LEGAL PROCEEDINGS.
−Removed: As of June 30, 2023, there were no material pending legal proceedings to which the Company is a party or as to which any of its property is subject other than described below.
−Removed: As previously disclosed, the Company, its Chief Executive Officer Andy Heyward, and its Chief Financial Officer Robert Denton were named as defendants in a putative class action lawsuit filed in the U.S.
+Added: As of September 30, 2023, there were no material pending legal proceedings to which the Company is a party or as to which any of its property is subject other than as described below.
+Added: As previously disclosed, the Company, its Chief Executive Officer Andy Heyward, and its former Chief Financial Officer Robert Denton were named as defendants in a putative class action lawsuit filed in the U.S.
District Court for the Central District of California and styled In re Genius Brands International, Inc.
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On August 12, 2022, lead plaintiffs filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit.
−Removed: Briefing of the appeal has concluded, and calendar inquiries from the Court of Appeals suggest that it may entertain a hearing on the appeal in either November or December 2023.
−Removed: The Company cannot predict whether the Court will entertain oral argument of the appeal, when a hearing might be scheduled, the outcome of the appeal or the timing of a decision on the appeal.
+Added: After full briefing of the appeal, a panel of the Court of Appeals held oral argument on the appeal on November 6, 2023 and took the matter under submission.
+Added: The Company cannot predict the outcome of the appeal or the timing of a decision on the appeal.
Related to the securities class action, the Company’s directors (other than Dr.
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The Company cannot predict the impact of the securities class action’s dismissal on the shareholder derivative lawsuits.
−Removed: Finally, the Company is also a nominal defendant in an action filed in January 2022 in the U.S.
+Added: The Company is also a nominal defendant in an action filed on January 11, 2022, in the U.S.
District Court for the Southern District of New York and styled Todd Augenbaum v.
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1:22-cv-00249 VM.
−Removed: The action, which purports to be brought on behalf and for the benefit of the Company, seeks recovery under Section 16(b) of the Exchange Act of supposed short-swing profits allegedly realized by roughly a dozen persons and entities that participated as investors in certain of the Company’s private placements of securities in 2020.
+Added: The action, which again purports to be brought on behalf and for the benefit of the Company, seeks the recovery under Section 16(b) of the Exchange Act of supposed short-swing profits allegedly realized by roughly a dozen persons and entities that participated as investors in certain of the Company’s private placements of securities in 2020.
+Added: Plaintiff Augenbaum, who purports to be a Company stockholder, filed his lawsuit after issuing a demand to the Company’s Board of Directors asking that the Company sue the investor defendants.
+Added: The Company rejected the demand in late December 2021, and Mr.
+Added: Augenbaum sued a few weeks later, as Section 16(b) permits him to do.
No Company officer or director is among the defendants.
−Removed: The defendant investors filed a motion to dismiss, which the Court took under submission in mid-November 2022 after the completion of full briefing.
−Removed: By decision issued March 30, 2023, the Court granted defendants’ motion to dismiss with leave to amend.
−Removed: On May 1, 2023, plaintiff filed an amended complaint.
−Removed: Pursuant to the court’s rules, defendants submitted a pre-motion letter seeking leave to file a motion to dismiss, which plaintiff opposed.
−Removed: On July 21, 2023, the court issued an order advising that it believed it could resolve the motion to dismiss based on the pre-motion letters, but giving the parties the opportunity to request further briefing on the defendants’ proposed motion.
−Removed: By stipulation submitted August 1, 2023, the parties requested further briefing and proposed a schedule that contemplates defendants’ filing of a joint motion by September 8, 2023, with briefing to continue into early November.
−Removed: Table of Conten t s
−Removed: The court has ordered the parties’ stipulation.
−Removed: The Company anticipates that defendants will renew their motions to dismiss, but no schedule for doing so has yet been set.
−Removed: There is otherwise no current activity in the case.
−Removed: The Company cannot predict the outcome of the anticipated motion to dismiss the amended complaint, the timing of court action on the requests, or the outcome of the lawsuit more generally.
−Removed: While the Company again notes that plaintiff seeks no relief against the Company, several defendant investors have made demands on the Company that it indemnify their costs of defending the action, invoking provisions in the agreements by which the investors acquired Company securities.
−Removed: The Company disagrees that it has indemnity obligations applicable to this action;
−Removed: however, the Company cannot predict the outcome of the indemnification issue.
+Added: The defendant investors in the action requested and received court permission to file motions to dismiss the action, and motions were filed July 25, 2022, and plaintiff has opposed the motions.
+Added: After full briefing, the court, by order entered March 30, 2023, granted the motion to dismiss with leave to amend.
+Added: Plaintiff subsequently filed his First Amended Complaint on May 1, 2023.
+Added: Defendants again moved to dismiss and briefing on that motion closed November 2, 2023.
+Added: On November 9, 2023, Judge Subramanian (to whom the case was reassigned in August
+Added: 2023) issued an order that, at the first pretrial conference, scheduled to be held on November 16, 2023, the parties are to be in a position to address the motion to dismiss.
+Added: The Company cannot predict whether the court will decide the motion at that time, take the matter under submission, order additional briefing or argument, or take any other particular action, and we cannot predict the timing of any action.
+Added: Aside from the motions directed to the pleading, there has been no discovery or other proceedings in the case.
In all of the above-mentioned active proceedings, the Company has denied and continues to deny any wrongdoing and intends to defend the claims vigorously.
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There have been no material changes to the Risk Factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2022.
+Added: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
+Added: DEFAULTS UPON SENIOR SECURITIES.
+Added: MINE SAFETY DISCLOSURES.
+Added: Not applicable.
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.