What changed in this filing

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Item 1. Legal Proceedings

2021-08-16 compared with 2021-05-18 · 57 added, 64 removed, 13 unchanged (90% of the section changed)

LEGAL PROCEEDINGS.

As of March 31, 2021, there were no material pending

As of June 30, 2021, there were no material pending

legal proceedings to which we are a party or as to which any of its property is subject other than described below.

As previously disclosed, on August 18, 2020, the

Company and its Chief Executive Officer Andy Heyward were named as defendants in a putative class action lawsuit filed in the U.S.

Court for the Central District of California and styled Salvador Verdin v.

Genius Brands International, Inc.

and Andy Heyward ,

2:20-cv-07457 DSF (RAOx).

We were later served with a similar lawsuit Sumit Garg v.

Genius Brands International, Inc.

Andy Heyward , Case No.

2:20-cv-07764.

Both suits allege generally that defendants violated Sections 10(b) and 20(a) of the Securities

Exchange Act of 1934 by making materially false or misleading statement regarding the Company’s business and business prospects,

artificially inflating the Company’s stock price during an alleged class period running from March 11 through July 5, 2020.

seek unspecified damages on behalf of the alleged class of persons who invested in our common stock during the alleged class period.

securities suits have been consolidated into a single proceeding before Judge Dale Fischer in the U.S.

District Court for the Central

District of California.

The proceeding will now be known as, styled In re Genius Brands International, Inc.

Securities Litigation,

Master File No.

On June 16, 2021, the Company was named as a defendant

in a lawsuit filed in the U.S.

District Court for the Central District of California styled A Parent Media Co.

Genius Brands

International, Inc.

2:21-CV-04897, alleging that the Company has infringed the plaintiff’s federally registered trademarks

KIDOODLE.TV, KIDOODLE and KIDOODLETV by sponsoring Google Ads in which the plaintiff’s trademarks appeared.

The Company has denied

the plaintiff’s allegations and believes that in the event of a finding of liability any potential damages would be nominal.

case is in the early stages with an initial status conference scheduled for August 30, 2021, and it is likely that a close of discovery

will be set in early 2022 with a trial date scheduled for mid-to-late 2022.

As previously disclosed, the Company, its

Chief Executive Officer Andy Heyward and its Chief Financial Officer Robert Denton are named as defendants in a putative class

action lawsuit filed in the U.S.

District Court for the Central District of California and styled In re Genius Brands

International, Inc.

Securities Litigation, Master File No.

2:20-cv-07457 DSF (RAOx).

The Lead Plaintiffs filed an amended complaint in the consolidated actions on February 1,

While asserting the same legal claims and class period, the amended complaint added a new defendant, Chief Financial Officer Robert

In a consolidated amended complaint filed

February 1, 2021, the Lead Plaintiffs allege generally that defendants violated Sections 10(b) and 20(a) of the Securities Exchange

Act of 1934 by making materially false or misleading statements regarding the Company’s business and business prospects,

artificially inflating the Company’s stock price during an alleged class period running from March 11 through July 5, 2020.

Plaintiffs seek unspecified damages on behalf of the alleged class of persons who invested in our common stock during the alleged

class period.

On March 17, 2021, the defendants filed a motion to dismiss the amended complaint.

Briefing of that motion is, by court-ordered

schedule, expected to extend into June 2021, with a hearing currently scheduled for July 5, 2021.

Pending resolution of the motion to

dismiss, neither discovery nor other substantive proceedings are expected.

Related to the securities class action, the Company’s

directors, Chief Executive Officer and Chief Financial Officer have been named as defendants in a putative shareholder derivative lawsuit

filed in September 2020 in the U.S.

District Court for the Central District of California and styled Correa, etc., v.

al., Case No.

That motion is fully briefed, and

the Court took the motion under submission without oral argument in early July 2021.

We cannot predict the outcome of the motion or

the timing of a decision from the Court.

Pending resolution of the motion to dismiss, neither discovery nor other substantive

proceedings are occurring or expected.

Related to the securities class action, the

Company’s directors, Chief Executive Officer and Chief Financial Officer have been named as defendants in several putative

shareholder derivative lawsuits.

As previously disclosed, these include a consolidated proceeding pending in the U.S.

District Court

for the Central District of California and styled In re Genius Brands Stockholder Derivative Litigation, Case No.

2:20-cv-08277 DSF (RAOx);

On November 20, 2020 a second case, Ly, etc.

an action filed in the Los Angeles County Superior Court captioned Ly, etc.

Heyward, et al.

was filed in the Los Angeles County Superior Court.

More recently, two additional putative shareholder derivative lawsuits have been filed,

one in the U.S.

District Court for the Central District of California captioned Contorno, etc.

Heyward et al., Case No.

2:21-cv-02331

DSF (RAOx), and another in the U.S.

and an additional case pending in the U.S.

District Court for the District of Nevada, styled Miceli, etc.

1 unchanged sentence

3:21-cv-00132-MMD-WGC.

While the allegations and legal claims vary somewhat among the derivative actions, they all generally allege that

the defendants breached fiduciary duties owed to the Company by, among other things, causing the Company to issue the supposedly false

and misleading statements that underlie the securities lawsuit, purportedly exposing the Company to liability and damaging the Company

in an unspecified amount.

By these derivative lawsuits, the plaintiffs seek no recovery from the Company.

Instead, as a shareholder derivative

action, the Company is named as Nominal Defendant;

and plaintiffs, all alleged stockholders of the Company, purports to sue on behalf

and for the benefit of the Company.

Pursuant to agreements among the parties, the courts have stayed proceedings in the derivative litigations

pending the outcome of anticipated motions to dismiss in the securities class action.

Additionally, the parties

to the Correa and Contorno actions have agreed to consolidate those two lawsuits and expect shortly to submit to the

Court an agreement formally to do so.

In all of the above-mentioned proceedings, defendants

have denied and continue to deny any wrongdoing and intend to defend the claims vigorously.

On July 7, 2020, we

received a letter from a law firm alleging that rights Genius Brands had licensed from POW!, LLC, through its the Stan Lee Universe, LLC

joint venture, had already been sold to another company, represented by that law firm.

The law firm alleged that the Company is, inter

alia, interfering with their contractual rights.

While the allegations and legal claims vary somewhat among the

derivative actions, they all generally allege that the defendants breached fiduciary duties owed to the Company by, among other

things, causing the Company to issue the supposedly false and misleading statements that underlie the securities lawsuit,

purportedly exposing the Company to liability and damaging the Company in an unspecified amount.

By these derivative lawsuits, the

plaintiffs seek no recovery from the Company.

Instead, as a shareholder derivative action, the Company is named as Nominal

and plaintiffs, all alleged stockholders of the Company, purport to sue on behalf and for the benefit of the Company.

Pursuant to agreements among the parties, the courts in all of the derivative lawsuits have stayed proceedings pending the outcome

of the motion to dismiss in the securities action.

On July 7, 2020, we received a letter from

a law firm alleging that rights Genius Brands had licensed from POW!, LLC, through its the Stan Lee Universe, LLC joint venture, had already

been sold to another company, represented by that law firm.

The law firm alleged that the Company is, inter alia, interfering with their

contractual rights.

This matter was referred to our outside litigation counsel.

We have been informed that

the matter is being adjudicated in an arbitration and that the arbitrator issued a gag order preventing further communications from Plaintiff

to 3 rd parties.

We have been informed that the matter is being adjudicated

in an arbitration and that the arbitrator issued a gag order preventing further communications from Plaintiff to 3 rd parties.

In all of the above-mentioned proceedings, the

Company has denied and continues to deny any wrongdoing and intends to defend the claims vigorously.

RISK FACTORS.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings