Item 1.01. Entry into a Material Definitive Agreement.

On January 28, 2021, Genius Brands International, Inc. (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"). The Existing Warrants (the "Registered Existing Warrants") and the shares of common stock underlying the Registered Existing Warrants were previously registered pursuant to a registration statement on Form S-3 (File No. 333-248623). 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 shall be 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.

The Special Equities Group, a division of Bradley Woods & Co. Ltd., acted as warrant solicitation agent and will receive a cash fee of approximately $4.3 million.

The gross proceeds to the Company from the Exercise are expected to be approximately $61.6 million. The Company currently intends to use the net proceeds from the Exercise for acquisitions of children's and family intellectual property, and/or companies in the children's and family entertainment space. The closing of the Exercise is expected to take place on or about January 29, 2021.

The foregoing descriptions of the Letter Agreements and the New Warrants are not complete and are qualified in their entirety by reference to the full text of the form of Letter Agreement and the form of the New Warrant, copies of which are attached as Exhibits 10.1 and 4.1, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 3.02. Unregistered Sales of Equity Securities.

The information in Item 1.01 above is incorporated herein by reference. The New Warrants described in Item 1.01 above will be issued in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and, along with the shares of common stock issuable upon the exercise thereof, have not been registered under the Securities Act, and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from such registration requirements.

This report shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

Item 9.01 Financial Statements and Exhibits.





(d) Exhibits



Exhibit Number   Description

4.1                Form of New Warrant
10.1               Form of Letter Agreement








  2

© Edgar Online, source Glimpses