What changed in this filing

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Item 1. Legal Proceedings

2025-11-14 compared with 2025-08-14 · 84 added, 81 removed, 99 unchanged (63% of the section changed)

Legal Proceedings

As of June 30, 2025,

As of September 30, 2025,

there were no material pending legal proceedings to which the Company is a party or as to which any of its property is subject other than

1 unchanged sentence

Securities Litigation:

On February 4, 2025, the District Court issued an order granting in

part and denying in part the renewed motion to dismiss and denying Plaintiffs’ motion for leave to file a sur-reply.

Court dismissed all claims against Mr.

On February 4, 2025, the District

Court issued an order granting in part and denying in part the renewed motion to dismiss and denying Plaintiffs’ motion for leave

to file a sur-reply.

The District Court dismissed all claims against Mr.

Denton, and claims against the Company and Mr.

Heyward based on all but one of the complained-of

However, the District Court determined that Plaintiffs had adequately pled a Section 10(b) claim based on March 2020 statements

concerning the number of times that the Rainbow Rangers cartoon was airing on Nickelodeon.

As to the other alleged misstatements that

were dismissed, and as to any claims against Mr.

Denton, the District Court granted Plaintiffs leave to amend their pleading another time.

On March 3, 2025, Plaintiffs filed a Third Amended Complaint, seeking again to assert claims against the Company and Mr.

Heyward related

to the four alleged misstatements that survived the Ninth Circuit appeal;

they did not replead any claims against Mr.

14, 2025, defendants filed a motion to dismiss the Third Amended Complaint.

On August 5, 2025, the District Court issued a decision that

granted in part and denied in part Defendants’ motion to dismiss Plaintiffs’ Third Amended Complaint.

Two of the four alleged

misstatements were dismissed with prejudice.

Plaintiffs were granted leave to amend as to one of the alleged misstatements, and the Court

denied the motion as to the fourth misstatement.

According to the August 5 decision, Plaintiffs may file a fourth amended complaint no

later than September 2, 2025 and Defendants’ response will be due September 29, 2025.

Heyward based

on all but one of the complained-of statements.

However, the District Court determined that Plaintiffs had adequately pled a Section 10(b)

claim based on March 2020 statements concerning the number of times that the Rainbow Rangers cartoon was airing on Nickelodeon.

the other alleged misstatements that were dismissed, and as to any claims against Mr.

Denton, the District Court granted Plaintiffs leave

to amend their pleading another time.

On March 3, 2025, Plaintiffs filed a Third Amended Complaint, seeking again to assert claims against

the Company and Mr.

Heyward related to the four alleged misstatements that survived the Ninth Circuit appeal;

they did not replead any

claims against Mr.

On April 14, 2025, defendants filed a motion to dismiss the Third Amended Complaint.

On August 5, 2025, the

District Court issued a decision that granted in part and denied in part Defendants’ motion to dismiss Plaintiffs’ Third Amended

Two of the four alleged misstatements were dismissed with prejudice.

Plaintiffs were granted leave to amend as to one of the

alleged misstatements, and the Court denied the motion as to the fourth misstatement.

Plaintiffs elected not to further amend their complaint.

Defendants’ response to the Third Amended Complaint will be due November 28, 2025.

Meanwhile, as previously reported,

the parties elected to mediate the dispute, as well as the shareholder derivative actions referenced below in Item 2, before Phillips

The mediation was held December 9, 2024.

the parties elected to mediate the dispute, as well as the shareholder derivative actions referenced below, before Phillips ADR.

The mediation

was held December 9, 2024.

The case did not settle during the mediation.

In light of the District Court’s February

4, 2025, order, however, the mediator has reached out to the parties to determine whether there is a basis now to resolve the dispute.

While the Company has advised that it would like to settle the lawsuit, the mediator has not reported back concerning his discussions

with Plaintiffs’ counsel.

We cannot predict whether the parties will decide to continue with mediation or, if they do, whether they

will be able to reach a settlement of the case and of related shareholder derivative litigation on terms acceptable to the parties.

In light of the District Court’s February 4, 2025, order,

however, the mediator has reached out to the parties to determine whether there is a basis now to resolve the dispute.

While the Company

has advised that it would like to settle the lawsuit, the mediator has not reported back concerning his discussions with Plaintiffs’

We cannot predict whether the parties will decide to continue with mediation or, if they do, whether they will be able to reach

a settlement of the case and of related shareholder derivative litigation on terms acceptable to the parties.

As previously disclosed, the

47 unchanged sentences

Since the Company’s

last quarterly report, there have been no developments in the shareholder derivative actions involving the Company.

Related to the securities

class action, the Company’s directors (other than Dr.

Cynthia Turner-Graham and Michael Hirsh), together with Messrs.

Denton and former director Michael Klein, have been named as defendants in several putative stockholder derivative lawsuits.

As previously

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

District Court for the Central District of California and styled

In re Genius Brands Stockholder Derivative Litigation , Case No.

last quarterly report, there have been no developments in the shareholder derivative actions involving the Company, which were previously

Related to the securities class action, the Company’s directors (other than Dr.

Cynthia Turner-Graham and Michael Hirsh),

together with Messrs.

Heyward and Denton and former director Michael Klein, have been named as defendants in several putative stockholder

derivative lawsuits.

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

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);

an action filed in the Los Angeles County

Superior Court captioned Ly, etc.

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

Heyward, et al.

and an additional case pending in the U.S.

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

and an additional

case pending in the U.S.

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

Heyward, et al.

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.

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

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.

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

of the Company.

Accordingly, the derivative plaintiffs seek no recovery from the Company.

Instead, as a stockholder derivative action, the Company is

named as a nominal defendant.

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

pending the outcome of the securities litigation.

As the Company cannot predict the outcome of the securities litigation, it is likewise

unable to predict the outcome of the shareholder derivative lawsuits.

Instead, as a stockholder derivative action,

the Company is named as a nominal defendant.

Pursuant to agreements among the parties, the courts in all of the derivative lawsuits have

stayed proceedings pending the outcome of the securities litigation.

On October 2, 2025, a new

shareholder derivative action, Cohen v.

Heyward, et al., Case No.

A-25-929617-C was filed in the District Court of Clark County,

Nevada, making substantially similar allegations to the derivative actions already pending, and the Company expects, that the Cohen action

will be similarly stayed pending the outcome of the securities class action.

As the Company cannot predict the outcome of the securities

class action, it is likewise unable to predict the outcome of the shareholder derivative lawsuits.

Section 16(b) Litigation:

27 unchanged sentences

filed cross-motions for summary judgment in mid-January 2025.

Those cross-motions are fully briefed.

The Court has not yet responded to

the parties’ requests for argument on the cross-motions, and we cannot predict the outcome of the motions.

With those motions pending,

the parties met on March 11, 2025, to try to mediate the dispute before Phillips ADR.

The mediation was unsuccessful, and no further mediation

sessions are scheduled.

To the extent the case continues following disposition of the cross-motions for summary judgment, pre-trial proceedings

have concluded and the case will presumably proceed to trial.

As of this writing, the Court still has not set a trial date.

As previously

noted, Plaintiff seeks no relief from the Company;

On September 30, 2025, the Court denied all cross-motions for summary judgment.

The parties met on March 11,

2025, to try to mediate the dispute before Phillips ADR.

The mediation was unsuccessful, and no further mediation sessions are scheduled.

As of this writing, the Court has not yet set a trial date or otherwise a pre-trial schedule.

As previously noted, Plaintiff seeks no

relief from the Company;

indeed, he seeks monetary relief for the Company.

In any event, the Company cannot

predict the outcome of the case.

In any event, the Company cannot predict the outcome of the

In connection with the Augenbaum

lawsuit, two of the investor groups named as defendants (the “demanding defendants”) have made a demand on the Company for

lawsuit, three of the investor groups named as defendants (the “demanding defendants”) have made a demand on the Company for

indemnification pursuant to terms of an indemnity provision of the securities purchase agreements under which they invested in the Company.

2 unchanged sentences

have entered into standstill agreements and the parties have agreed to defer resolution of the indemnification matter pending resolution

of the underlying litigation.

In addition, the Company’s placement agent for the offerings at issue, Special Equities Group (“SEG”),

was subpoenaed by Mr.

Pursuant to its placement-agent agreement with the Company, which covers a relationship broader than

the offerings at issue, SEG demanded indemnification from the Company for its legal fees to comply with that subpoena.

While reserving

its rights, the Company believes that SEG has an indemnity claim under the governing placement agent agreement that likely has more merit

than the demanding defendants’ demands.

The Company cannot predict whether other parties may issue indemnification demands, or the

outcome of any future proceedings that might arise concerning the such demands.

of the underlying litigation with two of the groups and is in negotiations with the third.

In addition, the Company’s placement

agent for the offerings at issue, Special Equities Group (“SEG”), was subpoenaed by Mr.

Pursuant to its placement-agent

agreement with the Company, SEG demanded indemnification from the Company for its legal fees incurred in complying with the discovery

While reserving its rights, the Company believes that SEG’s indemnity claim under the governing placement agent agreement

likely has more merit than the demands of the demanding defendants.

SEG has presented bills for legal expenses totaling several hundred

thousand dollars, a figure that the Company views as excessive.

The Company is unable to predict the outcome of this dispute.

In all of the above-mentioned

1 unchanged sentence

maintains a program of directors’ and officers’ liability insurance that, subject to the insurers’ reservations of rights,

has offset a portion of the costs of defending the securities class action litigation, and that the Company expects will afford coverage

for some costs of the other shareholder litigation should any of those cases proceed.

has offset a substantial portion of the costs incurred in defending the securities litigation and the shareholder derivative actions,

as well as the Augenbaum lawsuit.

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