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Item 9A. Controls and Procedures

2021-03-31 compared with 2020-03-30 · 1773 added, 1181 removed, 1086 unchanged (73% of the section changed)

23 unchanged sentences

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, 2019, our internal control over financial reporting were

effective based on those criteria.

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, 2019 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 Securities and Exchange Commission rules and forms.

Changes in Internal Control over Financial

There were no changes in our internal control

over financial reporting that occurred during the fourth quarter of our last fiscal year that have materially affected, or are

reasonably likely to materially affect, our internal control over financial reporting.

financial and accounting officer), has concluded that, as of December 31, 2020, our internal control over financial reporting

were effective based on those criteria.

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, 2020 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 Securities and Exchange Commission rules and forms.

Changes in Internal Control

over Financial Reporting

There were no changes in our internal

control over financial reporting that occurred during the fourth quarter of our last fiscal year that have materially affected,

or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

2 unchanged sentences

Executive Officers, Promoters and Control Persons

The following table sets forth information

about our directors and executive officers as of March 30, 2020:

The following

table sets forth information about our directors and executive officers as of March 30, 2021:

Chief Executive Officer and Chairman of the Board of Directors

Chief Financial Officer

General Counsel, Corporate Secretary

Chief Operating Officer and Corporate Secretary

Joseph “Gray”

4 unchanged sentences

Anthony Thomopoulos *

Karen McTier *

* 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.

On March 19, 2020, Bernard Cahill due to

personal reasons, decided he could no longer maintain his position as a member of the Board and as a member of the Audit Committee

of the Board, and departed effective as of that date.

Cahill’s departure was not as a result of any disagreement with

the Company on any matters related to the Company’s operations, policies or practices.

The following

sections of the Company’s definitive Proxy Statement relating to its 2020 Annual Meeting of Stockholders, which will be filed

no later than 120 days after the end of the Company’s fiscal year on December 31, 2019 (the “2020 Proxy Statement”),

are incorporated by reference:

“The Board of Directors,”

“Family Relationships,”

“Board Leadership

and Role in Risk Oversight,”

“Committees of the Board of Directors and Meetings”

and “Code of Conduct and

Ethics”.

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”

Clark Hallren, Michael Klein, Lynne

Segall, and Karen McTier and Anthony Thomopoulos.

Andy Heyward, 72, 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/

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 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.

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.

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 ;

The Real Ghostbusters ;

Strawberry Shortcake ;

and the Chipmunks ;

Hello Kitty’s Furry Tale Theater;

The Super Mario Brothers Super Show;

The Adventures of Sonic the

Sabrina The Animated Series ;

Captain Planet and the Planeteers ;

Liberty’s Kids , and

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, 61 , has been

our Chief Financial Officer since April 18, 2018.

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 Securities and Exchange Commission, including initial

public offerings.

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

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 left Artisan

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

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.

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

Michael Jaffa , 55 ,

has been 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 South East 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”

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

Davis served as the 37 th governor of California

from 1998 until 2003.

Davis currently serves as “Of Counsel”

in the Los Angeles, California office of Loeb &

Davis has served on the Board of Directors of DIC Entertainment and is a member of the bi-partisan 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

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

Clark Hallren, 58, 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.

From August 2012 to August 2014, 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.

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 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

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 , 72 , was

appointed as a Director of the Company since March 7, 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

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.

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,

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 financings.

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.

He also has led several real estate ventures in Southern California

including the Water Gardens phase two in Santa Monica.

Klein 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, 74, has been

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

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

From 2003 through 2009 Ms.

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.

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 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, 67, 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, Ms.

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

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.

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

Anthony Thomopoulos, 82, 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 served as the President of International Family Entertainment, Inc.

From June 2001 to January 2004, Mr.

Thomopoulos served as the Chairman and Chief Executive Officer of Media Arts Group,

a NYSE listed company.

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.

Since he founded it in 2008, Mr.

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

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.

Karen McTier , 61 ,

has been a director of the Company since September 7, 2020.

McTier served as Executive VP, World-Wide Consumer

Products for Warner Bros.

Her career at Warner Bros spanned over two decades from 1988-2016.

McTier managed a

vast portfolio of brands including Batman, Superman, Wonder Woman, Wizard of Oz, Friends, Looney Tunes, Scooby Doo, and Harry

Potter, to name a few.

In this role, Ms.

McTier managed over 300 employees (including offices in 13 countries) and had

oversight of the global licensing business including sales, promotions and partnerships, marketing, retail, creative, product

development, e-commerce, themed entertainment and live events.

McTier worked closely with Warner Bros.

WBTV, DC Comics and Cartoon Network on new content development relevant to merchandising, including numerous animated and live

action television series.

McTier has an in-depth of knowledge of all product categories, and broad experience working

with major retailers and licensees around the globe.

McTier was also instrumental in the negotiation,

execution and launch of Universal’s Wizarding World of Harry Potter in Orlando, Hollywood and Osaka, Japan.

In addition to

Universal, McTier played a key role in managing other theme park projects including the development of Warner Bros.

World Abu Dhabi,

Movie World Australia and Six Flags Theme Parks.

McTier has an expertise in working with producers, directors and

authors to bring their vision to life—reaching fans of all ages with targeted merchandise and experiential projects.

McTier set up a consulting practice, handling business development for a themed entertainment client,

IdeaRworks, and since 2019, McTier’s company serves as the licensing agency of record for Lionsgate Films.

Ms McTier was

chosen as a director based on her licensing and consumer products experience.

Family Relationships

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 seven 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.

16(a) Beneficial Ownership Reporting

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 SEV 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 2020, all Section 16(a) filings were made with the SEC on a timely

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.

Board Committees

During 2020, our Board

of Directors held 8 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 2020:

Nominating Committee

Joseph “Gray”

Clark Hallren

Margaret Loesch

Anthony Thomopoulos

Michael Klein (2)

Meetings in 2020:

Effective as of March 19, 2020, Mr.

joined as a member of our nominating committee (the “Nominating Committee”)

Effective as March 19, 2020, Mr.

Cahill as a member of our audit committee (the “Audit Committee”), and also joined as a member of the

Nominating Committee.

Effective September 7,

McTier 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 (the “Compensation Committee”) and

a Nominating 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

The Audit Committee’s responsibilities include:

selecting, hiring, and compensating our independent auditors;

evaluating the qualifications, independence and performance of our independent auditors;

overseeing and monitoring the integrity of our financial statements and our compliance with legal

and regulatory requirements as they relate to financial statements or accounting matters;

approving the audit and non-audit services to be performed by our independent auditor;

reviewing with the independent auditor the design, implementation, adequacy and effectiveness of

our internal controls and our critical accounting policies;

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.

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.

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:

reviewing and recommending to our board of directors the compensation of our Chief Executive Officer

and other executive officers, and the outside directors;

conducting a performance review of our Chief Executive Officer;

reviewing our compensation policies;

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

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 .

Nominating Committee

Davis and Klein serve on our Nominating Committee.

The Nominating Committee’s responsibilities include:

identifying qualified individuals to serve as members of our Board of Directors;

review the qualifications and performance of incumbent directors;

review and consider candidates who may be suggested by any director or executive officer or by

an stockholder of the Company;

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 .

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.

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

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

resumes and other forms of job inquiries

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.

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.

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 2020 and 2019.

Name and Principal Position

Andy Heyward (2)

Chief Executive Officer

Chief Financial Officer

695,000–

Chief Operating Officer and General Counsel and Corporate Secretary

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.

In association with the Merger, Mr.

Heyward was appointed Chief Executive Officer of the Company on November 15, 2013.

Per his employment agreement, Mr.

Heyward is entitled to an annual salary of $200,000.

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

Under his new employment agreement, Mr.

Heyward is 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 $430,000.

During 2020, Mr.

Heyward was paid $161,200 in producers fees for the production of Rainbow Rangers Season 1 and $322,400 in producers fees for the production of Rainbow Rangers season 2.

During 2020, Mr.

Heyward was also paid $11,370 in interest on the Senior Convertible Notes and $3,000 in board fees for his attendance at the unscheduled board meetings and the Company paid $380,989 in security costs at his residence.

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.

Denton received $5,550 for consulting services prior to becoming the CFO.

Denton also received

$49,962 in relocation expenses for his relocation from Salt Lake City, Utah to Los Angeles, California.

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 September 26, 2018, Mr.

Denton received

85,088 options with a strike price of $2.09.

On March 7, 2019, the Company granted 15,000

stock options to Mr.

Denton with a strike price of $1.99 and a term of five years.

The options vested on December 31, 2019.

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

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

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

Under his 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 September 26, 2018, Mr.

Jaffa received

85,088 options with a strike price of $2.09.

On March 7, 2019, the Company granted 15,000 stock options to Mr.

Jaffa with a strike price of $1.99 and a term of five years.

The options vested on December 31, 2019.

On December 7, 2020, the Company

granted 1,000,000 stock options to Mr.

Jaffa with a strike price of $1.39 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 to Mr.

The RSUs vest 166,666 on the first anniversary, 166,666 on the second anniversary and 166,668

on the third anniversary.

Narrative Disclosure to Summary Compensation

In 2020, the Company

paid $311,717 to Andy Heyward, $261,158 to Robert L.

Denton and $261,880 to Michael A.

In 2019, the Company paid $212,500

Heyward, $156,871 to Mr.

Denton and $159,375 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.

August 31, 2018, Llama Productions LLC entered into an animation production services agreement with Mr.

Heyward for services as

a producer for which he received $124,000 through the course of production of the Company’s animated series Llama

Llama Season 2.

Pursuant to his employment agreement

dated November 16, 2018, Mr.

Heyward is entitled to an Executive Producer fee of $12,400 per half hour episode for each episode

for which he provides services as an executive producer.

The first identified series under this employment agreement is Rainbow

As of March 31, 2019, twenty-six half hours had been delivered and, accordingly, Mr.

Heyward was owed $322,400.

The second series identified was Rainbow Rangers Season 2.

Thirteen half hours of Rainbow Rangers Season

2 were delivered in the fourth quarter of 2019 and, accordingly, Mr.

Heyward was owed $161,200.

Heyward was paid the

total amount due to him of $483,600 for his producer services on March 17, 2020.

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.

In fiscal 2019, Mr.

Denton and Mr.

each paid a $25,000 bonus in fiscal 2020 Mr.

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

Denton and Mr.

Jaffa were each paid two

bonuses totaling $150,000.

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.

As of December 31, 2019, no options granted to our named executive officers have been modified or repriced.

On December 7, 2020, Mr.

Heyward 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 with a value of $10,425,000.

On September 26, 2018, Mr.

received 85,088 options with a value of $155,517.

On March 7, 2019, Mr.

Denton received 15,000 options with a value of $21,814.

On December 7, 2020, Mr.

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

On September 26, 2018, Mr.

received 85,088 options with a value of $155,517.

On March 7, 2019, Mr.

Jaffa received 15,000 options with a value of $21,814.

On December 7, 2020, Mr.

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

Employment Agreements

On November 16, 2020, the Company

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

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.

also eligible to be paid a producing fee equal to $12,500 per 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.

Additionally, under

the terms of the Andy Heyward 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 Andy Heyward Employment Agreement, Mr.

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

Options granted to Mr.

Heyward were fully vested on the date of grant.

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.

In the event of Mr.

Heyward’s death or resignation, all

compensation then currently due would be payable to his estate.

The CEO Employment Agreement extends and modifies Mr.

Heyward’s

current employment agreement such that Mr.

Heyward is eligible to receive, during the five-year term of the CEO Employment Agreement

(i) an annualized base salary of $440,000, (ii) quarterly performance bonuses of up to $55,000, and (iii) producer fees of up to

$12,500 per one-half hour episode produced by the Company for up to 52 one-half hour episodes.

The CEO Employment Agreement also entitles

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 December 7, 2020, the Company entered

into an amended and restated agreement, (The COO and General Counsel Employment Agreement) with Michael A.

Jaffa in which Mr.

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

Jaffa will be entitled

to be paid a salary at the annual rate of $325,000 per year.

The term of the agreement is three years.

In addition, Mr.

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 General Counsel Employment Agreement and each anniversary thereafter during

the term, subject to Mr.

Jaffa’s continued employment.

The agreement granted Mr.

Jaffa 1,000,000 stock option and 500,00

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.

granted to Mr.

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

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.

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.

On December 7, 2020, the Company entered

into an Employment Agreement with Robert L.

Denton (the “CFO Employment Agreement”), whereby Mr.

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, in consideration for an annual salary of $300,000.

Under the terms of the Robert Denton Employment

Agreement, Mr.

Denton shall be entitled to an annual discretionary bonus based on his performance.

The Robert Denton Employment

Agreement may be terminated either (i) upon the end of the term, (ii) at any time by the Company for “Cause”

in the Robert Denton Employment Agreement) or (iii) upon an event of retirement, death or disability.

Upon the termination or expiration

Denton’s employment with the Company and for a period of three years thereafter, certain amounts paid to Mr.

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 clawback 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.

Denton with, during the one year term of the CFO Employment Agreement (i) an annualized base salary of $300,000, (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 CFO Employment Agreement and continuing on each anniversary

thereafter during the term, subject to Mr.

Denton’s continued employment.

The agreement granted Mr.

Denton 975,000 stock

options and 475,000 RSUs.

The Options granted to Mr.

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

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

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.

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.

Retirement Benefits

As of December 31, 2020, 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, 2020, the Company

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

Outstanding Equity Awards at Fiscal

The following table sets forth outstanding

stock option awards as of December 31, 2020 to each of the named executive officers.

As of December 31, 2020, the Company has not

granted any stock awards to its executive officers other than to Mr.

Denton and Mr.

Jaffa as noted below.

Number of securities

underlying unexercised options (#) exercisable

Number of securities

underlying unexercised options (#) unexercisable

Option exercise price

Option expiration date

Equity incentive

Number of securities underlying unearned Restricted Stock Units (#)

5,000,000 (5)

7,500,000 (6)

__________________

Denton’s and Mr.

Jaffa’s options vest one

third per year for three years.

Denton’s and Mr.

Jaffa’s options

vested as of December 31, 2020.

Denton’s options vest 380,000 upon grant and 190,000

options vest annually for the next three years on the anniversary dates.

Jaffa’s options vest 400,000 upon grant and 200,000

options vest annually for the next three years on the anniversary dates.

Heyward’s options vest upon the grant date.

Heyward was granted 7,500,000 RSUs, with 1,875,000

vesting on each of the next four anniversary dates.

Heyward was also granted 7,500,000 performance based RSUs that, if awarded,

vest 1,875,000 on each of the next four anniversary dates.

Denton’s RSUs vest 155,000 on the first anniversary

date, 158,000 on the second anniversary date and 162,000 on the third anniversary date.

Jaffa’s RSUs vest 166,666 on the first anniversary

date, 166,666 on the second anniversary date and 166,668 on the third anniversary date.

Director Compensation

The following table sets forth with respect to

the named directors, compensation information inclusive of equity awards and payments made for the year ended December 31, 2020 in the

director's capacity as director.

Bernard Cahill (2)

Joseph “Gray”

Clark Hallren

Karen McTier (3)

Margaret Loesch (4)

Anthony Thomopoulos

Michael Klein (5)

______________________

Directors, other than Mr.

Heyward, earn $5,000 for each meeting attended physically, $2,500 per meeting for each meeting attended telephonically, and nothing for non-attendance and $1,000 for unscheduled meetings.

These cash payments are paid to the Board member at the subsequent board meeting.

Cahill resigned from the Board effective March 19, 2020.

McTier was appointed to the Board effective September 7,

Loesch was paid $27,000 for her services on the Board and

$52,500 for her services as Executive Chairperson of the Kartoon Channel!

Klein was appointed to our Board

effective March 7, 2019.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the beneficial

ownership of shares of our $0.001 par value common stock as of March 29, 2020, known by us through transfer agent and other records

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

(ii) each of our directors;

(iii) each of our named executive officers;

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 300,273,163 shares of common stock outstanding as

of March 29, 2020.

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

Nature of Beneficial

Ownership (1)

Directors and Named Executive Officers

Michael Klein

Michael Jaffa

Anthony Thomopoulos

Joseph (Gray) Davis

Clark Hallren

Margaret Loesch

All current executive officers and directors as a group (consisting of 10 persons)

5% Stockholders

___________________

* Indicates ownership less than 1%

Applicable percentage ownership is based on 300,273,163 shares of common stock outstanding as of March 29, 2020, together with securities exercisable or convertible into shares of common stock within 60 days of March 29, 2020.

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission 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 March 29, 2020 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) 13,464,282 shares of common stock held by Andy Heyward;

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

(iv) 5,000,000 options to acquire shares of common stock issuable now or within 60 days of March 29, 2020 upon the exercise of stock options.

Consists of 480,088 shares of common stock issuable now or within 60 days of March 29, 2020 upon the exercise of stock options granted to Mr.

Consists of 100,000 shares of common stock and 120,000 shares of common stock issuable upon exercise of certain warrants.

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

Consists of 115 shares of common stock owned by Mr.

RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Certain Relationships and Related Party Transactions

Commission 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.

On August 31, 2018, Llama entered into an animation production

services agreement with Mr.

Heyward for services as a producer for which he is to receive $124,000 through the course of production

of the Company’s animated series Llama Llama Season 2.

As of December 31, 2019, Mr.

Heyward was paid $124,000.

further amounts are due.

Pursuant to his employment agreements dated

November 16, 2018 and November 16, 2020, Mr.

Heyward is entitled to an Executive Producer fee of $12,400 per half hour episode

for each episode he provides services as an executive producer.

The first identified series under this employment agreement is

Rainbow Rangers.

During the year ended December 31, 2020, 13 half hours had been delivered and accordingly Mr.

paid $161,200, The second identified series under this employment agreement is Rainbow Rangers Season 2.

During the year

ended December 31, 2020, 26 half hours had been delivered and accordingly Mr.

Heyward is owed $322,400.

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.

the year ended December 31, 2020, the Company earned $0 in royalties from this agreement.

On September 17, 2019, Mr.

Heyward purchased

$500,000 of the Secured Convertible Notes from another holder.

The Company did not receive any proceeds from this transaction.

October 2, 2019, Mr.

Heyward purchased 1,000,000 shares of the Company’s common stock for an aggregate purchase price of

$760,000, or $0.76 per share.

On March 11, 2020, Mr.

Heyward purchased

$1,000,000 of the 2020 Convertible Notes with an original discount of $250,000.

On June 19, 2020, Mr.

Heyward received

5,658,474 shares of Common Stock upon the cashless exercise of 6,119,048 warrants.

On June 23 , 2020, Mr.

Heyward received 5,952,381 shares of Common Stock upon conversion of $1,250,000 of 2020 Convertible Notes.

On December 7, 2020, Mr.

Heyward was granted

7,500,000 RSUs, which vest 1,875,000 on each of the next four anniversary dates.

Heyward was also granted 7,500,000 performance

based RSUs that, if awarded, vest 1,875,000 on each of the next four anniversary dates.

On December 7, 2020, Mr.

Heyward’s

was granted 5,000,000 options to purchase shares of the Company’s Common Stock at $1.39 per share.

The options vest on the

During the year ended December 31, 2020,

Heyward was paid a bonus of $73,528, $11,370 in interest on the Senior Convertible Notes, and $3,000 in board fees for his

attendance at the unscheduled board meetings.

During the year ended December 31, 2020,

the Company paid $380,989 for security at Mr.

Heyward’s residence.

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

Corporate Governance

We believe that

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

section describes key corporate governance practices that we have adopted.

Executive Compensation

The response to

this item is incorporate by reference from the discussion responsive thereto under the caption “Executive Officer and Director

Compensation”

in our 2020 Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The response to this item is incorporated by reference from

this discussion responsive thereto under the captions “Security Ownership of Certain Beneficial Owners and Management”

and “Equity Compensation Plan Information”

in our 2020 Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence

The response to this item is incorporated

by reference from this discussion responsive thereto under the captions “Certain Relationships and Related Person Transactions”

and “Management and Corporate Governance”

in our 2020 Proxy Statement.

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”

Our determination of the independence

of our directors is made using the definition of “independent”

contained in the listing standards of the Nasdaq Capital

On the basis of information solicited from each director, the board has determined that each of each of Messrs.

Hallren, Klein and Thomopoulos as well as Ms.

Segall and Ms.

Loesch are independent directors within the meaning of such rules.

Hallren, Klein, Thomopoulos and McTier as well as Ms.

Segall are independent directors within the meaning of such rules.

Principal Accounting Fees and Services

The response to this item is incorporated

by reference from this discussion responsive thereto under the caption “Independent Registered Public Accounting Firm (Proposal

in our 2020 Proxy Statement.

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, 2020 and 2019 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-Related Fees

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.

Audit-Related services are for assurance and related services that are traditionally performed by the independent auditor, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.

Tax services include all services performed by the independent auditor’s tax personnel except those services specifically related to the audit of the financial statements, and includes fees in the areas of tax compliance, tax planning, and tax advice.

Other Fees are those associated with services not captured in the other categories.

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.

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 two fiscal years.

Exhibits, Financial Statement Schedules

Financial Statements

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.

See Index to Consolidated Financial Statements at Item

Financial Statement Schedules have been omitted as they

are either not required, not applicable, or the information is otherwise included.

EXHIBIT INDEX

Agreement and Plan of Reorganization between Genius Brands International, Inc., A Squared Entertainment LLC, A Squared Holdings LLC and A2E Acquisition LLC dated November 15, 2013 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 20, 2013)

of Incorporation of Genius Brands International Inc., as amended (Incorporated by reference to the Company’s Annual

Report on Form 10-K , filed with the SEC on April 2, 2018 )

Articles of Incorporation of Genius Brands International Inc., as amended

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)

10 unchanged sentences

Form of Registered Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2019)

of Private Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on

February 15, 2019)

of Waiver Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February

Description of Capital Stock

Form of Private Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2019)

Form of Waiver Warrant (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 15, 2019)

Description of Capital Stock (Incorporated by reference to the Company’s Annual Report on Form 10-K, filed with the SEC on March 30, 2020)

Form of Amendment to Secured Convertible Note (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 22, 2019)

6 unchanged sentences

Form of Stock Option Grant Notice (Incorporated by reference from Registration Statement on Form 10 filed with the SEC on May 4, 2011)

Form of Registration Rights Agreement between Genius Brands International, Inc.

and the Investors signatory thereto (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 20, 2013)

Employment Agreement dated November 15, 2013 between Genius Brands International, Inc.

2 unchanged sentences

and ROAR LLC (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 20, 2013)

Form of Securities Purchase Agreement (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2014)

Form of Registration Rights Agreement (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on May 19, 2014)

10.10&dagger;

1 unchanged sentence

2015 Incentive Plan, as amended (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2017)

Form of Securities Purchase Agreement (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2015)

Form of Registration Rights Agreement (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on November 4, 2015)

Loan and Security Agreement dated August 5, 2016 between Genius Brands International, Inc.

3 unchanged sentences

(Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 17, 2017)

Form of Warrant Exercise Agreement dated February 9, 2017 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on February 10, 2017)

Securities Purchase Agreement dated October 3, 2017 (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on October 3, 2017)

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)

10 unchanged sentences

10.24&dagger;

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)

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)

Amendment, Waiver and Consent Agreement, dated as of July 22, 2019, by and among the Company and the signatories identified therein (Incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on July 22, 2019)

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List of Subsidiaries

Consent of Squar Milner LLP

Consent of Baker Tilly US LLP

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002

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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 Robert L.

Denton, 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.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose

signature appears below constitutes and appoints Andy Heyward and Robert L.

Denton, 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

Pursuant to the requirements of Section

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Chief Executive Officer (Principal Executive Officer)

/s/ Robert L.

March 31, 2020

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Margaret Loesch

/s/ Karen McTier Karen McTier

March 31, 2020

GENIUS BRANDS INTERNATIONAL, INC.

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Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Genius Brands International, Inc.

We have audited the accompanying consolidated balance

sheets of Genius Brands International, Inc.

and its subsidiaries (the “Company”) as of December 31, 2020 and 2019,

2018, the related consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for the years

then ended, and the related notes to the consolidated financial statements (collectively, the “financial statements”).

the related consolidated statements of operations, comprehensive income and 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

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principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial

statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated

financial statements, the Company has suffered recurring losses, negative cash flows from operations and has an accumulated deficit

that raise substantial doubt about its ability to continue as a going concern.

In addition, with respect to the ongoing and evolving

coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak

has caused substantial disruption in international and U.S.

economies and markets and if repercussions of the outbreak are prolonged,

could have a significant adverse impact on the Company’s business.

Management's plans in regard to these matters are also

described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of

this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States

of America) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S.

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 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 financial statements are the responsibility of the

Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States of America)

(“PCAOB”) and are required to be independent with respect to the Company in accordance with 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 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.

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reasonable basis for our opinion.

/s/ Squar Milner LLP

Critical Audit Matters

The critical audit matters communicated below

are matters arising from the current year audit of the financial statements that were communicated to the audit committee and that:

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.

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.

How the Critical Audit Matter Was

Addressed in the 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.

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.

Convertible Debt Financing

Critical Audit Matter Description

As described in Note 9 to the consolidated

financial statements, the Company issued a convertible note to investors in the aggregate principal amount of $13,500,000 along with a

warrant to purchase 65,476,190 shares, subject to adjustments of exercise price.

The Company accounted for the note as a liability and

the conversion option and warrants as freestanding instruments.

We identified the convertible debt financing

as a critical audit matter.

Accounting for the issuance of convertible note was complex due to the use of complex valuation models to

estimate the value of the note, embedded conversion feature, and warrants.

The inherent estimation uncertainty was primarily attributed

to assumptions used in the valuation models which involved a high degree of subjectivity.

How the Critical Audit Matter Was

Addressed in the Audit

The primary procedures we performed

to address this critical audit matter included:

Obtaining an understanding of the Company’s process to account for the

issuance of convertible note and warrants.

Reviewing the convertible note and warrant agreements.

Evaluating management's memorandum for accounting treatment and management specialist’s

valuation on the conversion option.

Testing the completeness and accuracy of the underlying data used in the valuation

models by tracing to terms contained in the note and warrant agreement.

With the assistance of auditor’s valuation specialist, evaluating the

valuation methodology used by the Company and significant assumptions used in the valuation model by evaluating individual assumptions

used by management.

/s/ Baker Tilly US, LLP

We have served as the Company's auditor since 2016.

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Consolidated Balance Sheets

As of December 31, 2019, and December

of December 31, 2020, and December 31, 2019

December 31, 2020

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Cash and Cash Equivalents

Restricted Cash

$ 100,456,324

Accounts Receivable, net

Other Receivable

Prepaid and Other Assets

Inventory, net

Prepaid Expenses

Total Current Assets

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Lease Deposits

Investment in Chizcomm Entities

Investment in Stan Lee Universe, LLC

Intangible Assets, net

$ 134,201,074

LIABILITIES AND STOCKHOLDERS’

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Deferred Revenue

Senior Secured Convertible Notes, net

Secured Convertible Notes, net

Payroll Protection Program

Warrant Derivative Liability

Lease Liability

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Total Liabilities and Stockholders’

$ 134,201,074

The accompanying notes are an integral part

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Consolidated Statements of Operations

Years Ended December 31, 2019 and 2018

Years Ended December 31, 2020 and December 31, 2019

Twelve Months Ended

December 31, 2020

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General and Administrative

Impairment Loss

Total Operating Expenses

Loss from Operations

(17,882,342 )

Other Income (Expense):

Interest Income

Loss on Extinguished Debt

Warrant Modification Expense

Loss on Foreign Exchange

Loss on Lease Termination

Warrant Revaluation Expense

(210,895,356 )

Conversion Option Revaluation Expense

(171,835,729 )

Sub-Lease Income

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Net Other Income (Expense)

(383,787,463 )

Loss Before Income Tax Expense

(401,669,805 )

(11,481,245 )

Income Tax Expense

(401,669,805 )

(11,481,245 )

Beneficial Conversion Feature on Preferred Stock

Net Loss Applicable to Common Shareholders

$ (401,669,805 )

$ (14,861,534 )

Net Loss per Common Share (Basic And Diluted)

Weighted Average Shares Outstanding (Basic and Diluted)

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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Years Ended December 31, 2020 and December 31, 2019

Twelve Months Ended

December 31, 2020

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$ (14,861,534 )

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.

Consolidated Statements of Stockholders'

Years Ended December 31, 2019 and 2018

Paid-In Capital

Accumulated Comprehensive Loss

Consolidated Statements of Stockholders' Equity

Years Ended December 31, 2020 and December 31, 2019

Additional Paid-In

Other Comprehensive

Balance, December 31, 2018

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(66,047,135 )

Balance, December 31, 2017

$ (41,551,497 )

Retained Earnings Adjustment (ASC 606)

Issuance of Common Stock in Registered Direct Offering, net

Conversion of Preferred Shares

Issuance of Common Stock for Services

Value of Preferred Stock Conversion

Share Based Compensation

Value of Beneficial Conversion Feature

Value of Beneficial Conversion Feature On Senior Secured Notes

Value of Beneficial Conversion Feature On Secured Convertible Notes

Proceeds from Securities Purchase Agreement, Net

Warrant Exercise

Note Conversion

Derivative Liability Adjustment

Warrant Revaluation :

Warrants Issued

(401,669,805 )

Balance, December 31, 2020

$ 588,500,680

$ (469,557,324 )

$ 119,196,677

The accompanying notes are an integral part

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Genius Brands International, Inc.

Consolidated Statements of Cash Flows

Years Ended December 31, 2019 and 2018

Statements of Cash Flows

Years Ended December 31, 2020 and December 31, 2019

December 31, 2020

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Cash Flows from Operating Activities:

$ (401,669,805 )

$ (11,481,245 )

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:

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Stock Issued for Services

Stock Compensation Expense

Warrant Modification Expense

Loss On Extinguished Debt

Loss on Impairment of Assets

Share Based Compensation Expense

Warrant Revaluation Expense

Loss On Lease Termination

Loss On Extinguishment of Debt

Conversion Option Revaluation Expense

Debt Discount in Excess of the Principal

Decrease (Increase) in Operating Assets:

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Other Receivable

Prepaid & Other Assets

Inventory, net

Prepaid Expenses

Lease Deposits

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Cash Flows from Investing Activities:

Investment in Stan Lee Universe, LLC

Investment in Chizcom Entities

Investment in Intangible Assets, net

Purchase of Property & Equipment

Investment in Property & Equipment

Net Cash Used in Investing Activities

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Proceeds From Warrant Exchange

(Repayment)/Proceeds on Secured Convertible Notes

Proceeds/(Repayment) on Production Facility, Net

Proceeds from Senior Secured Convertible Notes, net

Proceeds from Payroll Protection Program

Collection Of Investor Notes

Repayment of Secured Convertible Notes

Note Conversion Costs

Repayment of Production Facility, net

Net Cash Provided by Financing Activities

Net Decrease in Cash, Cash Equivalents, and Restricted Cash

Beginning Cash, Cash Equivalents, and Restricted Cash

Ending Cash, Cash Equivalents, and Restricted Cash

Net Increase/(Decrease) in Cash and Cash Equivalents

Beginning Cash and Cash Equivalents

Ending Cash and Cash Equivalents

$ 100,456,324

Supplemental Disclosures of Cash Flow Information:

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Capitalization of Operating Lease Right of Use Asset

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

The accompanying notes are an integral part

of these consolidated financial statements.

Genius Brands

International, Inc.

And Subsidiaries

Genius Brands International, Inc.

Notes to Consolidated Financial Statements

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and licenses multimedia content.

Led by experienced industry personel, we distribute our content in all formats as well as a broad

Led by experienced industry personnel, we distribute our content in all formats as well as a broad

range of consumer products based on our characters.

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the preschool property Rainbow Rangers , which debuted in November 2018 on Nickelodeon and which was renewed for a second

season and preschool property Llama Llama ;

which debuted on Netflix in January 2018 and was renewed by Netflix for a second

season and preschool property Llama Llama, which debuted on Netflix in January 2018 and was renewed by Netflix for

a second season.

Our library titles include the award-winning Baby Genius , adventure comedy Thomas Edison's Secret Lab ®

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Dish, Sling and Zumo, as well as Connected TV.

We are also developing an all-new animated series, Stan Lee’s Superhero

Kindergarten with Stan Lee’s Pow!

Entertainment, Oak Productions and Alibaba.

Arnold Schwarzenegger lends his voice

as the lead and is also an Executive Producer on the series.

The show will be broadcast in the United States on Amazon Prime and

the Company’s wholly owned distribution outlet, Kartoon Channel!.

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 are finalizing the details of the venture.

Through this agreement we are assuming 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, from which Genius Brands plans

to develop and license approximately multiple properties each year.

In addition, we act as licensing agent

for Penguin Young Readers, a division of Penguin Random House LLC who owns or controls the underlying rights to Llama Llama ,

for Penguin Young Readers, a division of Penguin Random House LLC which owns or controls the underlying rights to Llama Llama ,

leveraging our existing licensing infrastructure to expand this brand into new product categories, new retailers, and new territories.

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The Company’s management cannot at this point estimate the impact of the outbreak

on it’s business and no provision for this outbreak are reflected in the accompanying financial statements

on its business and no provision for this outbreak are reflected in the accompanying financial statements

Historically, the Company has incurred

For the years ended December 31, 2020 and 2019, the Company reported net losses of $401,669,805 and $11,481,245, respectively.

The Company reported net cash used in operating activities of $6,251,150 and $8,008,010 for the years ended December 31, 2019

and 2018, respectively.

The Company reported net cash used in operating activities of $7,844,715 and $6,251,150 for the years ended December 31, 2020 and

2019, respectively.

As of December 31, 2020, the Company had an accumulated deficit of $469,557,324 and total stockholders’

equity of $119,196,677.

As a result, the Company will require additional capital to fund its operations and execute its business

As of December 31, 2019, the Company had cash and cash equivalents of $305,121, which is not sufficient to fund the Company’s

planned operations and production through one year after the date the consolidated financial statements are issued, and accordingly,

there is substantial doubt about the Company’s ability to continue as a going concern.

The analysis used to determine the Company’s

ability as a going concern does not include cash sources outside the Company’s direct control that management expects to

be available within the next 12 months.

Management is in negotiations to obtain new long-term financing and has a long history

of successful capital raises with its investment bank group that will be leading the upcoming round.

Both the Company and the Investment

banking group are confident in their ability to raise sufficient capital to meet the Company’s obligations and fund its production

slate for the coming twelve months.

There is inherent uncertainty and business risks that the Company will be able to raise such

additional capital.

The Company also expects revenue from operations to increase in the third quarter and for the subsequent quarters

based on executed licensing agreements.

These consolidated financial statements have been prepared on a going concern basis and

do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the

Company can no longer continue as a going concern.

During 2019, the company completed five transactions that enhanced

cash and working capital balances:

Securities Purchase Agreement

On February 19, 2019, the Company entered

into a securities purchase agreement with a certain accredited investor pursuant to which it sold 945,894 shares of its common

stock, par value $0.001 per share ( the “Common Stock”), and warrants to purchase up to 945,894 shares of Common Stock,

or the registered warrants, to such investor (the “February 2019 Offering”).

The Company received $1,757,552 of net

proceeds from this offering.

Each share of Common Stock was accompanied by a registered warrant to purchase one share of Common

Stock at an exercise price of $2.12.

Each share of Common Stock and accompanying registered warrant were sold at a combined purchase

price of $2.12.

The shares of Common Stock and registered warrants were purchased together and were issued separately and were

immediately separable upon issuance.

In a concurrent private placement, the Company also sold to the purchaser in the February

2019 Offering, unregistered warrants to purchase up to an additional 945,894 shares of our Common Stock.

Amendment, Waiver and Consent

In connection with the February 2019 Offering

and concurrent private placement, the Company entered into an amendment, waiver and consent agreement, or the “February Amendment,

Waiver and Consent Agreement,”

with certain holders of its 10% Secured Convertible Notes which were issued pursuant to a

securities purchase agreement, dated August 17, 2018, by and among the Company and the purchasers identified on the signature pages

thereto, or the notes purchase agreement.

Pursuant to the February Amendment, Waiver and Consent Agreement, such holders agreed

to amend the notes purchase agreement, waive any applicable rights and remedies under the notes purchase agreement, and consent

to the February 2019 Offering and concurrent private placement.

In consideration for such February Amendment, Waiver and Consent

Agreement, the Company agreed to issue all holders of its 10% Secured Convertible Notes warrants to purchase up to an aggregate

amount of 1,800,000 shares of our Common Stock.

Such warrants have an exercise price of $2.55 per share, will become exercisable

commencing six months and one day from the date of issuance and will expire five (5) years from the date of issuance.

The issuance of the warrants resulted in

a modification of debt in accordance with ASC 470 and is characterized as an extinguishment of debt in accordance with ASC-470-50-40.

In accordance with ASC-470-50-40-2 the Company derecognized the existing debt as if it was extinguished and recorded the new debt,

with the difference between the reacquisition price of the new debt and the net carrying amount of the extinguished debt, $2,064,193

being recorded as a loss on the extinguishment of debt.

Proposed Public Offering

On July 22, 2019, in connection with a

proposed public offering of shares of Common Stock (the “August 2019 Offering”), the Company entered into an amendment,

waiver and consent agreement (the “July Amendment, Waiver and Consent”) with certain holders constituting (i) a majority-in-interest

of the holders of its Secured Convertible Notes and (ii) 51% in interest of the shares of Common Stock issued pursuant to a securities

purchase agreement, dated as of January 8, 2018, by and among the Company and the purchasers identified on the signature pages

thereto (the “January 2018 Purchase Agreement”).

Pursuant to the July Amendment, Waiver and Consent, such holders agreed

to amend the August 2018 Purchase Agreement, the January 2018 Purchase Agreement and the Secured Convertible Notes, waive any applicable

rights and remedies under each of the August 2018 Purchase Agreement and the January 2018 Purchase Agreement, and consent to the

August 2019 Offering in consideration for (i) a reduction in the conversion price of the Secured Convertible Notes from $2.50 per

share to an amount equal to $1.515 and (ii) the issuance to the August 2018 Purchasers of new warrants to purchase the same number

of shares of Common Stock that were issued to each August 2018 Purchaser pursuant to the August 2018 Purchase Agreement (for an

aggregate of 1,800,000 shares of Common Stock to all August 2018 Purchasers) at an exercise price per share equal to $1.14 and

will become exercisable commencing six (6) months and one day from the date of issuance and will expire (5) years from the date

The issuance of the warrants resulted in

a modification of debt in accordance with ASC 470 and is characterized as an extinguishment of debt in accordance with ASC-470-50-40.

In accordance with ASC-470-50-40-2, the Company derecognized the existing debt as if it was extinguished and recorded the new debt.

The difference between the reacquisition price of the debt including the fair value of the warrants issued and the net carrying

amount of the extinguished debt amounted to $957,867.

This amount was recorded as a loss on debt extinguishment.

On August 20, 2019, pursuant to the Secured

Convertible Notes, the Company elected to make six equal monthly principal payments of $750,000.

The first payment with interest

was paid on August 23, 2019.

On September 17, 2019, the Company’s

Chief Executive Officer (“CEO”), Andy Heyward, purchased $500,000 of the Secured Convertible Notes from another holder.

The Company did not receive any proceeds from this transaction.

On September 18, 2019, 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 originally

issued on February 19, 2019, to purchase an aggregate of 945,894 shares of Common Stock, at an exercise price of $2.12 per share

and were to expire on February 19, 2020.

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 $0.76 (the “Amended Exercise Price”).

The Company received $718,879 from the exercise of the Original Warrants before paying the placement agent fee of $50,320.

induced exercise resulted in the Company recognizing and recording an “imputed dividend”

The amount was

determined as the difference in warrants’

value due to the reduction in the exercise price.

It was recorded by debiting Accumulated

Deficit and crediting Additional Paid-In Capital.

As a result, the conversion price of the

Series A Convertible Preferred Stock decreased to $0.76.

On September 20, 2019, the Company and

the holders of $1,958,334 of the Secured Convertible Notes, extended the maturity date of those Secured Convertible Notes until

January 31, 2020.

The Company also agreed to pay the 10% interest to the holders monthly instead of quarterly.

On September 20, 2019, the Company and

the holders of $687,500 of the Secured Convertible Notes, extended the maturity date of those Secured Convertible Notes until August

The Company also agreed to pay the 10% interest to the holders monthly instead of quarterly.

The extension of maturity dates was characterized

as a modification of debt in accordance with ASC-470-50-40.

To account for the debt modification, the Company established a new

effective interest rate that will amortize pre-modification debt to revised future cash flows.

No gain or loss is recognized immediately

due to the debt modification transaction.

These notes were repaid in full on March

16, 2020, as part of a new Secured Convertible Note offering.

See Subsequent Events.

Securities Purchase Agreement and Private

On October 28, 2019, we entered into a

Securities Purchase Agreement (the “Purchase Agreement”) with a certain investor named therein (the “Investor”),

pursuant to which we agreed to issue and sell, in a registered direct offering directly to the Investor (the “Registered

Offering”), an aggregate of 663,158 shares (the “Shares”) of common stock, par value $0.001 per share (“Common

Stock”), of the Company, at a purchase price of $0.76 per Share of Common Stock.

The Company received $468,720 net proceeds

from this offering.

The placement agent received a cash fee of $35,280 and warrants to purchase 46,421 shares of Common Stock at

an exercise price of $0.836 per share.

In a concurrent private placement (the

“Private Placement”

and together with the Registered Offering, the “Offerings”), we agreed to issue to

the Investor who participated in the Registered Offering warrants (the “Warrants”

and collectively with the Shares,

the “Securities”) exercisable for one share of Common Stock for an aggregate of 477,474 shares of Common Stock at an

exercise price of $0.76 per share.

Each Warrant is immediately exercisable on the date of its issuance and will expire five (5)

years from the date it became exercisable.

Subject to limited exceptions, a holder of a Warrant will not have the right to exercise

any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% of the number

of shares of Common Stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”);

provided, however, that upon 61 days’

prior notice to the Company, the holder may increase or decrease the Beneficial Ownership

Limitation, provided further that in no event shall the Beneficial Ownership Limitation exceed 9.99%.

The Warrants and the shares

of our common stock issuable from time to time upon the exercise of the Warrants were not registered under the Securities Act of

1933, as amended (the “Securities Act”), were not offered pursuant to a registration statement and were offered pursuant

to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder.

Shares of common

stock underlying the Warrants are being registered for resale by the selling stockholders pursuant to the Registration Statement

of which this prospectus forms a part.

We closed such Offerings on October 29, 2019.

Warrant Exercise Agreement

On November 3, 2015, we issued warrants

to purchase up to an aggregate of 1,443,362 shares of the Company’s common stock, par value $0.001 per share (“Common

Stock”), which have an exercise price per share of $3.30 (the “November 2015 Warrants”).

On October 5, 2017,

the Company issued warrants to purchase up to an aggregate of 1,647,691 shares of Common Stock with an exercise price per share

of $3.90 (the “October 2017 Warrants”).

On August 20, 2018, the Company issued warrants to purchase up to an aggregate

of 1,800,000 shares of Common Stock with an exercise price per share of $3.00 (the “August 2018 Warrants”).

19, 2019, the Company issued warrants to purchase up to an aggregate of 945,894 shares of Common Stock with an exercise price per

share of $2.21 (the “February 2019 Warrants”

and together with the November 2015 Warrants, the October 2017 Warrants

and the August 2018 Warrants, the “Existing Warrants”).

The November 2015 Warrants were immediately exercisable and

are set to expire on November 3, 2020.

The October 2017 Warrants were immediately exercisable and are set to expire on October

The August 2018 Warrants were immediately exercisable and are set to expire on August 20, 2023.

The February 2019 Warrants

were immediately exercisable and are set to expire on February 19, 2024.

Warrant Exercise Agreement

On December 16, 2019, the Company entered

into Warrant Exercise Agreements (the “Exercise Agreements”) with certain of the holders of the Existing Warrants to

purchase an aggregate of 3,646,135 shares of Common Stock (the “Exercising Holders”).

Pursuant to the Exercise Agreements,

the Exercising Holders and the Company agreed that, subject to any applicable beneficial ownership limitations, the Exercising

Holders would exercise their Existing Warrants (the “Investor Warrants”) for shares of Common Stock underlying such

Existing Warrants (the “Exercised Shares”) at a reduced exercise price of $0.21 per share of Common Stock.

to induce the Exercising Holders to cash exercise the Investor Warrants, the Exercise Agreements provide for the issuance of new

warrants to purchase up to an aggregate of approximately 3,646,135 shares of Common Stock (the “New Warrants”), with

such New Warrants to be issued in an amount equal to the number of the Exercised Shares underlying any Investor Warrants.

Warrants are exercisable six months and one day after issuance and terminate on the date that is five years following the initial

exercise date.

The New Warrants have an exercise price per share of $0.3004, which was the Nasdaq Official Closing Price on December

The New Warrants and the shares of Common

Stock issuable upon the exercise of the New Warrants are not being registered under the Securities Act, and are being offered pursuant

to the exemption provided in Section 4(a)(2) under the Securities Act.

The Exercised Shares are registered for resale on effective

registration statements previously filed with the Securities and Exchange Commission.

The Investor Warrants are contemplated

to be exercised contemporaneously with the execution of the Exercise Agreements.

Assuming full exercise of the Investor Warrants

and subject to the Exercise Agreements, the Company received aggregate gross proceeds of up to approximately $765,688 from the

cash exercise of the Investor Warrants by the Exercising Holders and issue an aggregate of 3,646,135 shares of Common Stock and

New Warrants to purchase an aggregate of 3,646,135 shares of Common Stock to the Exercising Holders.

The induced exercise resulted in Company recognizing an “imputed

dividend”

of $296,925 in Company’s Accumulated Deficit in equity.

The Company also recorded a warrant modification

expense in the income statement of $182,074.

The expense was recorded in relation to the warrants originally issued in connection

with debt offering.

The Special Equities Group, LLC, a division

of Bradley Woods & Co.

LTD, acted as the exclusive financial advisor for the transaction in consideration for which it shall

receive $53,598 and warrants to purchase 255,230 shares of Common Stock.

During 2018, the company completed three

transactions that enhanced cash and working capital balances:

January 2018 Private Placement

On January 8, 2018, the Company entered

into a Securities Purchase Agreement with certain accredited investors pursuant to which the Company sold approximately $1,596,341

net, of common stock and warrants to such investors (the “January 2018 Private Placement”).

The Company issued and

sold warrants to purchase 592,000 shares of common stock at an exercise price of $3.00 per share.

In addition, the company issued

to Chardan Capital Markets, LLC, as placement agent, warrants to purchase 93,000 shares of common stock at an exercise price of

$3.00 per share.

Securities Purchase Agreement

On August 17, 2018, the Company entered

into a Securities Purchase Agreement (the “August 2018 Purchase Agreement”) with certain investors, pursuant to which

the Company agreed to sell (i) an aggregate principal amount of $4.50 million in secured convertible notes, convertible into shares

of our common stock, at a conversion price of $2.50 per share (the “Secured Convertible Notes”) and (ii) warrants to

purchase 1,800,000 shares of our common stock at an exercise price of $3.00 per share (the “Warrants,”

and, together

with the Secured Convertible Notes, the “Securities”).

The Company received approximately $4,186,054 in net proceeds

from the offering.

Production Loans

On September 28, 2018, Llama Productions

LLC, a California limited liability company (“Llama”) a wholly-owned subsidiary of the Company, entered into a Loan

and Security Agreement (the “Loan and Security Agreement”) with Bank Leumi USA (the “Lender”),

pursuant to which the Lender agreed to make a secured loan in the aggregate amount of $4,186,054, to Llama (the “Loan”).

The proceeds of the Loan were or will be used to pay the majority of the expenses of producing, completing and delivering two 22-minute

episodes and sixteen 11-minute episodes of the second season of the animated series Llama Llama to be initially

exhibited on Netflix.

In addition, on September 28, 2018, Llama

and 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 5, 2016 and amended as of November 7, 2017 (the “Original Loan and Security Agreement”), was amended to (i)

reduce the loan commitment thereunder to $1,768,010, which is a reduction of $3,075,406 from the original loan commitment under

the Original Loan and Security Agreement and (ii) include the Llama Llama season two obligations under the Loan and Security Agreement

as obligations under the Original Loan and Security Agreement.

The Maturity Date of the Prime Rate Loan facility and LIBOR

Loan facility is March 31, 2021.

While the Company believes that its anticipated

cash balances, working capital, and deal pipeline will be sufficient to fund operations for the next twelve months, there can be

no assurance that cash flows from operations will continue to improve in the near future or will not deteriorate during that period.

If the Company is unable to attain profitable operations and attain positive operating cash flows, it may need to (i) seek additional

funding, (ii) scale back its development or production plans, or (iii) reduce certain operations.

As of December 31, 2020, the Company had cash and cash equivalents of $100,456,324, which we believe is

sufficient to fund the Company’s planned operations and production through one year after the date the consolidated financial

statements are issued.

During 2020, the Company completed various transactions that

enhanced cash and working capital balances (See Notes 9 and 13).

Summary of Significant Accounting Policies

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statements include the accounts of Genius Brands International, Inc., its wholly-owned subsidiaries A Squared LLC, Llama Productions

LLC and Rainbow Rangers Productions LLC, as well as its interest in Stan Lee Comics, LLC (“Stan Lee Comics”).

All significant

inter-company balances and transactions have been eliminated in consolidation.

LLC and Rainbow Rangers Productions LLC.

All significant inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

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have been reclassified in these consolidated financial statements to conform to current period classifications.

Cash, Cash Equivalents, and Restricted

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, 2019, and 2018, restricted

cash totaled $0 and $400,543 which represented funds held in a cash account to be used solely for the production of Llama Llama

as a condition of its loan agreement with Bank Leumi USA.

The Company had no restricted cash as

of December 31, 2020 and 2019.

Allowance for Doubtful Accounts

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when collection of the individual accounts appears doubtful.

The Company had an allowance for doubtful accounts of $0 as of both

December 31, 2019 and 2018.

The Company had an allowance for doubtful accounts of $43,676 and

$0 as of December 31, 2020 and 2019, respectively.

Inventories are stated at the lower of

average cost or net realizable value and consist of finished goods such as DVDs, CDs and other products.

A reserve for slow-moving

and obsolete inventory is established for all inventory deemed potentially non-saleable.

The Company concluded that reserve for

slow moving and obsolete inventory was unnecessary and immaterial and has written off the balance of $26,097 as of December 31,

The Company concluded

that the inventory was obsolete and has written off the balance of $9,277 as of December 31, 2020.

Property and Equipment

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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 purchase 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.

To test for goodwill impairment, we are required to estimate the fair market value of each of our reporting units, of which we

While we may use a variety of methods to estimate fair value for impairment testing, our primary method is discounted

We estimate future cash flows and allocations of certain assets using estimates for future growth rates and our judgment

regarding the applicable discount rates.

Changes to our judgments and estimates could result in a significantly different estimate

of the fair market value of the reporting units, which could result in an impairment of goodwill or indefinite lived intangible

assets in future periods.

Goodwill represents the excess of purchase price over the estimated

fair value of net assets acquired in business combinations accounted for by the purchase 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.

We complete the

annual goodwill and indefinite-lived intangible asset impairment tests at the end of each fiscal year.

In testing goodwill, we

initially use a qualitative approach and analyze relevant factors to determine if events and circumstances have affected the value

of the goodwill.

If the result of this qualitative analysis indicates that the value has been impaired, we then apply a quantitative

approach to calculate the difference between the goodwill’s recorded value and its fair value.

An impairment loss is recognized

to the extent that the recorded value exceeds its fair value.

Goodwill, in addition to being tested for impairment annually, is

tested for impairment at interim periods if an event occurs or circumstances change such that it is more likely than not that the

carrying amount of goodwill may be impaired.

For the year ended December 31, 2020, the Company performed a qualitative analysis

of the carrying value of goodwill.

Based on the results of our analysis, we concluded that there is no impairment to the goodwill

balance and no adjustment is necessary at this time.

Other intangible assets have been acquired,

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Revenue Recognition

On January 1, 2018, the Company adopted

the new accounting standard ASC 606 (Topic 606), Revenue from Contracts with Customers and all the related amendments (“new

revenue standard”) using the modified retrospective method applied to those contracts which were not completed as of January

Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts

are not adjusted and continue to be reported in accordance with our historic accounting under ASC 605, (Topic 605).

Accordingly, on January 1, 2018 the Company

recorded a cumulative effect adjustment to beginning accumulated deficit in the amount of $206,245.

The impact to our financial

statements for the year ended December 31, 2018 resulting from the adoption of Topic 606 as of January 1, 2018 was a reduction

of revenue in the amount of $188,734 and a corresponding reduction in costs in the amount of $52,269 from the amounts reported.

The amounts prior to adoption were not recognized pursuant to Topic 606 and would have been reported pursuant to Topic 605.

Changes to the opening balances in prepaid

and other assets, film and television costs, total assets, accrued expenses, deferred revenue and total liabilities resulting from

the adoption of the new guidance were as follows (thousands):

Prepaid and Other Assets

Film and Television Costs, net

Participations Payable

Deferred Revenue

Total liabilities

The Company performed its analysis of its

existing revenue contracts and has completed its new revenue accounting policy documentation under the new standard.

has identified the following six material and distinct performance obligations:

The Company accounts for revenue according

to standard ASC 606 (Topic 606).

The Company has identified the following six material and distinct performance obligations:

License rights to exploit Functional Intellectual Property (Functional Intellectual Property or “functional IP”

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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

costs per thousand (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.

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 costs

per thousand (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 recognizes revenue related

to product sales when (i) the seller’s price is substantially fixed, (ii) shipment has occurred causing the buyer to be obligated

to pay for product, (iii) the buyer has economic substance apart from the seller, and (iv) there is no significant obligation for

future performance to directly bring about the resale of the product by the buyer.

to product sales when we complete our performance obligation, which is when the goods are transferred to the buyer.

Direct Operating Costs

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up to $250,000 per account.

As of December 31, 2020, the Company had four accounts with a combined uninsured balance of $99,260,006.

As of December 31, 2019, the Company had no accounts with a combined uninsured balance.

As of December

31, 2018, the Company had three accounts with a combined uninsured balance of $2,183,875.

For fiscal year 2020, the Company had two

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and represented 22% of accounts receivable.

For fiscal year 2018, the Company had one customer whose total revenue exceeded 10%

For fiscal year 2019, the Company had two customers whose total revenue exceeded 10%

of the total consolidated revenue.

This customer accounted for 20% of total revenue and represented 8.5% of accounts receivable.

These customers accounted for 65% of total revenue and represented 95% of accounts receivable.

The major customers for the year ended

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establishes allowances for any anticipated bad debt.

At December 31, 2019 and 2018, no allowance for bad debt has been established

for the major customers as these amounts are expected to be fully collectible.

At December 31, 2020 and 2019, the Company recorded an allowance for bad debt

of $43,676 and $0, respectively.

Fair value of financial instruments

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Recent Accounting Pronouncements

In February 2016, the FASB issued Accounting

Standards Update (ASU) 2016-02, “Leases.”

The standard requires lessees to recognize the assets and liabilities that

arise from leases on the balance sheet.

A lessee should recognize in the statement of financial position a liability to make lease

payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018.

In July 2018, the FASB issued ASU 2018-11,

Leases (Topic 842), Targeted Improvements, which allows for an additional optional transition method where comparative periods

presented in the financial statements in the period of adoption will not be restated and instead those periods will be presented

under existing guidance in accordance with ASC 840, Leases.

Management will use this optional transition method.

As of January

1, 2019, management recorded lease liability of $2,071,903, right-of-use asset of $2,029,677, a reversal of previously recorded

deferred rent of $37,920 and the increase in accumulated deficit of $4,306.

In January 2017, the FASB issued Accounting

Standards Update 2017-04, “Simplifying the Test for Goodwill Impairment”, which requires an entity to perform a one-step

quantitative impairment test, whereby a goodwill impairment loss will be measured as the excess of a reporting unit’s carrying

amount over its fair value (not to exceed the total goodwill allocated to that reporting unit).

It eliminates Step 2 of the current

two-step goodwill impairment test, under which a goodwill impairment loss is measured by comparing the implied fair value of a

reporting unit’s goodwill with the carrying amount of that goodwill.

The standard is effective January 1, 2020, with early

adoption as of January 1, 2017 permitted.

We adopted ASU 2017-04 in 2019.

The impact to our consolidated financial position, results

of operations and cash flows was minimal.

In July 2017, the FASB issued ASU No.

addressing, among other matters, accounting for certain financial instruments.

One of the amendments in this guidance intended

to reduce the complexity associated with the issuer’s accounting for certain financial instruments with characteristics of

liabilities and equity.

Specifically, the Board determined that a down round feature (as defined) would no longer cause a freestanding

equity-linked financial instrument (or an embedded conversion option) to be accounted for as a derivative liability at fair value

with changes in fair value recognized in current earnings.

ASU 2017-11 was effective for public business entities for fiscal year

beginning after December 15, 2018.

We adopted ASU 2017-04 in 2019.

The impact to our consolidated financial position, results of

operations and cash flows was minimal.

In August 2018, the FASB issued ASU

2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework –

Changes to the Disclosure Requirements for Fair Value

Measurement (“ASU 2018-13”), which changes the fair value measurement disclosure requirements of ASC 820.

removes some disclosures, modifies others, and add some new disclosure requirements.

The amendments in this ASU are effective for

all entities for fiscal years, and interim period within those fiscal years, beginning after December 15, 2019 with early adoption

We adopted ASU 2018-13 in 2019.

The impact to our consolidated financial position, results of operations and cash flows

were not material.

In June 2018, the FASB issued ASU No.

Compensation –

Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”),

which supersedes ASC 505-05 and expands the scope of ASC 718 to include all share-based payment arranges related to the acquisition

of goods and services from both nonemployees and employee.

As a result, most of the guidance in ASC 718 associated with employee

share-based payments, including most of its requirements related to classification and measurement, applies to nonemployee share-based

payment arrangements.

ASC 2018-07 is effective for all entities for fiscal year beginning after December 15, 2018, and interim

periods within that fiscal year.

We adopted ASU 2018-07 in 2019.

to our consolidated financial position, results of operations and cash flows were not material.

In March 2019, the FASB issued ASU No.

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interim periods within those fiscal years.

We have prospectively adopted ASU 2016-18.

The Company has prospectively adopted ASU 2016-18.

The impact to our consolidated financial

position, results of operations and cash flows were not material.

position, results of operations and cash flows was not material.

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.

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.

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

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 is in the process of

assessing the impact of the amendments to Company’s consolidated financial statements.

Various other accounting pronouncements

have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to

specific industries/transactions or special circumstances and are not expected to have a material effect on our financial position,

results of operations, or cash flows.

have been recently issued, most of which represented technical corrections to the accounting literature or were applicable to specific

industries/transactions or special circumstances and are not expected to have a material effect on our financial position, results

of operations, or cash flows.

Property and Equipment, Net

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as follows as of December 31, 2020 and 2019:

Property and Equipment, Net

December 31, 2020

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As of January 1,

management recorded lease liability of $2,071,903, right-of-use asset of $2,153,747, accumulated amortization of $124,070, a reversal

of previously recorded deferred rent of $37,920 and the increase in accumulated deficit of $4,306.

2019, the Company adopted ASU 2018-11.

Right Of Use Leased Asset

December 31, 2020

Right Of Use Leased Assets

Right Of Use Asset

December 31, 2019

Office Lease Asset

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Right Of Use Asset, Gross

Less Accumulated Amortization

Office Lease Accumulated Amortization

Printer Lease Accumulated Amortization

Accumulated Amortization

Right Of Use Asset, Net

During the twelve months ended December

31, 2019, the Company recorded amortization expense of $264,933.

During the year ended December 31, 2020

and 2019, the Company recorded amortization expense of $285,103 and 390,493.

Film and Television Costs, Net

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The increase relates primarily to the

production and development of Rainbow Rangers Season 2 and Llama Llama Season 2 offset by the amortization of film

costs associated with the revenue recognized for Space Pop, Thomas Edison's Secret Lab , Llama Llama Season 1 and Season

2, and Rainbow Rangers Season 1.

production and development of Rainbow Rangers Season 2 and Stan Lee’s Superhero Kindergarten Season 1 offset

by the amortization of film costs associated with the revenue recognized Rainbow Rangers Season 1 and Season 2.

During the years ended December 31, 2020

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in Film and Television Costs as of December 31, 2020 and 2019:

Film and Television Costs, Net

Film and Television Costs, Net as of December 31, 2018

Cumulative Effect of Adoption of ASC 606

Additions to Film and Television Costs

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Film Amortization Expense

Film and Television Costs, Net as of December 31, 2019

Film and Television Costs, Net as of September 30, 2020

Goodwill and Intangible Assets, Net

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assets as of December 31, 2020 and 2019:

Intangible Assets, Net

December 31, 2020

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Trademarks (a)

Product Masters (a)

Other Intangible Assets (a)

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Intangible Assets, Net

(a) Pursuant to FASB ASC 350-30-35,

Pursuant to FASB ASC 350-30-35,

the Company reviews these intangible assets periodically to determine if the value should be retired or impaired due to recent

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value and accumulated amortization were written off.

(b) During the years ended December

During the years ended December

31, 2020 and December 31, 2019, the Company recognized, $49,388 and $38,405, respectively, in amortization expense related to the

Trademarks, Product Masters, and Other Intangible Assets.

Additionally, the Company has removed $64,676 of asset and accumulated

depreciation of Product Masters.

Expected future intangible asset amortization as of December

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domestic distribution rights.

Accrued Liabilities - Current

Accrued Liabilities –

As of December 31, 2020, and 2019, the

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Total Accrued Liabilities –

(a) Other Accrued Expenses include the sub lease security deposit liability on the Rodeo Drive location

as well as estimates of expenses incurred but not yet recorded.

(b) Accrued Salaries and Wages include accrued Salaries and vacation payable to employees

Other Accrued Expenses include the sub lease security deposit liability on the Rodeo Drive location as well as estimates of expenses incurred but not yet recorded.

Accrued Salaries and Wages include accrued Salaries and vacation payable to employees

Secured Convertible Notes

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proceeds from the Offering.

The Secured Convertible Notes are our senior

secured obligations and are secured by certain tangible and intangible property of the Company as described in the Purchase Agreement.

The Secured Convertible Notes were our

senior secured obligations and are secured by certain tangible and intangible property of the Company as described in the Purchase

Unless earlier converted or redeemed, the Secured Convertible Notes will mature on August 20, 2019.

The Secured Convertible Notes

bear interest at a rate of 10% per annum and are convertible at any time until a Secured Convertible Note is no longer outstanding,

The Secured Convertible

Notes bear interest at a rate of 10% per annum and are convertible at any time until a Secured Convertible Note is no longer outstanding,

in whole or in part, at the option of the holders into shares of common stock at a conversion price of $2.50 per share.

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Interest under the Secured Convertible

Notes is payable in arrears beginning on September 1, 2018 and thereafter on each of December 1, 2018, March 1, 2019, June 1, 2019

Notes were payable in arrears beginning on September 1, 2018 and thereafter on each of December 1, 2018, March 1, 2019, June 1,

2019 and at maturity when all amounts outstanding under the Secured Convertible Notes become due and payable.

Subject to certain equity

conditions, we may force a conversion of the debt into equity.

We may redeem the Secured Convertible Notes at any time prior to

Subject to certain

equity conditions, we may force a conversion of the debt into equity.

We may redeem the Secured Convertible Notes at any time prior

If we do not meet such equity conditions at maturity, we are obligated to repay in cash one-sixth of the then outstanding

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such payment due on the date of maturity, followed by payments each month thereafter.

The Secured Convertible Notes contain certain

negative covenants, including prohibitions on the incurrence of indebtedness or liens.

The Secured Convertible Notes also contain

standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe or

perform covenants or agreements contained in the Secured Convertible Notes or the bankruptcy or insolvency of the Company or any

of our subsidiaries.

The Secured Convertible Notes contained

certain negative covenants, including prohibitions on the incurrence of indebtedness or liens.

The Secured Convertible Notes also

contain standard and customary events of default including, but not limited to, failure to make payments when due, failure to observe

or perform covenants or agreements contained in the Secured Convertible Notes or the bankruptcy or insolvency of the Company or

any of our subsidiaries.

The Company was in compliance with these covenants as of December 31, 2019.

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as part of the Company’s equity.

During the year ended December 31, 2018,

the Company recognized $678,016 of discount amortization which is included in interest expense.

In conjunction with the February 2019 Offering

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The Company also agreed to pay the 10% interest to the holders monthly instead of quarterly.

The issuance of the warrants

resulted in a modification of debt in accordance with ASC 470 and is characterized as an extinguishment of debt in accordance with

ASC-470-50-40.

In accordance with ASC-470-50-40-2 the Company derecognized the existing debt as if it was extinguished and recorded

the new debt, with the difference between the reacquisition price of the new debt and the net carrying amount of the extinguished

debt, $2,064,193 being recorded as a loss on the extinguishment of debt.

The remaining balance of $883,332

under the Secured Convertible Notes that were not extended were to be paid in four monthly installments of $220,883.

The September

through December payments, including interest, have been paid.

The remaining balance of $883,332 under

the Secured Convertible Notes that were not extended were to be paid in four monthly installments of $220,883.

The September through

December payments, including interest, have been paid.

On March 17, 2020, the Secured Convertible

Notes were paid in full including interest.

March 2020 Secured Convertible Note and Warrant Private Placement

On March 11, 2020, we entered into a Securities

Purchase Agreement (the “SPA”) with certain accredited investors (each an “Investor”

and collectively,

the “Investors”) pursuant to which we agreed to sell and issue (1) Senior Secured Convertible Notes to the Investors

in the aggregate principal amount of $13,750,000 (each, a “Note”

and collectively, the “2020 Convertible Notes”)

and $11,000,000 funding amount (reflecting an original issue discount of $2,750,000) and (2) warrants to purchase 65,476,190 shares

of the Company’s common stock, par value $0.001 per share (the “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 $7,000,000, 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 $4,000,000 (the “Investor Notes Principal”) (collectively, the “Financing”).

Andy Heyward,

our Chairman and Chief Executive Officer, participated as an Investor and invested $1,000,000 in connection with the Financing,

all of which was paid at the closing and not pursuant to an Investor Note.

The Special Equities Group, LLC, a division of Bradley

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,

The Company held a stockholder meeting

(the “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.

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.

As a result of the reduction in the Conversion

Price of the 2020 Convertible Notes to $0.21, the conversion feature was revalued.

This revaluation resulted in a conversion option

revaluation expense of $171,835,729.

Production Loan Facility

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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 $1,768,010, and (ii) include the Llama Llama season two obligations under the Loan and Security Agreement as obligations

under the Original Loan and Security Agreement.

the loan commitment thereunder to $1,768,010, 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 borrowing under the facility of $3,091,739.

As of December 31, 2018, the Company had gross outstanding borrowings

under the facility of $2,241,759 against which financing costs of $63,561 were applied resulting in net borrowings of $2,178,198.

outstanding borrowing under the facility of $1,099,713.

As of December 31, 2019, the Company had outstanding borrowings under the

facility of $3,091,739 .

Disputed Trade Payable

4 unchanged sentences

to the assertion of any legal claim relating to the collection of these liabilities has expired and therefore believes this liability

Payroll Protection Program

On April 30, 2020, the Company received loan proceeds in the

amount of $366,267 under the Paycheck Protection Program (“PPP”) which was established as part of the Coronavirus Aid,

Relief and Economic Security (“CARES”) Act and is administered through the Small Business Administration (“SBA”).

The PPP provides loans to qualifying businesses in amounts up to 2.5 times their average monthly payroll expenses and was designed

to provide a direct financial incentive for qualifying businesses to keep their workforce employed during the Coronavirus crisis.

PPP loans are uncollateralized and guaranteed by the SBA and are forgivable after a “covered period”

(eight or twenty-four

weeks) as long as the borrower maintains its payroll levels and uses the loan proceeds for eligible expenses, including payroll,

benefits, mortgage interest, rent, and utilities.

The forgiveness amount will be reduced if the borrower terminates employees or

reduces salaries and wages more than 25% during the covered period.

Any unforgiven portion is payable over 2 years if issued before,

or 5 years if issued after, June 5, 2020 at an interest rate of 1% with payments deferred until the SBA remits the borrower’s

loan forgiveness amount to the lender, or, if the borrower does not apply for forgiveness, ten months after the end of the covered

PPP loan terms provide for customary events of default, including payment defaults, breaches of representations and warranties,

and insolvency events and may be accelerated upon the occurrence of one or more of these events of default.

Additionally, PPP loan

terms do not include prepayment penalties.

The Company is in the process of repaying the loan.

Stockholders’

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of authorized shares of common stock was 400,000,000.

On February 9, 2017, the Company entered

into the Private Transaction pursuant to the Agreement with certain holders of the Original Warrants.

Pursuant to the Agreement,

the holders of the Original Warrants and the Company agreed that such Original Warrant holders would exercise their Original Warrants

in full, and the Company would issue to each such holder new warrants.

(See Note 13 for additional information about these warrants).

As of December 31, 2020, and 2019, there

were 258,438,514 and 21,877,724 shares of common stock outstanding, respectively.

Below are the changes to the Company’s common

stock during the year ended December 31, 2019:

Below are the changes to the Company’s

common stock during the year ended December 31, 2020:

Year Ended December

On January 10, 2019, the Company issued 17,200 shares of the Company’s

common stock valued at $2.44 per share for investor relations services.

On January 17, 2019, the Company issued 11,765 shares of the Company’s

common stock valued at $2.55 per share for investor relations services.

On February 14, 2019, the Company sold, to a certain investor, pursuant to

a Securities Purchase Agreement 945,894 shares of Common Stock at a purchase price of $2.12 per share.

On April 11, 2019, the Company issued 6,012 shares of common stock valued

at $1.92 per share to a vendor for consulting services rendered.

On May 2, 2019, the Company issued 10,923 shares of common stock valued at

$1.95 per share to a vendor for production services rendered.

On May 27, 2019, the Company issued 1,087 shares of common stock valued at

$1.84 per share to a vendor for production services rendered.

On May 28, 2019, the Company issued 25,000 shares of common stock valued

at $1.84 per share to a vendor for consulting services rendered.

On July 14, 2019, the Company issued 5,250 shares of Common Stock valued

at $1.14 per share to a vendor for consulting services rendered.

On July 16, 2019, the Company issued 25,000 shares of Common Stock valued

at $1.13 per share to a vendor for consulting services rendered.

On August 2, 2019, the Company issued 481,481 shares of Common Stock valued

at $0.81 per share to a vendor for production services rendered.

On September 18, 2019, the Company issued 945,894 shares of Common Stock

pursuant to a Warrant Exercise Agreement at $0.76 per share.

On October 2,

Heyward purchased 1,000,000 shares of the Company’s common stock for an aggregate purchase price of $760,000, or

$0.76 per share.

Between October

4 th and 22 nd , 2020, the Company issued 296,053 shares of Common Stock in exchange for 225 shares of Preferred

Stock at a conversion price of $0.76 per share

On October 18, 2019, the Company issued

534,247 shares of Common Stock valued at $0.73 per share to a vendor for production services rendered.

On October 28, 2019, the Company entered

into a Securities Purchase Agreement with a certain investor pursuant to which the Company agreed to issue and sell, 663,158 shares

of Common Stock, at an offering price of $0.76 per share.

Between November 21 st and December

10 th , 2019, the Company issued 3,804,766 shares of the Common Stock in exchange for 799 shares of preferred Stock at

a conversion price of $0.21 per share.

On December 17, 2019, the Company issued 3,646,135 shares of Common Stock

pursuant to a Warrant Exercise Agreement at $0.21 per share.

December 31, 2018

On January 8, 2018,

the Company issued 592,000 shares of the Company’s common stock valued at $3.00 per share pursuant to a securities

purchase agreement.

On May 7, 2018, the Company issued 277,508 shares of the Company’s common stock valued at $2.81 per share for production services.

On August 13, 2018, the Company issued 180,683 shares of the Company’s common stock valued at $2.64 per share to the same provider for production services.

On September 18, 2018, the Company issued 141,014 shares of the Company’s common stock valued at $2.17 per share to the same provider for production services.

On October 17, 2018, the Company issued 58,614 shares of the Company’s common stock valued at $2.45 per share to various providers for investor relations services.

On November 1, 2018, the Company issued 44,097 shares of the Company’s common stock valued at $2.27 per share to the same provider for production services.

On November 15, 2018, the Company issued 23,148 shares of the Company’s common stock valued at $2.16 per share for investor relations services.

On December 31, 2018, the Company issued 60,000 shares of the Company’s common stock valued at $2.16 per as part of a mediation settlement representing participation amounts due.

On various dates during the year ended December 31, 2018, the Company issued 470,001 shares of the Company’s common stock pursuant to the conversion of 1,410 shares of Series A Convertible Preferred Stock at a conversion price of $3.00.

On January 8, 2020, the Company issued 43,077 shares of Common Stock valued at $0.65 per share

to a provider for investor relations services.

On January 15, 2020, the Company issued 3,171,428 shares of Common Stock in exchange for 667 shares

of Preferred Stock at a conversion price of $0.21 per share.

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 originally issued on October 3, 2017, to purchase an aggregate

of 500,000 shares of Common Stock (as defined below) at an exercise price of $3.90 per share and were to expire in October 2022.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 (as reflected on Nasdaq.com) of the Common Stock (as defined below) for the five trading days immediately

preceding the signing of the Agreement) (the “Amended Exercise Price”).

The Company received $170,000 from the exercise

of the Original Warrants.

On March 22, 2020, the Company entered into the Purchase Agreement with the Investors, pursuant

to which the Company agreed to issue and sell, in the Registered Offering, an aggregate of 4,000,000 shares 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.

On May 7, 2020, we entered into a Securities Purchase Agreement with the May 7 th Investors,

pursuant to which we agreed to issue and sell, in a registered direct offering by the Company directly to the May 7 th Investors,

an aggregate of 8,000,000 shares of our Common Stock, at an offering price of $0.35 per share for gross proceeds of approximately

$2.8 million before deducting offering expenses.

On May 8, 2020, we entered into a Securities Purchase Agreement with the May 8 th Investors,

pursuant to which we agreed to issue and sell, in a registered direct offering by the Company directly to the May 8 th Investors,

an aggregate of 12,000,000 shares of our Common Stock, at an offering price of $0.454 per share for gross proceeds of approximately

$5.448 million before deducting offering expenses.

On May 18, 2020, we entered into a Securities Purchase Agreement with the May 18 th Investors,

pursuant to which we agreed to issue and sell, in a registered direct offering by the Company directly to the May 18 th Investors,

an aggregate of 7,500,000 shares of our Common Stock, at an offering price of $1.20 per share for gross proceeds of approximately

$9.0 million before deducting offering expenses.

On May 28, 2020, we entered into a Securities Purchase Agreement with the May 28 th Investors,

pursuant to which we agreed to issue and sell, in a registered direct offering by the Company directly to the May 28 th Investors,

an aggregate of 20,000,000 shares of our Common Stock, at an offering price of $1.50 per share for gross proceeds of approximately

$30.0 million before deducting offering expenses.

Between May 15 and June 19, 2020 certain warrant holders exercised 50,014,895 warrants in cashless

transactions resulting in the issuance of 45,000,428 shares of Common Stock.

Between May 15 and June 19, 2020, the Company received $5,649,319, net of expenses, from the exercise

of 29,666,283 warrants at an exercise price of $0.21 per share

Between May 18 and June 24, 2020, the Company issued 1,571,430 shares of Common Stock in exchange

for 330 shares of Preferred Stock at a conversion price of $0.21 per share.

On June 22, 2020, the Company issued 49,610 shares of Common Stock valued at $3.85 per share to

a provider for investor relations services.

Between June 10 and June 23, 2020, the 2020 Convertible Notes were converted and repaid through

the issuance of 65,476,190 shares of Common Stock.

On July 15, 2020, the Company issued 32,609 shares of Common Stock valued at $2.30 per share to

a provider for marketing services.

On July 21, 2020, the Company received $55,011, net of expenses, from the exercise of 16,670 warrants

at an exercise price of $0.454 per share.

On July 22, 2020, the Company issued 124,451 shares of Common Stock valued at $2.30 per share to

a provider for marketing services.

On October 25, 2020, the Company entered into an Agreement that granted 1,000,000 shares of our

Common Sock at an offering price of $1.39 per share in exchange for production serviceOn October 28, 2020, the Company entered

into the Purchase Agreement with the Investors pursuant to which the Company agreed to issue and sell, in a registered director

offering by the Company directly to the Investors, an aggregate of 37,400,000 shares of our Common Stock and warrants to purchase

up to 37,400,000 shares of our Common Stock, at an offering price of $1.55 per fixed combination of one share of Common Stock and

a warrant to purchase one share of Common Stock for gross proceeds of approximately $57.9 million before deducting offering expenses.

On November 17, 2020, the Company issued 476,190 shares of Common Stock in exchange for 100 shares

of Series A Convertible Preferred Stock at a conversion price of $0.21 per share.

On December 14, 2020 a warrant holder exercised 595,238 warrants on a cashless basis, resulting

in the issuance of 532,424 shares of Common Stock.

Year Ended December 31, 2019

On January 10, 2019, the Company issued 17,200 shares of the Company’s common stock valued at $2.44 per share for investor relations services.

On January 17, 2019, the Company issued 11,765 shares of the Company’s common stock valued at $2.55 per share for investor relations services.

On February 14, 2019, the Company sold, to a certain investor, pursuant to a Securities Purchase Agreement 945,894 shares of Common Stock at a purchase price of $2.12 per share.

On April 11, 2019, the Company issued 6,012 shares of common stock valued at $1.92 per share to a vendor for consulting services rendered.

On May 2, 2019, the Company issued 10,923 shares of common stock valued at $1.95 per share to a vendor for production services rendered.

On May 27, 2019, the Company issued 1,087 shares of common stock valued at $1.84 per share to a vendor for production services rendered.

On May 28, 2019, the Company issued 25,000 shares of common stock valued at $1.84 per share to a vendor for consulting services rendered.

On July 14, 2019, the Company issued 5,250 shares of Common Stock valued at $1.14 per share to a vendor for consulting services rendered.

On July 16, 2019, the Company issued 25,000 shares of Common Stock valued at $1.13 per share to a vendor for consulting services rendered.

On August 2, 2019, the Company issued 481,481 shares of Common Stock valued at $0.81 per share to a vendor for production services rendered.

On September 18, 2019, the Company issued 945,894 shares of Common Stock pursuant to a Warrant Exercise Agreement at $0.76 per share.

On October 2, 2019, Mr.

Heyward purchased 1,000,000 shares of the Company’s common stock for an aggregate purchase price of $760,000, or $0.76 per share.

Between October 4 th and 22 nd , 2020, the Company issued 296,053 shares of Common Stock in exchange for 225 shares of Preferred Stock at a conversion price of $0.76 per share

On October 18, 2019, the Company issued 534,247 shares of Common Stock valued at $0.73 per share to a vendor for production services rendered.

On October 28, 2019, the Company entered into a Securities Purchase Agreement with a certain investor pursuant to which the Company agreed to issue and sell, 663,158 shares of Common Stock, at an offering price of $0.76 per share.

Between November 21 st and December 10 th , 2019, the Company issued 3,804,766 shares of the Common Stock in exchange for 798 shares of preferred Stock at a conversion price of $0.21 per share.

On December 17, 2019, the Company issued 3,646,135 shares of Common Stock pursuant to a Warrant Exercise Agreement at $0.21 per share.

Preferred Stock

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The shares of Series A Convertible Preferred Stock possess no voting rights.

On May 14, 2014, we entered into securities

purchase agreements with certain accredited investors pursuant to which we sold an aggregate of 6,000 shares of our then newly

designated Series A Convertible Preferred Stock at a price of $1,000 per share for gross proceeds to us of $6,000,000.

to the sale, we incurred offering costs of $620,085 resulting in net proceeds of $5,379,915.

The transaction closed on May 15,

As the conversion price of the Series A

Convertible Preferred Stock on a converted basis was below the market price of the common stock on the closing date, this resulted

in a beneficial conversion feature recorded as an “imputed”

dividend of $2,010,000.

In addition, during the fourth

quarter of 2015, in connection with the 2015 Private Placement in which the Company’s common stock was sold at $3.00 per

share, the conversion price of the Series A Convertible Preferred Stock decreased to $3.00.

This decrease resulted in an additional

beneficial conversion feature of $3,383,850 recognized as of the time of the 2015 Private Placement.

On August 17, 2018, in connection with

the Securities Purchase Agreement in which the Secured Convertible Notes are convertible into shares of the Company’s common

stock at $2.50 per share, the conversion price of the Series A Convertible Preferred Stock decreased to $2.12.

This decrease resulted

in a beneficial conversion feature of $353,333 which was recognized on August 17, 2018.

October 4, 2019 and October 22, 2019, the Company issued 296,053 shares of Common Stock in exchange for 225 shares of Preferred

3 unchanged sentences

price of $0.21 per share.

In the future, issuance of common stock

or the grant of any rights to purchase our common stock or other securities convertible into our common stock for a per share price

less than the then existing conversion price of the Series A Convertible Preferred Stock would result in an adjustment to the then

current conversion price of the Series A Convertible Preferred Stock.

This reduction would give rise to a beneficial conversion

feature recorded as an “imputed”

On January 9, 2020, the Company issued

3,171,428 shares of the Common stock in exchange for 667 shares of Series A Convertible Preferred Stock at a conversion price of

$0.21 per share.

Between May 18 and June 24, 2020,

the Company issued 1,571,428 shares of Common Stock in exchange for 330 shares of Series A Convertible Preferred Stock at a conversion

price of $0.21 per share.

On November 17, 2020, the Company issued

476,190 shares of Common Stock in exchange for 100 shares of Series A Convertible Preferred Stock at a conversion price of $0.21

Stock Options

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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 1,666,667 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,

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.

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 27,

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 year ended December 31, 2019,

the Company granted options to purchase 81,000 shares of common stock to officers.

These stock options generally vest between one

and three years.

The fair value of these options was determined to be $117,797 using the Black-Scholes option pricing model based

on the following assumptions:

Exercise Price

Dividend Yield

Risk-free interest rate

Expected life of options

During the year ended December 31, 2020, the Company granted

options to purchase 8,880,000 shares of common stock to officers.

These stock options generally vest between one and three years.

The fair value of these options was determined to be $12,231,185 using the Black-Scholes option pricing model based on the following

Exercise Price

$1.39 - $10.00

Dividend Yield

Risk-free interest rate

Expected life of options

The following table summarizes the changes in the Company’s

stock option plan during the year ended December 31, 2019:

stock option plan during the year ended December 31, 2019 and December 31, 2020:

Options Outstanding Number Of Shares

Exercise Price Per Share

Exercise Prices Per Share

Weighted Average Remaining Contractual Life

Aggregate Intrinsic Value

Weighted Average Exercise Price Per Share

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Options Expired

$2.80 - $6.00

Balance at December 31, 2019

1 unchanged sentence

Options Granted

$ 1.39 - 10.00

Options Exercised

Options Cancelled

$1.99 –

Options Expired

$ 2.70 - 2.82

Balance at December 31, 2020

$1.99 –

$ 1.39 - 10.00

Exercisable December 31, 2019

1 unchanged sentence

Exercisable December 31, 2020

$1.99 –

During the year ended December 31,

2019, the Company granted options to purchase 81,000 shares of common stock to officers.

These stock options generally vest

between one and three years.

The fair value of these options was determined to be $117,797 using the Black-Scholes option

pricing model based on the following assumptions:

Exercise Price

Dividend Yield

Risk-free interest rate

Expected life of options

$ 1.39 - 3.17

During the years ended December 31, 2020

and 2019, the Company recognized $8,365,745 and $184,259 in share-based compensation expense, respectively.

share-based compensation as of December 31, 2019 was 142,880 which will be recognized through the second quarter of 2019

assuming the underlying grants are not cancelled or forfeited.

The unvested share-based

compensation as of December 31, 2020 is $4,008,320 which will be recognized through the fourth quarter of 2023 assuming the underlying

grants are not cancelled or forfeited.

Restricted Stock Units

On December 7, 2020, the Company granted

9,075,000 shares of Restricted Stock Units (RSU’s) with a fair market value of $12,614,250 to certain employees and officers.

The following table summarizes the Company’s

restricted stock issuance during the year ended December 31, 2020:

RSUs Outstanding Number Of Shares

Exercise Prices Per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price Per Share

Aggregate Intrinsic Value

Balance at December 31, 2019

RSUs Exercised

RSUs Cancelled

Balance at December 31, 2020

Exercisable December 31, 2019

Exercisable December 31, 2020

During the year ended December 31, 2020,

the Company recognized $563,700 in share-based compensation expense.

The unvested share-based compensation as of December 31, 2020

is $12,050,550 which will be recognized through the fourth quarter of 2024 assuming the underlying grants are not cancelled or

The Company has warrants outstanding to

purchase up to 45,511,965 shares and 11,124,405 shares at December 31, 2020 and 2019, respectively.

In connection with the sale of the Company’s

Series A Convertible Preferred Stock in May 2014, Chardan Capital Markets LLC (“Chardan”) acted as sole placement agent

in consideration for which it received a cash fee of $535,000 and a warrant to purchase up to 100,002 shares of the Company’s

common stock.

These warrants are exercisable immediately, have an exercise price of $6.00 per share, and have a five-year term.

In connection with the 2015 Private Placement,

the Company issued to accredited investors the Original Warrants to purchase up to an aggregate of 1,443,362 shares of common stock

for a purchase price of $3.00 per share.

The Original Warrants are exercisable into shares of common stock for a period of five

(5) years from issuance at an initial exercise price of $3.30 per share, subject to adjustment in the event of stock splits, dividends

and recapitalizations.

The Original Warrants are exercisable immediately.

The Company is prohibited from effecting an exercise

of the warrants to the extent that as a result of such exercise, the holder would beneficially own more than 4.99% (subject to

increase up to 9.99% upon 61 days’

notice) in the aggregate of the issued and outstanding shares of common stock, calculated

immediately after giving effect to the issuance of shares of common stock upon exercise of the warrant.

In connection with the 2015 Private Placement,

Chardan acted as sole placement agent in consideration for which it received a cash fee of $300,000 and a warrant to purchase up

to 141,668 shares of the Company’s common stock.

These warrants are exercisable immediately, have an exercise price of $3.60

per share, and have a five-year term.

On February 19, 2019, the Company entered

into the Private Transaction pursuant to the Agreement with certain holders of the Original Warrants.

Pursuant to the Agreement,

the holders of the Original Warrants and the Company agreed that such Original Warrant holders would exercise their Original Warrants

in full, and the Company would issue to each such holder new warrants, with the new warrants being identical to the Original Warrants

except that the termination date of such new warrants is February 10, 2022 (the “Reload Warrants”).

In addition, depending

on the number of Original Warrants exercised by all holders of the Original Warrants, the Company also agreed to issue to the holders

another new warrant, identical to the Original Warrant except that the exercise price of such warrant is $5.30 and such warrant

is not exercisable until August 10, 2017 (the “Market Price Warrants”

and together with the Reload Warrants, the “New

Warrants”).

The Company received gross proceeds of

$3,866,573 from the exercise of the Original Warrants and issued Reload Warrants to purchase an aggregate of 799,991 shares of

the Company’s common stock and Market Price Warrants to purchase an aggregate of 371,699 shares of the Company’s common

In association with the Private Transaction, the Company recorded $1,402,174, representing the difference in the fair market

value of the Original Warrants and the New Warrants, as an adjustment to additional paid-in capital.

Chardan acted as financial advisor on the

Private Transaction in consideration for which Chardan received $363,617, Chardan and its designees were issued New Warrants for

115,000 shares of the Company’s common stock.

On October 3, 2017, the Company sold, in

a registered direct offering, 1,647,691 shares of common stock at an offering price of $3.90 per share and, in a concurrent private

placement, warrants to purchase an aggregate of 1,647,691 shares of common stock for gross proceeds of approximately $6,425,995

before deducting the placement agent fee and related offering expenses.

On January 10, 2018, the Company issued

warrants for 685,000 shares of the Company’s common stock in connection with the January 2018 Private Placement.

were issued to the parties who purchased the Company’s common stock, as well as to Chardan and its designees who acted as

placement agents of the deal.

The warrants expire in five years and were exercisable immediately at an exercise price of $3.00

On August 17, 2018, the Company issued

warrants for 1,800,000 shares of the Company’s common stock in conjunction with the August 17, 2018 Securities Purchase Agreement.

The warrants were issued to the parties who purchased the Company’s Secured Convertible Notes.

The Warrants are not exercisable

until after six months from the date of issuance and expire five and half years from the date of issuance.

The Warrants have an

exercise price of $3.00 per share.

In the event of a “Fundamental Transaction”

(as defined in the Warrants), the Investors

have the right to receive the value of the Warrants as determined in accordance with the Black Scholes option pricing model.

Warrants are considered indexed to the Company’s own stock pursuant to ASC 815-40.

The Warrants also met additional equity

classification requirements and accordingly are accounted for as part of Company’s equity.

The allocation of carrying basis between

the Warrants issued and the Secured Convertible Notes was determined based on relative valuation.

The carrying basis attributable

to the Warrants to acquire common stock was $1,471,111 and was calculated using the Black-Scholes option pricing model.

On February 19, 2019, the Company entered

into a securities purchase agreement with a certain accredited investor pursuant to which we sold 945,894 shares of Common Stock

64 unchanged sentences

recognizing and recording an “imputed dividend”

In a connection with a Private Placement

the Company issued to the Investor warrants exercisable for one share of Common Stock for an aggregate of 477,474 shares of Common

Stock at an exercise price of $0.76 per share.

Each Warrant will be immediately exercisable on the date of its issuance and will

expire five years from the date it becomes exercisable.

Subject to limited exceptions, a holder of a Warrant will not have the

right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of

4.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise.

The Special Equities

Group, LLC, a division of Bradley Woods & Co.

LTD, acted as placement agent and will receive a cash fee of $35,280 and

warrants to purchase 46,421 shares at an exercise price of $0.836 per share.

On October 29, 2019, in a connection

with a Private Placement, the Company issued to the Investor warrants exercisable for one share of Common Stock for an

aggregate of 477,474 shares of Common Stock at an exercise price of $0.76 per share.

Each Warrant became immediately

exercisable on the date of its issuance and will expire five years from the date it becomes exercisable.

Subject to limited

exceptions, a holder of a Warrant will not have the right to exercise any portion of its warrants if the holder, together

with its affiliates, would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding

immediately after giving effect to such exercise.

The Special Equities Group, LLC, a division of Bradley Woods & Co.

acted as placement agent and will receive a cash fee of $35,280 and warrants to purchase 46,421 shares at an exercise price

of $0.836 per share.

On December 16, 2019, the Company entered

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the Exercising Holders and the Company agreed that, subject to any applicable beneficial ownership limitations, the Exercising

Holders would exercise their Existing Warrants (the “Investor Warrants”) for shares of Common Stock underlying such

Existing Warrants (the “Exercised Shares”) at a reduced exercise price of $0.21 per share of Common Stock.

to induce the Exercising Holders to cash exercise the Investor Warrants, the Exercise Agreements provide for the issuance of new

warrants to purchase up to an aggregate of approximately 3,646,135 shares of Common Stock (the “New Warrants”), with

such New Warrants to be issued in an amount equal to the number of the Exercised Shares underlying any Investor Warrants.

Warrants are exercisable six months and one day after issuance and terminate on the date that is five years following the initial

exercise date.

Holders exercised their Existing Warrants (the “Investor Warrants”) for shares of Common Stock underlying such Existing

Warrants (the “Exercised Shares”) at a reduced exercise price of $0.21 per share of Common Stock.

In order to induce

the Exercising Holders to cash exercise the Investor Warrants, the Exercise Agreements provide for the issuance of new warrants

to purchase up to an aggregate of approximately 3,646,135 shares of Common Stock (the “New Warrants”), with such New

Warrants to be issued in an amount equal to the number of the Exercised Shares underlying any Investor Warrants.

The New Warrants

are exercisable six months and one day after issuance and terminate on the date that is five years following the initial exercise

The New Warrants have an exercise price per share of $0.3004, which was the Nasdaq Official Closing Price on December 13,

On January 22, 2020, the Company entered

into the Private Transaction pursuant to the Agreement with the holder of the Company’s Original Warrants.

The Original Warrants

were originally 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 2022.

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 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 9,

the Company issued to the note holders warrants to purchase 65,476,191 shares of Common Stock, exercisable for a period of five

years at an initial exercise price of $0.26 per share.

The placement agent received warrants to

purchase 6,547,619 shares at an exercise price of $0.26 per share.

The warrants were accounted for as a derivative

liability upon issuance.

The warrants were revalued as of March 31, 2020.

which resulted in a warrant revaluation expense in the amount

of $3,467,961.

On May 15, 2020 stockholders of the Company

approved the reduction in warrants exercise price for the 2020 Convertible Notes holders to $0.21.

As a result of the exercise

price reduction, certain warrant holders exercised warrants for 29,000,526 shares of Common Stock at $0.21 per share in cash.

other warrant holders exercised 41,508,189, warrants on a cashless basis, resulting in the issuance of 37,449,140 shares of Common

The warrants were revalued prior to their

The estimated fair value of the exercised warrants immediately before the exercise was $219,034,621, This revaluation

resulted in a warrant revaluation expense of $205,130,151 which was recorded prior to the warrant exercise.

Upon exercise the $219,034,621

was reclassified form the warrant derivative liability to additional paid in capital.

Certain other warrant holders did not exercise

their warrants.

Accordingly, these warrants were revalued quarterly throughout the year, resulting in an additional warrant revaluation

expense of $1,552,923.

The fair values of derivative warrants attached

to the 2020 Convertible Notes were determined based on Level 3 inputs, using the Black-Scholes-Merton model with standard valuation

The valuation inputs used to value the warrants at March 31, 2020 included expected volatility of 89.91%, and annual interest

rate of 0.37%.

The valuation inputs for the warrants outstanding at December 31, 2020 included expected volatility of 169.99%, and annual

risk-free interest rate of .33%.

On May 15, 2020 stockholders of the Company

approved the reduction of all previously issued warrants held by the 2020 Convertible Notes holders exercise price to $0.21.

repricing of the warrants resulted in a deemed dividend of $1,840,384, which was charged to additional paid in capital for warrants

issued in connection with prior equity instruments and a warrant repricing loss of $744,321 recorded in Company’s consolidated

statements of operations, if the warrants were issued in connection with prior debt transaction.

All warrants were repriced using

standard Black-Scholes-Merton valuation model.

The valuation inputs for warrant repricing exercise included expected volatility

varying between 98.56% and 203.81% and annual risk-free interest rate of approximately 0.2%.

During the three months ended September

30, 2020, certain warrant holders exercised 16,670 warrants for shares of Common Stock at $3.30 per share in cash.

On May 25, 2020, the Company issued to

an individual and his management company 2,284,172 warrants to purchase shares of Common Stock at $1.39 per share for his involvement

with the production and distribution of a television series being developed by the Company.

The warrants have a 10-year term and

are fully vested upon issuance.

The warrants become immediately exercisable in whole upon the earlier of May 21, 2021 or the first

date the series is exhibited on television or is otherwise available for viewing through a streaming service or otherwise on the

The Company anticipates the warrants will become exercisable by April 23, 2021.

The warrants were valued at $3,174,806

using the Black-Scholes option pricing model.

The warrants were issued as an advance payment against participation amounts that

will become due to the individual upon the performance of the series.

The warrants are being accounted as non-employee compensation

expense which has been recorded as prepaid participation expense over the expected exercise period.

During the year ended December

31, 2020, the Company recorded $1,327,646 and $1,847,160 as prepaid participation expense.

The valuation inputs for the warrants

included expected volatility of 253.01%, and annual risk-free interest rate of 0.7%.

On October 15, 2020, the Company issued

to an individual and his management company 1,000,000 warrants to purchase shares of Common Stock at $1.39 per share for his involvement

with the production and distribution of a television series being developed by the Company.

The shares become freely tradable,

50% upon the six-month anniversary of issuance and 50% upon one year of issuance.

On October 28, 2020, the “Company,

entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain 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 “Offering”), an aggregate of 37,400,000 shares (the “Shares”) of our Common Stock and warrants (“Investor

Warrants”) to purchase up to 37,400,000 shares of our Common Stock (“Investor Warrant Shares”), available to

the Company through an increase in authorized shares, as approved by the shareholders on August 27, 2020.

The purchase price was

$1.55 per fixed combination of one share of common stock and a warrant to purchase one share of common stock, for gross proceeds

of approximately $57.9 million before deducting the placement agent fees and offering expenses.

The Investor Warrants have an exercise

price of $1.55 per share and are exercisable immediately on the date of issuance, and at any time thereafter up to five years from

the initial issuance date.

A holder will not have the right to exercise any portion of the Investor Warrant if the holder would

beneficially own in excess of 4.99% (or, at the election of the holder, 9.99%) of the outstanding Common Stock immediately after

exercise, except that upon notice from the holder to the Company, the holder may increase or decrease the beneficial ownership

limitation up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as

such percentage ownership is determined in accordance with the terms of the Investor Warrants, provided that any increase in such

beneficial ownership limitation shall not be effective until 61 days following notice from the holder to the Company.

The Offering closed on October 30,

The Special Equities Group, a division of Bradley Woods & Co.

Ltd., acted as placement agent and received (i) a cash

fee of approximately $4.1 million and (ii) warrants (“Placement Agent Warrants”

and together with Investor Warrants,

the “Warrants”) to purchase 2,618,000 shares of Common Stock (“Placement Agent Warrant Shares”

with Investor Warrant Shares, the “Warrant Shares”).

The Placement Agent Warrants have the same form and terms as the

Investor Warrants.

In addition, the Company will pay the placement agent a cash fee equal to 7% of the aggregate gross proceeds

from the exercise of any Warrants.

The Partnership has also agreed to reimburse the lead Investor for $25,000 of its legal fees

and expenses incurred in connection with the Offering.

The following table summarizes the changes

in the Company’s outstanding warrants during the year ended December 31, 2019:

Warrants Outstanding

Number Of Shares

Exercise Prices

in the Company’s outstanding warrants during the year ended December 31, 2019 and December 31, 2020:

Warrants Outstanding Number Of Shares

Exercise Prices Per Share

Weighted Average Remaining Contractual Life

Weighted Average Exercise Price Per Share

Aggregate Intrinsic Value

Balance at December 31, 2018

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Warrants Granted

Warrants Exercised

Warrants Expired

Balance at December 31, 2018

$ 2.55 - 2.12

Exercisable December 31, 2017

$ 3.30 - 6.00

Exercisable December 31, 2018

Warrants Exercised

$ 2.12 - 3.90

Warrants Expired

Balance at December 31, 2019

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Warrants Expired

Balance at December 31, 2019

$ 3.30 - 3.60

Balance at June 30, 2020

$ 0.21 - 5.30

Exercisable December 31, 2019

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Lease Liability

Inventory Reserve

Deferred Rent

Accrued Compensated Absences

Secured Convertible Notes

Charitable Contributions

Stock Compensation

Deferred Revenue

Valuation Allowance

(13,603,100 )

(10,068,700 )

Deferred tax liabilities:

Convertible Notes

Right of Use Assets

Deferred Rent

Depreciation and Amortization

Prepaid Expenses

Net Deferred Tax Asset

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State Income Taxes, Net of Federal Tax Effect

Meals and Entertainment

Stock Options

Intangible Assets

Stock Compensation

Conversion Option Revaluation

Secured Convertible Notes

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net operating loss carry forwards of approximately $43,112,000 and state net operating loss carry forwards of approximately $41,416,000

that may be offset against future taxable income from the year 2028 through 2038.

No tax benefit has been reported in the December

31, 2019 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

that may be offset against future taxable income will begin to expire in 2028, if not utilized.

No tax benefit has been reported

in the December 31, 2020 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.

Due to the change in ownership provisions

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31, 2020, the Company had no accrued interest or penalties related to uncertain tax positions.

During the year ended December 31, 2018,

the Company completed its accounting for the effects of the Tax Act which had no significant impact on the 2018 financial statement.

The Company files income tax returns in

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income tax examinations by tax authorities since inception of the Company.

Commitments and

Contingencies

The Company has various contractual obligations,

which are recorded as liabilities in our consolidated financial statements.

Other items, such as certain purchase commitments and

other executory contracts are not recognized as liabilities in our consolidated financial statements but are required to be disclosed

in the footnotes to the financial statements.

For example, the Company is contractually committed to make certain minimum lease

payments for the use of property under its operating lease.

In addition, the Company has contractual commitments for employment

agreements of certain employees.

In February 2016, the FASB issued Accounting

Standards Update 2016-02, “Leases.”

The standard requires lessees to recognize the assets and liabilities that arise

from leases on the balance sheet.

For practically all leases, a lessee should recognize in the statement of financial position

a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying

asset for the lease term.

The new guidance is effective for annual and interim reporting periods beginning after December 15, 2018.

In July 2018, the FASB issued ASU 2018-11,

Leases (Topic 842), Targeted Improvements, which allows for an additional optional transition method where comparative periods

presented in the financial statements in the period of adoption will not be restated and instead those periods will be presented

under existing guidance in accordance with ASC 840, Leases.

Management will use this optional transition method.

As of January 1, 2019, management recorded

lease liability of $2,071,903, right-of-use asset of $2,153,747, accumulated amortization of $124,070, a reversal of previously

recorded deferred rent of $37,920 and the increase in accumulated deficit of $4,306.

As of December 31, 2019, weighted-average

lease term for operating leases equals to 86 months.

Weighted-average discount rate equals to 10.30%.

Commitments and Contingencies

The Company has various contractual

obligations, which are recorded as liabilities in our consolidated financial statements.

Other items, such as certain purchase

commitments and other executory contracts are not recognized as liabilities in our consolidated financial statements but are required

to be disclosed in the footnotes to the financial statements.

For example, 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.

In addition, the Company has contractual commitments for employment agreements of certain employees.

Effective February 6, 2018, the Company

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Hills, CA 90212 pursuant to an 83-month sublease that commenced on February 4, 2019.

The subtenant will pay us rent of $422,321

annually, subject to annual escalations of 3.5%.

The subtenant paid us rent of $422,321 annually,

subject to annual escalations of 3.5%.

On September 11, 2020, the Company entered

into a Surrender Agreement with the landlord which terminated the 131 South Rodeo Dr lease agreement.

As a result, the Company

recorded decreases in the Right Of Use asset, accumulated amortization, and the lease liability of $2,142,863, $465,124 and $1,760,302

respectively.

The termination of the lease resulted in a loss of $338,586.

Simultaneously, as part of the Surrender Agreement the

Sublease was terminated.

Effective January 30, 2019, the Company

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Rental expenses incurred for operating

leases during the three months ended December 31, 2019 and December 31, 2018 were $740,135 and $343,347, respectively.

twelve months ended December 31, 2019, the Company received sub-lease income of $432,285.

leases during the twelve months ended December 31, 2020 and December 31, 2019 were $665,188 and $740,135, respectively.

the twelve months ended December 31, 2020 and December 31, 2019, the Company received sub-lease income of $316,762 and $432,285,

respectively.

The following is a schedule of future minimum

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Employment Contracts

Consulting Contracts

In addition to employment agreements and

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participations

for either (i) the use of third party intellectual property, such as the case with Stan Lee and the Mighty 7 and Llama

Llama among others, 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.

for either (i) the use of third party intellectual property, such as the case with Stan Lee and the Mighty 7 , Llama Llama

and Rainbow Rangers among others, 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.

Additionally, other agreements contain

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securing minimum production, broadcast, or other financing commitments from third parties.

Lastly, for its Genius Brands Network,

the Company licenses content for exhibition for which the Company is obligated to pay between 35% and 100% of revenues from the

channel allocated to the aforementioned content after the deduction of certain direct operating expenses.

Lastly, for its Cartoon Channel!, the Company

licenses content for exhibition for which the Company is obligated to pay between 35% and 100% of revenues from the channel allocated

to the aforementioned content after the deduction of certain direct operating expenses.

Related Party Transactions

On April 21, 2016, the Company entered

into a merchandising and licensing agreement with Andy Heyward Animation Art (“AHAA”), whose principal is Andy Heyward,

On August 31, 2018, Llama entered into an animation production

services agreement with Mr.

Heyward for services as a producer for which he is to receive $124,000 through the course of production

of the Company’s animated series Llama Llama Season 2.

During the year ended December 31, 2019, Mr.

Heyward was paid

No further amounts are due.

Pursuant to his employment agreements dated

November 16, 2018 and November 16, 2020, Mr.

Heyward is entitled to an Executive Producer fee of $12,400 per half hour episode

for each episode he provides services as an executive producer.

The first identified series under this employment agreement is

Rainbow Rangers.

During the year ended December 31, 2020, 13 half hours had been delivered and accordingly Mr.

paid $161,200, The second identified series under this employment agreement is Rainbow Rangers Season 2.

During the year

ended December 31, 2020, 26 half hours had been delivered and accordingly Mr.

Heyward was paid $322,400.

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.

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and the Company earns an arm-length industry standard royalty on all sales made by AHAA utilizing the licensed content.

the years ended December 31, 2019 and 2018, the Company earned $0 and $0 in royalties from this agreement, respectively.

On October 1, 2016, Llama Productions LLC

entered into an animation production services agreement with Mr.

Heyward for services as a producer for which he is to receive

$186,000 through the course of production of the Company’s animated series Llama Llama.

From October 1, 2016 through

December 31, 2017, Mr.

Heyward has been paid $186,000.

On August 31, 2018 Llama Productions LLC

entered into an animation production services agreement with Mr.

Heyward for services as a producer for which he is to receive

$124,000 through the course of production of the Company’s animated series Llama Llama.

As of December 31,

Heyward was paid $124,000, which is included in the Due To Related Party line item on our consolidated balance sheet.

Pursuant to his employment agreement dated

November 16, 2018, Mr.

Heyward is entitled to an Executive Producer fee of $12,400 per half hour episode for each episode he provides

services as an executive producer.

The first identified series under this employment agreement is Rainbow Rangers.

December 31, 2019, 26 half hours had been delivered and accordingly Mr.

Heyward is owed $322,400, which is included in the Due

To Related Party line item on our consolidated balance sheet.

The second identified series under this employment agreement is Rainbow

Rangers Season 2.

As of December 31, 2019, 13 half hours had been delivered and accordingly Mr.

Heyward is owed $161,200, which

is included in the Due To Related Party line item on our consolidated balance sheet,

the year ended December 31, 2020, the Company earned $0 in royalties from this agreement.

On September 17, 2019, Mr.

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$760,000, or $0.76 per share.

On March 11, 2020, Mr.

Heyward purchased

$1,000,000 of the 2020 Convertible Notes with an original discount of $250,000.

On June 19, 2020, Mr.

Heyward received

5,658,474 shares of Common Stock upon the cashless exercise of 6,119,048 warrants.

On June 23 , 2020, Mr.

Heyward received 5,952,381 shares of Common Stock upon conversion of $1,250,000 of 2020 Convertible Notes.

On December 7, 2020, Mr.

Heyward’s

was granted 7,500,000 Restricted Stock Units vest 1,875,000 on each of the next four anniversary dates.

Heyward was also granted

7,500,000 Performance Based Restricted Stock Units that, if awarded, vest 1,875,000 on each of the next four anniversary dates.

On December 7, 2020, Mr.

Heyward’s

was granted 5,000,000 options to purchase shares of the Company’s Common Stock at $1.39 per share.

The options vest on the

During the year ended December 31, 2020,

Heyward was paid a bonus of $73,528, $11,370 in interest on the Senior Convertible Notes and $3,000 in board fees for his attendance

at the unscheduled board meetings.

During the year ended December 31, 2020,

the Company paid $380,989 for security at Mr.

Heyward’s residence.

As of December 31, 2020, Andy Heyward is

owed $99,248 for reimbursable expenses which are included in the Due To Related Parties line item on our condensed consolidated

balance sheet

As of December 31, 2019, $1,507 of accrued

interest on the Secured Convertible Notes is included in the Due To Related Parties line item on our condensed consolidated balance

On July 25, 2016, the Company entered into

a consulting agreement with Foothill Entertainment, Inc.

(“Foothill”), an entity whose Chairman is Gregory Payne, our

corporate secretary.

The Company has engaged Foothill Entertainment, Inc.

for a term of six months to assist in the distribution

and commercial exploitation of its audiovisual content as well as for the preparation and attendance on behalf of the Company at

the MIPJR and MIPCOM markets in Cannes.

The agreement continues on a month-to-month basis following the initial term.

receives $12,500 per month for these services.

Subsequent to the end of the period, the consulting agreement with Foothill was

terminated effective January 31, 2018.

As of December 31, 2017, Gregory B.

individually and via his ownership position in Foothill, owed to the Company $5,558 for expenditures made during the fourth quarter

of 2017 related to the Brand Licensing Europe (“BLE”) and MIPCOM tradeshows.

In addition, during the fourth quarter

of 2017, Foothill acted as an agent on the Company’s behalf in licensing certain of our animated programs to certain broadcast

networks for which Foothill owed to the Company $7,517 in license fees to be paid by the broadcaster to Foothill.

Subsequent to

the end of the period, the Company received a payment of $7,517 from Foothill as satisfaction of the open licensing invoice.

Additionally,

on February 28, 2018, Mr.

Payne and the Company entered into an agreement whereby, among other things, Mr.

Payne was entitled to

be reimbursed for 100% of his expenses incurred at the BLE and MIPCOM tradeshows resulting in the Company owing to Mr.

As of December 31, 2018, and 2019, no amounts are due to or from Mr.

Payne or Foothill.

owed $2,420 for reimbursable expenses which are included in the “

Due To Related Parties ”

line item on our condensed

consolidated balance sheet

Subsequent Events

Pursuant to FASB ASC 855, Management has

evaluated all events and transactions that occurred from December 31, 2019 through the date of issuance of these financial statements.

During this period, we did not have any significant subsequent events, except as disclosed below:

Stock Issued for Services

On January 6, 2021, the Company issued

43,077 shares of the Company’s common stock valued at $0.65 per share to a provider for investor relations services.

Preferred Stock Conversions

25,000 shares of the Company’s Common Stock for consulting services at $1.40 per share.

The total amount of $35,000 was included

in accrued expenses as of December 31, 2020.

On January 25, 2021, the Company issued

3,171,428 shares of the Common Stock in exchange for 666 shares of preferred Stock at a conversion price of $0.21 per share.

Warrant Exercise Agreement

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 originally

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 2022.

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 Price”).

The Company received approximately $170,000 from the exercise of the Original Warrants.

Private Placement

On March 11, 2020, Genius Brands International,

(the “Company”) and certain accredited investors (each an “Investor”

and collectively, the “Investors”)

entered into a Securities Purchase Agreement (the “SPA”) pursuant to which the Company agreed to sell and issue (1)

Senior Secured Convertible Notes to the Investors in the aggregate principal amount of $13,750,000 (each, a “Note”

and collectively, the “2020 Convertible Notes”) and $11,000,000 funding amount (reflecting an original issue discount

of $2,750,000) and (2) warrants to purchase 65,476,190 shares of the Company’s common stock, par value $0.001 per share (the

“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 $7,000,000, 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 $4,000,000 (the “Investor Notes Principal”) (collectively,

the “Financing”).

Andy Heyward, the Company’s Chairman and Chief Executive Officer, participated as an Investor

and invested $1,000,000 in connection with the Financing, all of which was paid at the closing and not pursuant to an Investor

The closing of the sale and issuance of

the 2020 Convertible Notes, the Warrants and the Placement Agent Warrants described below occurred on March 17, 2020 (the “Closing

Date”).

The maturity date of the 2020 Convertible Notes is September 30, 2021 and the maturity date of the Investor Notes

is March 11, 2060.

The SPA contains certain representations

and warranties, covenants and indemnities customary for similar transactions.

In addition, the Company agreed to the following

additional covenants including, but not limited to:

(i) the Company shall hold a stockholder meeting (the “Stockholder Meeting”),

by no later than May 15, 2020, 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”) and the Company will be obligated to continue to seek Stockholder Approval every 90 days until

such approval is obtained, (ii) until the date that the 2020 Convertible Notes are no longer outstanding, the Company will not

issue, offer, sell or grant any equity or equity-linked security, subject to certain limited exceptions described in the SPA, unless

(A) Stockholder Approval has been obtained prior thereto and (B) (i) at least 75% of the gross proceeds in excess of the first

$2,000,000 of gross proceeds of all subsequent Financings consummated prior to the six month anniversary of the Closing Date are

first applied to the redemption of the 2020 Convertible Notes (pro-rata based on an Investor’s Purchase Price which redemption

may be waiver by an Investor and it will not increase the pro-rata percentage of any other Investors) or (ii) at least 75% of the

gross proceeds of any such subsequent placement consummated after the six month anniversary of the Closing Date are first applied

to the redemption of the 2020 Convertible Notes (pro-rata), (iii) the Company shall use its best efforts to effectuate the transactions

contemplated by the Voting Agreements executed by the Company and the stockholders who hold in the aggregate approximately 40%

of the outstanding shares of Common Stock which require that such stockholders vote in favor of the proposals voted on at the Stockholder

Meeting, and (iv) promptly securing the listing of certain shares issuable pursuant to the transaction documents and maintaining

the listing of the shares of Common Stock on an eligible market.

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, (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 of the Company, (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.

In addition, for as long as any 2020 Convertible

Notes or Warrants remain outstanding, the Company will not (i) issue or sell any rights, warrants or options to subscribe for or

purchase Common Stock or directly or indirectly convertible into or exchangeable or exercisable for Common Stock at a price which

varies or may vary with the market price of the Common Stock, including by way of one or more reset(s) to any fixed price, unless

the conversion, exchange or exercise price of any such security cannot be less than the then applicable Conversion Price with respect

to the Common Stock into which any 2020 Convertible Notes are convertible or redeemable or the then applicable Exercise Price (as

defined in the Warrants) with respect to the Common Stock into which any Warrant is exercisable or (ii) enter into, or effect any

transaction under, any agreement, including, but not limited to, an equity line of credit, an “at-the-market”

or similar agreement, whereby the Company may issue securities at a future determined price.

On March 16, 2020, the holders of the August

2018 Secured Convertible Notes were repaid in full, including any outstanding interest.

Amortization of Principal

The 2020 Convertible Notes provide that

the Company will repay the principal amount of 2020 Convertible Notes in equal monthly installments of 1/12th of the principal

amount of the 2020 Convertible Notes beginning October 31, 2020 and the last business day of each calendar month anniversary thereafter

(each an “Installment Date”).

On each Installment Date, assuming the Equity Conditions described below are met and

Stockholder Approval has been obtained, all or some of the Installment Amount (as defined in the 2020 Convertible Notes) shall

be converted into shares of Common Stock, provided however that the Company may elect prior to any Installment Date to pay all

or a portion of the installment amount in cash, as described below.

The Company may elect to pay each monthly

Installment Amount in (i) cash (a “Company Redemption”

and such cash payment, the “Company Installment Redemption

Price”) equal to 100% of the portion of such Installment Amount which the Company elects or is required to redeem pursuant

to a Company Redemption (the “Company Redemption Amount”) or (ii) if (a) the Equity Conditions described below are

satisfied or waived and (b) the Company so elects and Stockholder Approval has been obtained, by conversion of all or some of an

Installment Amount into Common Stock (a “Company Conversion”).

To the extent that the Company elects to pay an Installment

Amount in shares of Common Stock, then (A) twenty-three (23) trading days prior to the applicable Installment Date (each such date

being a “Pre-Installment Date”), the Company shall deliver to the Investor(s) a number of shares of Common Stock (each

such quantity being a “Pre-Installment Share Amount”) equal to the Installment Amount being paid in shares of Common

Stock divided by the lower of (i) the then prevailing Conversion Price or (ii) the Market Price (as defined below) determined on

the applicable Pre-Installment Date, and (B) on the applicable Installment Date, the Company shall deliver to the Investor a number

of shares of Common Stock equal to (a) the amount of the applicable Installment Amount being paid in shares of Common Stock divided

by the lower of (i) the then prevailing Conversion Price or (ii) the Market Price determined on the applicable Installment Date,

less (b) any applicable Pre-Installment Share Amount delivered pursuant to the applicable Installment Amount.

“Market Price”

means 85% of the arithmetic average of the five (5) lowest daily Weighted Average Prices of the Common Stock during the twenty

(20) consecutive Trading Day period ending on the Trading Day immediately preceding the applicable date of determination, subject

to adjustments for any stock split, stock dividend, stock combination, reclassification or other similar transaction during such

measuring period.

With respect to any given date of determination,

the “Equity Conditions”

(i) on each day during the period

beginning thirty (30) Trading Days immediately prior to the applicable date of determination and ending on and including the applicable

date of determination (the “Equity Conditions Measuring Period”), the shares of Common Stock issuable pursuant to the

2020 Convertible Notes and upon exercise of the Warrants (the “Underlying Securities”) shall be registered for resale

pursuant to one or more registration statements filed with the SEC or eligible for sale pursuant to Rule 144 promulgated under

the Securities Act (or a successor rule thereto) (collectively, “Rule 144”);

(ii) on each day during the Equity

Conditions Measuring Period, the Common Stock is designated for quotation on the Nasdaq Capital Market (the “Principal Market”)

or any other eligible market and shall not have been suspended from trading on such exchange or market nor shall delisting or suspension

by such exchange or market been threatened (with delisting reasonably likely to occur after giving effect to all applicable notice,

appeal, cure, compliance and hearing periods), commenced or pending either (A) in writing by such exchange or market or (B) by

falling below the then effective minimum listing maintenance requirements of such exchange or market;

(iii) during the Equity Conditions

Measuring Period, the Company shall have delivered shares of Common Stock pursuant to the terms of the 2020 Convertible Notes and

shares of Common Stock upon exercise of the Warrants to the holders on a timely basis as set forth in the 2020 Convertible Notes

and the Warrants, respectively;

(iv) the shares of Common Stock

issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion or Company Optional Redemption,

as applicable, requiring the satisfaction of the Equity Conditions may be issued in full without violating the 2020 Convertible

Notes and the rules or regulations of the Principal Market or any other applicable eligible market;

(v) during the Equity Conditions

Measuring Period, the Company shall not have failed to timely make any payments within five (5) business days of when such payment

is due pursuant to any transaction document.

(vi) during the Equity Conditions

Measuring Period, there shall not have occurred either (A) the public announcement of a pending, proposed or intended Fundamental

Transaction (as defined in the 2020 Convertible Notes) which has not been abandoned, terminated or consummated, (B) an Event of

Default or (C) an event that with the passage of time or giving of notice would constitute an Event of Default or Triggering Event

(as defined in the 2020 Convertible Notes);

(vii) the Company shall have

no knowledge of any fact that would cause (x) one or more registration statements not to be effective and available for the resale

of all remaining shares of Common Stock issuable pursuant to the terms of the 2020 Convertible Notes and upon exercise of the Warrants

(in each case, without giving effect to any limitation on conversion or exercise set forth herein and therein), including the shares

of Common Stock issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion or Company

Optional Redemption, as applicable, requiring the satisfaction of the Equity Conditions, or (y) any shares of Common Stock issuable

pursuant to the terms of the 2020 Convertible Notes and upon exercise of the Warrants (in each case, without giving effect to any

limitation on conversion or exercise set forth herein and therein), including the shares of Common Stock issuable upon conversion

of the Conversion Amount that is subject to the applicable Company Conversion or Company Optional Redemption, as applicable, requiring

the satisfaction of the Equity Conditions, not to be eligible for sale without restriction pursuant to Rule 144 (other than with

respect to Rule 144(i)) (or any successor thereto) promulgated under the Securities Act, provided that no Public Information Failure

has occurred, and any applicable state securities laws;

(viii) during the Equity Conditions

Measuring Period, the Company otherwise shall have been in compliance with and shall not have breached any provision, covenant,

representation or warranty of any transaction document in any material respect (other than representations or warranties subject

to material adverse effect or materiality, which may not be breached in any respect);

(ix) during the Equity Conditions

Measuring Period, the Investor shall not have been in possession of any material, nonpublic information received from the Company,

any subsidiary or its respective agent or affiliates;

(x) the shares of Common Stock

issuable upon conversion of the Conversion Amount that is subject to the applicable Company Conversion or Company Optional Redemption,

as applicable, requiring the satisfaction of the Equity Conditions are duly authorized and listed and eligible for trading without

restriction on an eligible market;

(xi) the average daily dollar

trading volume of the Common Stock as reported by Bloomberg during the twenty (20) Trading Days immediately prior to the applicable

date of determination shall be at least $100,000;

(xii) on each Trading Day during

the Equity Conditions Measuring Period, the closing price of the Common Stock equals or exceeds $0.05 (as adjusted for any stock

dividend, stock split, stock combination, reclassification or similar transaction occurring after March 11, 2020).

Any holder of a Note may, by notice to

the Company, accelerate future installment payments to any applicable Installment Date, in which case the Company will deliver

shares of Common Stock for the conversion of such accelerated payments (the “Accelerated Amount”), regardless of whether

the Installment Amount scheduled to be paid on such applicable Installment Date shall be paid in cash, shares of Common Stock or

a combination thereof.

In the event that the Investor delivers one or more such notices of acceleration, the aggregated Accelerated

Amount shall not be greater than six (6) times such Investor’s pro rata amount.

If the Company fails to redeem the Company

Redemption Amount on the applicable Installment Date by payment of the Company Installment Redemption Price on such date, then

at the option of the Investor designated in writing to the Company (any such designation shall be deemed a “Conversion Notice”

pursuant to the 2020 Convertible Notes), (i) the Investor shall have the rights set forth in the 2020 Convertible Notes as if the

Company failed to pay the applicable Company Installment Redemption Price and all other rights as an Investor in the 2020 Convertible

Notes (including, without limitation, such failure constituting an Event of Default described in the 2020 Convertible Notes) and

(ii) the Investor may require the Company to convert all or any part of the Company Redemption Amount at the Company Conversion

Price as in effect on the applicable Installment Date.

Subject to certain beneficial ownership

limitations, until the Company Installment Redemption Price is paid in full, the Company Redemption Amount may be converted, in

whole or in part, by the Investor into Common Stock.

In the event the Investor elects to convert all or any portion of the Company

Redemption Amount prior to the applicable Installment Date as set forth in the immediately preceding sentence, the Company Redemption

Amount so converted shall be deducted in reverse order starting from the final Installment Amount to be paid on the final Installment

Date, unless the Investor otherwise indicates and allocates among any Installment Dates in the applicable Conversion Notice.

Optional Redemption at Company’s

At any time after the date of issuance

of the 2020 Convertible Notes, the Company will have the right to redeem a portion or all of the 2020 Convertible Notes in cash

at a price equal to (i) so long as there has been no Equity Conditions Failure during the period beginning on the date on which

the Company provided notice of such redemption through the trading day immediately before the date the Company makes the entire

redemption payment, 110% of the Conversion Amount to be redeemed and (ii) if an Equity Conditions Failure occurs (which is not

waived in writing by the holder) at any time during the period beginning on the date on which the Company provided notice of such

redemption through the trading day immediately before the date the Company makes the entire redemption payment, the greater of

(x) 125% of the Conversion Amount to be redeemed and (y) the product of (A) the Conversion Amount being redeemed and (B) the quotient

determined by dividing (I) the greatest closing price of the Common Stock on any trading day during the period commencing on the

date immediately preceding the date on which the Company provided notice of such redemption and ending on the trading day immediately

before the date the Company makes the entire redemption payment, by (II) the lowest Conversion Price in effect during such period.

Conversion of the 2020 Convertible Notes

Each Note is convertible, at the option

of the Note holder, into shares of Common Stock at an initial conversion price of $1.375, subject to adjustment as provided in

the 2020 Convertible Notes;

provided, however, upon receipt of Stockholder Approval, the conversion price shall be $0.21, subject

to adjustment as provided in the 2020 Convertible Notes.

On or after the date Stockholder Approval

is obtained, if the Company issues or sells, or the Company publicly announces the issuance or sale of, any shares of Common Stock,

or convertible securities or options issuable or exchangeable into Common Stock (a “New Issuance”), under which such

Common Stock is sold for a consideration per share less than the Conversion Price then in effect, the conversion price of the 2020

Convertible Notes will be adjusted to the New Issuance price in accordance with the formulas provided in the 2020 Convertible Notes.

Any such adjustment will not apply with respect to the issuance of Excluded Securities (as defined in the 2020 Convertible Notes).

Upon Stockholder Approval, the conversion price may be further reduced to any amount and for any period of time deemed appropriate

by the board of directors of the Company.

March Securities Purchase Agreement

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 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,

136,986 shares of the Company’s Common Stock for marketing services at $1.46 per share.

On January 27, 2021, the Company issued

to certain employees 520,000 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.

On January 27, 2021, the Company issued

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 December 31, 2022 and have a five year term.

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”).

received approximately $61.6 million in gross proceeds.

The Special Equities Group, a division of Bradley Woods & Co.

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 will receive 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 and 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), will be exercisable immediately, and will have a term of exercise of

five years, and the Company will be required to register for resale the shares of common stock underlying the New Warrants.

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 pursuant to a Purchase and Sale Agreement

Purchase Agreement ”) with (i) Harold Aaron Chizick, (ii) Jennifer Mara Chizick, (iii) Wishing Thumbelina

Wishing Thumbelina ”), and (iv) Harold Aaron Chizick and Jennifer Mara Chizick, the trustees of The Chizsix

(2019) Family Trust for and on behalf of Harold Aaron Chizick, Jennifer Mara Chizick and Jay Mark Sonshine, trustees of The Chizsix

(2019) Family Trust, (the “

Trustees ”) (each a “

Seller ”

and, collectively, “

Sellers ”),

pursuant to which the Company acquired from the Sellers all 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 “

Acquisition ”).

Total consideration paid by the Company in the transaction at

closing consisted of $8.5 million in cash and 1,977,658 shares (the “

Shares ”) of the Company’s common stock, $0.001 par value per share (the “

Common Stock ”)

with a value of approximately $3.5 million, both as subject to certain purchase price adjustments.

Of 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.

On February 1, 2021,

the Company issued 53,763 Restricted Stock Units to an employee.

The Restricted Stock Units vest over three years with one third

vesting each anniversary date.

As a result of COVID 19, the majority

of our employees started working remotely and we stopped paying rent in April of 2020.

On November 30, 2020, the landlord filed

a lawsuit demanding that the Company pay all past due rent.

On February 18, 2021 we entered into a settlement agreement with the

landlord whereby we agreed to pay $237,500 in full settlement of all claims and promised to resume paying the contractually agreed

rent in full starting March 1, 2021.

On September 21, 2020, the Company entered

into an employment agreement with a senior executive.

The agreement provided for a two-year term and an equity grant among other

In or about January of 2021 the Company and the Executive mutually elected to terminate the agreement.

As part of the

separation agreement, the Company agreed to pay the executive $343,750 as well as $11,250 as reimbursement for health insurance

premiums for 15 months.

The executive was granted 750,000 fully vested options to purchase shares of the Company’s Common

Stock., with a strike price of $3.06 and 1 year in which to exercise said options, to and including February 2, 2022.

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