What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-15 compared with 2021-08-16 · 188 added, 181 removed, 211 unchanged (64% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

MANAGEMENT'S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our

results of operations, financial condition and liquidity and capital resources should be read in conjunction with our financial statements

and related notes for the three and six months ended June 30, 2021 and 2020.

Certain statements made or incorporated by reference in this

report and our other filings with the Securities and Exchange Commission, in our press releases and in statements made by or with the

approval of authorized personnel constitute forward looking statements within the meaning of Section 27A of the Securities Act of 1933,

as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are subject to the safe harbor

created thereby.

Forward-looking statements reflect intent, belief, current expectations, estimates or projections about, among other

things, our industry, management’s beliefs, and future events and financial trends affecting us.

and related notes for the three and nine months ended September 30, 2021 and 2020.

Certain statements made or incorporated by reference

in this report and our other filings with the Securities and Exchange Commission, in our press releases and in statements made by or with

the approval of authorized personnel constitute forward looking statements within the meaning of Section 27A of the Securities Act of

1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are subject to the safe

harbor created thereby.

Forward-looking statements reflect intent, belief, current expectations, estimates or projections about, among

other things, our industry, management’s beliefs, and future events and financial trends affecting us.

Words such as “anticipates,”

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Genius Brands International, Inc.

(“we,” “us,” “our,” or the “Company”) is a global content and brand management

company that creates and licenses multimedia content.

Led by experienced industry personnel, we distribute our content in all

formats as well as a broad range of consumer products based on our characters.

In the children's media sector, our portfolio

features “content with a purpose” for toddlers to tweens, which provides enrichment as well as entertainment.

intellectual property titles include Stan Lee’s Superhero Kindergarten produced with Stan Lee’s Pow!

“us,” “our,” or the “Company”) is a global content and brand management company that creates and licenses

multimedia content.

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.

In the children's media sector, our portfolio features “content with a purpose” for toddlers

to tweens, which provides enrichment as well as entertainment.

New intellectual property titles include Stan Lee’s Superhero

Kindergarten produced with Stan Lee’s Pow!

Entertainment, and Oak Productions.

Arnold Schwarzenegger lends his voice as the lead and is also an Executive Producer on the

The show is being broadcast in the United States on our wholly-owned distribution outlet, Kartoon Channel!.

series include, 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

Arnold Schwarzenegger lends his voice as

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

Another new offering is KC Pop Quiz , a live action game show featuring

kids as contestants.

The show is hosted by Casey Simpson, a prominent influencer and former Nickelodeon star.

Both KC Pop Quiz

and Superhero Kindergarten are being broadcast in the United States on our wholly-owned distribution outlet, Kartoon Channel!.

Other newer series include, 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.

Our library titles include the award-winning Baby Genius , adventure comedy

Thomas Edison's Secret Lab ® and Warren Buffett’s Secret Millionaires Club, created with and

starring iconic investor Warren Buffett, which is distributed across our Genius Brands Network on Comcast’s Xfinity on Demand,

AppleTV, Roku, Amazon Fire, YouTube, Amazon Prime, Cox, Dish, Sling and Zumo, as well as Connected TV.

In July 2020, we entered into

a binding term sheet with POW, Inc.

(“POW!”) in which we agreed to form an entity with POW!

to exploit certain rights in

intellectual property created by Stan Lee, as well as the name and likeness of Stan Lee.

The entity is called “Stan Lee

Universe, LLC”.

and the Company executed an Operating Agreement for the joint venture, effective as of June 1, 2021.

agreement enables us to assume the worldwide rights, in perpetuity, to the name, physical likeness, physical signature, live-action

and animated motion picture, television, online, digital, publishing, comic book, merchandising and licensing rights to Stan Lee and

over 100 original Stan Lee creations, from which Genius Brands plans to develop and license multiple properties each year.

also in production on a new animated series starring Shaquille O’Neal called Shaq’s Garage.

In addition, we act as licensing agent for

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

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

Our library titles include the award-winning Baby Genius , adventure comedy Thomas

Edison's Secret Lab ® and Warren Buffett’s Secret Millionaires Club, created with and starring iconic

investor Warren Buffett, which is distributed across our Genius Brands Network on Comcast’s Xfinity on Demand, AppleTV, Roku, Amazon

Fire, YouTube, Amazon Prime, Cox, Dish, Sling and Zumo, as well as Connected TV.

In July 2020, we entered into a binding term sheet with

in which we agreed to form an entity with POW!

to exploit certain rights in intellectual property created by Stan Lee, as well

as the name and likeness of Stan Lee.

The entity is called “Stan Lee Universe, LLC”.

and the Company executed an Operating

Agreement for the joint venture, effective as of June 1, 2021.

This agreement enables us to assume the worldwide rights, in perpetuity,

to the name, physical likeness, physical signature, live-action and animated motion picture, television, online, digital, publishing,

comic book, merchandising and licensing rights to Stan Lee and over 100 original Stan Lee creations, from which Genius Brands plans to

develop and license multiple properties each year.

We are also in production on a new animated series starring Shaquille O’Neal

called Shaq’s Garage.

In addition, we act as licensing agent for Penguin

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

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

Environmental, Social and Governance Strategy

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In 2021, we created the role of Chief Diversity Officer.

That role is responsible for both helping meet our hiring goals and reviewing

the content we create.

That role is responsible for both helping meet our hiring goals and reviewing the content we create.

Our board of directors is diverse:

33.3% female and with representation from people of color and the LBGTQ community.

· Our diverse workforce is 59% female.

Our diverse workforce is approximately 62% female.

Preventing Harassment and Discrimination

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We expect employees to report any violations of Company policies, including sexual harassment, they witness.

Among other ways, employees

can report incidents of harassment using our anonymous complaint and reporting hotline.

Among other ways, employees can report incidents of harassment using our anonymous complaint and reporting hotline.

Social Impact and Corporate Social Responsibility

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Group, a division of Bradley Woods & Co.

Ltd., acted as warrant solicitation agent and received a cash fee of approximately $4.3 million.

Ltd., acted as warrant solicitation agent and received a cash fee of approximately $4,286,844.

In consideration for the exercise of the Existing Warrants for cash, the exercising holders received new unregistered warrants to purchase

up to an aggregate of 39,740,500 shares of common stock (the “New Warrants”) at an exercise price of $2.37 per share 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), were exercisable immediately, and we were required to register the shares of common stock

underlying the New Warrants for resale.

up to an aggregate of 39,740,500 shares of common stock (the “New Warrants”) at an exercise price of $2.37 per share, exercisable

immediately, with an exercise period of five years from the initial issuance date.

Pursuant to the Letter Agreements, the New Warrants

are substantially in the form of the Existing Warrants (except for customary legends and other language typical for an unregistered warrant,

including the ability for the holder of the New Warrant to make a cashless exercise if no resale registration statement covering the common

stock underlying the New Warrants is effective after six months).

We were required to register the resale of the shares of common stock

issuable upon exercise of the New Warrants.

Coronavirus (COVID-19)

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We had announced a return to office date of September 7, 2021, for fully vaccinated employees.

However, due to a recent surge in COVID-19 cases and the increased transmissibility ofCOVID-19 variants, there may be a further delay

in returning, in-person, to the office.

We have not experienced any disruption in our supply chain, nor have we experienced any negative

impact from our animation production partners.

However, shipping logistical issues and increased expenses due to COVID-19 may impact our

consumer products partners and our projected advertising revenues.

With regard to content distribution, we have observed demand increases

for streaming entertainment services in 2021.

If there is a further resurgence and the COVID-19 outbreak is prolonged, we may see a negative

impact on our revenues.

Our management cannot at this point estimate the

impact of COVID-19 on our business and no provision for COVID-19 is reflected in the accompanying financial statements.

We will continue

to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state,

local or foreign authorities, or that we determine are in the best interests of our employees, customers, partners and stockholders.

date, we believe that COVID-19 has not caused a material negative impact on our business, including the effects on our customers, suppliers

or vendors, or on our financial results.

However, due to a recent surge in COVID-19 cases and the increased transmissibility of COVID-19 variants, the planned date for returning,

in-person, to the office is January 3, 2022.

To date, we believe that COVID-19 has started

to cause a negative impact on our business, including the effects on our customers, suppliers and vendors, which could have a negative

impact on our financial results.

Our management cannot at this point estimate the impact of COVID-19 on our business, and no provision

for COVID-19 is reflected in the accompanying financial statements.

However, with regard to content distribution, we have observed demand

increases for streaming entertainment services in 2021.

Supply chain issues are affecting the toy industry which may impact sales efforts

in our ChizComm Beacon Media subsidiary.

We will continue to actively monitor the situation and may take further actions that alter our

business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests

of our employees, customers, partners and stockholders.

Results of Operations

Our summary results for the three months ended

June 30, 2021 and the three months ended June 30, 2020 are below.

September 30, 2021 and September 30, 2020 are below.

Three Months Ended

June 30, 2021

June 30, 2020

September 30,

Licensing & Royalties

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During the three

months ended June 30, 2021 compared to the three months ended June 30, 2020, Licensing and Royalties revenue increased $1,073,397 or 660%.

The increase was primarily due to proceeds received in conjunction with the mutually agreed termination of certain licensing rights.

months ended September 30, 2021 compared to the three months ended September 30, 2020, Licensing and Royalties revenue decreased $108,912

The decrease was primarily due to the expiration of certain consumer product licenses that were not renewed.

Media Advisory & Advertising Services revenue

is a combination of client retainer fee-based services and media commissions.

The increase of $971,324 was a result of the ChizComm acquisition

on February 1, 2021.

The increase of $1,181,792 was a result of the ChizComm

acquisition on February 1, 2021.

Television & Home Entertainment revenue is

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as the start of a license period and the delivery of the content to the customer.

During the three months ended June 30, 2021 compared

to the three months ended June 30, 2020, Television & Home Entertainment revenue decreased $258,285, or 79%.

The decrease was primarily

due to the recognition of revenue related to the delivery of Rainbow Rangers Season 2 in 2020.

There was no comparable delivery

during the same period 2021.

During the three months ended September 30, 2021 compared

to the three months ended September 30, 2020, Television & Home Entertainment revenue increased $489,316, or 1,560%.

was primarily due to the recognition of revenue related to Stan Lee’s Superhero Kindergarten and Rainbow Rangers .

Advertising sales are generated on the Kid Genius

Cartoon Channel in the form of either flat rate promotions or advertising impressions served.

Advertising sales decreased by $4,255 or

6%, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

The decrease was primarily due to reduced

Ad impressions to drive an increase in market share and user growth.

Advertising sales increased by $34,186 or

80%, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

The increase was primarily

due to the addition of new licensed titles and revenue generated by Stan Lee’s Superhero Kindergarten .

Product sales are generated through Merch by Amazon

and consist of on-demand printed t-shirt sales for the Llama Llama and Rainbow Rangers brands.

Product sales decreased $655 or 50%, during

the three months ended June 30, 2021 compared to the three months ended June 30, 2021.

Product sales increased $1,075

or 326%, during the three months ended September 30, 2021 compared to the three months ended September 30, 2021.

Three Months Ended

June 30, 2021

June 30, 2020

September 30,

September 30, 2020

Marketing and Sales

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Marketing and sales expenses increased $822,885,

or 1,099%, for the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in

marketing and advertising expenses to promote Stan Lee’s Superhero Kindergarten and the Kartoon Channel!.

or 226%, for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to an increase

in marketing and advertising expenses to promote Stan Lee’s Superhero Kindergarten and the Kartoon Channel!.

Direct operating costs include costs of our product

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to share net profits of the properties on which they have rendered services.

During the three months ended June 30, 2021, we recorded

During the three months ended September 30, 2021, we recorded

film and television cost amortization expense of $249,141 and participation expense of $320,064 compared to expenses of $101,717 and $113,894,

respectively, for the three months ended June 30, 2020.

The increases in direct operating costs for the three months ended June 30, 2021

compared to the three months ended June 30, 2020 is primarily due to increased amortization and participation expenses related to revenues

from the Rainbow Rangers property.

respectively, for the three months ended September 30, 2020.

The increases in direct operating costs for the three months ended September

30, 2021 compared to the three months ended September 30, 2020 is primarily due to increased amortization and participation expenses related

to revenues from the Rainbow Rangers property.

General and administrative expenses consist primarily

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General and administrative expenses for

three months ended June 30, 2021 increased $4,737,317, or 200%, compared to the same period in 2020.

This increase was primarily related

to the acquisition of the ChizComm entities, increases in legal professional fees, share based compensation, rent expense and directors’

and officers’ insurance.

Interest expense for the three months ended June

three months ended September 30, 2021 increased $6,841,895, or 225%, compared to the same period in 2020.

This increase was primarily

due to an increase in share-based compensation expense of approximately $5.1 million as a result of the CEO’s RSU modification and

consolidation of ChizComm expenses due to the ChizComm Acquisition on February 1, 2021.

ChizComm general and administrative expenses consist

primarily of salaries, employee benefits and rent.

Interest expense for the three months ended September

30, 2021 decreased $15,136, or 88%, compared to the same period in 2020.

This decrease was due to the repayment of the outstanding Senior

Secured Convertible Notes in 2020.

Our summary results for the six months ended June

30, 2021 and the three months ended June 30, 2020 are below.

Six Months Ended

June 30, 2021

June 30, 2020

The decrease is primarily due to the repayment of the outstanding

Production Facility balance under the Loan and Security Agreement on July 14, 2021.

Our summary results for the nine months ended

September 30, 2021 and September 30, 2020 are below.

Nine Months Ended

September 30,

September 30, 2020

Licensing & Royalties

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for which we license the rights to our copyrights and trademarks of our brands and those of the brands for which we act as a licensing

During the six months ended June 30, 2021 compared to the six months ended June 30, 2020, Licensing and Royalties revenue increased

$1,040,492, or 284%.

The increase was primarily due to proceeds received in conjunction with the mutually agreed termination of certain

licensing rights.

On April 7, 2021, we finalized a Mutual Termination Agreement with Mattel, Inc., with regard to Rainbow Rangers

The agreement allows us to contract with other companies for the design and manufacturing of Rainbow Rangers toys.

During the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, Licensing and Royalties revenue

increased $931,581, or 165%.

The increase was primarily due to proceeds received in conjunction with the mutually agreed termination of

certain licensing rights during the second quarter.

Media Advisory & Advertising Services revenue

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to the customer.

During the six months ended June 30, 2021 compared to the six months ended June 30, 2020, Television & Home Entertainment

revenue decreased $227,031, or 60%.

The decrease was primarily due to the recognition of revenue related to the delivery of Rainbow

Rangers Season 2 in 2020.

There was no comparable delivery during the same period 2021.

During the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, Television &

Home Entertainment revenue increased $262,283, or 64%.

The increase was primarily due to the recognition of revenue related to Stan

Lee’s Superhero Kindergarten and Rainbow Rangers .

Advertising sales are generated on the Kid Genius

Cartoon Channel in the form of either flat rate promotions or advertising impressions served.

Advertising sales decreased by $26,450 or

18%, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

The decrease was primarily due to reduced

Ad impressions to drive an increase in market share and user growth.

Advertising sales increased by $7,736 or

4%, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The increase was primarily due

to the addition of new licensed titles and revenue generated by Stan Lee’s Superhero Kindergarten .

Product sales are generated through Merch by Amazon

and consist of on-demand printed t-shirt sales for the Llama Llama and Rainbow Rangers brands.

Product sales decreased $673 or 37%, during

the six months ended June 30, 2021 compared to the six months ended June 30, 2021.

Six Months Ended

June 30, 2021

June 30, 2020

Product sales increased $402

or 19%, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2021.

Nine Months Ended

September 30,

September 30, 2020

Marketing and Sales

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Marketing and sales expenses increased $2,724,790,

or 788%, for the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to an increase in marketing

and advertising expenses to promote Stan Lee’s Superhero Kindergarten and the Kartoon Channel!.

or 450%, for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to an increase

in marketing and advertising expenses to promote Stan Lee’s Superhero Kindergarten and the Kartoon Channel!.

Direct operating costs include costs of our product

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to share net profits of the properties on which they have rendered services.

During the six months ended June 30, 2021, we recorded film

and television cost amortization expense of $658,369 and participation expense of $704,949 compared to expenses of $292,362 and $370,803,

respectively, for the six months ended June 30, 2020.

The increases in direct operating costs for the six months ended June 30, 2021 compared

to the six months ended June 30, 2020 is primarily due to increased amortization and participation expenses related to revenues from the

Rainbow Rangers property.

During the nine months ended September 30, 2021, we recorded

film and television cost amortization expense of $907,511 and participation expense of $1,025,012 compared to expenses of $395,073 and

$484,697, respectively, for the nine months ended September 30, 2020.

The increases in direct operating costs for the nine months ended

September 30, 2021 compared to the nine months ended September 30, 2020 is primarily due to increased amortization and participation expenses

related to revenues from the Rainbow Rangers property.

General and administrative expenses consist primarily

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General and administrative expenses for

the six months ended June 30, 2021 increased $9,908,563, or 240%, compared to the same period in 2020.

This increase was primarily related

to the acquisition of the ChizComm entities, increases in legal professional fees, share based compensation, rent expense and directors’

and officers’ insurance.

Interest expense for the six months ended June

the nine months ended September 30, 2021 increased $16,758,728, or 234%, compared to the same period in 2020.

The increase is primarily

related to the acquisition of the ChizComm entities, increases in legal professional fees, increase in share-based compensation expense

related to the modification of the CEO’s RSUs, rent expense and directors’ and officers’ insurance.

Interest expense for the nine months ended September

30, 2021 decreased $1,149,236, or 98%, compared to the same period in 2020.

This decrease was due to the repayment of the outstanding

Senior Secured Convertible Notes in 2020.

The decrease is primarily due to the repayment of the outstanding

Production Facility balance under the Loan and Security Agreement on July 14, 2021.

Liquidity and Capital Resources

During the six months ended June 30, 2021, our

cash and cash equivalents and marketable security positions increased by $38,308,505, net.

Cash and cash equivalents were used to purchase

marketable securities of $80,902,119 during the six months ended June 30, 2021.

During the nine months ended September 30, 2021,

our cash and cash equivalents and marketable security positions increased by $29,768,161.

Cash in excess of immediate requirements is

invested in accordance with our investment policy, primarily with a view for liquidity and capital preservation.

Accordingly, available-for-sale

securities, consisting principally of corporate and government debt securities, and money market funds classified as cash equivalents

are also available as a source of liquidity.

During the nine months ended September 30, 2021, we purchased marketable securities of $128,277,575,

net of redemptions during the period.

Working Capital

As of June 30, 2021, we had current assets of

$152,521,636, including cash and cash equivalents of $58,372,335, and current liabilities of $15,507,100, resulting in working capital

of $137,014,536.

As of December 31, 2020, we had current assets of $108,566,089, including cash and cash equivalents of $100,456,324,

and current liabilities of $7,178,906, resulting in working capital of $101,387,183.

Historically, we have incurred net losses.

the three months ended September 30, 2021 and September 30, 2020, we reported net losses of $9,253,380 and $2,007,209, respectively.

the nine months ended September 30, 2021 and September 30, 2020, we reported net losses of $92,906,971 and $391,101,155, respectively.

We reported net cash used in operating activities of $15,965,351 and $5,475,826 for the nine months ended September 30, 2021 and September

30, 2020, respectively.

As of September 30, 2021, we had an accumulated deficit of $562,464,295 and total stockholders’ equity of

$167,976,968.

As of September 30, 2021, we had current assets of $143,046,171, including cash and cash equivalents of $4,884,149 and marketable

securities of $125,340,336, and current liabilities of $11,607,299.

We had working capital of $131,438,872 as of September 30, 2021, compared

to working capital of $101,387,183 as of December 31, 2020.

The increase of $30,051,689 in working capital

as compared to December 31, 2020, was primarily due to an increase in the our cash and cash equivalents and marketable security position,

as compared to December 31, 2020, was primarily due to an increase in our cash and cash equivalents and marketable security position,

offset by the change in net current assets and liabilities as a result of the acquisition of ChizComm.

During the six months ended June 30, 2021, we

met our immediate cash requirements through existing cash balances.

During the nine months ended September 30, 2021,

we met our immediate cash requirements through existing cash balances.

Additionally, we used equity and equity-linked instruments to pay

4 unchanged sentences

needs, we expect to use existing cash balances.

Comparison of Cash Flows for the Six Months

Ended June 30, 2021, and the Six Months Ended June 30, 2020

Comparison of Cash Flows for the Nine Months

Ended September 30, 2021, and the Nine Months Ended September 30, 2020

Our total cash and cash equivalents were $4,884,149

and $54,382,775 as of June 30, 2021 and June 30, 2020, respectively.

and $50,461,566 as of September 30, 2021 and September 30, 2020, respectively.

Comparison of Cash Flows

Six Months Ended

June 30, 2021

June 30, 2020

Nine Months Ended

September 30, 2021

September 30, 2020

Cash used in operations

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Operating Activities

Cash used in operating activities for the six

months ended June 30, 2021 was $8,972,775 as compared to cash used in operating activities of $2,331,261 during the comparable period

Cash used in operating activities for the nine

months ended September 30, 2021 was $15,965,351 as compared to cash used in operating activities of $5,475,826 during the comparable period

in the prior year.

The increase in cash used in operating activities was primarily due to the increase in stock-based compensation expense,

accounts receivable (primarily due to the ChizComm Acquisition) and film and television costs.

These increases were partially offset by

increases in accounts payable (primarily due to the ChizComm acquisition).

The increase in cash used in operating activities was primarily due to an increase in professional fees, marketing

expenses, D&O insurance and salaries.

Investing Activities

Cash used in investing activities for the six

months ended June 30, 2021 was $89,316,206 as compared to a use of $500 for the six months ended June 30, 2020.

The increase in cash used

for investing was primarily due to our investment in marketable securities of $80,902,119.

Investing activities also include the cash

paid, net of cash acquired from the ChizComm Acquisition of $7,788,877 which occurred on February 1, 2021.

Cash used in investing activities for the nine

months ended September 30, 2021 was $135,521,695 as compared to a use of $554,926 for the nine months ended September 30, 2020.

in cash used for investing was primarily due to our net investments in marketable securities of $128,277,575.

Investing activities also

include the cash paid, net of cash acquired from the ChizComm acquisition of $7,788,877 which occurred on February 1, 2021.

Financing Activities

Cash provided by financing activities for the

six months ended June 30, 2021 was $56,204,992 as compared to $56,409,414 of cash provided by the comparable period in 2020.

source of cash during the six months ended June 30, 2021 was the net proceeds of $57,264,656 from the warrant exercise during January

During the six months ended June 30, 2020, our primary sources of cash were the net sales of common shares for $44,755,672, net

proceeds from the 2020 Convertible Notes of $6,098,000, the net proceeds of $5,819,319 from warrant exercises and $3,600,000 from the

collection of the Investor Notes.

nine months ended September 30, 2021 was $55,914,871 as compared to $56,187,197 of cash provided by the comparable period in 2020.

primary source of cash during the nine months ended September 30, 2021 was the net proceeds of $57,264,656 from the warrant exercise during

January 2021.

During the nine months ended September 30, 2020, our primary sources of cash were the net sales of common shares for $44,755,672,

net proceeds from the 2020 Convertible Notes of $6,098,000, the net proceeds of $5,874,329 from warrant exercises and $3,600,000 from

the collection of the Investor Notes.

Capital Expenditures

As of June 30, 2021, we do not have any material

As of September 30, 2021, we do not have any material

commitments for capital expenditures.

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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 2. Management’s Discussion and Analysis