Legal Proceedings
−Removed: As of December 31, 2022, 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 December 31, 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.
8 unchanged sentences
they again alleged that these misstatements violated Section 10(b) and 20(a) of the Exchange Act.
−Removed: Lead plaintiffs again sought unspecified damages on behalf of an alleged class of persons who invested in the Company’s common stock during the expanded alleged class period.
+Added: Lead plaintiffs again sought unspecified
+Added: damages on behalf of an alleged class of persons who invested in the Company’s common stock during the expanded alleged class period.
In November 2021, defendants filed a motion to dismiss the second amended complaint.
1 unchanged sentence
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.
−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: On April 5, 2024, the Court of Appeals affirmed in part and reversed in part the district court's dismissal of the second amended complaint, remanding certain claims back to district court for further proceedings.
+Added: The Company cannot predict the outcome of the claims remanded for further proceedings or the timing of a decision with respect to such claims.
Related to the securities class action, the Company’s directors (other than Dr.
−Removed: Cynthia Turner-Graham), together with Messrs.
−Removed: Heyward and Denton and former director Michael Klein, have been named as defendants in several punitive stockholder derivative lawsuits.
+Added: Cynthia Turner-Graham, Michael Hirsh and Stefan Piech), together with Messrs.
+Added: Heyward and Denton and former director Michael Klein, have been named as defendants in several putative stockholder derivative lawsuits.
As previously disclosed, these include a consolidated proceeding pending in the U.S.
13 unchanged sentences
The Company cannot predict the impact of the securities class action’s dismissal on the shareholder derivative lawsuits.
−Removed: On January 18, 2022, the Company was named as a defendant in a lawsuit filed in the Supreme Court of the State of New York, County of New York styled Harold Chizick and Jennifer Chizick v.
−Removed: Genius Brands International, Inc., ChizComm Ltd., Index No.
−Removed: 650278/2022, alleging:
−Removed: (1) breach of employment agreement, (2) breach of duty of good faith, (3) constructive dismissal, (4) indemnification, (5) violation of the Employment Standards Act 2000 of Ontario, and (6) defamation.
−Removed: On October 3, 2022, the parties reached a full and complete settlement of the New York state action and the AAA arbitration proceeding and both proceedings have been dismissed with prejudice.
+Added: The Company is also a nominal defendant in an action filed on January 11, 2022, in the U.S.
+Added: District Court for the Southern District of New York and styled Todd Augenbaum v.
+Added: Anson Investments Master Fund LP, et al., Case No.
+Added: 1:22-cv-00249 VM.
+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.
+Added: No Company officer or director is among the defendants.
+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: At the first pretrial conference, held on November 16, 2023, the Court asked the parties to address the motion to dismiss.
+Added: Following the hearing, the Court requested supplemental letter briefs on one issue, which letters were submitted by the parties simultaneously just before Thanksgiving.
+Added: The motion is now under submission.
+Added: The Company cannot predict when or how the court will decide the motion, 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.
3 unchanged sentences
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.