Replies to post #1628 on Genius Brands International Inc (GNUS)

[patentminer2013]

I honestly think they needed the money as they are probably burning at a few million a quarter. Even though there are lock up agreements it still causes overhead issues as people short the stock down.

[236T568]

the CEO forgot to mention the sleazy move with the warrants in that, even though they were in the money significantly, GNUS still issued additional warrants for free in order for the warrant holders to exercise the original warrants...

Good companies with good things happening just don't do this

Shareholder Letter

Dear Genius Shareholders,

This morning we 8k’d a warrant exchange for the Genius Brands warrants that were issued in November of 2015. The largest warrant holder is a Registered Investment Advisor in Chicago and a fundamental long term investor with a five year time horizon. They approached us a few months ago with this concept and quite frankly we were not looking for additional capital. As you know, I am the largest common shareholder of the company and I always do what is in the best interest of shareholders. The proposal was reviewed carefully and discussed internally with our Board and outside advisors over the past few months.

Given all the recent successes we’ve had on the business side, management and the Board thought it was prudent to add cash to the balance sheet to demonstrate to our large partners (SONY, Netflix, Toys R Us, Comcast, and now Mattel), that Genius is properly capitalized to execute on the various opportunities in front of it. We believe that the modest amount of dilution was more than made up for by the additional $3.5 million of net proceeds received by the company. The company is amidst a rapid growth period and accumulation of valuable assets and the new cash will be used to fuel increased marketing and promotion of the upcoming brands and kids channel. Rest assured that management and the Board is focused on continually building shareholder value.

In our company that means creating great children’s properties and successfully building them in the marketplace. Secondly, it means growing our channel. As stated on the recent conference call, we believe that any one of our brands, as well as our channel, have the likelihood of becoming in and of itself, worth many multiples of the company’s current valuation.

To that end, we will continue to work hard to build shareholder value. We are thankful for the participation of our warrant holders who are some of the most loyal shareholders we have. Demonstrating their fundamental investment in GNUS, 100% of the warrant holders that were eligible for the exchange participated in the transaction. Moreover, every warrant holder agreed to sign a lock up and leak out agreement which illustrated that they have confidence not only in the direction of the company, but also the direction of stock price.

Sincerely,

Andy Heyward