the closing sale price of the common stock equals or exceeds $30.00 per share or the Company’s market capitalization equals or exceeds $903,000,000 for 20 consecutive trading days;

(ii) 375,000 RSUs vest when the closing sale price of the common stock equals or exceeds $35.00 per share or the Company’s market capitalization equals or exceeds $1,053,500,000 for 20 consecutive trading days, and (iii) 375,000 RSUs vest when the closing sale price of the common stock equals or exceeds $37.50 per share or the Company’s market capitalization equals or exceeds $1,128,750,000 for 20 consecutive trading days (the “market conditions”).

In the event the stock price and market capitalization vesting conditions set forth above are not achieved, such 1,125,000 RSUs may vest in four equal installments on the first, second, third and fourth anniversaries of December 7, 2020, based on achievement of certain other operating performance-based vesting conditions established by the Compensation Committee on June 23, 2021 and subject to his continued employment, adjusted pro-ratably for vesting pursuant to the market conditions above.

In the event of a Change in Control, the Committee will determine the extent to which the Common Stock Price Hurdles and/or the Market Capitalization Hurdles are achieved based on the value of the consideration per share paid to the Company's stockholders in the Change in Control transaction.

COO and General Counsel Employment Agreement

On December 7, 2020, the Company

entered into an amended and restated agreement (the “COO and General Counsel Employment Agreement”) with Michael A.

Jaffa would assume the role of Chief Operating Officer and General Counsel commencing on December 7, 2020.

The term of the

agreement is three years.

On November 7, 2020, the Company entered into an amended and restated agreement, as further amended on each of December 16, 2021 and January 8, 2023 (the “COO and General Counsel Employment Agreement”) with Michael A.

Jaffa, pursuant to which Mr.

Jaffa would assume the role of Chief Operating Officer ("COO") and General Counsel commencing on December 7, 2020.

The term of the agreement is three years.

In addition, Mr.

Jaffa will be entitled to an annual discretionary bonus based on his performance.

In the event of Mr.

Jaffa’s death or resignation, all compensation then currently due would be payable to his estate.

The COO and General Counsel

Employment Agreement provides Mr.

Jaffa with, during the three year term of the General Counsel Employment Agreement (i) an annualized

base salary of $325,000 for the first year of the term, $350,000 for the second year of the term and $375,000 for the third year of the

term, (ii) discretionary annual bonuses determined in the sole discretion of the Compensation Committee of the Board of Directors of the

Company (the “Compensation Committee”), and (iii) eligibility to receive renewal bonuses of $50,000 beginning within 60 days

following the effective date of the COO and General Counsel Employment Agreement and each anniversary thereafter during the term, subject

The COO and General Counsel Employment Agreement provides Mr.

Jaffa with, during the three year term of the General Counsel Employment Agreement (i) an annualized base salary of $325,000 for the first year of the term, $375,000 for the second year of the term and $450,000 for the third year of the term, (ii) discretionary annual bonuses determined in the sole discretion of the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”), and (iii) eligibility to receive renewal bonuses of $50,000 beginning within 60 days following the effective date of the COO and General Counsel Employment Agreement and each anniversary thereafter during the term, subject to Mr.

Jaffa’s continued employment.

1 unchanged sentence

Jaffa 100,000 stock option and 50,000 RSUs.

The Options granted

Jaffa were partially vested on the date of grant, and vest with respect to the unvested amounts in substantially equal installments

on the first three anniversaries of the grant date, subject to continued employment.

The Options granted to Mr.

Jaffa were partially vested on the date of grant, and vest with respect to the unvested amounts in substantially equal installments on the first three anniversaries of the grant date, subject to continued employment.

The RSUs granted to Mr.

Jaffa vest in three equal

installments on the first three anniversaries of the date of grant, subject to continued employment.

Any unvested Options or RSUs held

Jaffa will vest upon his termination of employment without Cause or resignation for Good Reason, each as defined in the Option

Grant and RSU Grant agreement.

The COO and General Counsel

Employment Agreement also entitles Mr.

Jaffa vest in three equal installments on the first three anniversaries of the date of grant, subject to continued employment.

Any unvested Options or RSUs held by Mr.

Jaffa will vest upon his termination of employment without Cause or resignation for Good Reason, each as defined in the Option Grant and RSU Grant agreement.

The COO and General Counsel Employment Agreement also entitles Mr.

Jaffa to separation payments in certain circumstances.

In the event Mr.

Jaffa’s employment

terminates due to his death or retirement, in addition to accrued amounts, he is entitled to receive any unpaid annual bonus for the fiscal

year preceding the fiscal year in which such termination occurs.

Jaffa’s employment terminates due to his death or retirement after the age of 65, in addition to accrued base salary and vacation and expense reimbursement, he is entitled to receive any unpaid annual bonus for the fiscal year preceding the fiscal year in which such termination occurs.

In the event Mr.

Jaffa’s employment terminates due to his permanent

disability, in addition to accrued amounts, he is entitled to receive (i) any unpaid annual bonus for the fiscal year preceding the fiscal

year in which such termination occurs, and (iii) two monthly payments equal to the amount, if any, of his monthly base salary in excess

of any disability benefits being received by Mr.

Additionally, the COO and

General Counsel Employment Agreement contains certain restrictive covenants regarding confidential information, intellectual property,

non-competition and non-solicitation.

This summary of the COO and General Counsel Employment Agreement is qualified in its entirety by

reference to the full text of the General Counsel Employment Agreement, which is attached hereto as Exhibit 10.2 and incorporated herein

by reference.

Jaffa’s employment terminates due to his permanent disability, in addition to accrued base salary and expense reimbursement, he is entitled to receive (i) any unpaid annual bonus for the fiscal year preceding the fiscal year in which such termination occurs, and (ii) for a period of two months (or for the remaining months of the term of his employment, if less than six months), monthly payments equal to the amount, if any, of his monthly base salary in excess of any disability benefits being received by Mr.

Jaffa, provided that he will not be entitled to any compensation under (i) or (ii) unless he signs a release of claims against the Company.

Additionally, the COO and General Counsel Employment Agreement contains certain restrictive covenants regarding confidential information, intellectual property, non-competition and non-solicitation.

Wow CEO Employment Agreement

Effective April 7, 2022, the Company entered into an employment agreement with Michael Hirsh (the "Hirsh Agreement"), whereby Mr.

Hirsh agreed to serve as the Chief Executive Officer of the Company's wholly owned subsidiaries WOW Unlimited Inc.

and its subsidiaries Mainframe Studios and Frederator for a period of three years in consideration for an annual salary of $440,000.

Hirsh is also eligible for an annual performance bonus of up to 100% of his base salary rate, in the discretion of our board of directors.

Hirsh is also entitled to earn $12,400 as an executive producer fee per 30-minute broadcast episode.

In addition, on June 23, 2022, Mr.

Hirsh was granted 50,000 RSUs with a fair value of $390,000 that vest evenly on each six month anniversary of the grant date and 50,000 options with an exercise price of $7.80 per share and a fair value of $316,481 on the grant date, that vest 16,666 on the first anniversary, 16,667 on the second anniversary and 16,667 on the third anniversary.

Hirsh may at any time terminate his employment upon providing three months' prior written notice to the Company.

Hirsh provides written notice of termination, the Company may at its sole discretion terminate his employment upon providing a pro rata share of his base salary in lieu of notice for the remaining time in the three-month notice period and the payment of any amounts required under applicable employment standards legislation.

The Company may at any time terminate this agreement without cause by providing Mr.

Hirsh written notice during a 24-month notice period.

At the Company's sole discretion, the Company may provide payment in lieu of notice for all or any part of the notice period, by continuing to pay the annual salary on a monthly basis for 12 months and paying a lump sum equal to the annual salary thereafter (the “Termination Payment”).

Hirsh may resign for Good Reason (as defined below) by providing 30 days’ notice after the occurrence of the event constituting Good Reason and providing the Company with 30 days to remedy such event.

If the Company fails to remedy the event within 30 days of notice, then the Company must pay Mr.

Hirsh the Termination Payment.

Hirsh is terminated by the Company without just cause or resigns for Good Reason and has been employed for a full fiscal year prior to such termination, he shall be eligible to receive his standard bonus for such fiscal year.

Further, if Mr.

Hirsh is terminated by the Company without just cause or resigns for Good Reason, any unvested options or RSUs held by him shall automatically vest.

Hirsh is terminated for any reason, the Company will pay Mr.

Hirsh any earned but unpaid salary and expense reimbursement.

By accepting any of the foregoing potential payments due to Mr.

Hirsh upon his termination, Mr.

Hirsh will be deemed to have released any claims, rights or entitlements he may have against the Company.

“Good Reason” is defined in the Hirsh Agreement as one or more of the following events occurring without Mr.

Hirsh’s written consent:

(i) a reduction in his base salary, (ii) a material diminution of Mr.

Hirsh’s authority, duties or responsibilities, (iii) relocation of Mr.

Hirsh’s principal place of employment from a place over 50 kilometers from the Company’s current Toronto office, or (iv) material breach of the Hirsh Agreement by the Company.

Retirement Benefits

As of December 31, 2021, the

Company did not provide any retirement plans to its executive officers or employees.

As of December 31, 2022, the Company did not provide any retirement plans to its executive officers or employees.

Potential Payments upon Termination or Change-in-Control

As of December 31, 2021, the

Company did not provide for any potential payments upon termination or change of control.

Payments upon Termination

Our employment agreements with our named executive officers provide incremental compensation in the event of termination, as described above under Employment Agreements .

Further, our equity incentive plans have provisions for payments to our named executive officers if they are terminated as a result of death or disability.

Under our 2015 Incentive Plan, if a grantee is terminated due to death or disability, the following adjustments shall be made to such grantee’s awards (unless any particular award agreement provides otherwise):

(i) any outstanding options and stock appreciation rights shall become immediately exercisable in full, (ii) any restricted stock shall become immediately vested in full, (iii) any restricted stock units and any unpaid dividend equivalents shall become immediately vested in full, and (iv) any cash awards or other stock-based awards shall become immediately vested in full.

Under our 2020 Incentive Plan, if a grantee is terminated due to death or disability, the Compensation Committee may, in its sole discretion, make the following adjustments to such grantee’s awards:

(i) termination of restrictions in any award agreements (ii) acceleration of any or all installments and rights, and/or (iii)

payment of the grantee’s aggregated accelerated payments in a lump sum to the grantee (or the grantee’s estate, beneficiaries or representative, as applicable).

Payments upon Change in Control

Under our 2015 Incentive Plan, upon a Change in Control, the Compensation Committee may, but is not required to, provide for one or more of the following:

(i) acceleration, vesting or lapsing of awards, (ii) cancellation of awards for fair value (as determined in the sole discretion of the Compensation Committee), (iii) issuance of substitute awards that substantially preserve the terms of the original awards, (iv) provision that options and rights shall be exercisable prior to such Change in Control and then be terminated following the Change in Control, or (v) any other action with respect to the awards as the Compensation Committee determines to be appropriate in its discretion.

Under our 2020 Incentive Plan, upon a Change in Control, the Compensation Committee may, but is not required to, provide for one or more of the following:

(i) assumption of the 2020 Incentive Plan and outstanding awards by the surviving entity or its parent, (ii) issuance of substitute awards that substantially preserve the terms of the original awards, (iii) notice to holders of vested options and rights that such options and rights shall be exercisable prior to such Change in Control and then be terminated following the Change in Control, (iv) settlement of the intrinsic value of outstanding vested options and rights in cash, cash equivalence or equity (regardless of vesting status), (v) cancellation of all unvested or unexercisable awards, or (vi) any other action with respect to the awards as the Compensation Committee determines to be appropriate in its discretion;

provided that in connection with an assumption or substitution awards under (i) or (ii), the awards so assumed or substituted shall continue to vest or become exercisable pursuant to the terms of the original award, except to the extent such terms are otherwise rendered inoperative.

Under our 2015 Incentive Plan and our 2020 Incentive Plan, “Change in Control” is defined to mean any of the following events:

(a) any “person” within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (other than the Company or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) becomes the “beneficial owner” within the meaning of Rule 13d 3 promulgated under the Act of 30% or more of the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of directors;

excluding, however, any circumstance in which such beneficial ownership resulted from any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company or by any corporation controlling, controlled by, or under common control with, the Company;

(b) a change in the composition of the board of directors since the date of shareholder approval, such that the individuals who, as of such date, constituted the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such board;

provided that any individual who becomes a director of the Company subsequent to date of shareholder approval whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent Board;

and provided further, that any individual who was initially elected as a director of the Company as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any person or entity other than the Board shall not be deemed a member of the Incumbent Board;

(c) a reorganization, recapitalization, merger, consolidation or similar form of corporate transaction, or the sale, transfer, or other disposition of all or substantially all of the assets of the Company to an entity that is not an Affiliate (each of the foregoing events, a “Corporate Transaction”) involving the Company, unless securities representing 60% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company or the corporation resulting from such Corporate Transaction, including a corporation that, as a result of such transaction owns all or substantially all of the Company’s assets (or the direct or indirect parent of such corporation), are held immediately subsequent to such transaction by the person or persons who were the beneficial holders of the outstanding voting securities entitled to vote generally in the election of directors of the Company immediately prior to such Corporate Transaction, in substantially the same proportions as their ownership immediately prior to such Corporate Transaction;

or (d) the liquidation or dissolution of the Company (or under the 2020 Incentive Plan, stockholder approval of such liquidation or dissolution), unless such liquidation or dissolution is part of a transaction or series of transactions described in clause (c) above that does not otherwise constitute a Change in Control.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth

outstanding equity awards as of December 31, 2021 to each of the named executive officers.

Option Awards

Stock Units Awards

Number of securities underlying unexercised options (#) exercisable

Number of securities underlying unexercised options (#) unexercisable

Option exercise price ($)

Option expiration date

Equity incentive plan awards:

Number of securities underlying unearned Restricted Stock Units (#)

The following table sets forth outstanding equity awards as of December 31, 2022 to each of the named executive officers.

Option Awards Stock Units Awards

Name Number of securities underlying

unexercised options (#) exercisable Number of securities underlying

unexercised options (#) unexercisable Option exercise price ($) Option expiration date Equity incentive plan awards:

securities underlying unearned Restricted

Stock Units (#) Market Value

of Shares ($)

Andy Heyward 500,000 (1) – 13.90 12/07/30 1,031,250 (2) 14,343,525

Jaffa 8,509 (3) – 20.90 04/16/23 – –

1,500 (3) – 19.90 03/07/24 – –

80,000 (4) 20,000 (4) 13.90 12/07/30 16,667 (5) 231,669

Michael Hirsh 58,270 (6) – 14.90-16.60 04/05/25 – –

– 9,699 (6) 5.10 02/10/26 – –

– 50,000 (7) 7.80 06/23/32 50,000 (7) 390,000

______________________

Heyward’s options vested upon the grant date.

(2) 937,500 of Mr.

Heyward’s RSUs vested on the first anniversary date of December 20, 2021.

23, 2021, the Compensation Committee amended service-based awards granted to the Mr.

Heyward, such that 3,750,000 of such RSUs shall continue

to vest in four equal installments on the first, second, third and fourth anniversaries of December 7, 2020, subject to his continued

employment and the remaining 3,750,000 RSUs shall be modified to vest based on performance or market conditions.

The previously issued

7,500,000 performance-based awards, along with the 3,750,000 modified service-based awards, shall vest as follows:

(i) 3,750,000 RSUs

vest when the closing sale price of the common stock equals or exceeds $3.00 per share or the Company’s market capitalization equals

or exceeds $903,000,000 for 20 consecutive trading days;

(ii) 3,750,000 RSUs vest when the closing sale price of the common stock equals

or exceeds $3.50 per share or the Company’s market capitalization equals or exceeds $1,053,500,000 for 20 consecutive trading days,

and (iii) 3,750,000 RSUs vest when the closing sale price of the common stock equals or exceeds $3.75 per share or the Company’s

market capitalization equals or exceeds $1,128,750,000 for 20 consecutive trading days (the “market conditions”).

to the stock price and market capitalization vesting conditions set forth above, such 11,250,000 RSUs may also vest in four equal installments

on the first, second, third and fourth anniversaries of December 7, 2020, based on achievement of certain operating performance-based

vesting conditions established by the Compensation Committee on June 23, 2021 and subject to his continued employment, adjusted pro-ratably

for vesting pursuant to the market conditions.

Denton’s and Mr.

(2) Of the 375,000 time-based RSUs previously issued to Mr.

Heyward, 93,750 vested on the first anniversary date of December 20, 2021 and 93,750 vested on the second anniversary date of December 31, 2022.

On June 23, 2021, the Compensation Committee amended 375,000 unvested service-based awards and 750,000 unvested performance-based awards previously issued to Mr.

Heyward, such that the RSUs shall vest based on performance or market conditions.

The total unvested RSUs of 1,125,000 were modified to vest as follows:

On April 7, 2022, 281,250 of the 1,125.000 modified RSUs vested upon the achievement of completing the Wow and Ameba acquisitions.

Jaffa’s options vested as of December 31, 2021.

Denton’s options vested 380,000 upon grant and 190,000 vested on the first anniversary date

of December 7, 2021.

190,000 options will vest annually on each anniversary date for the next 2 years.

(4) 40,000 of Mr.

Denton’s RSUs vested on the first anniversary date of December 7, 2021.

vest on the second anniversary date and 162,000 will vest on the third anniversary date.

Jaffa’s options vested 400,000 upon grant and 200,000 vested on the first anniversary date of

December 7, 2021.

200,000 options will vest annually on each anniversary date for the next 2 years.

Jaffa’s options vested upon grant and 20,000 vested on the first anniversary date of December 7, 2021 and 20,000 vested on the second anniversary of December 7, 2022.

The remaining 20,000 options will vest on December 31, 2023.

(5) 16,666 of Mr.

Jaffa’s RSUs vested on the first anniversary date of December 7, 2021.

vest on the second anniversary date and 166,668 will vest on the third anniversary date.

Jaffa’s RSUs vested on the first anniversary date of December 7, 2021 and 16,666 vested on the second anniversary of December 7, 2022.

The remaining 16,668 RSUs will vest on December 7, 2023.

(6) On April 7, 2022, Mr.

Hirsh was granted 67,969 of replacement option awards to purchase the Company's common stock subject to providing continued service to the Company after acquisition of Wow.

The number of shares granted and the exercise prices were based on an exchange ratio upon the acquisition date and the vesting terms remained the same as the original awards previously granted by Wow.

The options expire within 3 years from the replacement option grant date or the original Wow option, whichever is greater.

Of the replacement options granted to Mr.

Hirsh, 58,270 were vested previous to the acquisition date and will expire on April 5, 2025 and 9,699 will vest on February 10, 2024 and expire on February 10, 2026.

(7) On June 23, 2022, Mr.

Hirsh was granted 50,000 RSUs with a fair value of $390,000 that vest evenly on each six month anniversary of the grant date and 50,000 options with an exercise price of $7.80 per share and a fair value of $316,481 on the grant date, that vest 16,666 on the first anniversary, 16,667 on the second anniversary and 16,667 on the third anniversary.

Director Compensation

The following table sets forth

with respect to each of our non-employee directors, compensation information inclusive of equity awards and payments earned for the year

ended December 31, 2021.

The following table sets forth with respect to each of our non-employee directors, compensation information inclusive of equity awards and payments earned for the year ended December 31, 2022.

Name Year Fees

Earned or Paid in Cash

($) (2) All Other

Joseph “Gray” Davis (3) 2022 51,250 – – 51,250

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Anthony Thomopoulos (7) 2022 53,750 – 37,500 91,250

Michael Klein (8)

Cynthia Turner-Graham (8) 2022 40,000 – – 40,000

Michael Hirsh (9) 2022 – 706,481 – 706,481

Stefan Piëch (10)

______________________

(1) Directors, other than Mr.

Heyward, earn $10,000 for each quarterly meeting attended.

Heyward and Mr.

Hirsh, earn $10,000 for each quarterly meeting attended.

Directors, other than Mr.

Heyward, also earn $10,000 as appointed Chairmen and $5,000 as members of the Company’s Compensation,

Audit, Investment and Nominating Committees.

Represents the grant date fair value in accordance with FASB

ASC Topic 718.

The assumptions applied in determining the fair value of the awards are discussed in the Notes to our audited consolidated

financial statements for the year ended December 31, 2021, in the Form 10-K.

Davis was paid $40,000 for services on the Board for 2021 and $5,000

in arrears for services on the Board for 2020, $5,000 as a member the Company’s Nominating Committee and $5,000 as a member of the

Company’s Investment Committee.

Hallren was paid $40,000 for services on the Board for 2021, $5,000

in arrears for services on the Board for 2020.

Hallren was also paid $10,000 as Chair of the Company’s Audit Committee, $5,000

as a member of the Company’s Compensation Committee, $10,000 as Chair of the Company’s Investment Committee and $5,000 for

other consulting services.

Loesch was paid $40,000 for services on the Board for 2021, $5,000 in arrears for services on the Board in 2020 and $90,000 for services as Executive Chairperson of the Kartoon Channel!

Segall was paid $40,000 for services

on the Board for 2021, $5,000 in arrears for services on the Board in 2020 and $10,000 as the Chair of the Company’s Nominating

Thomopoulos was paid $40,000 for services

on the Board for 2021, $5,000 in arrears for services on the Board in 2020, $10,000 as Chair of the Company’s Compensation Committee

$5,000 as a member of the Company’s Audit Committee and $5,000 for other consulting services.

Klein was paid $30,000 for services on the Board, $5,000 as a member

of the Company’s Audit Committee, $5,000 as a member the Company’s Nominating Committee and $5,000 as a member of the Company’s

Investment Committee.

Hirsh and Mr.

Piëch, also earn $10,000 as appointed Chairmen and $5,000 as members of the Company’s Compensation, Audit, Investment and Nominating Committees.

(2) Represents the grant date fair value in accordance with FASB ASC Topic 718.

The assumptions applied in determining the fair value of the awards are discussed in the Notes to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

Davis was paid $40,000 for services on the Board, $1,250 as a member of the Company's Audit Committee, $5,000 as a member of the Company’s Nominating Committee and $5,000 as a member of the Company’s Investment Committee.

Hallren was paid $40,000 for services on the Board, $10,000 as Chair of the Company’s Audit Committee, $5,000 as a member of the Company’s Compensation Committee and $5,000 as a member of the Company’s Investment Committee.

Loesch was paid $40,000 for services on the Board for 2022 and $90,000 for services as Executive Chairperson of the Kartoon Channel!

Segall was paid $40,000 for services on the Board and $10,000 as the Chair of the Company’s Nominating Committee.

Thomopoulos was paid $40,000 for services on the Board, $3,750 as a member of the Company's Audit Committee, $10,000 as Chair of the Company’s Compensation Committee and $37,500 for other consulting services.

Cynthia Turner-Graham was paid $40,000 for services on the Board.

(9) Effective June 23, 2022, Mr.

Hirsh was elected as a member of our Board of Directors and was granted 50,000 RSUs with a value of $390,000 that vest evenly on each six month anniversary of the grant date and 50,000 options with an exercise price of $7.80 per share and a fair value of $316,481 on the grant date, that vest 16,666 on the first anniversary, 16,667 on the second anniversary and 16,667 on the third anniversary.

(10) Effective June 23, 2022, Dr.

Turner-Graham was elected as a member of our Board of Directors.

Turner-Graham was paid $30,000 for services on the Board

Stefan Piëch was elected as a member of our Board of Directors.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table

shows the beneficial ownership of shares of our common stock as of April 4, 2022, known by us through transfer agent and

other records held by:

The following table shows the beneficial ownership of shares of our common stock as of April 12, 2023, known by us through transfer agent and other records held by:

(i) each person who beneficially owns 5% or more of the shares of common stock then outstanding;

our directors;

(ii) each of our directors;

(iii) each of our named executive officers;

and (iv) all of our current directors and executive officers as a

The information in this

table reflects “beneficial ownership” as defined in Rule 13d-3 of the Exchange Act.

To our knowledge and unless

otherwise indicated, each stockholder has sole voting power and investment power over the shares listed as beneficially owned by

such stockholder, subject to community property laws where applicable.

Percentage ownership is based on 304,368,966 shares of common

stock outstanding as of April 4, 2022.

Unless otherwise indicated in the footnotes to the following table, each person named

in the table has sole voting and investment power and that person’s address is c/o 190 N.

Canon Drive, Floor 4, Beverly Hills,

Name of Beneficial Owner

Amount and Nature of Beneficial Ownership (1)

and (iv) all of our current directors and executive officers as a group.

The information in this table reflects “beneficial ownership” as defined in Rule 13d-3 of the Exchange Act.

To our knowledge and unless otherwise indicated, each stockholder has sole voting power and investment power over the shares listed as beneficially owned by such stockholder, subject to community property laws where applicable.

Percentage ownership is based on 32,059,657 shares of common stock outstanding as of April 12, 2023.

Unless otherwise indicated in the footnotes to the following table, each person named in the table has sole voting and investment power and that person’s address is c/o 190 N.

Canon Drive, Floor 4, Beverly Hills, CA 90210.

Name of Beneficial Owner Amount and Nature of Beneficial Ownership

(1) Percent of

Directors and Named Executive Officers

Andy Heyward 2,414,374 (2) 7.42 %

Michael Jaffa 123,342 (3) *

Michael Klein

Denton 117,309 (4) *

Michael Hirsh 152,105 (5) *

Anthony Thomopoulos 3,857 (6) *

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Margaret Loesch 3,845 (7) *

Lynne Segall 3,845 (7) *

Cynthia Turner-Graham 4,345 (8) *

278,127 (9) *

All current executive officers and directors as a group (consisting of 11 persons) 3,108,839 9.46 %

5% Stockholders

BlackRock, Inc.

_______________________

* Indicates ownership less than 1%

Applicable percentage ownership is based on 304,368,966 shares of common stock

outstanding as of April 4, 2022, together with securities exercisable or convertible into shares of common stock within 60 days of April

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power

with respect to securities.

Shares of common stock that a person has the right to acquire beneficial ownership of upon the exercise or

conversion of options, convertible stock, warrants or other securities that are currently exercisable or convertible or that will become

exercisable or convertible within 60 days of April 4, 2022 are deemed to be beneficially owned by the person holding such securities for

the purpose of computing the number of shares beneficially owned and percentage of ownership of such person, but are not treated as outstanding

for the purpose of computing the percentage ownership of any other person.

Consists of (i) 990,728 shares of common stock held by A Squared Holdings LLC

over which Andy Heyward holds sole voting and dispositive power;

(ii) 13,933,032 shares of common stock held by Andy Heyward or issuable

upon vested RSUs;

(iii) 1,234 shares held by Heyward Living Trust;

(iv) 5,000,000 options to acquire shares of common stock issuable upon

the exercise of stock options.

Consists of 83,334 shares of common stock held and 700,088 shares of common stock issuable upon exercise of stock options granted to Mr.

Consists of 77,500 shares of common stock held and 670,088 shares of common stock issuable upon exercise of stock options granted to Mr.

Consists of 99,600 shares of common stock, 20,000 shares of common

stock issuable upon exercise of stock options granted and 120,000 shares of common stock issuable upon the exercise of warrants

granted to Mr.

Klein that will become exercisable within 60 days of December 31, 2021.

(1) Applicable percentage ownership is based on 32,059,657 shares of common stock outstanding as of April 12, 2023, together with securities exercisable or convertible into shares of common stock within 60 days of April 12, 2023.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

Shares of common stock that a person has the right to acquire beneficial ownership of upon the exercise or conversion of options, convertible stock, warrants or other securities that are currently exercisable or convertible or that will become exercisable or convertible within 60 days of April 12, 2023 are deemed to be beneficially owned by the person holding such securities for the purpose of computing the number of shares beneficially owned and percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

(2) Consists of (i) 99,073 shares of common stock held by A Squared Holdings LLC over which Andy Heyward holds sole voting and dispositive power;

(ii) 1,557,366 shares of common stock held by Andy Heyward or issuable upon vested RSUs;

(iii) 257,813 shares of common stock held by AH Gadget IDF LLC an entity controlled by Mr.

Heyward (iv) 123 shares held by Heyward Living Trust;

(v) 500,000 options to acquire shares of common stock issuable upon the exercise of stock options.

that will become exercisable within 60 days of April 12, 2023.

(3) Consists of 33,333 shares of common stock held by Mr.

Jaffa or issuable upon vested RSUs;

and 90,009 shares of common stock issuable upon exercise of stock options granted to Mr.

Jaffa, that will become exercisable within 60 days of April 12, 2023.

(4) Consists of 31,300 shares of common stock held by Mr.

Denton or issuable upon vested RSUs and 86,009 shares of common stock issuable upon exercise of stock options granted to Mr.

Denton, that will become exercisable within 60 days of April 12, 2023.

(5) Consists of 26,168 shares of common stock, 58,270 shares of Exchangeable shares, exchangeable into shares of common stock and 58,270 shares issuable upon exercise of stock options granted to Mr.

Hirsh that will become exercisable within 60 days of April 12, 2023.

(6) Consists of 1,857 shares of common stock held and 2,000 shares of common stock issuable upon exercise of stock options granted to Mr.

Thomopoulos that will become exercisable within 60 days of December 31, 2021.

Consists of 20,000 shares of common stock

issuable upon exercise of stock options granted to each Board Member that will become exercisable within 60 days of December 31,

McTier resigned from the Board effective as of March 31, 2022.

This information is based solely on a Schedule 13G filed with the SEC on February 4, 2022.

Thomopoulos that will become exercisable within 60 days of April 12, 2023.

(7) Consists of 1,845 shares of common stock held and 2,000 shares of common stock issuable upon exercise of stock options granted to each Board Member that will become exercisable within 60 days of April 12, 2023.

(8) Consists of 2,345 shares of common stock held and 2,000 shares of common stock issuable upon exercise of stock options granted to Dr.

Turner-Graham that will become exercisable within 60 days of April 12, 2023.

(9) Consists of 278,127 shares of common stock held by Mr.

Equity Compensation Plan Information

On September 18, 2015, the

Company adopted the Genius Brands International, Inc.

On September 18, 2015, the Company adopted the Genius Brands International, Inc.

2015 Incentive Plan (the “2015 Plan”).

The 2015 Plan was approved by

our stockholders in September 2015.

The 2015 Plan as approved by the stockholders authorized the issuance up to an aggregate of 150,000

shares of common stock.

On December 14, 2015, the Board of Directors voted to amend the 2015 Plan to increase the total number of shares

that can be issued under the 2015 Plan by 1,293,334 from 150,000 shares to 1,443,334 shares.

The increase in shares available for issuance

under the 2015 Plan was approved by stockholders on February 3, 2016.

On May 18, 2017, the Board of Directors voted to amend the 2015

Plan to increase the total number of shares that can be issued under the 2015 Plan by 223,333 shares from 1,443,334 shares to an aggregate

of 1,667,667 shares.

The 2015 Plan was approved by our stockholders in September 2015.

The 2015 Plan as approved by the stockholders authorized the issuance of up to an aggregate of 15,000 shares of common stock.

On December 14, 2015, the Board of Directors voted to amend the 2015 Plan to increase the total number of shares that can be issued under the 2015 Plan by 129,333 from 15,000 shares to 144,333 shares.

The increase in shares available for issuance under the 2015 Plan was approved by stockholders on February 3, 2016.

On May 18, 2017, the Board of Directors voted to amend the 2015 Plan to increase the total number of shares that can be issued under the 2015 Plan by 223,333 shares from 144,333 shares to an aggregate of 166,767 shares.

The increase in shares available for issuance under the 2015 Plan was approved by the stockholders on July 25, 2017.

On September 6, 2018, the

Board of Directors voted to amend the 2015 Plan to increase the total number of shares that can be issued under the 2015 Plan by 500,000

shares from 1,667,667 shares to an aggregate of 2,167,667 shares.

The increase in shares available for issuance under the 2015 Plan was

approved by the Company’s stockholders on October 2, 2018.

On August 4, 2020, the Board

of Directors voted to adopt the Genius Brands International, Inc 2020 Incentive Plan (the “2020 Plan”).

The shares available

for issuance under the 2020 Plan was approved by stockholders on August 27, 2020.

The 2020 Plan as approved by the stockholders increased

the maximum number of shares available for issuance up to an aggregate of 32,167,667 shares of common stock.

The following table reflects,

as of December 31, 2021, compensation plans pursuant to which we are authorized to issue options, warrants, restricted stock units, or

other rights to purchase shares of its common stock, including the number of shares issuable under outstanding options, warrants and rights

issued under the plans and the number of shares remaining available for issuance under the plans.

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities

remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

On September 6, 2018, the Board of Directors voted to amend the 2015 Plan to increase the total number of shares that can be issued under the 2015 Plan by 50,000 shares from 166,767 shares to an aggregate of 216,767 shares.

The increase in shares available for issuance under the 2015 Plan was approved by the Company’s stockholders on October 2, 2018.

On August 4, 2020, the Board of Directors voted to adopt the Genius Brands International, Inc 2020 Incentive Plan (the “2020 Plan”).

The shares available for issuance under the 2020 Plan were approved by stockholders on August 27, 2020.

The 2020 Plan as approved by the stockholders increased the maximum number of shares available for issuance up to an aggregate of 3,216,767 shares of common stock, which does not include shares that the Company may issue related to acquisitions.

The following table reflects, as of December 31, 2022, compensation plans pursuant to which we are authorized to issue options, restricted stock units, common stock or other rights to purchase shares of its common stock, including the

number of shares issuable under outstanding options and rights issued under the plans and the number of shares remaining available for issuance under the plans.

Plan category Number of securities to be issued

upon exercise of outstanding options, vesting of restricted stock units and other rights Weighted-average exercise price of

outstanding options, restricted stock units and other rights Number of securities remaining available

for future issuance under equity

compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by shareholders 3,118,095 $ 18.80 98,672

Equity compensation plans not approved by shareholders – – –

Total 3,118,095 $ 18.80 98,672

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

SEC regulations define the

related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved

exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years in which we

were or are to be a participant and in which a related person had or will have a direct or indirect material interest.

A related person

(i) an executive officer, director or director nominee of the Company, (ii) a beneficial owner of more than 5% of our common stock,

(iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common

stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial

ownership interest or control.

SEC regulations define the related person transactions that require disclosure to include any transaction, arrangement or relationship in which the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years in which we were or are to be a participant and in which a related person had or will have a direct or indirect material interest.

A related person is:

(i) an executive officer, director or director nominee of the Company, (ii) a beneficial owner of more than 5% of our common stock, (iii) an immediate family member of an executive officer, director or director nominee or beneficial owner of more than 5% of our common stock, or (iv) any entity that is owned or controlled by any of the foregoing persons or in which any of the foregoing persons has a substantial ownership interest or control.

Described below are certain transactions or relationships between us and certain related persons.

Pursuant to his employment agreements dated December 7, 2020, Mr.

entitled to an Executive Producer fee of $12,500 per one-half hour episode for each episode he provides services as an executive producer .

Pursuant to his employment agreements dated December 7, 2020, Andy Heyward, the Company’s CEO, is entitled to an Executive Producer fee of $12,500 per one-half hour episode for each episode he provides services as an executive producer .

During the year ended December 31, 2022 and December 31, 2021, Mr.

Heyward earned $775,000 and $543,750 in producer fees, respectively, and earned $220,000 in quarterly bonuses in each year ended.

On August 25, 2022, Mr.

Heyward's employment agreement was amended to include assignment of music royalties to Mr.

If the Company acquires more than 50% of the writer's share of the royalties on musical compositions Mr.

Heyward provided services for, he has the option to purchase the additional royalties from the Company at the price the Company paid to acquire the additional royalties.

During the year ended December 31, 2022, Mr.

Heyward was paid $543,750 in producer fees.

On July 21, 2020, the Company

entered into a merchandising and licensing agreement with Andy Heyward Animation Art (“AHAA”), whose principal is Andy Heyward,

the Company’s Chief Executive Officer.

The Company entered into a customary merchandise license agreement with AHAA for the use

of characters and logos related to Warren Buffett’s Secret Millionaires Club and Stan Lee’s Mighty 7 in connection

with certain products to be sold by AHAA.

The terms and conditions of such license are customary within the industry, and the Company

earns an arm-length industry standard royalty on all sales made by AHAA utilizing the licensed content.

During the year ended December

31, 2021, the Company earned $0 in royalties from this agreement.

On March 11, 2020, Mr.

purchased $1,000,000 of the 2020 Convertible Notes with an original discount of $250,000.

On June 19, 2020, Mr.

received 5,658,474 shares of common stock upon the cashless exercise of 6,119,048 warrants.

On June 23 , 2020,

Heyward received 5,952,381 shares of common stock upon conversion of $1,250,000 of 2020 Convertible Notes.

Review, Approval or Ratification of Transactions

with Related Persons

to the written charter of our Audit Committee, the Audit Committee is responsible for reviewing and approving all transactions both in

which (i) we are a participant and (ii) any parties related to us, including our executive officers, our directors, beneficial owners

of more than 5% of our securities, immediate family members of the foregoing persons and any other persons whom our Board of Directors

determines may be considered related parties under Item 404 of Regulation S-K, has or will have a direct or indirect material interest.

Heyward earned $– in royalties from musical compositions.

Pursuant to his employment agreement dated April 7, 2022, Michael Hirsh, CEO of Wow and its Frederator and Mainframe Studio subsidiaries is entitled to an Executive Producer fee of $12,400 per one-half hour for each episode of any audio-visual production produced by Wow and any of its subsidiaries during the term of his employment, up to 52 episodes per year .

During the year ended December 31, 2022, Mr.

Hirsh earned $– in producer fees under the employment agreement.

On July 21, 2020, the Company entered into a merchandising and licensing agreement with Andy Heyward Animation Art (“AHAA”), whose principal is Andy Heyward.

The Company entered into a customary merchandise license agreement with AHAA for the use of characters and logos related to Warren Buffett’s Secret Millionaires Club and Stan Lee’s Mighty 7 in connection with certain products to be sold by AHAA.

The terms and conditions of such license are customary within the industry, and the Company earns an arm-length industry standard royalty on all sales made by AHAA

utilizing the licensed content.

During the year ended December 31, 2022, Mr.

Heyward earned $– in royalties from this agreement.

On December 1, 2021, the Company entered into an Independent Contractor Agreement for two years with F&M Film and Medien Beteiligungs GmbH ("F&M"), a company controlled by Dr.

Stefan Piëch.

Pursuant to the agreement, F&M will receive $150,000 annually, paid on a semi-monthly basis.

In addition, Dr.

Piëch was granted 30,000 of the Company's RSUs that vest in three six-month intervals beginning on December 1, 2021.

Review, Approval or Ratification of Transactions with Related Persons

Pursuant to the written charter of our Audit Committee, the Audit Committee is responsible for reviewing and approving all transactions both in which (i) we are a participant and (ii) any parties related to us, including our executive officers, our directors, beneficial owners of more than 5% of our securities, immediate family members of the foregoing persons and any other persons whom our Board of Directors determines may be considered related parties under Item 404 of Regulation S-K, has or will have a direct or indirect material interest.

All the transactions described in this section occurred prior to the adoption of the Audit Committee’s charter.

Corporate Governance

believe that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stockholders.

We believe that good corporate governance is important to ensure that the Company is managed for the long-term benefit of our stockholders.

This section describes key corporate governance practices that we have adopted.

Independence of the Board of Directors

Our determination of the

independence of our directors is made using the definition of “independent” contained in the listing standards of the

Nasdaq Capital Market.

Our determination of the independence of our directors is made using the definition of “independent” contained in the listing standards of the Nasdaq Capital Market.

On the basis of information solicited from each director, the board has determined that each of Messrs.

Davis, Hallren, Klein, and Thomopoulos as well as each of Mss.

Segall and Turner-Graham are independent directors within

the meaning of such rules.

Davis, Hallren and Thomopoulos as well as each of Mses.

Segall and Turner-Graham are independent directors within the meaning of such rules.

Principal Accounting Fees and Services

Principal Accountant Fees and Services

The following table sets forth

fees billed to us by our independent registered public accounting firm for the years ended December 31, 2021 and 2020 for (i) services

rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services rendered

that are reasonably related to the performance of the audit or review of our financial statements that are not reported as Audit Fees,

and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

The following table sets forth fees billed to us by our independent registered public accounting firm for the years ended December 31, 2022 and 2021 for (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services rendered that are reasonably related to the performance of the audit or review of our financial statements that are not reported as Audit Fees, and (iii) services rendered in connection with tax preparation, compliance, advice and assistance.

Audit Fees $ 510,019 $ 255,700

Audit-Related Fees 15,000 9,650

Our policy is to pre-approve

all audit and permissible non-audit services performed by the independent registered public accounting firm.

These services may include

audit services, audit-related services, tax services and other services, as follows:

Tax Fees 38,336 64,645

Other Fees – –

Total Fees $ 563,355 $ 329,995

Our policy is to pre-approve all audit and permissible non-audit services performed by the independent registered public accounting firm.

These services may include audit services, audit-related services, tax services and other services, as follows:

• Audit services include audit work performed in the preparation of financial statements, as well as work that generally only the independent auditor can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding financial accounting and/or reporting standards.

3 unchanged sentences

The Company generally does not request such services from the independent auditor.

Under our policy, pre-approval

is generally provided for particular services or categories of services, including planned services, project-based services and routine

consultations.

Under our policy, pre-approval is generally provided for particular services or categories of services, including planned services, project-based services and routine consultations.

In addition, the Board of Directors may also pre-approve particular services on a case-by-case basis.

Our Board of Directors

approved all services that our independent registered public accounting firm provided to us in the past three fiscal years.

Our Board of Directors approved all services that our independent registered public accounting firm provided to us in the past three fiscal years.

Exhibits, Financial Statement Schedules

1 unchanged sentence

See Index to Consolidated Financial Statements at Item 8 herein.

Financial Statement Schedules have been omitted as they are either

not required, not applicable, or the information is otherwise included.

Financial Statement Schedules have been omitted as they are either not required, not applicable, or the information is otherwise included.

EXHIBIT INDEX

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3.1 Articles of Incorporation of Genius Brands International Inc., as amended

3.2 Certificate of Change to the Articles of Incorporation of Genius Brands International, Inc., filed with the Secretary of State of the State of Nevada on February 9, 2023 (Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on February 10, 2023)

3.3 Bylaws of Genius Brands International, Inc., as amended (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on August 19, 2019)

3.4 Amended and Restated Certificate of Designations, Preferences and Rights of the 0% Series A Convertible Preferred Stock, filed with the Secretary of State of Nevada on November 21, 2019 (Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on November 21, 2019)

Form of Investor Warran t (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 3, 2017)

3.5 Certificate of Designation of Series B Preferred Stock (Incorporated by reference to the Company’s Current Report on Form 8-K, filed with the SEC on April 12, 2022)

4.1 Form of Investor Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 3, 2017)

4.2 Form of Investor Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 8, 2018)

20 unchanged sentences

10.17 Securities Purchase Agreement dated January 8, 2018(Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 8, 2018)

Employment Agreement dated April 18, 2018 between Genius Brands International, Inc.

and Robert Denton (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 5, 2018)

10.19 Securities Purchase Agreement dated August 17, 2018 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on August 17, 2018)

3 unchanged sentences

2 to Loan and Security Agreement, effective as of August 27, 2018, by and between Llama Productions LLC and Bank Leumi USA (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 4, 2018)

Amended and Restated Employment Agreement dated November 16, 2018 between Genius Brands International, Inc.

and Andrew Heyward (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 19, 2018)

Employment Agreement dated April 16, 2018 between Genius Brands International, Inc.

and Michael Jaffa (incorporated by reference to the Company’s Annual Report on Form 10-K filed with the SEC on April 1, 2019)

10.23† Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Michael Jaffa, dated November 7, 2020 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 11, 2020)

10.24† Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Andrew Heyward, dated December 7, 2020 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 11, 2020)

10.25 Form of Letter Agreement (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)

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and Harold Aaron Chizick, Jennifer Mara Chizick, Wishing Thumbelina Inc., and Harold Aaron Chizick and Jennifer Mara Chizick, trustees of The Chizick (2019) Family Trust for and on behalf of Harold Aaron Chizick, Jennifer Mara Chizick and Jay Mark Sonshine, the trustees of The Chizick (2019) Family Trust (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 2, 2021)

10.27†* Amendment No.

1 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Andrew Heyward dated February 22, 2021

10.28†* Amendment No.

2 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Andrew Heyward dated June 23, 2021

10.29†* Amendment No.

3 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Andrew Heyward dated November 22, 2021

10.30 Share Purchase Agreement, dated of December 1, 2021, by and among Genius Brands International, Inc.

2 unchanged sentences

and F&M Film-und Medien Beteiligungs GmbH (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 6, 2021)

Employment Agreement, dated as of December 13, 2021, by and between Genius Brands International, Inc.

and Zrinka Dekic (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 14, 2021)

10.32† Stock Option Grant Notice and Stock Option Grant Agreement between Genius Brands International, Inc.

and Zrinka Dekic dated December 9, 2021 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on December 14, 2021)

10.33†* Amendment No.

1 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Michael Jaffa dated December 16, 2021

10.34†* Employment Agreement between Wow Unlimited Media Inc.

and Michael Hirsh dated April 7, 2022

10.35†* Amendment No.

4 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Andrew Heyward dated August 25, 2022

10.36†* Amendment No.

2 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Michael Jaffa dated January 8, 2023

10.37†* Amendment No.

5 to the Amended and Restated Employment Agreement between Genius Brands International, Inc.

and Andrew Heyward dated February 27, 2023

10.38† Genius Brands International, Inc.

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32.2* Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive

Data File (formatted in inline XBRL, and included in exhibit 101).

101.INS Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104.0 Cover Page Interactive Data File (formatted in inline XBRL, and included in exhibit 101).

* Filed herewith.

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Form 10-K Summary

Pursuant to the requirements of the Securities

Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Genius Brands International, Inc.

April 5, 2022

April 13, 2023 By:

/s/ Andy Heyward

Chief Executive Officer (Principal Executive Officer)

April 5, 2022

/s/ Robert L.

April 13, 2023 /s/ Robert L.

Chief Financial Officer (Principal Financial and Accounting Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each

person whose signature appears below constitutes and appoints Andy Heyward and Michael Jaffa, jointly and severally, attorney-in-fact,

with the power of substitution in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the

same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying

and confirming all that each of said attorney-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and

in the capacities and on the dates indicated.

/s/ Andy Heyward

April 5, 2022

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Andy Heyward and Michael Jaffa, jointly and severally, attorney-in-fact, with the power of substitution in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorney-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Andy Heyward April 13, 2023

Chief Executive Officer (Principal Executive Officer)

/s/ Robert L.

April 5, 2022

Denton April 13, 2023

Chief Financial Officer (Principal Financial and Accounting Officer)

/s/ Michael Klein

April 5, 2022

/s/ Michael Klein April 13, 2023

Michael Klein

/s/ Joseph “Gray” Davis

April 5, 2022

/s/ Joseph “Gray” Davis April 13, 2023

Joseph “Gray” Davis

Clark Hallren

April 5, 2022

Clark Hallren April 13, 2023

Clark Hallren

/s/ Lynne Segall

April 5, 2022

/s/ Anthony Thomopoulos

April 5, 2022

/s/ Lynne Segall April 13, 2023

/s/ Anthony Thomopoulos April 13, 2023

Anthony Thomopoulos

/s/ Margaret Loesch

April 5, 2022

/s/ Margaret Loesch April 13, 2023

Margaret Loesch

Cynthia Turner-Graham

April 5, 2022

Cynthia Turner-Graham April 13, 2023

/s/ Michael Hirsh April 13, 2023

/s/ Stefan Piëch April 13, 2023

GENIUS BRANDS INTERNATIONAL, INC.

INDEX TO FINANCIAL STATEMENTS

Audited Financial Statements for the Year Ended December 31, 2021 and 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Audited Financial Statements for the Years Ended December 31, 2022 and 2021

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID:

CONSOLIDATED FINANCIAL STATEMENTS

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Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors

of Genius Brands International, Inc.

To the shareholders and the board of directors of Genius Brands International, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Genius Brands International, Inc.

and its subsidiaries (the “Company”) as of December 31, 2021 and 2020,

the related consolidated statements of operations, comprehensive loss, stockholders' equity and cash flows for the years then ended, and

the related notes to the consolidated financial statements (collectively, the “financial statements”).

In our opinion, the

financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020,

and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted

in the United States of America.

We have audited the accompanying consolidated balance sheets of Genius Brands International, Inc.

and its subsidiaries (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows, for the years then ended, and the related notes to the consolidated financial statements (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material

misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal

control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial

reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

These consolidated financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated

to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in

any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters

below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Film and Television Costs, net

Critical Audit Matter Description

As disclosed in Note 2 to the consolidated financial

statements, the Company capitalizes production costs for episodic series produced in accordance with Financial Accounting Standards Board

Accounting Standards Codification 926-20, Entertainment-Films-Other Assets-Film Costs.

Accordingly, production costs are capitalized and

amortized based on the attributable revenue for each contract to the estimated total remaining attributable revenue for each contract.

As disclosed in Note 2 to the consolidated financial statements, the Company capitalizes production costs for episodic series produced in accordance with Financial Accounting Standards Board Accounting Standards Codification 926-20, Entertainment-Films-Other Assets-Film Costs.

Accordingly, production costs are capitalized and amortized based on the attributable revenue for each contract to the estimated total remaining attributable revenue for each contract.

The Company expenses the capitalized costs that exceed the estimated attributable revenue in the period of delivery of the episodes.

Company evaluates its capitalized production costs annually.

Auditing the amortization of the Company's film

production costs is complex and subjective due to the judgmental nature of amortization, including estimates of future attributable revenues

based on historical experience and signed commitments.

If actual revenue differs from these estimates, the pattern and/or period of amortization

would be changed and could materially affect the timing and the amount of production costs amortization recognized.

The Company evaluates its capitalized production costs annually.

Auditing the amortization of the Company's film production costs is complex and subjective due to the judgmental nature of amortization, including estimates of future attributable revenues based on historical experience and signed commitments.

If actual revenue differs from these estimates, the pattern and/or period of amortization would be changed and could materially affect the timing and the amount of production costs amortization recognized.

How We Addressed the Matter in Our Audit:

The primary procedures we performed to address

this critical audit matter included:

§ Testing a selection of film and television costs

to ensure appropriate capitalization

§ Evaluating the significant assumptions used by

the Company to develop the estimated attributable revenues for each contract including management’s forecasts of estimated future

revenues and future commitments

§ Performing a look-back analysis of management’s

historical estimates compared to actual results.

§ Testing the completeness and accuracy of the

underlying data used in the analysis

§ Obtaining a memorandum from management understanding

the nature and timing of accelerated amortization compared to prior periods

§ Performing a sensitivity analysis of the estimate

future revenues to evaluate the change in amortization of the Company’s costs related from changes in the assumption

§ Recalculating the amortization expense and performed

analytical procedures

Valuation of Intangible Assets and Contingent

Earnout for the Chizcomm Acquisition

The primary procedures we performed to address this critical audit matter included:

• Obtained an understanding and evaluated the design and implementation of the Company's controls over its estimation process of revenues attributable to each contract.

• Evaluating the significant assumptions used by the Company to develop the estimated attributable revenues for each contract including management’s forecasts of estimated future revenues and future commitments.

• Performing a look-back analysis of management’s historical estimates compared to actual results.

• Testing the completeness and accuracy of the underlying data used in the analysis.

• Obtaining a memorandum from management understanding the nature and timing of accelerated amortization compared to prior periods.

• Performing a sensitivity analysis of the estimate future revenues to evaluate the change in amortization of the Company’s costs related from changes in the assumption.

• Recalculating the amortization expense and performed analytical procedures.

Valuation of Intangible Assets for the Wow and Ameba Acquisitions

Critical Audit Matter Description

As described in Note 3 to the consolidated financial

statements, on February 1, 2021, the Company acquired ChizComm Ltd.

and ChizComm USA Corp., which constitutes as a business combination

in accordance with ASC 805, Business Combinations.

The transactions were accounted for as business

combinations and the assets acquired and liabilities assumed have been recorded based on estimates of fair value as of December 31, 2021.

Auditing the valuation of intangible assets and

contingent earnout involved complex and subjective judgments and estimation due to the use of a discounted cash flow model, which includes

discounted cash flow scenarios and requires significant estimation such as expectations of future revenue, expenses, capital expenditures

and other costs as well as the discount rate.

As disclosed in Note 3, the Company completed two business combinations during 2022.

The Company measured the assets acquired and liabilities assumed at fair value, which resulted in the recognition of intangible assets consisting of tradenames, customer relationships, networks and platforms, technology, and goodwill.

Auditing the valuation of intangible assets involved complex and subjective judgments and estimation due to the use of a discounted cash flow model, which includes discounted cash flow scenarios and requires significant estimation such as expectations of future revenue, expenses, capital expenditures and other costs as well as the discount rate.

How We Addressed the Matter in Our Audit:

The primary procedures we performed to address

this critical audit matter included:

§ Obtained an understanding and evaluated the design

and implementation of the Company's controls over its estimation process supporting the recognition and measurement of the customer relationships

intangible assets and trade name intangible assets, including controls over management’s evaluation of the methodology and underlying

assumptions used in determining the fair value.

§ Involved auditor-engaged valuation specialist

to assist with our evaluation of the methodologies used by the Company and significant assumptions included in the fair value estimates.

§ Performed analyses to evaluate the sensitivity

of changes in assumptions to the fair value of the customer relationships intangible asset and compared the significant assumptions to

current industry and market and economic trends.

§ Evaluated the Company's selection of the valuation

methodology and significant assumptions used by the Company in the valuation of the intangible assets and the contingent earnout, and

the reasonableness of significant assumptions and estimates.

The primary procedures we performed to address this critical audit matter included:

• Obtained an understanding and evaluated the design and implementation of the Company's controls over its estimation process supporting the recognition and measurement of the customer relationships intangible assets and trade name intangible assets, including controls over management’s evaluation of the methodology and underlying assumptions used in determining the fair value.

• Involved auditor-engaged valuation specialist to assist with our evaluation of the methodologies used by the Company and significant assumptions included in the fair value estimates.

• Performed analyses to evaluate the sensitivity of changes in significant assumptions to the fair value of the intangible assets and compared the significant assumptions to current industry and market and economic trends.

• Evaluated the Company's selection of the valuation methodology and significant assumptions used by the Company in the valuation of the intangible assets, and the reasonableness of significant assumptions and estimates.

• Tested the completeness and accuracy of the inputs and data used within the significant assumptions.

• Tested the clerical accuracy of the models.

Goodwill Impairment Assessment

Critical Audit Matter Description

As discussed in Note 2 of the consolidated financial

statements, goodwill is tested for impairment at least annually on the reporting unit level, and more frequently if the Company believes

indicators of impairment exist.

The Company determined that the "Media Advisory & Advertising Services" reporting unit’s

goodwill was impaired, and the Company recorded a goodwill impairment loss of approximately $4.8M for the year ended December 31, 2021.

The determination of the fair value of the reporting unit requires significant estimates and assumptions.

Changes in these assumptions

could have a significant impact on the fair value of the reporting unit.

Auditing management's judgments regarding forecasts

of future revenue and operating margin, and the discount rate to be applied involved a high degree of subjectivity which were used in

the goodwill impairment assessment.

How We Addressed the Matter in Our Audit:

The primary procedures we performed to address

this critical audit matter included:

§ Obtained an understanding and evaluated the design

and implementation of the Company's controls over the goodwill impairment assessment process

§ Obtained and reviewed management's goodwill impairment

analysis memorandum including the fair value of reporting unit and intangible balances

§ Tested and evaluated whether the assumptions

used were reasonable by considering the past performance of the reporting units and third-party market data

§ Compared the actual results to those historically

forecasted by the Company

§ Involved auditor-engaged specialist to evaluate

the valuation methodologies used by the Company for the goodwill impairment assessment by comparing the methodologies to those utilized

by other companies holding similar assets, and to compare management's assumption inputs to information from external sources and available

economic forecasts and data

§ Tested the clerical accuracy of the goodwill

impairment model

/s/ Baker Tilly US, LLP

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Los Angeles, California

Auditor Firm ID:

April 12, 2023

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As of December 31,

ASSETS 2022 2021

Current Assets:

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Investments in Marketable Securities (amortized cost of $ 90,321 )

83,706 112,523

Accounts Receivable, net 15,558 7,632

Note Receivable from Related Party

Tax Credits Receivable, net 26,255 –

Notes and Accounts Receivable from Related Party 2,844 1,276

Other Receivable 1,162 969

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Total Current Assets 139,525 136,185

Noncurrent Assets:

Property and Equipment, net 2,400 449

Right Of Use Assets, net

Operating Lease Right of Use Assets, net 8,506 2,785

Finance Lease Right of Use Assets, net 2,338 –

Film and Television Costs, net 7,780 2,940

Lease Deposits

Investment in ChizComm Entities

Investment in Stan Lee Universe, LLC

Investment in Your Family Entertainment AG 16,247 6,695

Intangible Assets, net 29,167 9,733

Goodwill 31,807 15,227

Other Assets 148 69

Total Assets $ 237,918 $ 174,083

LIABILITIES AND STOCKHOLDERS’ EQUITY

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Accounts Payable $ 11,436 $ 7,192

Accrued Production Costs

Accrued Expenses

Participations Payable 2,965 2,438

Accrued Expenses 895 535

Accrued Salaries and Wages 2,484 799

Deferred Revenue 9,065 432

Notes Payable

Payroll Protection Program

Margin Loan 60,810 6,392

Production Facilities, net 18,282 –

Bank Indebtedness 1,741 –

Current Portion of Operating Lease Liability 802 664

Current Portion of Finance Lease Liability 1,623 –

Warrant Liability 548 855

Lease Liability

Due To Related Party 2 63

Accrued Salaries and Wages

Other Current Liabilities 255 1,761

Total Current Liabilities 110,908 21,131

Long Term Liabilities:

Noncurrent Liabilities:

Deferred Revenue 3,369 3,492

Lease Liability

Production Facility, net

Operating Lease Liability, Net Current Portion 8,095 2,460

Finance Lease Liability, Net Current Portion 1,020 –

Deferred Tax Liability 705 –

Contingent Earn Out – 1,340

Notes Payable

Disputed Trade Payable

Other Noncurrent Liabilities 952 1,007

Total Liabilities 125,049 29,430

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Stockholders’ Equity:

Preferred Stock, $ 0.001 Par Value, 10,000,000 Shares Authorized, 0 Shares Issued and Outstanding as of December 31, 2021 and December 31, 2020

Common Stock, $ 0.001 Par Value, 400,000,000 Shares Authorized 303,379,122 and 258,438,514 Shares Issued and Outstanding as of December 31, 2021, and 2020, respectively

Preferred Stock Series A, $ 0.001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Preferred Stock Series B, $ 0.001 par value, 1 share authorized, 1 share issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Common Stock, $ 0.001 par value, 40,000,000 shares authorized, 31,918,552 and 30,337,914 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively

Additional Paid in Capital 762,418 739,495

Treasury Stock at Cost, 42,633 and 0 shares of common stock as of December 31, 2022 and December 31, 2021, respectively

Accumulated Deficit ( 641,443 ) ( 595,848 )

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Total Liabilities and Stockholders’ Equity $ 237,918 $ 174,083

The accompanying notes are an integral part of

these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Genius Brands International, Inc.

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Year Ended December 31,

Production Services $ 29,620 $ –

Content Distribution 24,747 1,102

Licensing & Royalties 2,841 1,605

Media Advisory & Advertising Services 5,091 5,166

Television & Home Entertainment

Advertising & Subscription Sales

Total Revenues 62,299 7,873

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General and Administrative 45,851 35,967

Impairment of Goodwill

Impairment of Intangible Assets 4,117 3,452

Impairment of Goodwill 4,857 4,778

Total Operating Expenses 106,019 71,626

Loss from Operations ( 43,720 ) ( 63,753 )

Other Income (Expense):

Interest Expense ( 2,329 ) ( 20 )

Other Income (Expense), Net 1,625 ( 62,594 )

Loss Before Income Taxes

Provision for Income Taxes

Net Loss Attributable to Non-Controlling Interests

Loss Before Income Tax Expense ( 44,424 ) ( 126,367 )

Income Tax Expense ( 105 ) –

Net Loss ( 44,529 ) ( 126,367 )

Net Loss (Income) Attributable to Non-Controlling Interests ( 1,066 ) 76

Net Loss Attributable to Genius Brands International, Inc.

$ ( 45,595 ) $ ( 126,291 )

$ ( 401,670 )

Net Loss per Share (Basic and Diluted)

Weighted Average Common Shares Outstanding (Basic and Diluted)

The accompanying notes are an integral part of

these consolidated financial statements.

Net Loss per Share (Basic) $ ( 1.45 ) $ ( 4.24 )

Net Loss per Share (Diluted) $ ( 1.45 ) $ ( 4.24 )

Weighted Average Shares Outstanding (Basic) 31,388,277 29,751,337

Weighted Average Shares Outstanding (Diluted) 31,388,277 29,751,337

The accompanying notes are an integral part of these consolidated financial statements.

Genius Brands International, Inc.

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Year Ended December 31,

$ ( 126,367 )

$ ( 401,670 )

Other Comprehensive Income (Loss):

Net Loss $ ( 44,529 ) $ ( 126,367 )

Change in Accumulated Other Comprehensive Income (Loss):

Change in Unrealized Losses on Marketable Securities ( 5,774 ) ( 1,325 )

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Foreign Currency Translation Adjustments ( 3,343 ) 39

Total Other Comprehensive Loss

Total Change in Accumulated Other Comprehensive Loss ( 8,704 ) ( 1,216 )

Total Comprehensive Net Loss $ ( 53,233 ) $ ( 127,583 )

$ ( 127,588 )

$ ( 401,670 )

Comprehensive Loss Attributable to Non-Controlling Interests

Net Loss (Income) Attributable to Non-Controlling Interests ( 1,066 ) 76

Total Comprehensive Net Loss Attributable to Genius Brands International, Inc.

$ ( 54,299 ) $ ( 127,507 )

$ ( 401,670 )

The accompanying notes are an integral part of

these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Genius Brands International, Inc.

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(in thousands, except share data)

Preferred Stock

Additional Paid-In

Accumulated Other Comprehensive

Common Stock Preferred Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Non-Controlling Interest Total

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2020 25,843,851 $ 258 – $ — $ 588,501 – $ – $ ( 469,557 ) $ ( 5 ) $ – $ 119,197

Shares Issued for ChizComm Acquisition 198,067 2 – – 3,525 – – – – – 3,527

Shares Issued for YFE Acquisition 228,127 2 – – 3,406 – – – – – 3,408

Proceeds From Warrant Exchange, net 3,974,050 40 – – 57,225 – – – – – 57,265

Issuance of Common Stock for Services 80,777 1 – – 1,248 – – – – – 1,249

Value of Preferred Stock Conversion

Proceeds from Securities Purchase Agreement, Net

Warrant Exercise

Note Conversion

Loss on Conversion Option Revaluation

Warrant Revaluation:

Warrants Issued

Warrant Inducement – – – – 69,139 – – – – – 69,139

Issuance of Common Stock for Vested Restricted Stock Units, Net of Shares Withheld for Taxes 13,042 – – – – – – – – – –

Share Based Compensation – – – – 16,451 – – – – – 16,451

Other Comprehensive Loss Total – – – – – – – – ( 1,216 ) – ( 1,216 )

Contributions from Non-Controlling Interests – – – – – – – – – 2,000 2,000

Net Loss – – – – – – – ( 126,291 ) – ( 76 ) ( 126,367 )

Balance, December 31, 2021 30,337,914 $ 303 – $ – $ 739,495 – $ – $ ( 595,848 ) $ ( 1,221 ) $ 1,924 $ 144,653

$ ( 469,557 )

Shares Issued for Wow Acquisition 1,105,708 11 1 – 11,543 – – – – – 11,554

Fair Value of Replacement Options Related to Wow Acquisition – – – – 1,213 – – – – – 1,213

Issuance of Common Stock for Services 112,287 1 – – 752 – – – – – 753

Issuance of Common Stock for Vested Restricted Stock Units

Issuance of Common Stock for ChizComm Acquisition

Exchange of Common Stock for Investment in YFE

Warrant Exercise

Warrant Incentive

Issuance of Common Stock for Vested Restricted Stock Units, Net of Shares Withheld for Taxes 404,577 4 – – ( 4 ) 699 ( 5 ) – – – ( 5 )

Repurchased Shares Upon Legal Settlement ( 41,934 ) – – – – 41,934 ( 285 ) – – – ( 285 )

Reclassification of Stock Warrant to a Derivative Liability – – – – ( 1,476 ) – – – – – ( 1,476 )

Share Based Compensation – – – – 10,895 – – – – – 10,895

Other Comprehensive Loss

Contributions from Non-Controlling Interest

Other Comprehensive Loss Total – – – – – – – – ( 8,704 ) – ( 8,704 )

Distributions to Non-Controlling Interest – – – – – – – – – ( 1,200 ) ( 1,200 )

Net Income (Loss) – – – – – – – ( 45,595 ) – 1,066 ( 44,529 )

Balance, December 31, 2022 31,918,552 $ 319 1 $ – $ 762,418 42,633 $ ( 290 ) $ ( 641,443 ) $ ( 9,925 ) $ 1,790 $ 112,869

$ ( 595,848 )

The accompanying notes are an integral part of

these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Genius Brands International, Inc.

3 unchanged sentences

Cash Flows from Operating Activities:

$ ( 126,291 )

$ ( 401,670 )

Net Loss ( 44,529 ) $ ( 126,367 )

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:

1 unchanged sentence

Depreciation and Amortization of Property, Equipment & Intangible Assets 2,711 599

Share Based Compensation Expense

Amortization of Right of Use Asset 2,024 298

Amortization of Premium on Marketable Securities 1,055 659

Loss on Fair Value of Equity Investment

Gain on Contingent Consideration Revaluation

(Gain) Loss on Warrant Revaluation

Realized Loss on Marketable Securities

Impairment of Goodwill

Impairment Loss on Intangible Assets

Share Based Compensation Expense 10,895 16,451

Warrant Incentive Expense – 69,139

Impairment Loss on Intangible Assets 4,117 3,452

Impairment of Goodwill 4,857 4,778

Impairment of Film and Television Costs 6,816 18,200

Deferred Tax Benefit ( 45 ) –

(Gain) Loss on Revaluation of Equity Investments in Your Family Entertainment AG ( 1,392 ) 106

Unrealized (Gain) Loss on Foreign Currency Transactions 1,380 ( 6 )

Gain on Warrant Revaluation ( 557 ) ( 342 )

Write-Off of Contingent Consideration Liability ( 1,340 ) ( 5,870 )

Realized Loss on Marketable Securities 413 70

Noncash Interest Expense 2,270 –

Stock Issued for Services 312 41

Loss On Lease Termination

Loss on Conversion Option Revaluation

Debt Discount in Excess of the Principal

Bad Debt Expense 337 22

Other Non-Cash Items 18 3

2 unchanged sentences

Other Receivable 347 ( 504 )

Tax Credits Earned (less capitalized) ( 13,663 ) –

Tax Credits Received, net 9,513 –

Film and Television Costs, net ( 8,044 ) ( 9,642 )

Inventory, net

Lease Deposits

Prepaid Expenses and Other Assets 1,283 2,896

1 unchanged sentence

Accounts Payable 2,751 ( 169 )

Accrued Production Costs

Accrued Salaries & Wages 191 370

Accrued Expenses ( 1,958 ) 54

Accrued Production Costs ( 1,478 ) 1,733

Participations Payable ( 784 ) ( 721 )

2 unchanged sentences

Due To Related Party ( 61 ) 60

Accrued Expenses

Other Liabilities ( 25 ) –

Net Cash Used in Operating Activities ( 23,653 ) ( 23,819 )

Cash Flows from Investing Activities:

Investment in Stan Lee Universe, LLC

Cash Payment for ChizComm, net of Cash Acquired

Cash Payment for Wow, net of Cash Acquired ( 37,311 ) –

Cash Payment for Equity Investment in Your Family Entertainment ( 9,540 ) ( 3,386 )

Cash Payment for Ameba, net of Cash Acquired ( 3,893 ) –

Cash Payment for ChizComm, net of Cash Acquired – ( 7,789 )

Investment in Marketable Securities – ( 305,387 )

Loans to Related Party ( 1,567 ) ( 1,276 )

Proceeds from Principal Collections on Marketable Securities 7,876 4,251

1 unchanged sentence

Investment in Intangible Assets, net ( 22 ) ( 1,008 )

Investment in Property & Equipment

Purchase of Property & Equipment ( 592 ) ( 302 )

Net Cash Used in Investing Activities ( 30,937 ) ( 128,732 )

Cash Flows from Financing Activities:

Proceeds from Margin Loan

Note Receivable from Related Party

Proceeds from Margin Loan, net 53,077 6,392

(Repayments of)/Proceeds from Production Facilities, net 1,976 ( 1,100 )

Proceeds from Bank Indebtedness, net 225 –

Repayments of Notes Payable – ( 20 )

Repayment of Payroll Protection Plan – ( 366 )

Principal Payments on Finance Lease Obligations ( 1,310 ) –

Distributions to Noncontrolling Interests ( 1,200 ) –

Debt Issuance Costs ( 54 ) –

Repurchase of Common Stock ( 285 ) –

Shares Withheld for Taxes on Vested Restricted Shares ( 5 ) –

Proceeds From Warrant Exchange – 57,265

Repayment of Production Facility, net

Proceeds from/(Payment) of Payroll Protection Program, net

Payment of Notes Payable

Consolidation of VIE (VIE Asset/Liability Additions)

Proceeds from Sale of Securities Purchase Agreement, net

Proceeds from Senior Secured Convertible Notes, net

Collection Of Investor Notes

Payment of Secured Convertible Notes

Note Conversion Costs

Payment for Warrant Put Option Exercise ( 250 ) –

Net Cash Provided by Financing Activities 52,174 62,171

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 212 ) ( 16 )

Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash

Net Decrease in Cash, Cash Equivalents and Restricted Cash ( 2,628 ) ( 90,396 )

Beginning Cash, Cash Equivalents and Restricted Cash 10,060 100,456

2 unchanged sentences

Cash Paid for Interest $ 252 $ 19

Cash Paid for Income Taxes $ 19 $ –

Schedule of Non-Cash Financing and Investing Activities

Senior Convertible notes were converted into 65,476,190 shares of Common Stock 58,522,601 warrants were exercised on a cashless basis resulting in the issuance of 52,551,716 shares of Common Stock

Shares Issued for Wow Acquisition 11,554 –

FV of Replacement Options Granted Related to Wow Acquisition 1,213 –

Leased Assets Obtained in Exchange for New Finance Lease Liabilities 582 –

Shares Issued for ChizComm Acquisition – 3,527

Shares Issued for YFE Investment – 3,409

Liability for Acquisition Earnout Shares – 7,210

Non-cash Investment in Intangible Asset – 2,000

Non-cash Contributions from non-controlling Interests – ( 2,000 )

Issuance of Common Stock for production services

Warrant Derivative Liability

Contingent Earn Out Liability

The accompanying notes are an integral part of

these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Genius Brands International, Inc.

4 unchanged sentences

Organization and Nature of Business

Genius Brands International,

(“we,” “us,” “our,” or the “Company”) is a global content and brand management company

that creates and licenses multimedia content.

Led by experienced industry personnel, the Company distributes its content primarily on

television and streaming platforms and license its properties for a broad range of consumer products based on the Company’s characters.

In the children's media sector, the Company’s portfolio features “content with a purpose” for toddlers to tweens, which

provides enrichment as well as entertainment.

New intellectual property titles include Stan Lee’s Superhero Kindergarten produced

with Stan Lee’s Pow!

Entertainment and Oak Productions.

Arnold Schwarzenegger lends his voice as the lead and is also an Executive

Producer on the series.

Another new offering is KC!

Pop Quiz , a live action game show featuring kids as contestants.

hosted by Casey Simpson, a prominent social media influencer and former Nickelodeon star.

Pop Quiz and Superhero Kindergarten are

being broadcast in the United States on the Company’s wholly-owned advertisement supported video on demand (“AVOD”)

distribution outlet, the Kartoon Channel!.

Other newer series include, the preschool property Rainbow Rangers , which debuted

in November 2018 on Nickelodeon, and which was renewed for a third season and preschool property Llama Llama, which debuted on

Netflix in January 2018 and was renewed by Netflix for a second season.

The Company’s library titles include the award-winning Baby

Genius , adventure comedy Thomas Edison's Secret Lab® and Warren Buffett’s Secret Millionaires Club, created

with and starring iconic investor Warren Buffett, which is distributed across the Company’s Genius Brands Network on Comcast’s

Xfinity on Demand, AppleTV, Roku, Amazon Fire, YouTube, Amazon Prime, Cox, Dish, Sling and Zumo, as well as Connected TV.

is in production on a new animated series starring Shaquille O’Neal called Shaq’s Garage which the Company expects

to debut during the fourth quarter of 2022.

In addition, the Company acts

as licensing agent for Penguin Young Readers, a division of Penguin Random House LLC which owns or controls the underlying rights to Llama

Llama , leveraging the Company’s existing licensing infrastructure to expand this brand into new product categories, new retailers,

and new territories.

The Company commenced operations

in 2006, assuming all the rights and obligations of its then Chief Executive Officer, under an Asset Purchase Agreement between the Company

and Genius Products, Inc., in which the Company obtained all rights, copyrights, and trademarks to the brands “Baby Genius,”

“Kid Genius,” “123 Favorite Music” and “ Wee Worship,” and all then existing productions

under those titles.

In 2011, the Company reincorporated in Nevada and changed its name to Genius Brands International, Inc.

(the “Reincorporation”).

In connection with the Reincorporation, the Company changed its trading symbol to “GNUS.”

In 2013, the Company entered

into an Agreement and Plan of Reorganization (the “Merger Agreement”) with A Squared Entertainment LLC, a Delaware limited

liability company (“A Squared”), A Squared Holdings LLC, a California limited liability company and sole member of A Squared

(the “Parent Member”), and A2E Acquisition LLC, its newly formed, wholly-owned Delaware subsidiary (“Acquisition Sub”).

Upon closing of the transactions, A Squared, as the surviving entity, became a wholly-owned subsidiary of the Company.

On February 1, 2021, the Company,

through GBI Acquisition LLC, a New Jersey limited liability company, and 2811210 Ontario Inc., a company organized under the laws of the

Province of Ontario, two wholly-owned subsidiaries of the Company, purchased the outstanding equity

interests of ChizComm Ltd., a corporation organized in Canada, and ChizComm USA Corp., a New Jersey corporation (collectively “ChizComm”).

During the year ended December

31, 2021, the Company’s cash and cash equivalents and marketable security positions increased by $ 14.1 million.

Cash in excess

of immediate requirements is invested in accordance with the Company’s investment policy, primarily with a view for liquidity and

capital preservation.

Accordingly, available-for-sale securities, consisting principally of corporate and government debt securities, are also available as a source of liquidity.

As of December 31, 2021, the Company held marketable securities with a fair value of $ 112.5 million as available-for-sale.

Historically, the Company

has incurred net losses.

For the years ended December 31, 2021, and December 31, 2020, the Company reported net losses of $ 126.3

million and $ 401.7 million, respectively.

The Company reported net cash used in operating activities of $ 23.7

million and $ 8.1 million for the years ended December 31, 2021, and December 31, 2020, respectively.

As of December 31, 2021,

the Company had an accumulated deficit of $ 595.8 million and total stockholders’ equity of $ 144.7 million.

As of December 31, 2021,

the Company had current assets of $ 136.2 million,

including cash and cash equivalents of $ 2.1

million and marketable securities of $ 112.5

million, and current liabilities of $ 21.1

The Company had working capital of $ 115.1

million as of December 31, 2021, compared to working capital of $ 101.4

million as of December 31, 2020.

On January 28, 2021, the Company

entered into letter agreements (the “Letter Agreements”) with certain existing institutional and accredited investors to exercise

certain outstanding warrants (the “Existing Warrants”) to purchase up to an aggregate of 39,740,500 shares of the Company’s

common stock at their original exercise price of $ 1.55 per share (the “Exercise”).

The Company received approximately $ 61.6

million in gross proceeds.

The Special Equities Group, a division of Bradley Woods & Co.

Ltd., acted as warrant solicitation agent

and received a cash fee of approximately $ 4.3 million.

In consideration for the exercise of the Existing Warrants for cash, the exercising

holders received new unregistered warrants to purchase up to an aggregate of 39,740,500 shares of common stock (the “New Warrants”)

at an exercise price of $ 2.37 per share, exercisable immediately, with an exercise period of five years from the initial issuance date.

Pursuant to the Letter Agreements, the New Warrants are substantially in the form of the Existing Warrants (except for customary legends

and other language typical for an unregistered warrant, including the ability for the holder of the New Warrant to make a cashless exercise

if no resale registration statement covering the common stock underlying the New Warrants is effective after six months).

was required to register the resale of the shares of common stock issuable upon exercise of the New Warrants.

During December 2021, the

Company borrowed from its investment margin account the aggregate amount of $ 6.4

million for its investments in YFE and future closing of its pending acquisition of WOW, in each case pledging certain of its

marketable securities as collateral.

The interest rate for these investment margin account borrowings fluctuates based on the Federal

Funds Rate plus 0.65 %

with interest only payable monthly.

The weighted average interest rate during the year ended December 31, 2021, was 0.72% and the average

balance of the borrowings was $5.9 million as of December 31, 2021.

These investment margin account borrowings do not mature but are

payable on demand and recorded as a current liability on the Company’s consolidated balance sheets.

As of December 31, 2021, the

Company had the ability to borrow up to 66% of the balance held in marketable securities, with the option to increase its borrowing capacity,

Effective as of June 1, 2021,

the Company executed an Operating Agreement with POW!, Inc.

(“POW!”) to form a joint venture to exploit certain rights in

intellectual property created by Stan Lee, as well as the name and likeness of Stan Lee.

The entity is called Stan Lee Universe, LLC (“SLU”)

and activity commenced during the fourth quarter of 2021.

In exchange for a cash investment of $ 2.0 million, the Company obtained 50%

ownership in the entity as a variable interest in the Stan Lee trade name.

This agreement enables the Company to assume the worldwide

rights, in perpetuity, to the name, physical likeness, physical signature, live-action and animated motion picture, television, online,

digital, publishing, comic book, merchandising and licensing rights to Stan Lee and over 100 original Stan Lee creations (the “Stan

Lee Assets”), from which Genius Brands plans to develop and license multiple properties each year.

SLU is considered a variable

interest entity in which the Company is the primary beneficiary.

Accordingly, the transaction was accounted for as an asset acquisition

of the Stan Lee Assets in the amount of $4.0 million and the results of SLU are included in the Company’s consolidated financial

statements, with the portion of non-controlling interest recorded in stockholders’ equity.

On December 1, 2021, the Company

completed a $ 6.8 million investment in Your Family Entertainment (“YFE”).

In exchange for $ 3.4 million in cash and 2,281,269

shares of the Company’s common stock (valued at approximately $3.4 million), the Company received 3,000,500 shares of YFE’s

common stock.

As of December 31, 2021, the Company has a 29% economic ownership interest in YFE.

On January 13, 2022, the Company

acquired Canadian streaming service Ameba TV and gained access to its kid-safe platform technology and 13,000 episodes of content including

Casper the Friendly Ghost , Donkey Kong Country, Gummy Bears and Rescue Heroes .

The Company purchased 100% of Ameba’s

issued and outstanding shares for $ 3.5 million in cash and paid $ 0.3 million for the underlying software code that powers the subscription

video on demand (“SVOD”) deliveries.

Pending Acquisition

On October 26, 2021, 1326919

LTD., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company and

Wow Unlimited Media Inc.

(“WOW”), a corporation existing under the laws of the Province of British Columbia, entered into

an Arrangement Agreement to effect a transaction among the parties by way of a plan of arrangement under the arrangement provisions of

Part 9, Division 5 of the Business Corporations Act , whereby the Company will purchase 100% of WOW’s issued and outstanding

shares for $ 38.4 million in cash and 11,000,000 shares of the Company’s common stock.

Company has not completed its initial accounting for the business combination which will be accounted for using the acquisition method

of accounting.

The fair value of the assets and liabilities are still to be determined.

The acquisition is expected to be completed during

the second quarter of 2022.

Genius Brands International, Inc.

(“we,” “us,” “our,” or the “Company”) is a global content and brand management company that creates, produces, licenses, and broadcasts timeless and educational, multimedia animated content for children.

Led by experienced industry personnel, the Company distributes its content primarily on streaming platforms and television and licenses its properties for a broad range of consumer products based on the Company’s characters.

The Company is a “work for hire” producer for many of the streaming outlets and animated content intellectual property ("IP") holders.

In the children’s media sector, the Company’s portfolio features “content with a purpose” for toddlers to tweens, providing enrichment as well as entertainment.

With the exception of the Company's recent acquisition of Wow Unlimited Media Inc.

and related titles, the Company’s programs, along with those programs it licenses, are being broadcast in the United States on the Company’s wholly-owned advertisement supported video on demand (“AVOD”) service, its free ad supported TV ("FAST") channels, and its subscription video on demand (“SVOD”) outlets, Kartoon Channel!

These streaming services are available on Apple TV, Apple iOS, Android TV, Android mobile, Amazon Prime, Amazon Fire, Tubi, Roku, Comcast, Cox, Dish/Sling, Xumo, Pluto, Samsung Smart TVs, LG Smart TVs, as well as YouTube, among other platforms.

The Company's in-house owned and produced animated shows include Stan Lee’s Superhero Kindergarten starring Arnold Schwarzenegger, Llama Llama starring Jennifer Garner, Rainbow Rangers, KC Pop Quiz , and the upcoming Shaq’s Garage starring Shaquille O’Neal, scheduled to debut in the second quarter of 2023.

The Company’s library titles include the award-winning Baby Genius , adventure comedy Thomas Edison’s Secret Lab®, and Warren Buffett’s Secret Millionaires Club , created with and starring iconic investor Warren Buffett, Team Zenko Go!, Reboot , Bee & PuppyCat:

Lazy in Space and C astlevania .

The Company also licenses its programs to other services worldwide, in addition to the operation of its own channels, including but not limited to Netflix, HBO Max, Paramount+, Nickelodeon, and satellite, cable and terrestrial broadcasters around the world.

Through the Company’s investments in Germany’s Your Family Entertainment (“YFE”), a publicly traded company on the Frankfurt Exchange (RTV-Frankfurt), it has gained access to one of the largest animation catalogues in Europe with over 50 titles consisting of over 1,600 episodes, and a global distribution network which currently covers over 60 territories worldwide.

Through the ownership of WOW Unlimited Media Inc.

(“Wow”), the Company established an affiliate relationship with Mainframe Studios, which is one of the largest animation producers in the world.

In addition, Wow owns Frederator Networks Inc.

(“Frederator”) and its Channel Frederator Network , the largest animation focused multi-channel network on YouTube with over 2,500 channels.

The Company has rights to a select amount of valuable IP, including among them a controlling interest in Stan Lee Universe (“SLU”), through which it controls the name, likeness, signature, and all consumer product and IP rights to Stan Lee (the “Stan Lee Assets”).

The Company also owns Beacon Media Group ("Beacon"), the largest media buying service for children in North America.

Beacon represents over 30 major toy companies, including Playmobile, Bandai Toys, Bazooka, Moose Toys, and JAKKS Pacific.

In addition, the Company owns the Canadian company Ameba Inc.

(“Ameba”), which distributes a profitable SVOD service for kids, and has become the focal point of revenue growth for Genius Networks’ subscription offering.

The Company and its affiliates provide world class animation production studios, a catalogue representing thousands of hours of premium global content for children, a broadcast system for delivering that content and an in-house consumer products licensing infrastructure to fully exploit the content.

Recent Developments

On February 6, 2023, the Company's board of directors approved a 1-for-10 reverse stock split of the Company's outstanding shares of common stock.

The reverse stock split was effected on February 10, 2023 at 5:00 p.m.

Eastern time.

At the effective time, every 10 issued and outstanding shares of the Company's common stock were converted into 1 share

of common stock.

Any fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole post-split share and no shareholders received cash in lieu of fractional shares.

The par value of each share of common stock remained unchanged.

The reverse stock split proportionately reduced the number of shares of authorized common stock from 400,000,000 to 40,000,000 shares.

The reverse stock split also applied to common stock issuable upon the exercise of the Company's outstanding warrants and stock options.

The reverse stock split did not affect the authorized preferred stock of 10,000,001 shares.

Unless noted, all references to shares of common stock and per share amounts contained in this Annual Report on Form 10-K have been retroactively adjusted to reflect a 1-for-10 reverse stock split.

2022 Investments

On January 13, 2022, the Company acquired Ameba and gained access to its kid-safe platform technology and 13,000 episodes of owned and licensed content.

Refer to Note 3 for additional details.

On April 6, 2022, the Company completed the acquisition of Wow.

On October 26, 2021, the Company’s wholly-owned subsidiary, 1326919 B.C.

LTD., a corporation existing under the laws of the Province of British Columbia and Wow, entered into an Arrangement Agreement to effect a plan of arrangement under the arrangement provisions of Part 9, Division 5 of the Business Corporations Act.

The Company purchased 100 % of the issued and outstanding shares of Wow, including Wow's subsidiary Frederator, for $ 38.3 million in cash and 1,105,708 shares of the Company's common stock.

The plan of arrangement and final agreement, together with the acquisition of Wow’s Mainframe Studios and its subsidiary Frederator, are referred to as the “Wow Acquisition.” Refer to Note 3 for additional details.

On December 1, 2021, the Company completed a $ 6.8 million investment in YFE.

In exchange for $ 3.4 million in cash and 228,127 shares of the Company’s common stock (valued at approximately $ 3.4 million), the Company received 3,000,500 shares of YFE’s common stock, a 28.7 % ownership in YFE.

Following the initial equity investment in YFE, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by YFE shareholders.

Upon the expiration of the offer on February 14, 2022, the Company purchased an additional 2,637,717 shares of YFE at 2.00 EUROS per share or 5.3 million EUROS ($ 6.0 million USD) in the aggregate.

On March 9, 2022, bonds held by YFE shareholders were converted into 2,573,800 shares of YFE common stock, 304,431 of which were purchased by the Company, at 2.00 EUROS per share or 0.6 million EUROS ($ 0.7 million USD).

On April 5, 2022, the Company exercised its subscription rights to purchase an additional 914,284 shares of YFE’s common stock at 3.00 EUROS per share, or 2.7 million EUROS ($ 2.9 million USD), increasing the number of YFE’s outstanding shares to 6,857,132 .

During the fourth quarter of 2022, the Company did not take part in a round of financing raised by YFE which increased YFE's outstanding shares and therefore decreased the Company’s ownership in YFE from 48.0 % to 44.8 % as of December 31, 2022.

During the year ended December 31, 2022, the Company’s cash, cash equivalents and restricted cash decreased by $ 2.6 million.

The decrease was primarily due to cash used in investment activities, inclusive of the Wow and Ameba acquisitions and the YFE investments, totaling $ 30.9 million, $ 23.7 million used in operational activities, 1.3 million of principal payments made on finance leases and $ 1.2 million distributed to SLU.

Cash used was offset by $ 55.3 million of proceeds provided by the margin loan, production facilities and bank indebtedness, net of repayments.

As of December 31, 2022, the Company held available-for-sale marketable securities with a fair value of $ 83.7 million, a decrease of $ 28.8 million as compared to December 31, 2021.

The decrease was primarily due to selling $ 14.1 million securities during the year, additional prepayment proceeds of $ 7.9 million on principals for certain mortgage-backed securities and an increase in unrealized loss of $ 5.4 million for the securities still held.

The available-for-sale securities consist principally of corporate and government debt securities and are also available as a source of liquidity.

The Company borrowed an additional $ 68.8 million from its investment margin account during the year ended December 31, 2022 and repaid $ 15.7 million with cash received from sales and/or redemptions of its marketable securities.

During the year ended December 31, 2022, the borrowed amounts were primarily used to finance the Company’s additional investments in YFE and the closing of the acquisitions of Ameba and Wow, with the remaining borrowing used for operational costs, in each case pledging certain of its marketable securities as collateral.

The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 0.65 % with interest only payable monthly.

The weighted average interest rate was 2.59 % and 0.72 % on an average margin loan balance of $ 48.2 million and $ 5.9 million during the years ended December 31, 2022 and December 31, 2021, respectively.

The Company incurred interest expense on the loan of $ 1.3 million during the year ended December 31, 2022.

The amount of interest incurred on the margin loan during the year ended December 31, 2021 was insignificant.

The investment margin account borrowings do not mature but are payable on demand as the custodian can issue a margin call at any time, therefore the margin loan is

recorded as a current liability on the Company’s consolidated balance sheets.

As of December 31, 2022 and December 31, 2021, the Company's margin loan balance was $ 60.8 million and $ 6.4 million, respectively.

Upon the acquisition of Wow, the Company assumed certain credit facilities (the “Facilities”).

The Facilities are comprised of:

(i) an $ 8.0 million CAD revolving demand facility, (ii) a $ 4.3 million CAD equipment lease line, (iii) a treasury risk management facility for foreign exchange forward contracts, (iv) interim financing facilities for specific production titles and (v) a $ 1.4 million CAD equipment lease facility, separate from the equipment lease line.

Refer to Note 13 for additional details.

Historically, the Company has incurred net losses.

For the years ended December 31, 2022, and December 31, 2021, the Company reported net losses of $ 45.6 million and $ 126.3 million, respectively.

The Company reported net cash used in operating activities of $ 23.7 million and $ 23.8 million for the years ended December 31, 2022, and December 31, 2021, respectively.

As of December 31, 2022, the Company had an accumulated deficit of $ 641.4 million and total stockholders’ equity of $ 112.9 million.

As of December 31, 2022, the Company had current assets of $ 139.5 million, including cash and cash equivalents of $ 7.4 million and marketable securities of $ 83.7 million, and current liabilities of $ 110.9 million.

The Company had working capital of $ 28.6 million as of December 31, 2022, compared to working capital of $ 115.1 million as of December 31, 2021.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated

financial statements have been prepared in conformity with U.S.

The accompanying consolidated financial statements have been prepared in conformity with U.S.

Generally Accepted Accounting Principles (“GAAP”).

The accompanying consolidated

financial statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications)

necessary to state fairly the Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Loss, Statements of Stockholders'

Equity, and Statements of Cash Flows for all periods presented.

Certain prior period amounts

have been reclassified for consistency with the current period presentation.

These reclassifications had no effect on the reported results

of operations.

The Company determined

its operating segments on the same basis that it assesses performance and makes operating decisions.

The Company principally

operates in two distinct business segments:

the Content Production & Distribution Segment which produces and distributes

children’s content, and the Media Advisory & Advertising Services Segment which provides media and advertising services.

These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating

results for the purposes of allocating resources and assessing performance.

The Company has identified its Chief Executive Officer

The segments are organized around the products and services provided to customers and represent the

Company’s reportable segments.

Prior to the acquisition of ChizComm, the Company’s

operations were comprised of a single segment.

The accounting policies for

each segment are the same as for the Company as a whole.

The accompanying consolidated financial statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Loss, Statements of Stockholders' Equity, and Statements of Cash Flows for all periods presented.

Certain prior period amounts have been reclassified for consistency with the current period presentation.

These reclassifications had no effect on the reported results of operations.

The Company determined its operating segments on the same basis that it assesses performance and makes operating decisions.

The Company principally operates in two distinct business segments:

the Content Production & Distribution Segment, which produces and distributes children’s content, and the Media Advisory & Advertising Services Segment, which provides media and advertising services.

These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance.

The Company has identified its Chief Executive Officer as the CODM.

The segments are organized around the products and services provided to customers and represent the Company’s reportable segments.

The accounting policies for each segment are the same as for the Company as a whole.

Refer to Note 22 for additional information.

Principles of Consolidation and Basis of Presentation

The Company’s consolidated

financial statements include the accounts of Genius Brands International, Inc., and its wholly-owned subsidiaries.

The Company consolidates

all majority-owned subsidiaries, investments in entities in which it has controlling influence and variable interest entities where the

Company has been determined to be the primary beneficiary.

Minority interests are recorded as noncontrolling interests.

Non-consolidated

investments are accounted for using the equity method or the fair value option when the Company has the ability to significantly influence

the operating decisions of the investee.

When the Company does not have the ability to significantly influence the operating decisions

of an investee, these equity securities are classified as either marketable investment securities or other investments and recorded at

fair value with changes recognized within other Income (expense) on the consolidated statements of operations and comprehensive income

The Company’s consolidated financial statements include the accounts of Genius Brands International, Inc.

and its wholly-owned subsidiaries.

The Company consolidates all majority-owned subsidiaries and variable interest entities where the Company has been determined to be the primary beneficiary.

The interests in a variable interest entity which the Company does not control are recorded as non-controlling interests.

Non-consolidated investments are accounted for using the equity method or the fair value option and recorded at fair value with changes recognized within Other Income (Expense), net on the consolidated statements of operations and comprehensive income (loss).

All significant intercompany accounts and transactions have been eliminated in consolidation.

Business Combinations

Company allocates the fair value of the purchase consideration of a business acquisition to the tangible assets, liabilities, and intangible

assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these

identifiable assets and liabilities is recorded as goodwill.

The valuation of acquired assets and assumed liabilities requires significant

judgment and estimates, especially with respect to intangible assets.

The valuation of intangible assets requires that the Company use

valuation techniques such as the income approach.

The income approach includes the use of a discounted cash flow model, which includes

discounted cash flow scenarios and requires significant estimates such as future expected revenue, expenses, capital expenditures and

other costs, and discount rates.

The Company estimates the fair value based upon assumptions management believes to be reasonable, but

which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Estimates associated with

the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.

Acquisition-related expenses and any related restructuring costs are recognized separately from the business combination and are expensed

The Company accounts for transactions that are classified as business combinations in accordance with the Financial Accounting Standards Boards’ (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) .

Once a business is acquired, the Company allocates the fair value of the purchase consideration to the tangible assets, liabilities, and intangible assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

As required, preliminary fair values are determined upon acquisition, with the final determination of the fair values being completed within the one-year measurement period from the date of acquisition.

The valuation of acquired assets and assumed liabilities requires significant judgment and estimates, especially with respect to intangible assets.

The valuation of intangible assets requires that the Company use valuation techniques such as the income approach.

The income approach includes the use of a discounted cash flow model, which includes discounted cash flow scenarios and requires significant estimates such as future expected revenue, expenses, capital expenditures and other costs, and discount rates.

The Company estimates the fair value based upon assumptions management believes to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.

Acquisition-related expenses and any related restructuring costs are recognized separately from the business combination and are expensed as incurred.

Variable Interest Entities

The Company holds an interest

in Stan Lee University (“SLU”), an entity that is considered a variable interest entity (“VIE”).

interest relates to 50% ownership in the entity that is comprised of the Stan Lee Assets and that requires additional financial support

from the Company to continue operations.

The Company’s total cash investment in SLU was $ 2.0 million as of December 31,

The Company holds an interest in Stan Lee University (“SLU”), an entity that is considered a variable interest entity (“VIE”).

The variable interest relates to 50 % ownership in the entity that is comprised of the Stan Lee Assets and that requires additional financial support from the Company to continue operations.

The Company's investment in SLU was $ 0.8 million, net $ 1.2 million of distributions as of December 31, 2022 and $ 2.0 million as of December 31, 2021, respectively.

The Company is considered the primary beneficiary and is required to consolidate the VIE.

In evaluating whether the

Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers

the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and the Company’s decision-making

role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest

This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s

future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether the

Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company

evaluates all of its economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual

arrangements).

In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and the Company’s decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders.

This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important.

In determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all of its economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements).

This evaluation considers all relevant factors of the entity’s design, including:

the entity’s capital structure,

contractual rights to earnings (losses), subordination of our interests relative to those of other investors, contingent payments, as

well as other contractual arrangements that have the potential to be economically significant.

The evaluation of each of these factors

in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional

The Company continuously assesses whether it is the primary beneficiary of a variable interest entity as changes to existing

relationships or future transactions may result in the Company consolidating its collaborators or partners.

the entity’s capital structure, contractual rights to earnings (losses), subordination of the Company’s interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have the potential to be economically significant.

The evaluation of each of these factors in reaching a conclusion about the potential significance of the Company’s economic interests is a matter that requires the exercise of professional judgment.

The Company continuously assesses whether it is the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in the Company consolidating its collaborators or partners.

Use of Estimates

The preparation of financial

statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses during the reporting periods.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Foreign Currency

The Company considers the

dollar to be its functional currency for its United States based operations.

The Company considers the Canadian dollar to be its

functional currency for its Canada based operation.

Accordingly, the financial information is translated from the Canadian dollar to the

The Company considers the U.S.

dollar to be its functional currency for its United States and certain Canadian based operations.

The Canadian dollar is the functional currency of its Wow Mainframe Studio entity.

Accordingly, the financial information is translated from the Canadian dollar to the U.S.

dollar for inclusion in the Company’s consolidated financial statements.

Revenue and expenses are translated at average exchange

rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date.

translation adjustments are included as a component of accumulated other comprehensive income (loss), net in stockholders’ equity.

Foreign exchange transaction

gains and losses are included in other income (expense), net in the condensed consolidated statements of operations.

Revenue and expenses are translated at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date.

Resulting translation adjustments are included as a component of Accumulated Other Comprehensive Income (Loss), net in stockholders’ equity.

Foreign exchange transaction gains and losses are included in Other Income (Expense), Net on the consolidated statements of operations.

Foreign Currency Forward Contracts

The Company's wholly-owned subsidiary, Wow, is exposed to fluctuations in various foreign currencies against its functional currency, the Canadian dollar.

Wow uses foreign currency derivatives, specifically foreign currency forward contracts ("FX forwards"), to manage its exposure to fluctuations in the CAD-USD exchange rates.

FX forwards involve fixing the foreign currency exchange rate for delivery of a specified amount of foreign currency on a specified date.

The FX forwards are typically settled in CAD for their fair value at or close to their settlement date.

The Company does not currently designate any of the FX forwards under hedge accounting and therefore reflects changes in fair value as unrealized gains or losses immediately in earnings as part of the revenue generated from the transactions hedged.

The Company does not hold or use these instruments for speculative or trading purposes.

Per FASB ASC 815-10-45, Derivatives and Hedging , the Company has elected an accounting policy to offset the fair value amounts recognized for eligible forward contract derivative instruments.

Therefore, the Company presents the asset or liability position of the FX Forwards that are with the same counterparty net as either an asset or liability in its consolidated balance sheets.

As of December 31, 2022, the gross amount of FX Forwards in an asset and liability position that were subject to a master netting arrangement was $ 12.9 million and $ 13.0 million, respectively, resulting in a liability recorded within Other Current Liabilities on the Company's consolidated balance sheet of $ 0.1 million.

The change in fair value of $ 0.1 million for the year ended December 31, 2022 was recorded as an unrealized loss within Production Services Revenue on the Company's consolidated statement of operations.

The Company did not hold FX Forwards prior to the Wow Acquisition.

Cash and Cash Equivalents

The Company considers all

highly liquid debt instruments with initial maturities of three months or less to be cash equivalents.

As of December 31, 2021, and December

31, 2020, the Company had cash and cash equivalents of $ 2.1 million and $ 100.5 million, respectively.

The Company considers all highly liquid debt instruments with initial maturities of three months or less to be cash equivalents.

As of December 31, 2022 and December 31, 2021, the Company had cash and cash equivalents of $ 7.4 million and $ 2.1 million, respectively, that at times could exceed FDIC or CDIC limits..

Restricted Cash

The Company holds restricted

cash of $ 8.0 million in an escrow account for the future commitment of financing related to our investment in YFE.

The Company does not hold restricted cash as of December 31, 2022.

As of December 31, 2021 a restricted cash balance of $ 8.0 million was held in an escrow account for the future commitment of financing related to the Company's investment in YFE.

Allowance for Doubtful Accounts

Accounts receivable are presented on the consolidated balance sheets net of estimated uncollectible amounts.

The carrying amounts of trade accounts receivable and unbilled accounts receivable represent the maximum credit risk exposure of these assets.

The Company evaluates its accounts receivable balances on a quarterly basis to determine collectability based on an assessment of past events, current economic conditions, and forecasts of future events.

The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses.

Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful.

At December 31, 2022 and 2021, the Company recorded an allowance for bad debt of $ 65,421 and $ 22,080 , respectively.

The Company limits its exposure to this credit risk through a credit approval process and credit monitoring procedures.

In addition, Wow’s contracts with customers usually require upfront and milestone payments throughout the production process.

The Company’s customer base is mainly comprised of major Canadian, American, and worldwide studios, distributors, broadcasters, toy companies and AVOD and SVOD platforms that have been customers for several years.

Tax Credits Receivable

The Canada Revenue Agency (“CRA”) and certain Provincial governments in Canada provide programs that are designed to assist film and television production in the form of refundable tax credits or other incentives.

Estimated amounts receivable in respect of refundable tax credits are recorded as an offset to the related production operating cost, or to investment in film and television costs when the conditions for eligibility of production assistance based on the government’s criteria are met, the qualifying expenditures are made and there is reasonable assurance of realization.

Determination of when and if the conditions of eligibility have been met is based on management’s judgment, and the amount recognized is based on management’s estimates of qualifying expenditures.

The ultimate collection of previously recorded estimates is subject to ordinary course audits from the CRA and Provincial agencies.

Changes in administrative policies by the CRA or subsequent review of eligibility documentation may impact the collectability of these estimates.

The Company continuously reviews the results of these audits to determine if any circumstances arise that in management’s judgment would result in a previously recognized amount to be considered no longer collectible.

The Company classifies the tax credits receivable as current based on their normal operating cycle.

Government assistance, in the form of refundable tax credits, is relied upon as a key component of production financing.

These amounts are claimed from the CRA through the submission of income tax returns and can take up to 18 to 24 months from the date of the first tax credit dollar being earned to being received.

As this financing is fundamental to the Company’s ability to produce animated productions and generate revenue in the normal course of business, the normal operating cycle for such assets is considered to be a 12 to 24-month period, or the time it takes for the CRA to assess and refund the tax credits earned.

As of December 31, 2022, $ 26.3 million in current tax credit receivables related to Wow’s film and television productions was recorded, net of $ 0.2 million recorded as an allowance.

The allowance is related to uncertainties in tax credits applied for in the amount of $ 1.6 million with a Provincial government the Company has not yet established a history.

Marketable Debt Securities

The Company purchases high

quality, investment grade securities from diverse issuers.

Management determines the appropriate classification of securities at

the time of purchase and reevaluates such designation as of each balance sheet date.

Currently, the Company classifies its investments

in marketable securities as “available-for-sale” and records these investments at fair value.

The securities are available

to support current operations and, accordingly, the Company classifies the investments as current assets without regard to their contractual

Unrealized gains or losses

on available-for-sale securities for which the Company expects to fully recover the amortized cost basis are recognized in accumulated

other comprehensive (loss) income, a component of stockholders’ equity.

If the Company intends to sell a debt security, or it is

more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference

between the security's amortized cost basis and its fair value at the balance sheet date would be recognized as a loss in the consolidated

statements of operations.

The Company reports accrued

interest receivable separately from the available-for-sale securities and has elected not to measure an allowance for credit losses for

accrued interest receivables.

Uncollectible accrued interest is written off when the Company determines that no additional interest payments

will be received.

Approximately $ 0.4 million in interest income was receivable as of December 31, 2021, classified within Other Receivables

on the consolidated balance sheets.

Interest earned on investment

securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums accounted

for by the level yield method with no pre-payment anticipated.

The Company purchases high quality, investment grade securities from diverse issuers.

Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date.

Currently, the Company classifies its investments in marketable securities as “available-for-sale” and records these investments at fair value.

The securities are available to support current operations and, accordingly, the Company classifies the investments as current assets without regard to their contractual maturity.

Unrealized gains or losses on available-for-sale securities for which the Company expects to fully recover the amortized cost basis are recognized in accumulated other comprehensive (loss) income, a component of stockholders’ equity.

If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized as a loss in the consolidated statements of operations.

The Company reports accrued interest receivable separately from the available-for-sale securities and has elected not to measure an allowance for credit losses for accrued interest receivables.

Uncollectible accrued interest is written off when the Company determines that no additional interest payments will be received.

Classified within Other Receivables on the consolidated balance sheets, approximately $ 0.3 million in interest income was receivable as of December 31, 2022.

Interest earned on investment securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums accounted for over the life of the security or, in the case of callable securities, through the first call date, using the level yield method, with no prepayment anticipated.

Equity-Method Investments

When the Company does

not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial

policies, the investment is accounted for either (i) under the equity method of accounting or (ii) at fair value by electing

the fair value option available under U.S.

Significant influence generally exists when the firm owns 20% to 50% of the

entity’s common stock or in-substance common stock.

In general, the Company

accounts for investments acquired at fair value.

See Note 5 for further information about the Company’s investment in YFE’s

equity securities accounted for under the fair value option.

Allowance for Doubtful Accounts

Accounts receivable are presented

on the balance sheets net of estimated uncollectible amounts.

The Company assesses its accounts receivable balances on a quarterly basis

to determine collectability and records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses

based on historical experience and future expectations.

Individual uncollectible accounts are written off against the allowance when collection

of the individual accounts appears doubtful.

When the Company does not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial policies, the investment is accounted for either (i) under the equity method of accounting or (ii) at fair value by electing the fair value option available under U.S.

Significant influence generally exists when the firm owns 20% to 50% of the entity’s common stock or in-substance common stock.

In general, the Company accounts for investments acquired at fair value.

See Note 5 for further information about the Company’s investment in YFE’s equity securities accounted for under the fair value option.

Property and Equipment

Property and equipment are

recorded at cost.

Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of

the assets, which range from two to seven years.

Maintenance, repairs, and renewals, which neither materially add to the value of the

assets nor appreciably prolong their lives, are charged to expense as incurred.

Gains and losses from any dispositions of property and

equipment are reflected in the consolidated statement of operations.

Property and equipment are recorded at cost.

Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to seven years .

Maintenance, repairs, and renewals, which neither materially add to the value of the assets nor appreciably prolong their lives, are charged to expense as incurred.

Gains and losses from any dispositions of property and equipment are reflected in the consolidated statement of operations.

Right of Use Leased Assets

Effective January 1, 2019,

the Company adopted ASC 842, Leases , using the modified retrospective transition method applied at the effective date of the standard.

The Company determines at

contract inception whether the arrangement is a lease based on its ability to control a physically distinct asset and determines the classification

of the lease as either operating or finance.

For all leases, the Company combines all components of the lease including related nonlease

components as a single component.

Operating leases are reflected as operating right of use (“ROU”) assets and operating lease

liabilities in the consolidated balance sheets.

The Company does not have any finance leases.

Operating lease ROU assets

and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As the Company’s

leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement

date in determining the present value of lease payments.

The Company estimates the incremental borrowing rate to reflect the profile of

collateralized borrowing over the expected term of the leases based on the information available at the later of the initial date of adoption,

or the lease commencement date.

The operating lease ROU asset

also includes any lease payments made prior to lease commencement date and excludes lease incentives.

Lease terms may include options

to extend or terminate the lease when the Company is reasonably certain that it will exercise the option.

Lease expense is recognized

on a straight-line basis over the lease term in the consolidated statement of operations.

Lease incentives are recognized as a reduction

to the lease expense on a straight-line basis over the underlying lease term.

The Company determines at contract inception whether the arrangement is a lease based on its ability to control a physically distinct asset and determines the classification of the lease as either operating or finance under FASB ASC 842, Leases (“ASC 842”) .

For all leases, the Company combines all components of the lease including related nonlease components as a single component.

Operating leases are reflected as Operating Lease Right of Use (“ROU”) Assets and Operating Lease Liabilities and finance leases are reflected as Finance Lease ROU assets and Finance Lease Liabilities on the consolidated balance sheets.

Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The Company estimates the incremental borrowing rate to reflect the profile of collateralized borrowing over the expected term of the leases based on the information available on the lease commencement date or for leases existing upon the date of initial adoption of ASC 842, the date of adoption.

The implicit rates within the Company’s existing finance leases are determinable and therefore used to determine the present value of finance lease payments.

The operating lease ROU assets also include any lease payments made prior to lease commencement date and excludes lease incentives.

Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option.

Lease expense is recognized on a straight-line basis over the lease term within General and Administrative Expenses on the consolidated statements of operations.

Lease incentives are recognized as a reduction to the lease expense on a straight-line basis over the underlying lease term.

Refer to Notes 8 and 20 for details of the Company's leases.

Film and Television Costs

The Company capitalizes production

costs for episodic series produced in accordance with FASB ASC 926-20, Entertainment-Films - Other Assets - Film Costs .

production costs are capitalized at actual cost and amortized using the individual-film-forecast method, whereby these costs are amortized,

and participations costs are accrued based on the ratio of the current period’s revenues to management’s estimate of

ultimate revenue expected to be recognized from each production.

Due to the inherent uncertainties

involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and

are likely to differ to some extent in the future from actual results.

In addition, in the normal course of the Company’s business,

some titles are more successful or less successful than anticipated.

Management reviews its ultimate revenue and cost estimates on a title-by-title

basis, when an event or change in circumstances indicates that the fair value of the production may be less than its unamortized cost.

This may result in a change in the rate of amortization of film costs and participations and/or a write-down of all or a portion of the

unamortized costs of the film or television production to its estimated fair value.

An impairment charge is recorded in the amount by

which the unamortized costs exceed the estimated fair value.

These write-downs are included in amortization expense within Direct Operating

Expenses on the Company’s consolidated statements of operations.

See further discussion in Note 9 for impairment charges recorded

during the year ended December 31, 2021.

The Company expenses all capitalized

costs that exceed the initial market firm commitment revenue in the period of delivery of the episodes.

Additionally, for episodic series,

from time to time, the Company develops additional content, improved animation and bonus songs/features for its existing content.

the initial release of the episodic series, the costs of significant improvement to existing products are capitalized while routine and

periodic alterations to existing products are expensed as incurred.

The Company capitalizes production costs for episodic series produced in accordance with FASB ASC 926-20, Entertainment-Films - Other Assets - Film Costs .

Accordingly, production costs are capitalized at actual cost and amortized using the individual-film-forecast method, whereby these costs are amortized, and participations costs are accrued based on the ratio of the current period’s revenues to management’s estimate of ultimate revenue expected to be recognized from each production.

Productions in Development

Capitalized development costs are reclassified to productions in progress once the project is approved and physical production of the film or television program commences.

Development costs include the costs of acquiring film rights to books, scripts or original screenplays and the third-party costs to adapt such projects, including visual development and design.

Advances or contributions received from third parties to assist in development are deducted from these costs.

Productions in Progress

For the Company’s film and television programs in progress, capitalized costs include all direct production and financing costs incurred during production that are expected to provide future economic benefit to the Company.

Borrowing costs and depreciation are capitalized to the cost of a film or television program until substantially all of the activities necessary to prepare the film or television program for its use intended by management are complete.

Completed Productions

Completed productions are carried at the cost of proprietary film and television programs which have been produced by the Company or to which the Company has acquired distribution rights, less accumulated amortization and accumulated impairment losses.

Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results.

In addition, in the normal course of business, some titles are more successful or less successful than anticipated.

Management reviews the ultimate revenue and cost estimates on a title-by-title basis, when an event or change in circumstances indicates that the fair value of the production may be less than its unamortized cost.

This may result in a change in the rate of amortization of film costs and participations and/or a write-down of all or a portion of the unamortized costs of the film or television production to its estimated fair value.

An impairment charge is recorded in the amount by which the unamortized costs exceed the estimated fair value.

These write-downs are included in amortization expense within Direct Operating Expenses on the consolidated statements of operations.

See further discussion in Note 9 for impairment charges recorded during the years ended December 31, 2022 and 2021.

All capitalized costs that exceed the initial market firm commitment revenue are expensed in the period of delivery of the episodes.

Additionally, for episodic series, from time to time, the Company develops additional content, improved animation and bonus songs/features for its existing content.

After the initial release of the episodic series, the costs of significant improvement to existing products are capitalized while routine and periodic alterations to existing products are expensed as incurred.

Goodwill and Intangible Assets

Goodwill represents the excess

of purchase price over the estimated fair value of net assets acquired in business combinations accounted for by the acquisition method.

In accordance with FASB ASC 350, Intangibles Goodwill and Other , goodwill and certain intangible assets are presumed to have indefinite

useful lives and are thus not amortized, but subject to an impairment test annually or more frequently if indicators of impairment arise.

Goodwill represents the excess of purchase price over the estimated fair value of net assets acquired in business combinations accounted for by the acquisition method.

In accordance with FASB ASC 350, Intangibles Goodwill and Other, goodwill and certain intangible assets are presumed to have indefinite useful lives and are thus not amortized, but subject to an impairment test annually or more frequently if indicators of impairment arise.

The Company completes the annual goodwill and indefinite-lived intangible asset impairment tests at the end of each fiscal year.

for goodwill impairment, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that

the fair value of a reporting unit, of which the Company has two, is less than its carrying value.

If impairment is indicated in the qualitative

assessment, or, if management elects to initially perform a quantitative assessment of goodwill, the impairment test uses a one-step approach.

To test for goodwill impairment, the Company may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit, of which the Company has two , is less than its carrying value.

If impairment is indicated in the qualitative assessment, or, if management elects to initially perform a quantitative assessment of goodwill, the impairment test uses a one-step approach.

The fair value of a reporting unit is compared with its carrying amount, including goodwill.

If the fair value of the reporting unit exceeds

its carrying amount, goodwill of the reporting unit is not impaired.

If the carrying amount of a reporting unit exceeds its fair value,

an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed

the total amount of goodwill allocated to that reporting unit.

Changes in future results,

assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in

future periods.

Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable,

thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions.

Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the

fair values of its reporting units have fallen below their carrying values.

The Company has performed

its annual impairment test on its goodwill and indefinite-lived intangible asset during the fourth quarter of the year ended December

If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is not impaired.

If the carrying amount of a reporting unit exceeds its fair value, an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods.

Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions.

Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values.

Intangible assets have been acquired, either individually or with a group of other assets, and were initially recognized and measured based on fair value.

Annual amortization of these intangible assets is computed based on the straight-line method over the remaining economic life of the asset.

The Company has performed its annual impairment test on its goodwill and indefinite-lived intangible assets during the fourth quarter of the year ended December 31, 2022 and 2021.

Refer to Note 10 for details.

Other intangible assets have

been acquired, either individually or with a group of other assets, and were initially recognized and measured based on fair value.

amortization of these intangible assets is computed based on the straight-line method over the remaining economic life of the asset.

Debt and Attached Equity-Linked Instruments

The Company measures issued

debt on an amortized cost basis, net of debt premium/discount and debt issuance costs amortized using the effective interest rate method

or the straight-line method when the latter does not lead to materially different results.

The Company analyzes freestanding

equity-linked instruments including warrants attached to debt to conclude whether the instrument meets the definition of the derivative

and whether it is considered indexed to the Company’s own stock.

If the instrument is not considered indexed to the Company’s

stock, it is classified as an asset or liability recorded at fair value.

If the instrument is considered indexed to the Company’s

stock, the Company analyzes additional equity classification requirements per ASC 815-40, Contract’s in Entity’s Own Equity .

When the requirements are met, the instrument is recorded as part of the Company’s equity, initially measured based on its relative

fair value with no subsequent re-measurement.

When the equity classification requirements are not met, the instrument is recorded as an

asset or liability and is measured at fair value with subsequent changes in fair value recorded in earnings.

When required, the Company

also considers the bifurcation guidance for embedded derivatives per ASC 815-15, Embedded Derivatives .

The Company measures issued debt on an amortized cost basis, net of debt premium/discount and debt issuance costs amortized using the effective interest rate method or the straight-line method when the latter does not lead to materially different results.

The Company analyzes freestanding equity-linked instruments including warrants attached to debt to determine whether the instrument meets the definition of the derivative and whether it is considered indexed to the Company’s own stock.

If the instrument is not considered indexed to the Company’s stock, it is classified as an asset or liability recorded at fair value.

If the instrument is considered indexed to the Company’s stock, the Company analyzes additional equity classification requirements per FASB ASC 815-40, Contract’s in Entity’s Own Equity .

When the requirements are met, the instrument is recorded as part of the Company’s equity, initially measured based on its relative fair value with no

subsequent re-measurement.

When the equity classification requirements are not met, the instrument is recorded as an asset or liability and is measured at fair value with subsequent changes in fair value recorded in earnings.

When required, the Company also considers the bifurcation guidance for embedded derivatives per ASC 815-15, Embedded Derivatives .

Treasury stock

The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction.

These shares are considered treasury stock, which is a reduction to stockholders’ equity.

Treasury stock is included in authorized and issued shares but excluded from outstanding shares.

Revenue Recognition

The Company accounts for revenue

according to standard FASB ASC 606, Revenue from Contracts with Customers .

The Company has identified the following seven material

and distinct performance obligations:

License rights to exploit Functional Intellectual Property (“Functional Intellectual Property” or “functional IP” is defined as intellectual property that has significant standalone functionality, such as the ability be played or aired.

Functional Intellectual Property derives a substantial portion of its utility from its significant standalone functionality).

License rights to exploit Symbolic

Intellectual Property (“Symbolic Intellectual Property” or “symbolic IP” is intellectual property that is not

functional as it does not have significant standalone use and substantially all of the utility of symbolic IP is derived from its association

with the entity’s past or ongoing activities, including its ordinary business activities, such as the Company’s licensing

and merchandising programs associated with its animated content).

Provide media and advertising services

The Company accounts for revenue according to standard FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”).

Revenue is measured based on the consideration specified in a contract with a customer.

Revenue is recognized when a customer obtains control of the products or services in a contract.

Judgment is required in determining the timing of whether the transfer of control occurs at a point in time or over time and is discussed below.

The Company evaluates each contract to identify separate performance obligations as a contract with a customer may have one or more performance obligations.

Consideration in a contract with multiple performance obligations is allocated to the separate performance obligations based on their stand-alone selling prices.

If a stand-alone selling price is not determinable, the Company estimates the stand-alone selling price using an adjusted market assessment approach.

The Company’s main sources of revenue are derived from animation production services provided to third parties, the sale of licenses for the distribution of films and television programs, advertising revenues, and merchandising and licensing sales.

The Company has identified the following material and distinct performance obligations:

• Provide animation production services.

• License rights to exploit Functional Intellectual Property (“functional IP” is defined as intellectual property that has significant standalone functionality, such as the ability to be played or aired.

Functional IP derives a substantial portion of its utility from its significant standalone functionality).

• License rights to exploit Symbolic Intellectual Property (“symbolic IP” is intellectual property that is not functional as it does not have significant standalone use and substantially all of the utility of symbolic IP is derived from its association with the entity’s past or ongoing activities, including its ordinary business activities, such as the Company’s licensing and merchandising programs associated with its animated content).

• Provide media and advertising services to clients.

• Fixed and variable fee advertising and subscription-based revenue generated from the Genius Brands Kartoon Channel!, the Frederator owned and operated YouTube channels and revenues generated from the operation of its multi-channel network on YouTube .

• Options to renew or extend a contract at fixed terms.

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(While this performance obligation is not significant for the Company’s current contracts, it could become significant in the future).

Fixed fee advertising revenue generated from the Genius Brands Kartoon Channel!

Variable fee advertising revenue generated from the Genius Brands Kartoon Channel!

The Company recognizes revenue

related to licensed rights to exploit functional IP in two ways;

for minimum guarantees, the Company recognizes fixed revenue upon delivery

of content and the start of the license period and for functional IP contracts with a variable component, the Company estimates revenue

such that it is probable there will not be a material reversal of revenue in future periods.

The Company recognizes revenue related to

licensed rights to exploit symbolic IP substantially similarly to functional IP.

Although it has a different recognition pattern from

functional IP, the valuation method is substantially the same, depending on the nature of the license.

The Company sells advertising

on its App and OTT based “Kartoon Channel!” in the form of either flat rate promotions or impressions served.

rate promotions with a fixed term, the Company recognizes revenue when all five revenue recognition criteria under FASB ASC 606 are met.

For impressions served, the Company delivers a certain minimum number of impressions on the channel to the advertiser for which the advertiser

pays a contractual CPM per impression.

Impressions served are reported to the Company on a monthly basis, and revenue is reported in the

month the impressions are served.

The Company provides media

and advertising services to clients.

Production Services

Animation Production Services

For revenue from animation production services, the customer controls the output throughout the production process.

Each production is made to an individual customer’s specifications and if the contract is terminated by the customer, the Company is entitled to be reimbursed for any costs incurred to date, and for any prepaid commitments made, plus the agreed contractual mark-up.

Revenue and the associated costs of such contracts are recognized over time on a percentage of completion basis - i.e., as the project is being produced, prior to it being delivered to the customer.

percentage-of-completion is calculated based upon the proportion of costs incurred cumulatively to total expected costs.

Changes in revenue recognized as a result of adjustments to total expected costs are recognized in profit or loss on a prospective basis.

Invoices related to these projects are issued based on the achievement of milestones during the project or other contractual terms.

The difference between contractual payments received and revenue recognized is recorded as deferred revenue when receipts exceed revenue.

When revenue exceeds milestone billings, the Company recognizes this difference as unbilled accounts receivable within other receivables on the Company's consolidated balance sheet.

Unbilled accounts receivables are transferred to accounts receivable when the Company has an unconditional right to consideration.

When the outcome of an arrangement cannot be estimated reliably, revenue is recognized only to the extent of the expenses incurred that are recoverable.

Content Distribution

Film and Television Licensing

The Company recognizes revenue related to licensed rights to exploit functional IP in two ways;

for minimum guarantees, the Company recognizes fixed revenue upon delivery of content and the start of the license period and for functional IP contracts with a variable component, the Company estimates revenue such that it is probable there will not be a material reversal of revenue in future periods.

The Company recognizes revenue related to licensed rights to exploit symbolic IP substantially similarly to functional IP.

Although it has a different recognition pattern from functional IP, the valuation method is substantially the same, depending on the nature of the license.

Invoices related to these projects are issued based on the achievement of milestones during the project or other contractual terms.

The difference between contractual payments received and revenue recognized is recorded as deferred revenue when receipts exceed revenue.

When revenue exceeds milestone billings, the Company recognizes this difference as unbilled accounts receivable within other receivables on the Company's consolidated balance sheet.

Unbilled accounts receivables are transferred to accounts receivable when the Company has an unconditional right to consideration.

Advertising revenues

The Company sells advertising and subscriptions on its wholly-owned AVOD service, Kartoon Channel!

, and its SVOD distribution outlets, Kartoon Channel!

Kidaverse , and Ameba TV .

Advertising sales are generated in the form of either flat rate promotions or advertising impressions served.

For flat rate promotions with a fixed term, revenue is recognized when all five revenue recognition criteria under ASC 606 are met.

For impressions served, the Company delivers a certain minimum number of impressions on the channel to the advertiser for which the advertiser pays a contractual cost per mille impressions ("CPM").

Impressions served are reported on a monthly basis, and revenue is reported in the month the impressions are served.

For subscription-based revenue, revenue is recognized when a customer downloads the mobile device application and their credit card is charged.

Upon the acquisition of Wow, the Company generates advertising revenue from Frederator’s owned and operated YouTube channels as well as revenues generated from the operation of its multi-channel network on YouTube .

Revenue is recognized when services are provided in accordance with the Company’s agreement with YouTube, the price is fixed or determinable, and collection of the related receivable is probable.

Receivables are usually collectable within 30 days.

Licensing & Royalties

Merchandising and licensing

The Company enters into merchandising and licensing agreements that allow licensees to produce merchandise utilizing certain of the Company’s intellectual property.

For minimum guaranteed amounts that make up a contract, revenue is recognized over time, over the term of the license period commencing on the date at which the licensees can use and benefit from the licensed content.

Variable consideration in excess of non-refundable guaranteed amounts, such as royalties and other contractual payments are recognized as revenue when the amounts are known and become due provided collectability is reasonably assured.

Invoices are issued based on the contractual terms of an agreement and are usually payable within 30 - 45 days.

Product Sales

The Company recognizes revenue related to product sales when the Company completes its performance obligation, which is when the goods are transferred to the buyer.

Media Advisory & Advertising Services

Media and Advertising Services

The Company provides media and advertising services to clients.

Revenue is recognized when the services are performed.

When the Company purchases advertising for

clients on linear and across digital and streaming platforms and receives a commission, the commissions are recognized as revenue in the

month the advertising is displayed.

The Company recognizes revenue

related to product sales when the Company completes its performance obligation, which is when the goods are transferred to the buyer.

When the Company purchases advertising for clients on linear and across digital and streaming platforms and receives a commission, the commissions are recognized as revenue in the month the advertising is displayed.

Gross Versus Net Revenue Presentation

The Company evaluates individual arrangements with third parties to determine whether the Company acts as principal or agent under the terms.

To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items.

To the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any expenses incurred in providing agency services.

Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement.

The most significant factors that the Company considers include identification of the primary obligor, as well as which party has credit risk, general and inventory risk and the latitude or ability in establishing prices.

Direct Operating Costs

Direct operating costs include

costs of the Company’s product sales, non-capitalizable film costs, film and television cost amortization expense, impairment expenses

related to film and television costs, and participation expense related to agreements with various animation studios, post-production

studios, writers, directors, musicians or other creative talent with which the Company is obligated to share net profits of the properties

on which they have rendered services.

Direct operating costs include costs of the Company’s product sales, non-capitalizable film costs, film and television cost amortization expense, impairment expenses related to film and television costs, and participation expense related to agreements with various animation studios, post-production studios, writers, directors, musicians or other creative talent with which the Company is obligated to share net profits of the properties on which they have rendered services.

Upon the acquisition of Wow, the Company also includes salaries and related service production employee costs as part of its direct operating costs.

Share-Based Compensation

The Company issues stock-based

awards to employees and non-employees that are generally in the form of stock options or restricted stock units (“RSUs”).

Share-based compensation cost is recorded for all options and awards of non-vested stock based on the grant-date fair value of the award.

The fair value of stock options

is estimated at the date of grant using the Black-Scholes option pricing model, which requires management to make assumptions with respect

to the fair value on the grant date.

The Company issues stock-based awards to employees and non-employees that are generally in the form of stock options or restricted stock units (“RSUs”).

Share-based compensation cost is recorded for all options and awards based on the grant-date fair value of the award.

The fair value of stock options is estimated at the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which requires management to make assumptions with respect to the fair value on the grant date.

The assumptions are as follows:

(i) the expected term assumption of the award is based on the Company’s

historical exercise and post-vesting behavior (ii) the expected volatility assumption is based on historical and implied volatilities

of the Company’s common stock calculated based on a period of time generally commensurate with the expected term of the award;

the risk-free interest rates are based on the implied yield available on U.S.

treasury zero-coupon issues with an equivalent expected

(i) the expected term assumption of the award is based on the Company’s historical exercise and post-vesting behavior (ii) the expected volatility assumption is based on historical and implied volatilities of the Company’s common stock calculated based on a period of time generally commensurate with the expected term of the award;

(iii) the risk-free interest rates are based on the implied yield available on U.S.

treasury zero-coupon issues with an equivalent expected term;

(iv) and the expected dividend yields of the Company’s stock are based on history and expectations of future dividends payable.

In the case of RSUs the fair value is calculated based on the Company’s underlying common stock on the date of grant.

The Company recognizes compensation

expense over the requisite service period ratably, using the graded attribution method, which is in-substance, recognizing multiple awards

based on the vesting schedule.

The Company recognizes compensation expense over the requisite service period ratably, using the graded attribution method, which is in-substance, recognizing multiple awards based on the vesting schedule.

The Company has elected to account for forfeitures when they occur.

The Company issues authorized shares

available for issuance under the Company’s 2015 Incentive Plan and the Company’s 2020 Incentive Plan upon employees’

exercise of their stock options.

The Company issues authorized shares available for issuance under the Company’s 2015 Incentive Plan and the Company’s 2020 Incentive Plan upon employees’ exercise of their stock options.

Debt Issuance Costs

Debt issuance costs relate to the issuance of Wow’s Production Facilities and are recorded as a reduction to the carrying amount of debt and amortized to interest expense using the effective interest method over the respective terms of the facilities.

Debt issuance costs directly attributable to the acquisition or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time the assets are substantially ready for their intended use or sale.

Debt issuance costs as of December 31, 2022 and 2021 were insignificant.

Earnings Per Share

Basic earnings (loss) per

common share (“EPS”) is calculated by dividing net income (loss) applicable to common shareholders by the weighted average

number of shares of common stock outstanding for the period.

Diluted EPS is calculated by dividing net income (loss) applicable to common

shareholders by the weighted average number of shares of common stock outstanding, plus the assumed exercise of all dilutive securities

using the treasury stock or “as converted” method, as appropriate.

During periods of net loss, all common stock equivalents

are excluded from the diluted EPS calculation because they are antidilutive.

Deferred income tax assets

and liabilities are recognized based on differences between the financial statement and tax basis of assets and liabilities using presently

enacted tax rates.

At each balance sheet date, the Company evaluates the available evidence about future taxable income and other possible

sources of realization of deferred tax assets and records a valuation allowance that reduces the deferred tax assets to an amount that

represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized.

Basic earnings (loss) per share of common stock (“EPS”) is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period.

Diluted EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding, plus the assumed exercise of all dilutive securities using the treasury stock or “as converted” method, as appropriate.

During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are antidilutive.

Deferred income tax assets and liabilities are recognized based on differences between the financial statement and tax basis of assets and liabilities using presently enacted tax rates.

At each balance sheet date, the Company evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets and records a valuation allowance that reduces the deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized.

Concentration of Risk

The Company maintains its

cash in bank deposit accounts which, at times, may exceed the Federal Deposit Insurance Corporation’s (“FDIC”) or the

Canadian Deposit Insurance Corporation’s (“CDIC”) insured amounts.

Balances on interest bearing deposits at banks in

the United States are insured by the FDIC up to $ 250,000 per account and deposits in banks in Canada are insured by the CDIC up to $100,000

As of December 31, 2021, the Company had four accounts with an uninsured balance in bank deposit accounts of $ 1.1 million.

The Company has a managed

account and a brokerage account with a financial institution.

The managed account maintains our investments in marketable securities of

$ 112.5 million as of December 31, 2021.

The brokerage account does not have a balance as of December 31, 2021.

Assets in the managed account

and brokerage account are protected by the Securities Investor Protection Corporation (“SIPC”) up to $500,000 (with a limit

of $ 250,000 for cash).

In addition, the financial institution provides additional “excess of SIPC” coverage which insures

up to $1 billion.

As of December 31, 2021, the Company has not had account balances held at this financial institution that exceed the

insured balances.

The Company’s investment

portfolio consists of investment-grade securities diversified among security types, industries and issuers.

The Company’s policy

limits the amount of credit exposure to any one security issue or issuer and the Company believes no significant concentration of credit

risk exists with respect to these investments.

For fiscal year 2021, the

Company had one customer, as reported in the Content Production & Distribution operating segment, whose total revenue exceeded 10%

of total consolidated revenue.

The Company maintains its cash in bank deposit accounts which, at times, may exceed the Federal Deposit Insurance Corporation’s (“FDIC”) or the Canadian Deposit Insurance Corporation’s (“CDIC”) insured amounts.

Balances on interest bearing deposits at banks in the United States are insured by the FDIC up to $250,000 per account and deposits in banks in Canada are insured by the CDIC up to $100,000 CAD.

As of December 31, 2022, the Company had twelve bank deposit accounts with an uninsured balance of $ 3.4 million.

The Company has a managed account and a brokerage account with a financial institution.

The managed account maintains our investments in marketable securities of $ 83.7 million as of December 31, 2022.

The brokerage account had a cash balance of $ 2.2 million as of December 31, 2022.

Assets in the managed account and brokerage account are protected by the Securities Investor Protection Corporation (“SIPC”) up to $500,000 (with a limit of $250,000 for cash).

In addition, the financial institution provides additional “excess of SIPC” coverage which insures up to $1.0 billion.

As of December 31, 2022, the Company has not had account balances held at this financial institution that exceed the insured balances.

The Company’s investment portfolio consists of investment-grade securities diversified among security types, industries and issuers.

The Company’s policy limits the amount of credit exposure to any one security issue or issuer and the Company believes no significant concentration of credit risk exists with respect to these investments.

For fiscal year 2022, the Company had four customers, whose total revenue exceeded 10% of total consolidated revenue.

These customers accounted for 71.9 % of total revenue.

As of December 31, 2022, the Company had two customers whose total accounts receivable exceeded 10% of total accounts receivable.

These customers accounted for 26.1 % of the total accounts receivable as of December 31, 2022.

For fiscal year 2021, the Company had one customer whose total revenue exceeded 10% of the total consolidated revenue.

This customer accounted for 14.6 % of total revenue.

The Company had two customers whose total accounts

receivable exceeded 10% of total accounts receivable.

As of December 31, 2021, the Company had two customers whose total accounts receivable exceeded 10% of total accounts receivable.

These customers accounted for 29.9 % of the total accounts receivable as of December 31, 2021.

For fiscal year 2020, the Company had two customers whose total revenue exceeded 10% of the total consolidated revenue.

customers accounted for 44 % of total revenue and represented 22 % of accounts receivable.

There is significant financial

risk associated with a dependence upon a small number of customers.

The Company periodically assesses the financial strength of these

customers and establishes allowances for any anticipated bad debt.

At December 31, 2021 and 2020, the Company recorded an allowance for

bad debt of $ 22,080 and $ 43,676 , respectively.

There is significant financial risk associated with a dependence upon a small number of customers.

The Company periodically assesses the financial strength of these customers and establishes allowances for any anticipated bad debt.

Fair value of Financial Instruments

Fair value is defined as the

price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at

the measurement date.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements)

and the lowest priority to unobservable inputs (level 3 measurements).

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).

These tiers include:

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• Level 3 - Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The carrying amounts of cash,

restricted cash, receivables, payables, accrued liabilities and the margin loan approximate fair value due to the short-term maturity

of the instruments.

The fair values of the available-for-sale

securities are generally based on quoted market prices, where available.

These fair values are obtained primarily from third-party pricing

services, which generally use Level 1 or Level 2 inputs for the determination of fair value to facilitate fair value measurements and

Level 2 securities primarily include corporate securities, securities from states, municipalities and political subdivisions,

mortgage-backed securities, United States Government securities, foreign government securities, and certain other asset-backed securities.

For securities not actively traded, the pricing services may use quoted market prices of comparable instruments or a variety of valuation

techniques, incorporating inputs that are currently observable in the markets for similar securities.

The following table summarizes

the marketable securities measured at fair value by level within the fair value hierarchy as of December 31, 2021 (in thousands):

Schedule of marketable security measured at fair value

Total Fair Value

The carrying amounts of cash, restricted cash, receivables, payables, accrued liabilities, bank indebtedness and the margin loan approximate fair value due to the short-term nature of the instruments.

The Company used the settlement value for its put option liability on certain warrants and the fair values of the liability-classified derivative warrants are revalued at the end of each reporting period determined using the BSM model (Level 2) with standard valuation inputs.

Refer to Note 18 for additional details.

The investment in YFE is also revalued at the end of each reporting period based on the trading price of YFE (Level 1).

Refer to Note 5 for additional details.

Upon the acquisition of Wow, foreign currency forward contracts that are not traded in active markets were assumed.

These are fair valued using observable forward exchange rates at the measurement dates and interest rates corresponding to the maturity of the contracts (Level 2).

The fair values of the available-for-sale securities are generally based on quoted market prices, where available.

These fair values are obtained primarily from third-party pricing services, which generally use Level 1 or Level 2 inputs for the determination of fair value to facilitate fair value measurements and disclosures.

Level 2 securities primarily include corporate securities, securities from states, municipalities and political subdivisions, mortgage-backed securities, United States Government securities, foreign government securities, and certain other asset-backed securities.

For securities not actively traded, the pricing services may use quoted market prices of comparable instruments or a variety of valuation techniques, incorporating inputs that are currently observable in the markets for similar securities.

The following table summarizes the marketable securities measured at fair value by level within the fair value hierarchy as of December 31, 2022 (in thousands):

Level 1 Level 2 Total Fair Value

Marketable investments:

Corporate Bonds $ 34,465 $ 3,779 $ 38,244

Treasury 19,556 – 19,556

Mortgage-Backed – 5,374 5,374

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states and municipalities – 10,906 10,906

Commercial paper

Fair values were determined

for each individual security in the investment portfolio.

The Company’s marketable securities are considered to be available-for-sale

investments as defined under ASC 320, Investments – Debt and Equity Securities .

There were no impairment charges recorded

for the marketable securities.

Refer to Note 6 for additional details.

The fair values of the derivative warrants attached to the 2020

Convertible Notes were determined using the Black-Scholes-Merton model (Level 2) with standard valuation inputs.

Refer to Note 22 for

additional details.

The investment in YFE is valued based on the trading price of YFE (Level 1).

Asset-Backed – 66 66

Total $ 54,021 $ 29,685 $ 83,706

Fair values were determined for each individual security in the investment portfolio.

The Company’s marketable securities are considered to be available-for-sale investments as defined under FASB ASC 320, Investments – Debt and Equity Securities .

There were no impairment charges recorded for the marketable securities during the years ended December 31, 2022 and 2021.

Refer to Note 6 for additional details.

Financial and nonfinancial

assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs.

Company’s financial and nonfinancial assets and liabilities measured at fair value on a non-recurring basis as of December

31, 2021 include the contingent earn-out liability (refer to Note 3), the indefinite-lived intangible asset and goodwill related to the

ChizComm acquisition (refer to Note 10) and the Film and Television Costs (refer to Note 9).

Financial and nonfinancial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs and include the Company’s contingent earn-out liability, goodwill, intangible assets and film and television costs.

Recent Accounting Pronouncements

In June 2016, the FASB issued

Accounting Standards Update (“ASU”) No.

In June 2016, the FASB issued Accounting Standards Update ("ASU") No.

2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) .

ASU 2016-13 replaces the “incurred loss” credit losses framework with a new accounting standard that requires management’s

measurement of the allowance for credit losses to be based on a broader range of reasonable and supportable information for lifetime credit

loss estimates.

ASU 2016-13 replaces the “incurred loss” credit losses framework with a new accounting standard that requires management's measurement of the allowance for credit losses to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates.

The new model, referred to as the current expected credit loss (“CECL”) model, will apply to:

(1) financial

assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures.

This includes, but

is not limited to, loans, leases, held-to-maturity securities, loan commitments, and financial guarantees.

The CECL model does not apply

to available-for-sale (“AFS”) debt securities.

For AFS debt securities with unrealized losses, entities will measure credit

losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the

amortized cost of the securities.

(1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures.

This includes, but is not limited to, loans, leases, held-to-

maturity securities, loan commitments, and financial guarantees.

The CECL model does not apply to available-for-sale (“AFS”) debt securities.

For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities.

The ASU also simplifies the accounting model for purchased credit-impaired debt securities and loans.

2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the

allowance for loan and lease losses.

On November 16, 2019, the FASB issued ASU No.

2019-10, Financial Instruments-Credit Losses, Effective

Dates approving a proposal to change the effective date of ASU No.

2016-13 for smaller reporting companies, such as the Company, delaying

the effective date to fiscal years beginning after December 31, 2022, including interim periods within those fiscal periods.

Early adoption

is permitted for interim and annual reporting periods.

The Company is currently evaluating the effect that the ASU will have on its consolidated

financial statements and related disclosures.

In August 2020, the FASB issued

2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity .

The update simplifies the

accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and

Other Options , for convertible instruments.

As part of the amendment, the embedded conversion features are no longer separated from

the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under

Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital.

The FASB has eliminated

the cash conversion and beneficial conversion feature models.

The FASB has also modified accounting rules relating to application of the

scope exception from derivative accounting.

The amendments revise the guidance in ASC 815-40-25-10, to remove three out of seven conditions

from the settlement guidance, referred to as additional equity classification requirements.

Following the above amendments, more convertible

debt instruments will be accounted for as a single liability measured at its amortized cost and more convertible preferred stock will

be accounted for as a single equity instrument measured at its historical cost, as long as no features require bifurcation and recognition

as derivatives.

The amendments are effective for public business entities, excluding smaller reporting companies, for fiscal years beginning

after December 15, 2021, including interim periods within those fiscal years.

For all other entities, including smaller reporting companies

the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those

fiscal years.

The Company has early adopted ASU No.

2020-06 starting January 1, 2021 on a modified retrospective basis.

The impact to

the Company’s consolidated financial position, results of operations and cash flows was not material as the Company does not have

any convertible instruments outstanding as of the beginning of the fiscal year.

In May 2021, the FASB issued

2021-04, Modification of Equity-Classified Written Call Options .

The update requires the issuer to treat a modification

of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant

for a new warrant.

This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant

or as termination of the original warrant and issuance of a new warrant.

Under the amendments, an issuer should measure the effect of

a modification as the difference between the fair value of the modified warrant and the fair value of that warrant immediately before

modification.

The recognition of the modification depends on the nature of the transaction in which a warrant is modified, i.e., in connection

with equity issuance, debt origination, debt modification, or other.

For example, if a warrant is modified in connection with an equity

issuance, the issuer should recognize the increase (and disregard any decrease) in the warrant’s fair value as an equity issuance

cost, which should be charged against the gross proceeds of the offering.

The amendments are effective for public business entities for

fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted, including

interim periods within those fiscal years.

The amendment would be applied prospectively to modifications that occur after the date of

initial application.

The Company will apply the amendment during the interim periods of fiscal year 2022 to any prospective modifications.

In October 2021, the FASB

issued ASU No.

2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with

ASU 2021-08 requires the recognition and measurement of contract assets and contract liabilities acquired in a business

combination in accordance with ASC 606, Revenue from Contracts with Customers .

Considerations to determine the amount of contract

assets and contract liabilities to record at the acquisition date include the terms of the acquired contract, such as timing of payment,

identification of each performance obligation in the contract and allocation of the contract transaction price to each identified performance

obligation on a relative standalone selling price basis as of contract inception.

The amendments are effective for public business entities

for fiscal years beginning after December 15, 2022.

ASU 2021-08 should be applied prospectively for acquisitions occurring on or after

the effective date of the amendments.

Early adoption of the proposed amendments would be permitted, including adoption in an interim period.

The Company is currently evaluating the effect that the ASU will have on its consolidated financial statements and related disclosures.

Various other accounting pronouncements

have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific

industries and are not expected to have a material effect on the Company’s financial position, results of operations, or cash flows.

Acquisition of ChizComm Entities

On February 1, 2021, the Company

through GBI Acquisition LLC, a New Jersey limited liability company, and 2811210 Ontario Inc., a company organized under the laws of the

Province of Ontario, two wholly-owned subsidiaries of the Company, closed its previously announced acquisition of the issued and outstanding

equity interests of ChizComm Ltd., a corporation organized in Canada (“ChizComm Canada”), and ChizComm USA Corp., a New Jersey

corporation (“ChizComm USA” and, together with ChizComm Canada, “ChizComm”) (the “ChizComm Acquisition”).

following table summarizes the fair value of the purchase price consideration paid to acquire ChizComm (in thousands):

Total purchase price consideration paid

Cash consideration at closing

Equity consideration at closing

Fair value of Earn-Out shares

Total consideration paid by

the Company in the transaction at closing consisted of $ 8.5 million in cash and 1,980,658 shares (the “Closing Shares”) of

the Company’s common stock with a value of approximately $3.5 million, both as subject to certain purchase price adjustments.

the Closing Shares, 674,157 shares of common stock, with a value of approximately $ 1.2 million, were deposited into an escrow account

to cover potential post-closing indemnification obligations of Sellers under the Purchase Agreement.

Additionally, the Purchase Agreement

also provides for the issuance of additional shares of common stock with an aggregate value of up to $8.0 million that may be issued to

the Sellers if certain EBITDA and performance levels are achieved within a four-year period commencing on the date of the Purchase Agreement

ChizComm Acquisition was approved by the board of directors of each company.

Transaction costs incurred relating to this acquisition including

legal and accounting totaled $0.5 million, which is included in general and administrative expenses on the statement of operations.

ChizComm Acquisition expands the Company’s revenue streams into media and advertising services.

Company has determined that the ChizComm Acquisition constitutes a business acquisition as defined by ASC 805, Business Combinations .

Accordingly, the assets acquired and the liabilities assumed in the transaction were recorded at their estimated acquisition fair values,

while transaction costs associated with the acquisition were expensed as incurred pursuant to the purchase method of accounting in accordance

with ASC 805.

The Company’s purchase price allocation was based on an evaluation of the appropriate fair values and represent managements

best estimate based on available data.

Fair values are determined based on the requirements of ASC 820, Fair Measurements and Disclosures .

Earn-Out arrangement meets the liability classification criteria outlined in ASC 815-40, Derivatives and Hedging:

Entity’s Own Equity.

Liability classified contingent consideration is measured initially at the fair value on the

acquisition date and is remeasured at each reporting period.

Subsequent differences between the estimated fair value of the Earn-Out

recorded at the acquisition date and the remeasurement date will be reflected as a charge or credit, as applicable, in the statement

of operations.

As of December 31, 2021, due to an update in the assumptions used to value the contingent consideration during the

fourth quarter of 2021, a credit was recorded as other income in the Company’s statement of operations, in the amount of

$ 5.9 million.

Company completed and finalized the purchase price allocation during the year ended December 31, 2021.

The Company recorded assets acquired

and liabilities assumed at their respective fair values.

The following table summarizes the final fair value of assets acquired and liabilities

assumed (in thousands):

Assets acquired and liabilities assumed

2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating the allowance for loan and lease losses.

On October 16, 2019, the FASB approved a proposal to change the effective date of ASU No.

2016-13 for smaller reporting companies, such as the Company, delaying the effective date to fiscal years beginning after December 31, 2022, including interim periods within those fiscal periods.

Early adoption is permitted for interim and annual reporting periods.

The Company is currently evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements but does not expect that the adoption of this standard will have a material impact.

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" (“ASU 2021-08”).

The standard requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, “Revenue from Contracts with Customers,” as if it had originated the contracts.

The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

Early adoption is permitted.

The Company adopted this ASU during the second quarter of 2022 and has incorporated this guidance in its evaluation of the accounting for the acquisition of Wow.

The Company has determined that the following acquisitions completed by the Company constitute a business acquisition as defined by ASC 805, Business Combinations (“ASC 805”).

Accordingly, the assets acquired and the liabilities assumed in the transactions were recorded at their estimated acquisition date fair values, while transaction costs associated with the acquisition were expensed as incurred pursuant to the purchase method of accounting in accordance with ASC 805.

The Company’s purchase price allocations were based on an evaluation of the appropriate fair values and represent management's best estimate based on available data at the time of acquisition and during the one year period thereafter.

Fair values were determined based on the requirements of ASC 820, Fair Measurements and Disclosures (“ASC 820”).

On January 13, 2022, the Company completed the acquisition of Ameba, pursuant to a Stock Purchase Agreement (the “SPA”) by and between the Company and Tony Havelka, a resident of the Province of Manitoba (the “Seller”), in which the Company acquired from the Seller all of the issued and outstanding equity interests of Ameba.

Concurrently, pursuant to an Asset Purchase Agreement (the “APA”) by and among the Company, the Seller and Tek Gear Inc., a corporation owned by the Seller, the Company acquired from the Seller a proprietary software platform (the “Technology”) that powers the Ameba SVOD deliveries.

The transactions contemplated by the SPA and the APA are referred to as the “Ameba Acquisition.”

Final consideration paid by the Company at closing, excluding transaction costs, consisted of $ 3.8 million in cash pursuant to the SPA, inclusive of $ 0.3 million for a net working capital adjustment (the “NWC Adjustment”) and $ 0.3 million in cash pursuant to the APA, for total consideration of $ 4.1 million, or $ 3.9 million net of cash acquired.

Transaction costs relating to the Ameba Acquisition of $ 0.1 million, including legal and accounting fees, were expensed as part of General and Administrative expense on the Company's consolidated statement of operations.

The Ameba Acquisition facilitates the Company’s expansion into SVOD with its technology and content essential to the launch of the ad-free subscription-based Kartoon Channel!

Kidaverse platform.

The acquisition provides immediate benefit recognized through the content available on the SVOD Ameba TV channel app, available for download on Amazon Fire TV, Roku, Xbox 360, Xumo, LG Smart TV, TiVo, VEWD, CINEMOOD and iOS and Android devices.

The following table summarizes the consideration paid, including the NWC Adjustment (in thousands):

SPA cash consideration at closing $ 3,500

APA cash consideration at closing 300

Net working capital adjustment 269

Total $ 4,069

The NWC Adjustment of $ 268,658 was calculated by the Company as defined by the agreement.

The adjustment was agreed upon by the acquiree and paid out during the second quarter of 2022.

The Company has completed and finalized the purchase price allocation as of December 31, 2022 and recorded the respective fair values of assets acquired and liabilities assumed on January 13, 2022 as follows (in thousands):

Accounts Receivable 239

Prepaid Expenses 25

Lease Deposits

Customer Relationships

Non-Compete Agreements

Trade Name 24

Digital Networks 2,804

Technology 300

Accounts Payable and Accrued Expenses ( 140 )

Payroll Tax Liability

Tax Liability ( 31 )

Total Consideration $ 4,069

The identifiable

intangible assets acquired of $ 9.6

million was composed of $ 3.4

million for ChizComm’s trade name with an indefinite economical life, $ 6.1

million for ChizComm’s customer base with a useful life of approximately 12

years, and $ 60,000

for ChizComm’s non-compete agreements with an economic life of 3

The goodwill arising from the acquisition consists largely of the synergies expected from combining the operations

of ChizComm and the Company and was recorded to the Media Advisory & Advertising Services reporting unit.

The identifiable intangible assets acquired of $ 3.1 million is comprised of $ 2.8 million for the Digital Network, Ameba TV, with a remaining economic life of 18 years, $ 23,557 for Ameba’s trade name with a useful life of 3 years and $ 0.3 million for the SVOD technology with a remaining useful life of approximately 3 years.

The $ 0.7 million in goodwill arising from the acquisition consists largely of the synergies expected from the combined businesses, including the Company’s build-out of its technology for the expansion of the Kartoon Channel!

The goodwill was recorded to the Content Production & Distribution reporting unit and was not deductible for tax purposes.

With the assistance of a third-party specialist, the Company calculated an estimate of the underlying tax basis of the acquired net assets resulting in a $ 0.8 million deferred tax liability and a step-up in the fair value of goodwill.

The Company recorded the deferred tax liability and increase in fair value of goodwill during the fourth quarter of 2022.

The fair values of the acquired identifiable intangible assets as described above were determined using the following methods:

Valuation Methodology

relationships for ChizComm were valued by performing a discounted cash flow analysis using the multiperiod excess earnings method.

method includes discounting the projected cash flows associated with existing customers based primarily upon customer turnover data over

its expected life and considers the operating expenses and contributory asset charges associated with servicing such existing customers.

Projected cash flows attributable to the customer relationships were discounted to their present value at a rate commensurate with the

perceived risk.

The useful lives of customer relationships are estimated based primarily upon the present value of cash flows attributable

to the customer relationships.

and trade names for ChizComm were valued using the relief-from-royalty method.

This method is an income approach that estimates the portion

of a company’s earnings attributable to an asset based on the royalty rate the company would have paid for the use of the asset

if it did not own it.

Royalty payments are estimated by applying a royalty rate to the prospective revenue attributable to the intangible

The digital network was valued by performing a discounted cash flow analysis.

This method includes discounting the projected cash flows associated with the current digital network content, based primarily upon historical revenue and projections over its expected life and considers the operating expenses and contributory asset charges associated with servicing such network.

Projected cash flows attributable to the digital network were discounted to the present value at a rate commensurate with the perceived risk.

The useful life of the digital network is estimated based primarily upon the present value of cash flows attributable to the digital network.

The Ameba trade name was valued using the relief-from-royalty method.

This method is an income approach that estimates the portion of a company’s earnings attributable to an asset based on the royalty rate the company would have paid for the use of the asset if it did not own it.

Royalty payments are estimated by applying a royalty rate to the prospective revenue attributable to the intangible asset.

The resulting annual royalty payments are tax-affected and then discounted to present value.

agreements were valued using a with and without method.

Under this method, estimated prospective financial information (“PFI”)

is calculated with the existence and ownership of an intangible asset and compared to the PFI in the absence of the ownership of the intangible

The after-tax differential PFI attributable to the intangible asset is then discounted to its present value.

used in forecasting cash flows for each of the identified intangible assets included consideration of the following:

The useful life of the trade name is based on the estimated time it will take for the Company to rebrand the Ameba trade name and logo with the Company branded Kartoon Channel!

Kidaverse trade name.

The technology was valued at cost as the Company determined that the cost approximated the fair value.

The assumptions used in forecasting cash flows for each of the identified intangible assets included consideration of the following:

• Historical performance including sales and profitability.

Business prospects and industry expectations.

• Expense estimates.

• Contributory asset charges.

• Estimated economic life of asset.

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• Attrition of existing customers.

The acquisition was treated

for tax purposes as a nontaxable transaction and as such, the historical tax basis of the acquired assets, net operating loss, and other

tax attributes of ChizComm will carryover.

As a result, no new goodwill for tax purposes was created in connection with the acquisition

as there is no step-up to the fair value of the underlying tax bases of the acquired net assets.

The following supplemental

pro forma information summarize the Company’s results of operations for the current reporting period, as if the Company completed

the acquisition as of the beginning of the annual reporting period.

Supplemental pro forma information

is as follows (in thousands) :

Wow Unlimited Media

On April 6, 2022, the Company completed the acquisition of Wow.

On October 26, 2021, the Company’s wholly-owned subsidiary, 1326919 B.C.

The Company purchased 100 % of the issued and outstanding shares of Wow, including Wow’s subsidiary Frederator.

The plan of arrangement and final agreement, together with the acquisition of Wow’s Mainframe Studios and its subsidiary Frederator, are referred to as the “Wow Acquisition.”

The final consideration of $ 52.7 million, excluding transaction costs, was paid by the Company at closing.

The consideration consisted of $ 38.3 million in cash, 1,105,708 shares of the Company’s common stock, including 69,126 Exchangeable Shares, with a fair value of $ 11.6 million, 240,952 options granted to employees of Wow, 196,753 of which with a fair value of $ 1.2 million, were previously vested and included in the purchase price and $ 1.6 million in severance and bonuses to executives.

Transaction costs relating to the Wow Acquisition of $ 4.5 million, including bank, legal and accounting fees, were expensed as part of General and Administrative expenses on the Company's consolidated statement of operations.

The Company will also expense the unvested replacement options, with a fair value of $ 0.3 million, as stock-based compensation expense over the remaining requisite service period specified in the agreements.

The Wow Acquisition facilitates the Company’s expansion as a global animation and children’s digital media company.

With Wow’s content, ongoing production projects and the addition of two studios that can also be leveraged for in-house production of the Company’s properties, will drive cost synergies, facilitate further expansion into the global children’s entertainment market and strengthen financial growth.

Frederator, with its owned and operated channels on YouTube, will provide a distribution platform to facilitate the global growth of Kartoon Channel!

The following table summarizes the consideration paid (in thousands):

Cash $ 38,310

Genius Common Stock Issued 10,832

Shares Issued Exchangeable for Genius Common Stock 722

Stock Option Value of Replacement Options- Pre- Combination Vested Options 1,214

Severance Payments 1,044

Total $ 52,651

Cash and cash equivalents $ 2,573

Accounts Receivable 34,237

Other Receivable 78

Prepaid Expenses and Other 1,245

Property and Equipment 1,936

ROU Assets 10,311

IP (Productions in Progress) 4,600

IP (Completed Productions) 5,684

Tradename 7,630

Customer Relationships 16,064

Networks and Platforms 803

Goodwill 21,398

Accounts Payable ( 1,547 )

Participations Payable ( 1,380 )

Bank Debt ( 1,475 )

Accrued Liabilities ( 3,825 )

Interim Production Facilities ( 16,930 )

Deferred Revenue ( 18,080 )

Lease Liabilities ( 10,614 )

Other Liabilities ( 57 )

Total Consideration

The identifiable intangible assets acquired of $ 34.8 million is comprised of $ 16.1 million for Customer Relationships, with remaining economic lives of 8 years, $ 10.3 million for IP Content including completed productions and productions in progress, that is included as part of Film and Television Costs, net on the consolidated balance sheet and will be amortized as such, Tradenames for $ 7.6 million, with an indefinite life and Networks and Platforms of $ 0.8 million, with a remaining economic life of 16 years.

The goodwill of $ 21.4 million arising from the acquisition consists largely of the synergies expected from the combined businesses, including the Company’s ability to produce its content in-house utilizing the acquired studios and expansion of the Kartoon Channel!

The goodwill was recorded to the Content Production & Distribution reporting unit and is not deductible for tax purposes.

The fair values of the acquired identifiable intangible assets as described above were determined using the following methods:

Valuation Methodology

The Networks and Platforms were valued by performing a discounted cash flow analysis, specifically the multi-period excess earnings method.

This method involves quantifying the amount of residual (or excess) cash flows generated by the current digital network content, based primarily upon historical revenue and projections over its expected life, and considers the operating expenses and contributory asset charges associated with servicing such network.

Projected cash flows attributable to the networks are discounted to present value at a rate commensurate with the perceived risk.

The significant assumptions used in this model included the customer attrition rate, acquisition rate of new customers, weighted average cost of capital, and expense estimates.

The useful life of the networks is estimated based primarily upon the present value of cash flows attributable to the digital network.

The significant assumptions used in this method included the royalty rate and weighted average cost of capital.

The Tradenames were valued using the relief-from-royalty method.

The relief-from-royalty method is one of the methods under the income approach wherein estimates of a company’s earnings attributable to the intangible asset are based on the royalty rate the company would have paid for the use of the asset if it did not own it.

Royalty payments are estimated by applying a royalty rate to the prospective revenue attributable to the intangible asset.

The resulting annual royalty payments are tax-affected and then discounted to present value.

Supplemental Pro Forma Information

Year Ended December 31,

The following supplemental unaudited pro forma information summarizes the Company’s results of operations as if the acquisitions were completed at the beginning of the periods presented (in thousands, except for share and per share data):

Year Ended Partial Period Pre-Acquisition Year Ended

Genius Brands Consolidated (inc.

WOW and Ameba Pre-Acquisition Results) Wow Pre-Acquisition Ameba Pre-Acquisition Wow Pre-Acquisition Ameba Pre-Acquisition

December 31, 2022 (1)

December 31, 2021

January 1- March 31, 2022

January 1-16, 2022 December 31, 2021 (1)

December 31, 2021

Total Revenues $ 80,404 $ 72,641 $ 18,076 $ 28 $ 64,010 $ 758

Net Loss per Common Share (Basic and Diluted)

Net Loss Attributable to Genius Brands International, Inc.

$ ( 44,617 ) $ ( 123,370 ) $ 1,011 $ ( 32 ) $ 2,542 $ 380

Net Loss per Share of Common Stock (Basic and Diluted) $ ( 1.42 ) $ ( 4.15 )

Weighted Average Shares Outstanding (Basic and Diluted) 31,388,277 29,751,337

(1) The unaudited historical financial statements of Wow are not adjusted for conversion to U.S.

GAAP from International Financial Reporting Standards, as the adjustments are immaterial to the periods presented.

Variable Interest Entity

In July 2020, the Company entered into a binding

term sheet with POW, Inc.

(“POW!”) in which we agreed to form an entity with POW!

to exploit certain rights in intellectual

property created by Stan Lee, as well as the name and likeness of Stan Lee.

The entity is called “Stan Lee Universe, LLC.”

and the Company executed an Operating Agreement for the joint venture, effective as of June 1, 2021.

The purpose of the acquisition

was to enable the Company to assume the worldwide rights, in perpetuity, to the name, physical likeness, physical signature, live-action

and animated motion picture, television, online, digital, publishing, comic book, merchandising and licensing rights to Stan Lee and over

100 original Stan Lee creations (the “Stan Lee Assets”), from which Genius Brands plans to develop and license multiple properties

The Company contributed $ 2.0 million to obtain

50% of SLU’s voting equity and POW, for the remaining 50%, contributed the specified intangible assets associated with the Stan

POW will retain certain rights in the transferred intangible assets, namely existing the rights/obligations arising from current

licensing agreements.

Under ASC 805, the Company determined that the value of SLU was wholly attributable to the Stan Lee Assets and would

be accounted for as an asset acquisition.

The acquisition cost of $ 2.0 million was equivalent to the value of the Stan Lee Assets contributed

Therefore, the fair value of the consideration paid by the entity of $2.0 million and the fair value of the 50% noncontrolling

interest approximated a total of $4.0 million.

Pursuant to the guidance under ASC 810, the Company

concluded that SLU qualifies as a variable interest entity (“VIE”).

The Company consolidates the results of SLU as it was

determined that the Company is the primary beneficiary due to having the power through the collaboration to direct the activities that

most significantly impact the entity’s economic performance and the Company is required to fund over half of the economic support

of the entity.

Accordingly, the Company recorded the total fair value of the Stan Lee Assets in SLU of $ 4.0 million, as an intangible

asset to be amortized over the duration of 70 years, the life of the publicity rights related to Stan Lee’s name, likeness, voice,

physical characteristics, etc.

On an ongoing basis, the Company will re-evaluate

the VIE assessment based on changes in facts and circumstances.

In July 2020, the Company entered into a binding term sheet with POW!

Entertainment, LLC.

(“POW”) in which we agreed to form an entity with POW to exploit certain rights in intellectual property created by Stan Lee, as well as the name and likeness of Stan Lee.

The entity is called “Stan Lee Universe, LLC.” POW and the Company executed an Operating Agreement for the joint venture, effective as of June 1, 2021.

The purpose of the acquisition was to enable the Company to assume the worldwide rights, in perpetuity, to the name, physical likeness, physical signature, live-action and animated motion picture, television, online, digital, publishing, comic book, merchandising and licensing rights to Stan Lee and over 100 original Stan Lee creations (the “Stan Lee Assets”), from which Genius Brands plans to develop and license multiple properties each year.

The Company contributed $ 2.0 million to obtain 50 % of SLU’s voting equity and POW, for the remaining 50 %, contributed the specified intangible assets associated with the Stan Lee Assets.

POW will retain certain rights in the transferred intangible assets, namely existing the rights/obligations arising from current licensing agreements.

Under ASC 805, the Company determined that the value of SLU was wholly attributable to the Stan Lee Assets and would be accounted for as an asset acquisition.

The acquisition cost of $ 2.0 million was equivalent to the value of the Stan Lee Assets contributed by POW.

Therefore, the fair value of the consideration paid by the entity of $ 2.0 million and the fair value of the 50 % noncontrolling interest approximated a total of $ 4.0 million.

Pursuant to the guidance under ASC 810, the Company concluded that SLU qualifies as a variable interest entity (“VIE”).

The Company consolidates the results of SLU as it was determined that the Company is the primary beneficiary due to having the power through the collaboration to direct the activities that most significantly impact the entity’s economic performance and the Company is required to fund over half of the economic support of the entity.

Accordingly, the Company recorded the total fair value of the Stan Lee Assets in SLU of $ 4.0 million, as an intangible asset to be amortized over the duration of 70 years, the life of the publicity rights related to Stan Lee’s name, likeness, voice, physical characteristics, etc.

During the year ended December 31, 2022, SLU generated $ 2.1 million in net income and the Company distributed $ 1.2 million to POW as their share of the non-controlling interest in SLU.

The Company's investment in SLU was $ 0.8 million, net $ 1.2 million of distributions as of December 31, 2022 and $ 2.0 million as of December 31, 2021, respectively.

There were no changes in facts and circumstances that occurred during the year ended December 31, 2022 that would result in a re-evaluation of the VIE assessment.

Investment in Equity Interest

On December 1, 2021, the Company

completed a $ 6.8 million investment in Your Family Entertainment AG (“YFE”).

In exchange for $ 3.4 million in cash and 2,281,269

shares of the Company’s common stock (valued at approximately $3.4 million), the Company received 3,000,500 shares of YFE’s

common stock.

As of December 31, 2021, the Company has a 29 % economic ownership interest in YFE.

The Company has elected to apply the

fair value option for its investment in YFE (Level 1) as it is believed that investors value this investment based on the trading price

The Company recognizes changes in the fair value of its investment in YFE as unrealized gains (losses), net in the accompanying

consolidated statements of operations with other income (loss), net.

The Company revalued the investment

in YFE’s securities on December 31, 2021 and recorded a loss of $ 105,654 within other income (loss), net on the Company’s

consolidated statement of operations.

Following the acquisition

of YFE’s shares, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by shareholders.

In addition, the Company committed to providing YFE between EURO 4.0 million to EURO 7.0 million by way of additional equity or by providing

shareholder loans that have terms comparable to those of the converted bonds.

On December 1, 2021, the Company completed a $ 6.8 million investment in YFE.

Following the initial equity investment in YFE, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by YFE shareholders.

Upon the expiration of the offer on February 14, 2022, the Company purchased an additional 2,637,717 shares of YFE at 2.00 EUROS per share or $ 5.3 million EUROS ($ 6.0 million USD) in the aggregate.

On April 5, 2022, the Company exercised its subscription rights to purchase an additional 914,284 shares of YFE’s common stock at 3.00 EUROS per share, or $ 2.7 million EUROS ($ 2.9 million USD), increasing the number of YFE’s outstanding shares to 6,857,132 .

Marketable Securities

The Company classifies and accounts for its marketable

debt securities as available-for-sale and the securities are stated at fair value.

The investments in marketable

securities had an adjusted cost basis of $113.8 million and a market value of $112.5 million as of December 31, 2021 are as follows (in

Summary of Investment in marketable security

Adjusted Cost

Unrealized Gain/(Loss)

The Company classifies and accounts for its marketable debt securities as available-for-sale and the securities are stated at fair value.

The investments in marketable securities had an adjusted cost basis of $ 90.3 million and a market value of $ 83.7 million as of December 31, 2022.

The balances consisted of the following securities (in thousands) :

Adjusted Cost Unrealized Gain/(Loss) Fair Value

Corporate Bonds $ 40,823 $ ( 2,579 ) $ 38,244

Treasury 20,869 ( 1,313 ) 19,556

Mortgage-Backed 5,980 ( 606 ) 5,374

1 unchanged sentence

states and municipalities 11,801 ( 895 ) 10,906

Asset-Backed 67 ( 1 ) 66

Total $ 90,321 $ ( 6,615 ) $ 83,706

The investments in marketable securities had an adjusted cost basis of $ 113.8 million and a market value of $ 112.5 million as of December 31, 2021.

The balances consisted of the following securities (in thousands) :

Adjusted Cost Unrealized Gain/(Loss) Fair Value

Corporate Bonds $ 47,864 $ ( 529 ) $ 47,335

Treasury 24,410 ( 257 ) 24,153

Mortgage-Backed 7,504 ( 143 ) 7,361

agency and government sponsored securities 14,675 ( 87 ) 14,588

states and municipalities 11,871 ( 189 ) 11,682

Asset-Backed 6,456 ( 50 ) 6,406

Commercial Paper 998 – 998

The Company reported the net

unrealized losses in accumulated other comprehensive (loss) income, a component of stockholders' equity.

The decline in fair value is

largely due to changes in interest rates and other market conditions and is expected to recover as the securities approach maturity.

Company has evaluated these securities and determined that no allowance is necessary based on the credit quality and the low risk of loss

due to the security type.

The Company has not yet held marketable securities in an unrealized loss position for greater than twelve months.

A net realized loss of $70,260 related to the prepayment of principals for certain mortgage-backed securities was recorded in earnings

during the year ended December 31, 2021.

The contractual maturities of the Company’s

marketable investments as of December 31, 2021 were as follows (in thousands) :

Summary of contractual maturity

Total $ 113,778 $ ( 1,255 ) $ 112,523

The Company holds eighty-three available-for-sale securities, all of which are in an unrealized loss position as of December 31, 2022.

All of the available-for-sale securities held by the Company as of December 31, 2022, have been in an unrealized loss position for a period greater than twelve months .

As of December 31, 2021, the Company had not yet held marketable securities for greater than twelve months .

The Company reported the net unrealized losses in accumulated other comprehensive (loss) income, a component of stockholders' equity.

The decline in fair value is largely due to changes in

interest rates and other market conditions and is expected to recover as the securities approach maturity.

As the decline in fair value is attributable to interest rates and not credit quality, and the Company does not intend to sell the securities and it is not more likely than not the Company would be required to sell the securities before recovery of their amortized cost basis, which may be maturity, the Company does not consider the securities to be other-than-temporarily impaired as of December 31, 2022.

A realized loss of $ 0.2 million and $ 0.1 million was recognized in earnings during the year ended December 31, 2022 and December 31, 2021, respectively, due to prepayments of principals for certain mortgage-backed securities and an additional $ 0.2 million realized loss was recognized during the year ended December 31, 2022 from securities sold prior to their maturities.

The contractual maturities of the Company’s marketable investments as of December 31, 2022 were as follows (in thousands):

Due within 1 year $ 12,665

Due after 1 year through 5 years 62,377

1 unchanged sentence

Due after 10 years 4,193

The Company may sell certain

of its marketable debt securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit

risk, duration and asset allocation.

The Company did not sell any securities during

the year ended December 31, 2021, that resulted in material gains or losses.

Total $ 83,706

The Company may sell certain of its marketable debt securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit risk, duration and asset allocation.

Property and Equipment, Net

The Company has property

and equipment as follows (in thousands) :

Schedule of property and equipment, net

The Company has property and equipment as follows (in thousands):

As of December 31,

2 unchanged sentences

Leasehold Improvements 2,273 44

Software 263 177

Production Equipment 23 23

1 unchanged sentence

Less Accumulated Depreciation ( 530 ) ( 149 )

Foreign Currency Translation Adjustment ( 168 ) –

Property and Equipment, Net $ 2,400 $ 449

During the years ended December

31, 2021 and December 31, 2020, the Company recorded depreciation expense of $ 93,983 and $ 44,942 .

During the year ended December 31, 2021,

the Company disposed of computer equipment that was replaced in the normal course of business, resulting in the removal of $ 118,502 from

accumulated depreciation and $ 117,005 from gross property and equipment.

During the years ended December 31, 2022 and December 31, 2021, the Company recorded depreciation expense of $ 0.4 million and $ 0.6 million, respectively.

Right of Use Leased Asset

Right of use asset consisted

of the following (in thousands) :

Schedule of right of use asset

Right of use asset consisted of the following (in thousands):

As of December 31,

Office Lease Asset

Printer Lease Asset

Office Lease Assets $ 10,313 $ 3,351

Equipment Lease Assets 3,928 13

Right Of Use Asset, Gross 14,241 3,364

Accumulated Amortization ( 2,587 ) ( 579 )

Foreign Currency Translation Adjustment ( 810 ) –

Right Of Use Asset, Net $ 10,844 $ 2,785

During the years ended December

31, 2021 and December 31, 2020, the Company recorded ROU asset amortization of $ 298,258 million and $ 285,103 , respectively.

Refer to Note 20 for details on the Company's lease commitments.

As of December 31, 2022, the weighted-average lease term for the Company's operating leases was 93 months and the weighted-average discount rate was 10.4 %.

As of December 31, 2022, the weighted-average lease term for the Company's finance leases was 35 months and the weighted-average discount rate was 5.3 %.

As of December 31, 2021, the weighted-average lease term for operating leases was 70 months and the weighted-average discount rate was 8.2 %.

Operating lease costs during the years December 31, 2022 and December 31, 2021 were $ 1.4 million and $ 0.5 million, respectively, recorded within General and Administrative Expenses on the Company's consolidated statement of operations.

During the year ended December 31, 2022 the Company recorded finance lease costs of $ 1.5 million, comprised of ROU amortization of $ 1.3 million recorded within General and Administrative Expenses on the Company's consolidated statement of operations and accretion of interest expense of $ 0.1 million recorded within Interest Expense on the Company's consolidated statement of operations.

The Company did not have finance leases at December 31, 2021.

Film and Television Costs, Net

As of December 31, 2021, the

Company had net Film and Television Costs of $2.9 million, compared to $11.8 million as of December 31, 2020.

The decrease in Film and

Television Costs was primarily due to production cost impairments of $18.2 million as described below, amortization of Rainbow Rangers

Seasons 1 & 2 and Llama Llama Seasons 1 & 2, offset by an increase primarily related to the production costs associated

with Stan Lee’s Superhero Kindergarten and KC!

During the years ended December

31, 2021 and December 31, 2020, the Company recorded Film and Television Cost amortization expense of $ 19.5 million and $ 0.98 million,

respectively.

As of December 31, 2021, the amortization includes an impairment expense of $ 18.2 million.

The production cost impairments

were due to management’s periodic assessment of the ultimate revenues expected to be recognized on each episodic series, in conjunction

with historical performance and current market conditions and determined the estimated future cash flows were not sufficient to recover

the entire unamortized asset.

The following table

highlights the activity in Film and Television Costs as of December 31, 2021 and 2020 (in thousands) :

Schedule of film and television costs activity

During the year ended December 31, 2022, Film and Television Costs increased by $ 4.8 million, net of amortization expense, as compared to December 31, 2021.

The increase in Film and Television Costs is primarily related to assuming Wow's Film and Television Cost balance into the consolidated balance sheet of $ 6.4 million as of December 31, 2022.

The remaining decrease, as compared to the prior year, is primarily due to the production of Shaq’s Garage .

During the years ended December 31, 2022 and December 31, 2021, the Company recorded amortization expense of $ 13.0 million and $ 19.5 million, respectively.

Included in amortization expense during the year ended December 31, 2022, the Company recorded impairment charges of $ 6.8 million comprised of $ 1.0 million related to the write-off of the license rights to YFE titles and $ 5.8 million related to production costs.

During the year ended December 31, 2021, the Company recorded impairment charge of $ 18.2 million related to production costs.

The production cost impairments resulted from management’s periodic assessment of the ultimate revenues expected to be recognized on each episodic series, in conjunction with historical performance and current market conditions and determined the estimated future cash flows were not sufficient to recover the entire unamortized asset.

The following table highlights the activity in Film and Television Costs as of December 31, 2022 and 2021 (in thousands):

Film and Television Costs, Net as of December 31, 2020 $ 11,828

Additions to Film and Television Costs 10,650

Film Amortization Expense

Film Amortization Expense & Impairment Losses ( 19,538 )

Film and Television Costs, Net as of December 31, 2021 2,940

Additions to Film and Television Costs 18,364

Film Amortization Expense

Film and Television Costs, Net as of December 31, 2021

Goodwill and Intangible Assets,

In 2013, the Company recognized

$10.4 million in goodwill, representing the excess of the fair value of the consideration for the merger with A Squared over net identifiable

assets acquired.

As a result of the ChizComm acquisition, the consideration exceeded the fair value of the assets acquired by $9.6 million.

Accordingly, this amount was recorded as goodwill at the time of the acquisition.

As ChizComm Ltd.

is a Canadian company with CAD being

its functional currency, goodwill will change each period due to currency exchange differences.

The Company has performed

its annual review of goodwill and its indefinite lived intangible asset during the fourth quarter of 2021.

Goodwill on the Company’s

consolidated financial statements relates to both the Content Production & Distribution reporting unit and the Media Advisory &

Advertising Services reporting unit.

The Company performed a qualitative assessment of the Content Production & Distribution reporting

unit and determined that an impairment was not indicated.

Due to a decrease in projected cash flows, the Company elected to initially

perform a quantitative assessment on its Media Advisory & Advertising Services segment.

The fair value of the Media

Advisory & Advertising Services reporting unit in accordance with the goodwill impairment test was determined using the income and

market approaches.

The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated

by market participants and then adjusted for time value of money factors and requires management to make significant estimates and assumptions

related to forecasts of future revenues, operating margins, and discount rates.

The market approach utilizes an analysis of comparable

publicly traded companies and requires management to make significant estimates and assumptions related to the forecasts of future revenues,

earnings before interest, taxes, depreciation, and amortization (EBITDA) and multiples that are applied to management’s forecasted

revenues and EBITDA estimates.

The carrying value of the

Media Advisory & Advertising Services reporting unit, which is comprised of the ChizComm operations, exceeded its fair value, resulting

in an impairment of goodwill of $4.8 million.

The following table summarizes

the changes in the carrying amount of goodwill by reportable segment (in thousands) :

Schedule of Goodwill

Content Production & Distribution

Media Advisory & Advertising Services

Goodwill as of December 31, 2020

Acquisition of ChizComm Entities

Goodwill Impairment

Disposals ( 11 )

Film Amortization Expense & Impairment Losses ( 12,996 )

Foreign Currency Translation Adjustment ( 517 )

Goodwill as of December 31, 2021

Film and Television Costs, Net as of December 31, 2022 $ 7,780

Intangible Assets, Net and Goodwill

Intangible Assets, Net

The Company had the following

intangible assets (in thousands) :

The Company had the following intangible assets (in thousands) with their weighted average remaining amortization period (in years) :

Intangible Assets, Net

Schedule of Intangible Asset

Weighted Average Remaining Amortization Period

As of December 31,

Trademarks (a)

Customer Relationships (b)

Non-Compete (c)

Trade names (d)

Customer Relationships 10 $ 17,325 $ 6,120

Digital Networks 17 3,537 –

Trade Names 68 11,783 4,000

Technology 2 293 –

Non Compete – – 60

Other Intangible Assets (a) 2 325 301

Intangible Assets, Gross 33,263 10,481

Foreign Currency Translation Adjustment

Less Accumulated Amortization ( 2,398 ) ( 772 )

Foreign Currency Translation Adjustment ( 1,698 ) 24

Intangible Assets, Net $ 29,167 $ 9,733

_______________________

During the years ended December 31, 2021 and December

31, 2020, the Company recognized, $16,277 and $49,388, respectively, in amortization expense related to the Trademarks, Product Masters,

and Other Intangible Assets.

Amount represents the fair value of the ChizComm

and ChizComm Beacon Media Customer Relationships with a useful life of 12 years.

Amortization expense for the year ended December 31,

2021 was $0.5 million.

Amount represents the fair value of the Non-Compete

agreements as part of the ChizComm acquisition.

The Non-Compete agreements have a useful life of 3 years.

Amortization expense for the

year ended December 31, 2021 was $18,345.

Amount represents the fair value of the Stan

Lee Assets acquired through the consolidation of the Stan Lee Universe variable interest entity.

The assets have been determined to have

a useful life of 70 years.

The amortization expense was deemed immaterial during the fourth quarter of 2021.

Pursuant to ASC 350-30, General

Intangibles Other than Goodwill , the Company reviews these intangible assets periodically to determine if the value should be retired

or impaired due to recent events.

During the fourth quarter

ended December 31 2021, the Company decided to discontinue the use of the ChizComm trade name acquired as part of the acquisition

of ChizComm in February 2021.

In connection with the initial accounting for the Acquisition, $ 3.4 million of the purchase price was allocated

to the indefinite-lived trade name.

As no future cash flows will be attributed to the impacted trade name, the entire book value

was written-off, resulting in a non-cash impairment charge of $ 3.4 million as of December 31, 2021 recorded in

the Company's consolidated statements of operations.

No impairment

existed as of December 31, 2021 or December 31, 2020 with respect to the company's other identifiable intangible assets.

Expected future intangible asset amortization

as of December 31, 2021 is as follows (in thousands) :

Expected future intangible asset amortization

Deferred Revenue

As of December 31, 2021, and

2020, the Company had total short term and long term deferred revenue of $ 3.9 million and $ 4.4 million, respectively.

(a) Represents the remaining unamortized logo and website intangible assets related to the merger with A Squared.

During the years ended December 31, 2022 and December 31, 2021, the Company recorded intangible asset amortization expense of $ 2.3 million and $ 0.5 million, respectively.

As of December 31, 2022, $ 7.2 million of the Company's intangible assets related to the acquired trade names from the Wow acquisition have indefinite lives and are not subject to amortization.

The Company did not have any indefinite-lived intangible assets as of December 31, 2021.

Pursuant to ASC 350-30, General Intangibles Other than Goodwill , the Company reviews these intangible assets periodically to determine if the value should be retired or impaired due to recent events.

During the year ended December 31, 2022, as a result of our annual impairment testing, the Company recorded a non-cash intangible impairment charge of $ 4.1 million for a determined decrease in value of Beacon's Customer Relationships and Non-Compete Agreements.

As of December 31, 2021, the Company decided to discontinue the use of the trade name acquired as part of the acquisition of Beacon, resulting in a write-down of the full book value of $ 3.4 million.

Expected future intangible asset amortization as of December 31, 2022 is as follows (in thousands):

Thereafter 10,674

Total $ 21,958

In 2013, the Company recognized $ 10.4 million in goodwill, as a result of the merger with A Squared.

During the first quarter of 2021, the Company recognized $ 9.7 million in goodwill, as a result of the acquisition of Beacon, which was subsequently written down to $ 4.9 million as of December 31, 2021.

As of December 31, 2022, the remaining goodwill balance from the acquisition of Beacon was fully written off due to impairment.

As a result of the Ameba Acquisition during the first quarter of 2022 and the Wow Acquisition during the second quarter of 2022, the Company recorded goodwill of $ 0.7 million and $ 21.4 million, respectively, as determined to be the amount in excess of the fair value of the assets acquired and liabilities assumed in the acquisition.

The goodwill for the Ameba and Wow Acquisition was allocated to the Content Production and Distribution reportable segment.

As Wow's functional currency is the CAD, goodwill will change each period due to currency exchange differences.

The Company has performed its annual review of goodwill and its indefinite lived intangible asset during the fourth quarter of 2022.

Goodwill on the Company’s consolidated financial statements relates to both the Content Production & Distribution reporting unit and the Media Advisory & Advertising Services reporting unit.

The Company performed a qualitative assessment of the Content Production & Distribution reporting unit and determined that an impairment was not indicated.

Due to a decrease in projected cash flows, the Company elected to initially perform a quantitative assessment on its Media Advisory & Advertising Services segment.

The fair value of the Media Advisory & Advertising Services reporting unit in accordance with the goodwill impairment test was determined using the income and market approaches.

The income approach employs the discounted cash flow method reflecting projected cash flows expected to be generated by market participants and then adjusted for time value of money factors and requires management to make significant estimates and assumptions related to forecasts of future revenues, operating margins, and discount rates.

The market approach utilizes an analysis of comparable publicly traded companies and requires management to make significant estimates and assumptions related to the forecasts of future revenues, earnings before interest, taxes, depreciation, and amortization (EBITDA) and multiples that are applied to management’s forecasted revenues and EBITDA estimates.

The carrying value of the Media Advisory & Advertising Services reporting unit, which is comprised of the Beacon operations, exceeded its fair value, resulting in an impairment of goodwill of $ 4.9 million.

The following table summarizes the changes in the carrying amount of goodwill by reportable segment (in thousands):

Content Production & Distribution Media Advisory & Advertising Services Total

Goodwill as of December 31, 2021 $ 10,366 $ 4,861 $ 15,227

Acquisition of Ameba 1,422 – 1,422

Acquisition of Wow 21,398 – 21,398

Goodwill Impairment – ( 4,857 ) ( 4,857 )

Foreign Currency Translation Adjustment ( 1,379 ) ( 4 ) ( 1,383 )

Goodwill as of December 31, 2022 $ 31,807 $ – $ 31,807

Deferred Revenue

includes both (i) variable fee contracts with licensees and customers in which the Company had collected advances and minimum guarantees

against future royalties and (ii) fixed fee contracts.

The Company recognizes revenue related to these contracts when all revenue recognition

criteria have been met.

Included in the deferred revenue balance as of December 31, 2021 is $ 3.4 million which is the remaining balance

from the total $ 3.5 million advance against future royalty that Sony paid to the Company for both the foreign and domestic distribution

Supplemental Financial Statement

Accrued Expenses

The Company had the following

current accrued liabilities (in thousands) :

Schedule of other accrued liabilities

As of December 31,

Accrued Production Costs (a)

Other Accrued Expenses (b)

Accrued Salaries and Wages (c)

Total Accrued Liabilities – Current

__________________

Represents production costs accrued for Rainbow Rangers Season 3 and KC!

Primarily represents external consulting services and legal fees.

Represents accrued salaries and wages and accrued vacation payable to employees.

As of December 31, 2022, and 2021, the Company had total short term and long term deferred revenue of $ 12.4 million and $ 3.9 million, respectively.

The increase in deferred revenue is partially related to assuming Wow's deferred revenue balance into the consolidated balance sheet of $ 8.7 million as of December 31, 2022.

Wow's deferred revenue balance relates to cash received from customers for productions in progress.

Revenue is fully recognized upon production completion.

Deferred revenue also includes both (i) variable fee contracts with licensees and customers in which the Company collected advances and minimum guarantees against future royalties and (ii) fixed fee contracts.

The Company recognizes revenue related to these contracts when all revenue recognition criteria have been met.

Supplemental Financial Statement Information

Other Income (Expense), Net

Components of other income (expense), net, are

summarized as follows (in thousands) :

Schedule of Other Operating Cost and Expense, by Component

Components of other income (expense), net, are summarized as follows (in thousands):

Year Ended December 31,

Gain on Contingent Consideration Revaluation

Gain (Loss) on Warrant Revaluation

Loss on Foreign Exchange

Loss on Marketable Securities Investments

Loss on Equity Investment

Interest Income

Warrant Incentive Expense

Loss on Conversion Option Revaluation

Loss on Lease Termination

Sublease Income

Net Other Expense

$ ( 382,608 )

The gain on contingent consideration

revaluation is related to the change in fair value of the liability recorded for the earn-out arrangement with the sellers of the ChizComm

entity acquired during 2021.

The favorable decrease in the liability is based on the Company’s updated assumptions utilized to value

the contingency.

The gain (loss) on warrant

revaluation is related to the change in fair value of outstanding warrants that were determined to be derivative liabilities attached

to previously issued and converted convertible notes.

The foreign exchange gains

and losses are due to foreign currency denominated transactions, including the investment in YFE’s equity securities accounted for

under the fair value option, in which the Company also realized a loss due to a decrease in fair value.

The Company started investing

in marketable securities during the year ended December 31, 2021.

The net realized loss on marketable securities recognized during the

year ended December 31, 2021, reflects the loss in the investments in available-for-sale securities that will not be recovered due to

prepayments of principals on certain mortgage-backed securities.

Interest Income, net during

the year ended December 31, 2021, primarily consists of cash interest received of $ 1.2 million on the investments in marketable securities,

net of $ 0.6 million for amortization of premiums.

The Warrant Incentive Expense

is related to the fair value of new warrants issued in 2021 to certain existing warrant holders in exchange for previously issued outstanding

As of December 31, 2020 all

notes were converted and repaid, therefore a revaluation on conversion options was not performed in 2021.

In addition, as of December

31, 2020 the Company terminated the lease that generated sublease income, resulting in a loss on lease termination that did not occur

during the year ended December 31, 2021.

Secured Convertible Notes

On March 11, 2020, the Company

entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (each an “Investor”

and collectively, the “Investors”) pursuant to which the Company agreed to sell and issue (1) Senior Secured Convertible Notes

to the Investors in the aggregate principal amount of $ 13.75 million (each, a “Note” and collectively, the “2020 Convertible

Notes”) and $ 11.0 million funding amount (reflecting an original issue discount of $ 2.75 million) and (2) warrants to purchase 65,476,190

shares of the Company’s common stock exercisable for a period of five years at an initial exercise price of $ 0.26 per share (each

a “Warrant” and collectively, the “Warrants”), for consideration consisting of (i) a cash payment of $ 7.0 million,

and (ii) full recourse cash secured promissory notes payable by the Investors to the Company (each, an “Investor Note” and

collectively, the “Investor Notes”) in the principal amount of $ 4.0 million (the “Investor Notes Principal”) (collectively,

the “Financing”).

Andy Heyward, the Company’s Chairman and Chief Executive Officer, participated as an Investor and

invested $ 1.0 million in connection with the Financing, all of which was paid at the closing and not pursuant to an Investor Note.

Special Equities Group, LLC, a division of Bradley Woods & Co.

LTD, acted as placement agent and received warrants to purchase 6,547,619

shares at an exercise price of $ 0.26 per share (the “Placement Agent Warrants”).

The closing of the sale and

issuance of the 2020 Convertible Notes, the Warrants and the Placement Agent Warrants occurred on March 17, 2020 (the “Closing Date”).

The maturity date of the 2020 Convertible Notes was September 30, 2021 and the maturity date of the Investor Notes was March 11, 2060.

The Company held a stockholder

meeting to approve the issuance of shares of common stock issuable under the 2020 Convertible Notes and pursuant to the terms of the SPA

for the purposes of compliance with the stockholder approval rules of The Nasdaq Stock Market (“Stockholder Approval”).

In addition, pursuant to the

terms of the SPA, the 2020 Convertible Notes and the Warrants, the Company agreed that the following will apply or become effective only

following Stockholder Approval:

(1) the conversion price of the 2020 Convertible Notes shall be reduced to $0.21 per share and may be

further reduced to any amount and for any period of time deemed appropriate by the board of directors of the Company (the “Board

of Directors”), (2) the exercise price of the Warrants shall be immediately reduced to $0.21 per share and may be further reduced

to any amount and for any period of time deemed appropriate by the Board of Directors, (3) the 2020 Convertible Notes and Warrants shall

each have full ratchet anti-dilution protection for subsequent financings (subject to certain exceptions), (4) existing warrant holders

that are participating in the Financing (representing warrants to purchase an aggregate of 8,715,229 shares of Company common stock) will

have their existing warrants’ exercise prices reduced to $ 0.21 and (5) the investors shall have a most favored nations right which

provides that if the Company enters into a subsequent financing, then the Investors (together with their affiliates) at their sole discretion

shall have the ability to exchange their 2020 Convertible Notes on a $1 for $1 basis into securities issued in the new transaction.

Additionally,

in the event that any warrants or options (or any similar security or right) issued in a subsequent financing include any terms more favorable

to the holders thereof (less favorable to the Company) than the terms of the Warrants, the Warrants shall be automatically amended to

include such more favorable terms.

On March 16, 2020, the holders of the August 2018 Secured Convertible Notes were repaid in full including

any outstanding interest.

On May 15, 2020, the Company

received the necessary Stockholder Approval in connection with the Nasdaq proposals described above.

As a result, the Conversion Price

of the 2020 Convertible Notes and the exercise price of the Warrants were each reduced to $0.21.

In addition, existing warrant holders

that participated in the Financing (representing warrants to purchase an aggregate of 9,172,463 shares of common stock) also had their

existing warrants’ exercise prices reduced to $ 0.21 .

On June 23, 2020, the Company

received $ 3.6 million, net of expenses, from the payment of the Investor Notes Principal.

Between June 19 and June

23, 2020, the Convertible Notes were converted and repaid through the issuance of 65,476,190

shares of common stock.

As of December 31, 2020 and 2021, there were no outstanding convertible

Production Loan Facility

On August 8, 2016, Llama Productions

LLC (“Llama”) closed a $5,275,000 multiple draw-down, secured, non-recourse, non-revolving credit facility (the “Facility”)

with Bank Leumi USA (the “Lender”) to produce its animated series Llama Llama , (the “Series”) which is

configured as fifteen half-hour episodes comprised of thirty 11-minute programs that were delivered to Netflix in fall 2017.

As a condition

of the loan agreement with Bank Leumi, the Company deposited $1.0 million into a cash account to be used solely to produce the Series.

On September 28, 2018, Llama

entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with the Lender, pursuant to which the Lender

agreed to make a secured loan in an aggregate amount not to exceed $ 4.2 million to Llama (the “Loan”).

The proceeds of the

Loan were used to pay the majority of the expenses of producing, completing and delivering two 22-minute episodes and nineteen 11- minute

episodes of the second season of the animated series Llama Llama to be initially exhibited on Netflix.

To secure payment of the

Loan, Llama has granted to the Lender a continuing security interest in and against, generally, all of its tangible and intangible assets,

which includes all seasons of the Llama Llama animated series.

Under the Loan and Security

Agreement, Llama could request revolving loan advances under (a) the Prime Rate Loan facility and (b) the LIBOR Loan facility, each as

further described in the Loan and Security Agreement.

The Maturity Date of the Prime Rate Loan facility and LIBOR Loan facility was June

In addition, on September

28, 2018, Llama and the Lender entered into Amendment No.

2 to the Loan and Security Agreement, effective as of August 27, 2018, by and

between Llama and the Lender (the “Amendment”).

Pursuant to the Amendment, the original Loan and Security Agreement, dated

as of August 8, 2016 and amended as of November 7, 2017 (the “Original Loan and Security Agreement”), was amended to (i) reduce

the loan commitment thereunder to $ 1.8 million, and (ii) include the Llama Llama season two obligations under the Loan and Security

Agreement as obligations under the Original Loan and Security Agreement.

As of December 31, 2020, the

Company had gross outstanding borrowings under the facility of $ 1.1 million.

The outstanding borrowings were repaid on July 14, 2021.

Disputed Trade Payable

As part of the merger in 2013,

the Company assumed certain liabilities from a previous member of A Squared which has claimed certain liabilities totaling $ 925,000 .

Company disputes the basis for this liability.

As of December 31, 2021, the Company believes that the statute of limitations applicable

to the assertion of any legal claim relating to the collection of these liabilities has expired, and therefore believes this liability is not owed.

Payroll Protection Program Loan

On April 30, 2020, the Company

received loan proceeds in the amount of $ 366,267 under the Paycheck Protection Program which was established as part of the Coronavirus

Aid, Relief and Economic Security Act and is administered through the Small Business Administration.

The Company repaid the outstanding

balance, including interest of $ 3,452 on April 28, 2021.

On February 1, 2021, as part

of the ChizComm Acquisition, the Company assumed a $ 200,000 business loan that was entered into on October 15, 2019 .

The loan matures

on September 15, 2026 , with payments of $ 2,999 , plus interest at a rate of Prime plus 2.85 % per annum, due monthly.

As of December 31,

2021, the Company has an outstanding balance of $ 110,000 , classified as a note payable within current and noncurrent liabilities on its

consolidated balance sheets.

During December 2021, the

Company borrowed an aggregate amount of $ 6.4 million from its investment margin account with the custodian of the Company’s

marketable debt security investment account.

The borrowed amounts were used to finance the Company’s investments in YFE and the

future closing of its pending acquisition of WOW, in each case pledging certain of its marketable securities as collateral.

rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 0.65 % with interest only payable

The weighted average interest rate was 0.72 % and the average balance of the borrowings was $ 5.9 million as of December 31, 2021.

The interest incurred as of December 31, 2021 was immaterial.

The investment margin account borrowings do not mature

but are payable on demand as the custodian can issue a margin call at any time, therefore the margin loan is recorded as a current liability

on the Company’s consolidated balance sheets.

As of December 31, 2021, the Company had the ability to borrow up to 66 % of the balance

held in marketable securities, with the option to increase its borrowing capacity, if needed.

Interest Expense (a) $ ( 2,329 ) $ ( 20 )

Gain on Warrant Revaluation (b) 557 342

Loss on Foreign Exchange (c) ( 2,161 ) ( 26 )

Loss on Marketable Securities Investments (d) ( 413 ) ( 70 )

Gain (Loss) on Revaluation of Equity Investment in YFE (e) 1,392 ( 106 )

Interest Income (f) 1,015 559

Finance Lease Interest Expense (g) ( 116 ) –

Warrant Incentive Expense (h) – ( 69,139 )

Gain on Contingent Consideration Revaluation (i) 1,345 5,846

Other Income (Expense) $ 1,625 $ ( 62,594 )

(a) Interest expense during the year ended December 31, 2022 primarily consisted of $ 1.3 million of interest incurred on the margin loan collateralized by the marketable security investments and $ 0.9 million of interest incurred on production facilities loans and bank indebtedness assumed as part of the Wow Acquisition.

(b) The gain on warrant revaluation is related to the change in fair value of outstanding warrants that were determined to be derivative liabilities attached to previously issued and converted convertible notes.

(c) The loss on foreign currency exchange during the year ended December 31, 2022 primarily relates to the EURO strengthening against the USD compared to the year ended December 31, 2021.

The remeasurement of the investment in YFE’s equity securities resulted in a foreign exchange loss of $ 1.4 million and the remeasurement of cash held in a German bank account resulted in a foreign exchange loss of $ 0.5 million.

For the year ended December 31, 2021 the loss on foreign currency exchange is related to foreign currency denominated monetary transactions.

(d) The net realized loss on marketable securities reflects the loss that will not be recovered from the investments due to selling securities and issuers' prepayments of principals on certain mortgage-backed securities.

(e) The fair value revaluation of the investment in YFE, accounted for using the fair value option, as of December 31, 2022, resulted in a $ 1.4 million gain.

The gain is a result of the increase in YFE’s stock price as of December 31, 2022, as compared to December 31, 2021.

(f) Interest Income during the year ended December 31, 2022, primarily consisted of cash interest received of $ 2.0 million from the investments in marketable securities, net of premium amortization expense of $ 1.1 million.

(g) The finance lease interest expense represents the interest portion of the finance lease obligations assumed as part of the Wow Acquisition for equipment purchased under an equipment lease line.

Prior to the acquisition of Wow, the Company did not have any finance leases.

(h) The Warrant Incentive Expense was related to the fair value of new warrants issued in 2021 to certain existing warrant holders in exchange for previously issued outstanding warrants.

(i) The gain on contingent consideration revaluation is related to the change in fair value of the liability recorded for the earn-out arrangement with the sellers of the ChizComm entity acquired during 2021.

The favorable decrease in the liability was based on updated assumptions utilized to value the contingency as of each period presented.

Bank Indebtedness and Production Facilities

Upon the acquisition of Wow, the Company assumed certain credit facilities (the “Facilities”).

The Facilities are comprised of the following:

Revolving Demand Facility

On December 15, 2022, the Company amended the Facility.

Draws of up to $ 8.0 million CAD (previously $ 5.0 million CAD) under a revolving demand facility can be made in Canadian or US dollars at the option of the Company by way of bank prime rate loans, Canadian Bankers’ Acceptances, Secured Overnight Financing Rate (“SOFR”) or letters of credit.

Canadian or US dollar bank prime borrowings bear interest at a rate equal to bank prime plus 2.00 % per annum.

For other draws under the revolving facility, the respective loans bear interest at a rate equal to Canadian Bankers’ Acceptances or SOFR plus 3.75 % per annum.

As of December 31, 2022, the Company had an outstanding balance of $ 2.4 million CAD ($ 1.7 million USD) on the revolving demand facility by way of bank prime rate loan draws, included as Bank Indebtedness within current liabilities on the Company’s consolidated balance sheet.

Equipment Lease Line

On December 15, 2022, the Company amended the terms of the equipment lease line under the Facility.

Under the equipment lease line, the Company may borrow up to $ 4.3 million CAD.

Each transaction under the equipment lease line has specific financing terms in respect of the leased equipment such as term, finance amount, rate, and payment terms.

The finance rates for these equipment leases range from 3.94 % - 4.49 % with remaining lease terms of 8 - 22 months.

The Company has recorded finance lease right of use assets and finance lease liabilities for the leased equipment acquired in respect of these draws.

As at December 31, 2022, the Company has drawn down a total of $ 3.3 million CAD ($ 2.4 million USD) under the equipment lease line.

These outstanding balances as of December 31, 2022, net of repayments, are included within current and noncurrent Finance Lease Liabilities on the Company’s consolidated balance sheet.

Treasury Risk Management Facility

Advances under the treasury risk management facility are subject to market rates as determined by the lender’s treasury department or derivatives group at the time of the drawdown request.

The maximum term for foreign exchange forward contracts and interest rate swaps is one year .

As of December 31, 2022, there were no outstanding amounts drawn under the treasury risk management facility.

As of December 31, 2022, the Company was in compliance with all covenants under the Facility.

Production Facilities

As part of the acquisition of WOW, the Company assumed production facilities for financing specific productions.

The Company’s production facilities bear interest at rates ranging from bank prime plus 1.00 % - 1.25 % per annum.

The production facilities are generally repayable on demand and are guaranteed and secured by the Company.

The security reflects substantially all of the Company's tangible and intangible assets including a combination of federal and provincial tax credits, other government incentives, production service agreements and license agreements.

As of December 31, 2022, the Company had an outstanding balance of $ 24.8 million CAD ($ 18.3 million USD), including $ 1.5 million CAD of interest ($ 1.1 million USD), recorded as Production Facilities, net within current liabilities on the Company’s consolidated balance sheet.

Equipment Lease Facility

During the fourth quarter ended December 31, 2022, a subsidiary of the Company entered into an equipment lease agreement with a Canadian bank, separate from the Facility's equipment lease line.

This additional equipment lease facility allows the Company to finance equipment purchases of up to $ 1.4 million CAD in total.

Each equipment lease is for a term of three years and will have specific financing terms such as, finance amount and the bank’s lease base rate.

The Company has recorded finance lease right of use assets and finance lease liabilities for the leased equipment acquired in respect of these draws.

As at December 31, 2022, the Company has drawn a total of $ 0.7 million CAD ($ 0.5 million USD) under the equipment lease facility.

These outstanding balances as of December 31, 2022, net of repayments, are included within current and noncurrent Finance Lease Liabilities on the Company’s consolidated balance sheet.

The interest rate for these investment margin account borrowings fluctuates based on the Federal Funds Rate plus 0.65 % with interest only payable monthly.

The Company incurred interest expense on the loan of $ 1.3 million during the year ended December 31, 2022.

The amount of interest incurred on the margin loan during the year ended December 31, 2021 was insignificant.

The investment margin account borrowings do not mature but are payable on demand as the custodian can issue a margin call at any time, therefore the margin loan is recorded as a current liability on the Company’s consolidated balance sheets.

As of December 31, 2022 and December 31, 2021, the Company's margin loan balance was $ 60.8 million and $ 6.4 million, respectively.

Stockholders’ Equity

As of December 31, 2021, the

total number of authorized shares of common stock was 400,000,000 .

On March 22, 2020, the Company

entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain long-standing investors (the “Investors”),

pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the Investors (the

“Registered Offering”), an aggregate of 4,000,000 shares of common stock at an offering price of $0.2568 per share for gross

proceeds of approximately $ 1.0 million before deducting offering expenses.

The Registered Offering closed on March 25, 2020.

As of December 31, 2021 and

December 31, 2020, there were 303,379,122 and 258,438,514 shares of common stock outstanding, respectively.

On January 6, 2021, the Company

issued 25,000 shares of the Company’s common stock valued at $ 1.40 per share for marketing services.

On January 21, 2021, the Company

issued 136,986 shares of the Company’s common stock valued at $ 1.46 per share for marketing services.

On February 1, 2021, the Company

issued 1,932,163 shares of the Company’s common stock valued at $ 1.78 per share as partial consideration for the ChizComm acquisition.

On February 4, 2021, the Company

issued 48,495 shares of the Company’s common stock valued at $ 1.81 per share as partial consideration for the ChizComm acquisition.

On May 14, 2021, the Company

issued 469,677 shares of the Company’s common stock valued at $ 1.55 per share for production services.

On October 27, 2021, we issued

176,101 shares of common stock valued at $ 1.59 per share for production services.

On December 1, 2021, we issued

2,281,269 shares of common stock valued at $ 1.49 per share in partial consideration for 3,000,000 shares of YFE.

On February 6, 2023, the Company's board of directors approved a 1-for-10 reverse stock split of the Company's outstanding shares of common stock.

The reverse stock split was effected on February 10, 2023 at 5:00 p.m.

Eastern time.

At the effective time, every 10 issued and outstanding shares of the Company's common stock were converted into 1 share of common stock.

Any fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole post-split share and no shareholders received cash in lieu of fractional shares.

The par value of each share of common stock remained unchanged.

The reverse stock split proportionately reduced the number of shares of authorized common stock from 400,000,000 to 40,000,000 shares.

The reverse stock split also applied to common stock issuable upon the exercise of the Company's outstanding warrants and stock options.

The reverse stock split did not affect the authorized preferred stock of 10,000,001 shares.

Unless noted, all references to shares of common stock and per share amounts contained in this Annual Report on Form 10-K have been retroactively adjusted to reflect a 1-for-10 reverse stock split.

As of December 31, 2022, the total number of authorized shares of common stock was 40,000,000 .

As of December 31, 2022 and December 31, 2021, there were 31,918,552 and 30,337,914 shares of common stock outstanding, respectively.

On February 18, 2022, the Company issued 35,000 shares of the Company’s common stock valued at $ 0.3 million for consulting services.

On February 24, 2022, the Company issued 3,620 shares of the Company’s common stock valued at $ 0.1 million which were held in escrow as part of the ChizComm acquisition.

On April 7, 2022, the Company issued 1,036,582 shares of the Company’s common stock valued at $ 10.8 million related to the Wow Acquisition, as part of the purchase price.

Also included as part of the Wow Acquisition, the Company has issued 69,126 shares, valued at $ 0.7 million, which will be exchanged at a future redemption date upon tender of ExchangeCo (as defined below) shares as specified in the agreement.

See additional information on the ExchangeCo shares below under “Preferred Stock.”

On May 31, 2022, the Company issued 73,667 shares of the Company’s common stock valued at $ 0.4 million to a nonemployee for productions services.

Preferred Stock

The Company has 10,000,000

shares of preferred stock authorized with a par value of $ 0.001 per share.

The Board of Directors is authorized, subject to any limitations

prescribed by law, without further vote or action by our stockholders, to issue from time-to-time shares of preferred stock in one or

Each series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications

and special or relative rights or privileges as shall be determined by our Board of Directors, which may include, among others, dividend

rights, voting rights, liquidation preferences, conversion rights and preemptive rights.

There were no shares of preferred

stock outstanding as of December 31, 2021 and December 31, 2020.

The Company has 10,000,001 shares of preferred stock authorized with a par value of $ 0.001 per share.

The Board of Directors is authorized, subject to any limitations prescribed by law, without further vote or action by our

stockholders, to issue from time-to-time shares of preferred stock in one or more series.

Each series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by our Board of Directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights.

In connection with the Company’s acquisition of Wow, certain eligible Canadian shareholders, noteholders and optionholders of Wow elected to receive the Exchangeable Shares in the capital of the Wow Exchange Co.

(“ExchangeCo”) instead of shares of the Company’s common stock to which they were otherwise entitled.

The shares of ExchangeCo are exchangeable into shares of the Company’s common stock in accordance with their terms.

Holders of the ExchangeCo shares are entitled to defined voting rights (the “Voting Rights”) in the Company pursuant to a voting and exchange trust agreement (the “Voting Agreement”) dated April 6, 2022 between the Company, ExchangeCo, 1329258 B.C.

and Computershare Trust Company of Canada (the “Voting Trustee”).

The Voting Trustee holds a single share of Series B Preferred Stock in the capital of the Company (the “Special Voting Share”), which grants the Voting Trustee that number of votes at the meetings of the Company’s shareholders as is equal to the number of shares of the Company’s common stock that at such time have not been delivered pursuant to the tender of ExchangeCo shares.

The Voting Trustee is required to exercise each vote attached to the Special Voting Share only as directed by the relevant holder of the underlying Company shares of common stock and, in the absence of any instructions, will not exercise voting rights with respect to the applicable shares.

As of December 31, 2022 and December 31, 2021, there were 0 shares of Series A Convertible Preferred Stock outstanding.

As of December 31, 2022 and December 31, 2021, there was 1 share of Series B Preferred Stock outstanding.

Treasury Stock

During the year ended December 31, 2022, 699 shares of common stock were withheld to cover taxes owed by certain employees, all of which were included as treasury stock outstanding and recorded at cost within Treasury Stock on the consolidated balance sheet.

In addition, the Company agreed to settle the lawsuit, Harold Chizick and Jennifer Chizick v.

Genius Brands International, Inc., ChizComm Ltd, pursuant to a settlement agreement (the “Settlement Agreement”) dated October 6, 2022 (the “Settlement Date”).

Pursuant to the Settlement Agreement, the Company agreed to purchase 41,934 shares of its common stock (the “Settlement Shares”) held by the Chizicks as of the Settlement Date.

The Settlement Shares were purchased at the market price of $ 6.80 per share, plus a premium of $ 13.10 per share, for a total cost of $ 0.8 million.

As of December 31, 2022, the shares were repurchased by the Company and the market based cost on the Settlement Date of $ 0.3 million was recorded within Treasury Stock on the consolidated balance sheet and the amount in excess of market of $ 0.5 million was recorded as a legal expense within General and Administrative expenses on the Company’s consolidated statement of operations.

Stock Options

On September 18, 2015, the

Company adopted the Genius Brands International, Inc.

On September 18, 2015, the Company adopted the Genius Brands International, Inc.

2015 Incentive Plan (the “2015 Plan”).

The total number of shares that

can be issued under the 2015 Plan is 2,167,667 shares.

On September 1, 2020, the

Company adopted the Genius Brands International, Inc.

The total number of shares that can be issued under the 2015 Plan is 3,000,000 shares.

On September 1, 2020, the Company adopted the Genius Brands International, Inc.

2020 Incentive Plan (the “2020 Plan”).

On August 4, 2020, the Board

of Directors voted to adopt the 2020 Plan.

The shares available for issuance under the 2020 Plan was approved by stockholders on August

The 2020 Plan as approved by the stockholders increased the maximum number of shares available for issuance up to an aggregate

of 32,167,667 shares of common stock.

During the three months ended

March 31, 2021, the Company granted options to purchase 520,000 shares of common stock to employees and granted to each of the members

of the Board of Directors 20,000 options to purchase shares of the Company’s common stock with an option price of $ 3.06 per share.

The options vest on January 27, 2022 and have a five-year term.

During the three months ended

June 30, 2021, the Company granted options to purchase 253,636 shares of common stock to employees that fully vest on January 24, 2024

and have a five-year term.

The Company also granted 20,000 options to purchase shares of common stock to a new member of the Board of

Directors that vest on June 24, 2022 and have a five-year term .

The shares have an option price of $1.98 per share.

During the three months ended

December 31, 2021, the Company granted options to purchase 312,500 shares of common stock to employees that fully vest on December 9,

2026 and have a five-year term.

The shares have an option price of $ 1.20 per share.

The fair value of the options

granted was calculated using a Black-Scholes option-pricing model with the following assumptions:

Schedule of assumptions used

Ended December 31,

On August 4, 2020, the Board of Directors voted to adopt the 2020 Plan.

The shares available for issuance under the 2020 Plan were approved by stockholders on August 27, 2020.

The 2020 Plan as approved by the stockholders increased the maximum number of shares available for issuance up to an aggregate of 216,767 shares of common stock, which does not include shares that the Company may issue related to acquisitions.

During the year ended December 31, 2022, the Company granted options to purchase 201,029 shares of common stock to employees with a fair market value of $ 1.3 million.

The options vest evenly over one to three years and expire five to ten years from grant date.

In addition, as part of the Wow Acquisition, the Company granted replacement options to purchase 173,310 shares of the Company’s common stock to Wow employees who would continue to provide services to the Company.

67,642 options to purchase common stock were also granted to certain departing Wow shareholders to replace their previously vested Wow options.

These options were cancelled after 30 days of the grant date if not exercised.

The fair market value of $ 1.5 million was determined utilizing assumptions as of the replacement date of April 6, 2022 and were valued using the

BSM option pricing model.

The number of shares granted was determined by using an exchange ratio calculated by a third party based on the intrinsic value of the Wow common stock purchased as part of the acquisition and the value of the Company’s common stock as of the agreement date.

The vesting terms of the replacement options remained the same as the Wow options for which they were exchanged.

All shares that replaced previously vested Wow shares were included as part of the purchase price based on the calculated fair value on the acquisition date of $ 1.2 million for 196,753 shares.

The remaining options to vest with a fair value of $ 0.3 million will be expensed over the remaining requisite period.

The options expire within three years from the replacement option grant date or the original Wow option, whichever is greater.

The fair value of the options granted during the years ended December 31, 2022 and 2021 were calculated using the BSM option pricing model based on the following assumptions:

December 31, 2022 December 31, 2021

Exercise Price $ 5.10 - 9.00

$ 12.00 - 30.60

$ 1.39 - $ 10.00

Dividend Yield – % – %

121 % - 122 %

Volatility 100 % - 123 %

Risk-free interest rate 0.41 % - 3.75 %

0.41 % - 1.26 %

0.31 % - 0.39 %

Expected life of options

The following table summarizes the stock option

activity during the years ended December 31, 2021 and December 31, 2020:

Schedule of stock option activity

Number of Shares

Weighted- Average Remaining Contractual Life

Weighted- Average Exercise Price

Expected life of options 3.0 - 5.0 years

The following table summarizes the stock option activity during the years ended December 31, 2022 and December 31, 2021:

Number of Shares Weighted- Average Remaining Contractual

Life Weighted- Average Exercise Price

Outstanding at December 31, 2020 911,618 9.84 $ 16.90

Granted 124,614 4.38 $ 23.60

Exercised – – $ –

Forfeited/Cancelled ( 16,500 ) 3.73 $ 27.90

( 1,051,690 )

Expired – – $ –

Outstanding at December 31, 2021 1,019,732 7.96 $ 17.50

Granted 441,981 4.49 $ 10.59

Exercised – – $ –

Forfeited/Cancelled ( 110,292 ) 2.82 $ 16.48

Expired – – $ –

Outstanding at December 31, 2022 1,351,421 6.49 $ 15.09

1 unchanged sentence

Vested and exercisable December 31, 2022 981,801 6.66 $ 15.85

During the years ended December

31, 2021 and December 31, 2020, the Company recognized $ 3.7 million and $ 8.4 million, respectively in share-based compensation expense

related to stock options.

The unrecognized share-based compensation expense as of December 31, 2021 was $ 1.6 million and will be recognized

over a weighted average remaining contractual life of 6.4 years.

The outstanding shares as of December 31, 2021 have an aggregated intrinsic

value of $ 0 .

The weighted average fair values per option granted for the year ended December 31, 2021 was determined to be $ 1.36 .

During the years ended December 31, 2022 and December 31, 2021, the Company recognized $ 1.7 million and $ 3.7 million, respectively in share-based compensation expense related to stock options.

The unrecognized share-based compensation expense as of December 31, 2022 was $ 1.3 million and will be recognized over a weighted average remaining contractual life of 6.49 years.

The outstanding shares as of December 31, 2022 have an aggregated intrinsic value of $ 0 .

The weighted average fair values per option granted for the year ended December 31, 2022 was determined to be $ 6.45 per share.

Restricted Stock Units

On December 7, 2020, the Company

granted 9,075,000 shares of Restricted Stock Units (RSUs) with a fair market value of $ 12.6 million to certain employees and officers.

Of such RSUs, 7,500,000 were issued to Andy Heyward, the Company’s Chief Executive Officer (“CEO”) and were to vest

in four equal installments on the first, second, third and fourth anniversaries of December 7, 2020, subject to his continued employment

(the “service-based awards”).

The CEO also received an additional 7,500,000 RSUs that vested in four equal installments on

the first, second, third and fourth anniversaries of December 7, 2020, based on achievement of certain performance goals (the “performance-based

awards”), which have not been established at the time the CEO and the Company entered into the arrangement, and subject to his continued

As the performance conditions have not been established for the performance-based awards, a grant date was not yet established.

On February 1, 2021, the Company

issued 53,763 RSUs with a fair market value of $ 74,193 .

On June 23, 2021, the Compensation

Committee of the Board of Directors amended the service-based awards granted to the CEO, such that 3,750,000 of such RSUs shall continue

to vest in four equal installments on the first, second, third and fourth anniversaries of December 7, 2020, subject to his continued

employment and the remaining 3,750,000 RSUs shall be modified to vest based on performance or market conditions.

The previously issued

7,500,000 performance-based awards, along with the 3,750,000 modified service-based awards, shall vest as follows:

(i) 3,750,000

RSUs vest when the Company’s common stock closing sale price equals or exceeds $3.00 per share or the Company’s market capitalization

equals or exceeds $903,000,000 for 20 consecutive trading days;

(ii) 3,750,000 RSUs vest when the Company’s common stock closing

sale price equals or exceeds $3.50 per share or the Company’s market capitalization equals or exceeds $1,053,500,000 for 20 consecutive

trading days, and (iii) 3,750,000 RSUs vest when the Company’s common stock closing sale price equals or exceeds $3.75 per share

or the Company’s market capitalization equals or exceeds $1,128,750,000 for 20 consecutive trading days (the “market conditions”).

In addition to the stock price and market capitalization vesting conditions set forth above, such 11,250,000 RSUs may also vest in four

equal installments on the first, second, third and fourth anniversaries of December 7, 2020, based on achievement of certain operating

performance-based vesting conditions established by the Compensation Committee on June 23, 2021 and subject to his continued employment,

adjusted pro-ratably for vesting pursuant to the market conditions.

As a result of these modifications, the RSUs subject to the market

conditions were valued at $15.6 million with a derived service period of 12 months, using a Monte-Carlo simulation model.

On June 24, 2021, the Company

issued 213,636 shares of RSUs with a fair market value of $ 0.4 million.

The following table summarizes

the Company’s RSU activity during the years ended December 31, 2021 and December 31, 2020:

Schedule of restricted stock units

Restricted Stock Unites

Average Remaining Contractual Life

During the year ended December 31, 2022, the Company granted 108,667 fully vested RSUs to nonemployees for consulting services with a fair market value of $ 0.8 million and 30,000 RSUs to a nonemployee with a fair market value of $ 0.3 million that vest over 1.5 years.

The Company granted 50,000 RSUs to an executive employee with a fair market value of $ 0.4 million that vest evenly over 3 years.

The RSUs expire five years from date of grant.

Per terms of the restricted stock agreements, per option of the employee, the Company may pay the employee’s related taxes associated with the employee’s vested and issued stock by issuing shares net of taxes to the employee and decreasing the freely tradable shares of the Company.

The value of the shares netted for employee taxes represents treasury stock repurchased.

An aggregate of 593,358 shares of common stock were issued as a result of vested RSUs, of which, 699 shares of common stock were withheld to pay employee taxes upon such vesting.

The Company recorded the cost of the withheld shares of $ 2,553 within Treasury Stock on the consolidated balance sheet as of December 31, 2022.

The following table summarizes the Company’s RSU activity during the years ended December 31, 2022 and December 31, 2021:

Restricted Stock Unites Weighted-

Average Remaining Contractual Life Weighted-

Average Grant Date Fair Value per Share

Unvested at December 31, 2020 907,500 4.94 $ 13.90

Granted 841,318 4.47 $ 14.20

Vested ( 210,494 ) 4.09 $ 14.40

Forfeited/Cancelled – – $ –

Unvested at December 31, 2021 1,538,324 4.34 $ 14.00

Granted 188,667 4.28 $ 7.48

Vested ( 565,047 ) 3.51 $ 12.46

Forfeited/Cancelled – – $ –

Unvested at December 31, 2022 1,161,944 3.41 $ 13.67

During the years ended December

31, 2021 and December 31, 2020, the Company recognized $ 12.75 million and $ 0.6 million, respectively in share-based compensation expense

related to RSU awards.

The unvested share-based compensation as of December 31, 2021 is $ 10.2 million which will be recognized through

the fourth quarter of 2024 assuming the underlying grants are not cancelled or forfeited.

The total fair value of shares vested during

the year ended December 31, 2021 was $ 3.0 million.

The Company has warrants outstanding

to purchase up to 45,511,965 shares as of December 31, 2021 and 2020.

On January 22, 2020, the Company

entered into a private transaction (the “Private Transaction”) pursuant to a Warrant Exercise Agreement (the “Agreement”)

with the holder of the Company’s existing warrants (the “Original Warrants”).

The Original Warrants were issued on October

3, 2017, to purchase an aggregate of 500,000 shares of common stock, at an exercise price of $3.90 per share and were to expire in October

Pursuant to the Agreement,

the holder of the Original Warrants and the Company agreed that such Original Warrant holder would exercise its Original Warrants in full

and the Company would amend the Original Warrants to reduce the exercise price thereof to $ 0.34 (the average closing price of the common

stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the Agreement) (the “Amended Exercise

The Company received approximately $ 170,000 from the exercise of the Original Warrants.

The placement agent received

warrants to purchase 50,000 shares at an exercise price of $0.34 per share.

Pursuant to the SPA

described in Note 13, the Company issued to the note holders warrants to purchase 65,476,191

shares of common stock, exercisable for a period of 5 five years at an initial exercise price of $ 0.26

The placement agent received

warrants to purchase 6,547,619 shares at an exercise price of $ 0.26 per share.

The fair values of derivative warrants attached to the

2020 Convertible Notes and Notes conversion option were determined using the Black-Scholes-Merton option pricing model with standard valuation

The valuation inputs as of March 17, 2020 included expected volatility of 89%, and annual interest rate of 0.66%.

were determined to be liability classified and adjusted to fair value as of each reporting period.

As of December 31, 2021, warrants to

purchase 892,857 shares were outstanding and re-valued at $0.85 million, resulting in a net decrease in liability of $0.3 million, as

compared to December 31, 2020.

The change in value is recorded within Net Other Income (Expense) on the consolidated statement of operations.

The valuation inputs as of December 31, 2021 included expected volatility of 106%, and annual interest rate of 1.02%.

On January 28, 2021, the

Company entered into letter agreements (the “Letter Agreements”) with certain existing institutional and accredited investors

to exercise certain outstanding warrants (the “Existing Warrants”) to purchase up to an aggregate of 39,740,500 shares of

the Company’s common stock at their original exercise price of $ 1.55

per share (the “Exercise”).

The Company received approximately $ 61.6

million in gross proceeds.

The Special Equities Group, a division of Bradley Woods & Co.

Ltd., acted as warrant solicitation

agent and received a cash fee of $4.3 million.

In consideration for the exercise of the Existing Warrants for cash, the exercising holders

received new unregistered warrants to purchase up to an aggregate of 39,740,500

shares of common stock (the “New Warrants”) at an exercise price of $2.37 per share, exercisable immediately, with

an exercise period of five years from the initial issuance date.

Pursuant to the Letter Agreements, the New Warrants are substantially

in the form of the Existing Warrants (except for customary legends and other language typical for an unregistered warrant, including

the ability for the holder of the New Warrant to make a cashless exercise if no resale registration statement covering the common stock

underlying the New Warrants is effective after six months).

The Company registered the resale of the shares of common stock issuable

upon exercise of the New Warrants.

The fair value of these warrants was determined to be $69.1 million using the Black-Scholes option

pricing model and was recorded within Net Other Income (Expense) on the consolidated statement of operations, based on the following

Schedule of assumptions for warrant activity

Exercise Price

Dividend Yield

Risk-free interest rate

Expected life of options

The following table summarizes

the changes in the Company’s outstanding warrants during the years ended December 31, 2021 and December 31, 2020:

Schedule of warrant activity

Warrants Outstanding Number of Shares

Exercise Prices

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price Per Share

Balance at December 31, 2019

$ 0.21 - 5.30

$ 0.21 – 1.55

( 80,820,087 )

$ 0.21 - 5.30

$ 3.30 – 3.60

During the years ended December 31, 2022 and December 31, 2021, the Company recognized $ 9.2 million and $ 12.8 million, respectively in share-based compensation expense related to RSU awards.

The unvested share-based compensation as of December 31, 2022 is $ 1.7 million which will be recognized through the second quarter of 2025 assuming the underlying grants are not cancelled or forfeited.

The total fair value of shares vested during the year ended December 31, 2022 was $ 5.5 million.

The following table summarizes the changes in the Company's outstanding warrants during the years ended December 31, 2022 and December 31, 2021:

Warrants Outstanding Number of

Shares Exercise Prices

Per Share Weighted Average Remaining

Contractual Life Weighted Average Exercise Price Per

Balance at December 31, 2021 4,551,197 $ 2.10 - 53.00

( 39,740,500 )

Granted – $ – – $ –

Exercised – $ – – $ –

Expired ( 67,604 ) $ 33.00 - 53.00

Forfeitures ( 50,000 ) $ 13.90 – $ 13.90

Balance at December 31, 2022 4,433,593 $ 2.10 - 30.00

Exercisable December 31, 2022 4,433,593 $ 2.10 - 30.00

$ 0.76 - 6.00

Exercisable December 31, 2021 4,451,197 $ 2.10 - 53.00

$ 0.21 - 5.30

Deferred taxes are provided

on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit

carry forwards and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences

between the reported amounts of assets and liabilities and their tax basis.

Deferred tax assets are reduced by a valuation allowance when,

in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist

of the following components (in thousands) :

Schedule of deferred tax assets and liabilities

The warrants to purchase shares of the Company’s common stock outstanding as of December 31, 2022 and December 31, 2021 had a total value of $ 73.3 million and $ 73.8 million, respectively.

As of December 31, 2022, 89,286 liability classified derivative warrants to purchase shares of the Company’s common stock remained outstanding and are revalued each reporting period.

As of December 31, 2022, the warrants were revalued at $ 0.3 million, resulting in a decrease of $ 0.6 million in liability as compared to December 31, 2021.

The change in value is recorded within net other income (expense) on the consolidated statements of operations.

The fair value of the outstanding derivative warrants was determined by using the Black-Scholes option pricing model ("BSM") based on the following assumptions:

Exercise Price $ 2.10

Dividend Yield – %

Volatility 95 %

Risk-free interest rate 4.37 %

Expected life of options 2.2 years

Of the total outstanding warrants, two shareholders were each issued 50,000 warrants, for a total of 100,000 warrants, to purchase the Company's common stock on October 15, 2020.

The warrant agreement included a right for each holder to put their warrants to the Company for a fixed rate of $ 250,000 in cash commencing on the 2nd anniversary of the issue date.

The put option was exercisable commencing on October 15, 2022 and anytime thereafter, prior to the ten years expiration term.

On October 10, 2022, the Company received a notification of intent from one holder to exercise the put option for their 50,000 warrants in return for $ 250,000 in cash on the commencement date.

The Company paid the balance on October 10, 2022.

The remaining 50,000 warrants recorded as equity-classified warrants prior to the two-year commencement date of the option to exercise for cash, were reclassified as a current liability on the commencement date.

At each reporting period, the Company will record the greater of the cash payable upon the exercise of the put option and the fair value of the warrants as of the reporting date.

The Company revalued the remaining 50,000 warrants at $ 181,341 as of December 31, 2022 using the BSM model.

As the cash payable for the exercise of the put option is greater than the fair value of the warrant, the Company recorded $ 250,000 within Warrant Liability on the Company's consolidated balance sheet as of December 31, 2022.

The significant components of income tax expense (benefit) are as follows (in thousands):

As of December 31,

Federal $ – $ –

Foreign 150 –

Foreign ( 45 ) –

Income Tax Expense:

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components (in thousands):

As of December 31,

Deferred Tax Assets:

2 unchanged sentences

Stock Compensation 2,355 2,058

Warrants 153 239

Marketable Securities 1,851 351

Deferred Revenue

Other 1,924 291

Subtotal 50,293 26,260

Valuation Allowance ( 41,271 ) ( 23,931 )

2 unchanged sentences

Intangible Assets ( 6,778 ) ( 1,541 )

Net Deferred Tax Asset

The income tax provision

differs from the amount of income tax determined by applying the U.S.

federal tax rate to pretax income from continuing operations due

to the following (in thousands) :

Schedule of effective income tax rate reconciliation

Net Deferred Tax Liability $ ( 705 ) $ –

The income tax provision differs from the amount of income tax determined by applying the U.S.

federal tax rate to pretax income from continuing operations due to the following (in thousands):

Year Ended December 31,

2 unchanged sentences

Stock Compensation 1,894 2,421

Conversion Option Revaluation

Contingent Earn Out ( 282 ) ( 1,228 )

Goodwill Impairment 1,020 1,003

Secured Convertible Notes

Warrants ( 53 ) 14,519

Other 960 305

operations ( 94 ) ( 106 )

Valuation Allowance 8,096 12,664

Income Tax Expenses

At December 31, 2021, the

Company had Federal, state, and foreign net operating loss carry forwards of approximately $ 80,508 , $ 78,827 , and $ 151 , respectively, that

may be offset against future taxable income and will begin to expire in 2028, if not utilized.

No tax benefit has been reported in the

December 31, 2021 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership

provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual

Income Tax Expense $ 105 $ –

At December 31, 2022, the Company had Federal, state, and foreign net operating loss carry forwards of approximately $ 104.8 million, $ 102.9 million, and $ 43.2 million, respectively, that may be offset against future taxable income and will begin to expire in 2028, if not utilized.

No tax benefit has been reported in the December 31, 2022 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual limitations.

Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.

The Company accounts for income

taxes in accordance with ASC 740, Income Taxes , which requires the recognition of deferred tax liabilities and assets at currently

enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns.

The Company accounts for income taxes in accordance with ASC 740, Income Taxes , which requires the recognition of deferred tax liabilities and assets at currently enacted tax rates for the expected future tax consequences of events that have been included in the financial statements or tax returns.

A valuation allowance is recognized to reduce the net deferred tax asset to an amount that is more likely than not to be realized.

ASC 740 provides guidance

on the accounting for uncertainty in income taxes recognized in a company’s financial statements.

ASC 740 requires a company to

determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of

the position.

If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize

in the financial statements.

The Company includes interest

and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes.

As of December

31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company files income tax

returns in the U.S.

ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements.

ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position.

If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes.

As of December 31, 2022, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company files income tax returns in the U.S.

federal jurisdiction and in the states of California, Massachusetts, and New Jersey.

The Company is currently subject

The Company is currently subject to U.S.

federal, state and local, or non-U.S.

income tax examinations by tax authorities since inception of the Company.

Genius Brands International,

Genius Brands International, Inc.

is subject to U.S.

income taxes on a stand-alone basis.

Genius Brands International, Inc.

and ChizComm Canada file separate stand-alone

tax returns in each jurisdiction in which they operate.

ChizComm Canada is a corporation operating in Canada and is subject to Canadian

income taxes on its stand-alone taxable income.

Genius Brands International, Inc., Beacon Communications Canada, Ameba Inc., and WOW Unlimited Media Inc.

file separate stand-alone tax returns in each jurisdiction in which they operate.

Beacon Communications Canada, Ameba Inc., and WOW Unlimited Media Inc.

are corporations operating in Canada and are subject to Canadian income taxes on their stand-alone taxable incomes.

Commitments and Contingencies

The following is a schedule of future minimum

contractual obligations as of December 31, 2021 (in thousands) :

Schedule of future minimum lease payments

The following is a schedule of future minimum contractual obligations as of December 31, 2022 (in thousands):

2023 2024 2025 2026 2027 Thereafter Total

Operating Leases $ 1,638 $ 1,701 $ 1,750 $ 1,768 $ 1,541 $ 4,601 $ 12,999

Finance Leases 1,730 676 197 – – – 2,603

Employment Contracts 3,592 1,088 427 – – – 5,107

Consulting Contracts 3,177 1,452 24 24 18 – 4,695

The Company has not included

any amounts that may be required related to its pending acquisition of WOW or its subsequent acquisition of Ameba TV as described in Note

Commencing February 4, 2019, the Company entered

into an 83-month sublease for the 6,969 square feet of general office space leased by the Company at 131 South Rodeo Drive, Suite 250,

Beverly Hills, CA 90212.

The subtenant paid the Company rent of $0.4 million annually, subject to annual escalations of 3.5%.

11, 2020, the Company entered into a Surrender Agreement with the landlord which terminated the lease agreement.

As a result, the Company

recorded a decrease in the right-of-use asset, accumulated amortization, and the lease liability of $ 2.1 million, $ 0.5 million and $ 1.8

million respectively.

The termination of the lease resulted in a loss of $0.3 million.

Simultaneously, as part of the Surrender Agreement

the Sublease was terminated.

On January 30, 2019, the Company

entered into an operating lease for 5,838 square feet of general office space at 190 N.

Canon Drive, Suite 400, Beverly Hills, CA 90210

pursuant to a 96-month lease that commenced on August 1, 2019.

The Company pays rent of $0.4 million annually, subject to annual escalations

On February 1, 2021, as part

of the ChizComm Acquisition, the Company assumed an operating lease that was entered into on May 19, 2019 for 6,845 square feet of general

office space located at 245 Fairview Mall Drive, Suites 202 and 301, Toronto, Ontario M2J 4T1 pursuant to an 84-month lease which commenced

on October 1, 2019.

The Company pays rent of $95,830 annually, subject to annual escalations 5% to 7%.

Also, as part of the ChizComm Acquisition,

the Company assumed an operating lease that was entered into on April 30, 2019 for 3,379 square feet of general office space located at

One International Boulevard, 11 th Floor, Mahawh, New Jersey pursuant to a 24-month lease which ended on May 1, 2021.

Company paid rent of $74,338 annually.

On March 2, 2021, the Company

entered into an operating lease for 4,765 square feet of general office space located at 1050 Wall Street West, Suite 665, Lyndhurst NJ,

07071 pursuant to an 89-month lease which commenced on October 1, 2021.

The Company will pay $0.1 million annually subject to annual escalations

As of December 31, 2021, the

weighted-average lease term for operating leases was 70 months.

The weighted-average discount rate on the leases was 24.9 %.

Rental expenses incurred for

operating leases during the years ended December 31, 2021 and December 31, 2020 were $ 0.5 million and $ 0.7 million, respectively.

the years ended December 31, 2021 and December 31, 2020, the Company received sub-lease income of $ 0 and $ 0.3 million, respectively.

Debt 64,119 18,429 24 24 18 – 82,614

$ 74,256 $ 23,346 $ 2,422 $ 1,816 $ 1,577 $ 4,601 $ 108,018

On January 30, 2019, the Company entered into an operating lease for 5,838 square feet of general office space at 190 N.

Canon Drive, Suite 400, Beverly Hills, CA 90210 pursuant to a 96-month lease that commenced on August 1, 2019.

The Company pays rent of $ 0.4 million annually, subject to annual escalations of 3.5 %.

On February 1, 2021, as part of the ChizComm Acquisition, the Company assumed an operating lease that was entered into on May 19, 2019 for 6,845 square feet of general office space located at 245 Fairview Mall Drive, Suites 202 and 301, Toronto, Ontario M2J 4T1 pursuant to an 84-month lease which commenced on October 1, 2019.

The Company pays rent of $ 95,830 annually, subject to annual escalations of 5 % to 7 %.

Also, as part of the ChizComm Acquisition, the Company assumed an operating lease that was entered into on April 30, 2019 for 3,379 square feet of general office space located at One International Boulevard, 11 th Floor, Mahawh, New Jersey pursuant to a 24-month lease which ended on May 1, 2021.

The Company pays rent of $ 74,338 annually.

On March 2, 2021, the Company entered into an operating lease for 4,765 square feet of general office space located at 1050 Wall Street West, Suite 665, Lyndhurst NJ, 07071 pursuant to an 89-month lease which commenced on October 1, 2021.

The Company pays rent of $ 0.1 million annually subject to annual escalations of 2.5 %.

On April 6, 2022, as part of the Wow Acquisition, the Company assumed an operating lease for 45,119 square feet of general office space located at 2025 West Broadway, Suite 200, Vancouver, B.C., V6J 1Z6.

The right of use asset and lease liability were revalued on the acquisition date based on the remaining lease term of 117 months with payments of $ 81,769 per month, subject to escalations of 7 % each of the third and fifth years.

The lease liability and right of use asset were determined to be $ 6.6 million, utilizing a discount rate of 11.5 %.

As part of the assumed office lease, the Company also assumed a parking lease for 80 parking spaces.

The parking lease was also revalued utilizing the 11.5 % discount rate.

With a remaining lease term of 117 months, paying $ 6,091 per month, the ROU asset and lease liability were determined to be $ 0.5 million as of the acquisition date and recorded within current and noncurrent Operating Lease Liabilities on the Company's consolidated balance sheet upon acquisition.

Also, as part of the Wow Acquisition, the Company assumed various equipment finance leases, the majority of which are under Master Line of Credit Agreements with certain banking institutions.

As the rates were implicit in the leases, the Company determined that the carrying value of the leases as of the acquisition date equaled the fair value.

With the implicit rates in the leases range from 3.7 %- 14.5 %, remaining lease terms of 10 - 33 months and monthly payments of $ 1,346 -$ 57,362 as of the Wow Acquisition date, the finance lease obligations were determined to be $ 3.5 million and recorded as current and noncurrent Finance Lease Liabilities on the Company’s consolidated balance sheet upon consolidation.

The present value discount of the minimum operating lease payments above was $ 4.1 million as of December 31, 2022.

Other Funding Commitments

The Company enters into various

agreements associated with its individual properties.

Some of these agreements call for the potential future payment of royalties or “profit”

participations for either (i) the use of third party intellectual property, in which the Company is obligated to share net profits with

the underlying rights holders on a certain basis as defined in the respective agreements or (ii) services rendered by animation studios,

post-production studios, writers, directors, musicians or other creative talent for which the Company is obligated to share with these

service providers a portion of the net profits of the properties on which they have rendered services, as defined in each respective agreement.

Following the equity investment

in YFE, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by shareholders.

Upon the expiration

of the offer on February 14, 2022, the Company purchased 2,637,717 additional shares of YFE, increasing the Company’s ownership

of YFE to 53.9%.

However, on March 9, 2022, including 304,631 additional shares acquired by the Company, bonds convertible into YFE’s

common stock were converted into 2,574,000 shares, increasing the number of outstanding shares and resulting in a dilution of the Company’s

ownership in YFE to 45.6%.

On October 26, 2021, 1326919

LTD., a corporation existing under the laws of the Province of British Columbia and a wholly-owned subsidiary of the Company and

Wow Unlimited Media Inc.

(“WOW”), a corporation existing under the laws of the Province of British Columbia, entered into

an Arrangement Agreement to effect a transaction among the parties by way of a plan of arrangement under the arrangement provisions of

Part 9, Division 5 of the Business Corporations Act , whereby the Company will purchase 100% of WOW’s issued and outstanding

shares for $38.4 million in cash and 11,000,000 shares of the Company’s common stock.

The transaction is expected to be completed

during the second quarter of 2022.

The Company enters into various agreements associated with its individual properties.

Some of these agreements call for the potential future payment of royalties or “profit” participations for either (i) the use of third party intellectual property, in which the Company is obligated to share net profits with the underlying rights holders on a certain basis as defined in the respective agreements or (ii) services rendered by animation studios, post-production studios, writers,

directors, musicians or other creative talent for which the Company is obligated to share with these service providers a portion of the net profits of the properties on which they have rendered services, as defined in each respective agreement.

Related Party Transactions

Pursuant to his employment

agreements dated December 7, 2020, Andy Heyward, the Company’s CEO, is entitled to an Executive Producer fee of $12,500 per one-half

hour episode for each episode he provides services as an executive producer .

Pursuant to his employment agreements dated December 7, 2020, Andy Heyward, the Company’s CEO, is entitled to an Executive Producer fee of $ 12,500 per one-half hour episode for each episode he provides services as an executive producer .

During the year ended December 31, 2022 and December 31, 2021, Mr.

Heyward earned $ 775,000 and $ 543,750 in producer fees, respectively, and earned $ 220,000 in quarterly bonuses in each year ended.

On August 25, 2022, Mr.

Heyward's employment agreement was amended to include assignment of music royalties to Mr.

Heyward for all musical compositions in which he provides services as a composer for or on behalf of the Company, in the event that the Company acquires up to 50 % of the writer's share of the royalties for that musical composition.

If the Company acquires more than 50 % of the writer's share of the royalties on musical compositions Mr.

Heyward provided services for, he has the option to purchase the additional royalties from the Company at the price the Company paid to acquire the additional royalties.

During the year ended December 31, 2022, Mr.

earned $ 543,750 in producer fees and is owed $ 63,000 as of December 31, 2021, which is included in Due to Related Party on the Company’s

consolidated balance sheets.

On July 21, 2020, the

Company entered into a merchandising and licensing agreement with Andy Heyward Animation Art (“AHAA”), whose principal

is Andy Heyward.

The Company entered into a customary merchandise license agreement with AHAA for the use of characters and logos

related to Warren Buffett’s Secret Millionaires Club and Stan Lee’s Mighty 7 in connection with

certain products to be sold by AHAA.

The terms and conditions of such license are customary within the industry, and the Company

earns an arm-length industry standard royalty on all sales made by AHAA utilizing the licensed content.

During the year ended

December 31, 2021, the Company earned $ 0

in royalties from this agreement.

On September 30, 2021, the

Company entered into a Loan Agreement and Promissory Note with POW!

in the amount of $ 1,250,000 , accruing simple interest at the annualized

The entire principal sum was required to be remitted to POW!’s client trust account of POW!’s legal counsel within

5 days of the effective date.

The principal, plus interest must be repaid by no later than November 1, 2022.

Within the Loan Agreement,

it is stated that the proceeds of $1,000,000 are required to be used by POW!

to settle the arbitration against Stan Lee Studios (aka Proxima

Studios) and $250,000 shall be used to solely pay for the payment of legal costs and fees.

Heyward earned $ – in royalties from musical compositions.

Pursuant to his employment agreement dated April 7, 2022, Michael Hirsh, CEO of Wow and its Frederator and Mainframe Studio subsidiaries is entitled to an Executive Producer fee of $ 12,400 per one-half hour for each episode of any audio-visual production produced by Wow and any of its subsidiaries during the term of his employment, up to 52 episodes per year .

During the year ended December 31, 2022, Mr.

Hirsh earned $ – in producer fees under the employment agreement.

On July 21, 2020, the Company entered into a merchandising and licensing agreement with Andy Heyward Animation Art (“AHAA”), whose principal is Andy Heyward.

The terms and conditions of such license are customary within the industry, and the Company earns an arm-length industry standard royalty on all sales made by AHAA utilizing the licensed content.

During the year ended December 31, 2022 and December 31, 2021, Mr.

Heyward earned $ – in royalties from this agreement.

On September 30, 2021, the Company entered into a Loan Agreement and Promissory Note with POW in the amount of $ 1,250,000 , accruing simple interest at the annualized rate of 9 %.

The Stan Lee Library (the "Library") and related intellectual property not yet owned by the Company secure repayment of the loan.

Within the Loan Agreement, it is stated that the proceeds of $ 1,000,000 are required to be used by POW to settle the arbitration against Stan Lee Studios (aka Proxima Studios) and $ 250,000 shall be used to solely pay for the payment of legal costs and fees.

The principal amount was transferred to POW!

on October 12, 2021 and on or about November 4, 2021, POW and Proxima entered into a binding settlement agreement resolving all the claims

made by Proxima.

The loan has accrued interest of $ 26,221 as of December 31, 2021 and is recorded as a Note Receivable from Related Party

on the Company’s consolidated balance sheet.

During the year ended December

31, 2021, the Company issued 160,000 stock options to its Board Members for services with a grant date fair value of $ 411,800 .

on October 12, 2021 and on or about November 4, 2021, POW and Proxima entered into a binding settlement agreement resolving all the claims made by Proxima.

The loan has accrued interest of $ 0.1 million and $ 0.03 million as of December 31, 2022 and December 31, 2021, respectively, recorded with the principal balance within Note Receivable from Related Party on the Company’s consolidated balance sheets.

In addition, pursuant to its joint venture with POW and formation of the entity Stan Lee Universe, LLC, the Company included within Note Receivable from Related Party, the amount owed to the Company related to the 50 % non-controlling interest held by POW.

On November 1, 2022, POW failed to repay the Loan as set forth in the applicable loan agreement.

GBI then provided POW with a notice of default and thirty days to cure.

As of December 31, 2022, the Company has not received payment on the Loan.

As the Library secures repayment, the Company initiated a public sale during February 2023 of the Stan Lee Library owned by POW.

The Library consists of over 250 titles, most of which were created by Stan Lee during his employment with POW from 2001 to 2018.

The Library includes treatments, synopses and screenplays, as well as derivative rights in certain novels, comic books and other publications.

The public auction is being conducted by auctioneer Ocean Tomo, a division of J.S.

The auction will be held on April 21, 2023 and Ocean Tomo will be accepting initial bids on the Library until April 7, 2023.

The Company will be participating in the auction as a credit bidder.

During the year ended December 31, 2022, the Company and YFE completed an asset exchange transaction pursuant to a License and Distribution Agreement (the “Agreement”) signed on June 27, 2022.

The Agreement includes multiple elements, including (i) broadcast rights and (ii) distribution rights.

Stefan Piëch, a member of the Company’s Board of Directors since June 23, 2022, is the Chief Executive Officer of YFE.

The Company currently has a 44.8 % economic ownership interest in YFE and Mr.

Piëch has a 26.1 % economic ownership interest in YFE.

Pursuant to the Agreement, the Company granted YFE the right to use certain of the Company’s programs to broadcast on YFE’s channels

in certain territories and in exchange, the Company shall be entitled to receive a flat fee of EUR 1.0 million upon delivery of the programs.

In addition, YFE granted the Company the right to use certain of YFE’s programs to broadcast on the Company’s channels in certain territories and in exchange, YFE shall be entitled to receive a flat fee of EUR 1.0 million upon YFE’s delivery of the programs.

The rights between the parties were exchanged and invoices were generated and marked as paid without cash actually being exchanged between the parties as it was agreed that the physical transfer of cash was unnecessary.

The EUR 1.0 million was treated as an asset exchange and was not included as part of revenue generated by the Company.

Each party granted to the other distribution rights to those same titles.

The distribution rights grant the Company the right to license the YFE titles to third parties within specific territories and YFE the right to license the Company’s titles to third parties worldwide.

Each party will earn a commission of 30 % from gross receipts of titles distributed and reimbursement of up to 5 % of expenses incurred.

On July 19, 2022, the Company entered into a Shareholder Loan Agreement with YFE in the amount of EURO 1.3 million, accruing interest at the fixed annualized rate of 5 %, with successive interest periods of three months due on the last day of each calendar quarter.

The entire principal sum was required to be remitted to YFE within 5 days of the effective date.

The principal, plus interest must be repaid by no later than June 30, 2026.

The loan has accrued interest of USD $ 0.03 million as of December 31, 2022 recorded with the principal balance within Note Receivable from Related Party on the Company’s consolidated balance sheet.

On December 1, 2021, the Company entered into an Independent Contractor Agreement for two years with F&M Film and Medien Beteiligungs GmbH ("F&M"), a company controlled by Dr.

Stefan Piëch.

Pursuant to the agreement, F&M will receive $ 150,000 annually, paid on a semi-monthly basis.

In addition, Dr.

Piëch was granted 30,000 of the Company's RSUs that vest in three six-month intervals beginning on December 1, 2021.

During 2022, the Company entered into a sublease agreement with a related party to lease one office in the general office space at 190 N.

Canon Drive, Suite 400, Beverly Hills, CA 90210.

During the year ended December 31, 2022, the Company recorded $ 2,985 of sublease income within Other Income (Expense), Net on the Company's consolidated statement of operations.

Segment Reporting

The Company’s CODM uses

revenue and net earnings to evaluate the profitability and performance of each operating segment.

All other financial information is reviewed

by the CODM on a consolidated basis.

The CODM does not evaluate the operating segments using asset information and it is therefore

not disclosed.

All expenses directly attributable to each reportable segment is included in operating results for each segment.

the CODM does not evaluate the expenses by operating segment and, therefore, it is not separately presented.

Prior to the acquisition

of ChizComm during the year ended December 31, 2021, the Company only operated in one reportable segment.

The following table presents

the revenue and net earnings within the two operating segments at the year ended December 31, 2021 (in

Segment information

by revenues and net earnings

The Company’s CODM uses revenue and net earnings to evaluate the profitability and performance of each operating segment.

All other financial information is reviewed by the CODM on a consolidated basis.

The CODM does not evaluate the operating segments using asset information and it is therefore not disclosed.

All expenses directly attributable to each reportable segment are included in operating results for each segment.

However, the CODM does not evaluate the expenses by operating segment and, therefore, it is not separately presented.

The following table presents the revenue and net earnings within the Company's two operating segments for the year ended December 31, 2022 (in thousands):

December 31, 2022 December 31, 2021

Total Revenues:

3 unchanged sentences

Content Production & Distribution $ ( 36,862 ) $ ( 122,944 )

$ ( 122,944 )

Media Advisory & Advertising Services ( 8,733 ) ( 3,347 )

Total Operating Loss $ ( 45,595 ) $ ( 126,291 )

$ ( 126,291 )

Geographic Information

The following table provides

information about disaggregated revenue by geographic area at year ended December 31, 2021 (in

Schedule of segments by geographic area

The following table provides information about disaggregated revenue by geographic area at year ended December 31, 2022 (in thousands):

December 31, 2022 December 31, 2021

Total Revenues:

United States $ 45,773 $ 5,567

Canada 13,113 2,306

United Kingdom 3,057 –

Total Revenue $ 62,299 $ 7,873

Subsequent Events

On January 13, 2022, the Company

acquired Canadian streaming service Ameba TV and gained access to its kid-safe platform technology and 13,000 episodes of content including

Casper the Friendly Ghost , Donkey Kong Country, Gummy Bears and Rescue Heroes .

The Company purchased 100% of Ameba’s

issued and outstanding shares for $3.5 million in cash and paid $0.3 million for the underlying software code that powers the SVOD deliveries.

During the first quarter of

2022, the Company has borrowed an additional $51.4 million, net of pay-downs from its investment margin account.

On February 24, 2022, the

Company issued 36,196 shares of the Company’s common stock valued at $65,515 which were held in escrow as part of the ChizComm acquisition.

On March 2, 2022, the Company issued 350,000 shares

of the Company’s common stock valued at $0.3 million to a consultant for advisory services.

During the first quarter of 2022, the Company issued

603,648 shares of the Company’s common stock valued at $0.6 million which represented delivery of vested RSUs.

Following the equity investment

in YFE, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by shareholders.

Upon the expiration

of the offer on February 14, 2022, the Company purchased 2,637,717 additional shares of YFE, increasing the Company’s ownership

of YFE to 53.9%.

However, on March 9, 2022, including 304,631 additional shares acquired by the Company, bonds convertible into YFE’s

common stock were converted into 2,574,000 shares, increasing the number of outstanding shares and resulting in a dilution of the Company’s

ownership in YFE to 45.6%.

On March 24, 2022,

the Board of Directors of Genius Brands International, Inc.

accepted the resignation of Ms.

Zrinka Dekic who has served as Chief Financial

Officer and Head of Strategy and Mergers and Acquisitions since December 13, 2021.

Dekic voluntarily resigned for personal reasons.

The Board re-appointed Robert Denton as the Company’s Chief Financial Officer, to serve as the Company’s principal financial

officer and principal accounting officer.

Denton previously

served as Chief Financial Officer and principal financial officer and principal accounting officer of the Company from April 2018 to December

Since December 2021, Mr.

Denton has served as Executive Vice President of Finance and Accounting for the Company.

Additional information

required by Items 401(b), (d), and (e) and Item 404(a) of Regulation S-K regarding Mr.

Denton was previously reported in the Company’s

Definitive Proxy Statement for its 2021 Annual Meeting of Shareholders on Schedule 14A filed with the Securities and Exchange Commission

(“SEC”) on August 24, 2021, and which information is incorporated by reference herein.

On March 8, 2022, the Company and Mr.

Denton entered into an amendment to his Amended and Restated Employment Agreement, dated as of December 7, 2020, which increased the term

of his employment to three years from March 7, 2022 (the “Effective Date”) unless earlier terminated and provided for a base

salary at the rate of (a) $300,000 concluding on the first anniversary of the Effective Date, (b) $350,000 beginning on the first anniversary

of the Effective Date and concluding on the second anniversary thereof, and (c) $375,000 beginning on the second anniversary of the Effective

Date and concluding on the third anniversary thereof.

The foregoing summary

of the material terms of the amendment to the Amended and Restated Employment Agreement with Mr.

Denton described above does not purport

to be complete and is qualified in its entirety by reference to the full text of his employment agreement, which will be filed with the

Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2022.

On February 6, 2023, the Company's board of directors approved a 1-for-10 reverse stock split of the Company's outstanding shares of common stock.

The reverse stock split was effected on February 10, 2023 at 5:00 p.m.

Eastern time.

At the effective time, every 10 issued and outstanding shares of the Company's common stock were converted into 1 share of common stock.

Any fractional shares of common stock resulting from the reverse stock split were rounded up to the nearest whole post-split share and no shareholders received cash in lieu of fractional shares.

The par value of each share of common stock remained unchanged.

The reverse stock split proportionately reduced the number of shares of authorized common stock from 400,000,000 to 40,000,000 shares.

The reverse stock split also applied to common stock issuable upon the exercise of the Company's outstanding warrants and stock options.

The reverse stock split did not affect the authorized preferred stock of 10,000,001 shares.

Unless noted, all references to shares of common stock and per share amounts contained in this Annual Report on Form 10-K have been retroactively adjusted to reflect a 1-for-10 reverse stock split.

On February 16, 2023, the Company received a notification of exercise from a holder of certain warrants with a put option that became exercisable on October 25, 2022.

The put option was exercised for a fixed rate of $ 250,000 for the 50,000 warrants held.

On February 20, 2023, the Company initiated a public sale of the Stan Lee Library owned by POW.

The Library consists of over 250 titles, most of which were created by Stan Lee during his employment with POW from 2001 to 2018.

The Library includes treatments, synopses and screenplays, as well as derivative rights in certain novels, comic books and other publications.

The public auction is being conducted by auctioneer Ocean Tomo, a division of J.S.

The auction will be held on April 21, 2023 and Ocean Tomo will be accepting initial bids on the Library until April 7, 2023.

The Company will be participating in the auction as a credit bidder.

On February 27, 2023, Mr.

Heyward’s employment agreement was further amended with regard to his eligibility to receive Executive Producer Fees.

Pursuant to a prior amendment to his employment agreement executed in 2021, Mr.

Heyward was granted the right to be paid an Executive Producer Fee for up to 104 half hour episodes.

The February 2023 amendment reduced the number of episodes eligible for Executive Producer fees to 52 per year and instead provided that Mr.

Heyward shall receive a bonus of $ 100,000 per quarter for services rendered to the Company’s subsidiary Wow Unlimited Media.

On February 28, 2023, the Company received written notification from Nasdaq notifying it that since the closing bid price of its Common Stock for the previous 10 consecutive business days, from February 13, 2023, through February 28, 2023, had been at $1.00 per share or greater, the Company has regained compliance with the Minimum Bid Price Requirement during the Second Compliance Period and that this matter is now closed.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures