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GNUS > SEC Filings for GNUS > Form 8-K/A on 30-Jan-2014All Recent SEC Filings

Show all filings for GENIUS BRANDS INTERNATIONAL, INC.

Form 8-K/A for GENIUS BRANDS INTERNATIONAL, INC.


30-Jan-2014

Completion of Acquisition or Disposition of Assets, Unregiste


Item 2.01 Completion of Acquisition or Disposition of Assets.

The Merger

On November 15, 2013, Genius Brands International, Inc., a Nevada corporation ("we" or the "Company") entered into an Agreement and Plan of Reorganization (the "Merger Agreement") with A Squared Entertainment LLC, a Delaware limited liability company ("A Squared"), A Squared Holdings LLC, a California limited liability company and sole member of A Squared (the "Parent Member") and A2E Acquisition LLC, our newly formed, wholly-owned Delaware subsidiary ("Acquisition Sub"). Upon closing of the transactions contemplated under the Merger Agreement (the "Merger"), which occurred concurrently with entering into the Merger Agreement, our Acquisition Sub merged with and into A Squared, and A Squared, as the surviving entity, became a wholly-owned subsidiary of the Company. As a result of the Merger, the Company acquired the business and operations of A Squared. A Squared is a children's entertainment production company that produces original content for children and families that provide entertaining and educational media experiences. A Squared also creates comprehensive consumer product programs in the forms of toys, books and electronics. A Squared works with broadcasters, digital and online distributors and retailers worldwide as well as major toy companies, video game companies and top licensees in the kids and family arena.

Pursuant to the terms and conditions of the Merger:

At the closing of the Merger, the membership interests of A Squared issued and outstanding immediately prior to the closing of the Merger were cancelled and the Parent Member received shares of our common stock. Accordingly, an aggregate of 297,218,237 shares of our common stock were issued to the Parent Member.

Upon the closing of the Merger, Klaus Moeller resigned as the Company's Chief Executive Officer and Chairman and Larry Balaban resigned as the Company's Corporate Secretary, and simultaneously with the effectiveness of the Merger, Andrew Heyward was appointed as the Company's Chief Executive Officer, Amy Moynihan Heyward was appointed as the Company's President and Gregory Payne was appointed as the Company's Corporate Secretary. Mr. Moeller remains a director of the Company.

Effective upon the Company's meeting its information obligations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Michael Meader, Larry Balaban Howard Balaban and Saul Hyatt will resign as directors of the Company and Andrew Heyward, Amy Moynihan Heyward, Lynne Segall, Jeffrey Weiss, Joseph "Gray" Davis, William McDonough and Bernard Cahill will be appointed as directors of the Company.

In connection with the Merger, the Parent Member, Andrew Heyward and Amy Moynihan Heyward each executed a lockup agreement pursuant to which they agreed to refrain from selling or transferring securities of the Company they own for a period of time beginning on the closing date of the Merger and ending 90 days after the effective date of the Company's registration statement filed pursuant to the Financing Registration Rights Agreement (as discussed below). Additionally, the Company and the Parent Member entered into a Registration Rights Agreement (the "Merger Registration Rights Agreement") pursuant to which the Company granted the Parent Member demand registration rights and piggy back registration rights at any time following (18) months from the date of the closing of the Merger.

At the closing of the Merger, the Company sold an aggregate of 29,642,857 shares of shares of its common stock, $0.001 par value per share (the "Common Stock") in a private placement (the "Private Placement") to certain investors (the "Investors") at a per share price of $0.035 for gross proceeds to the Company of $1,037,500. The shares of Common Stock issued in the Private Placement are subject to price protection and "most favored nations" protection for a period equal to the lesser of three (3) years from the closing of the Private Placement or until no Investor holds any Common Stock purchased in the Private Placement, in the event the Company issues securities at a per share price of less than $0.035 per share, subject to certain exceptions, or otherwise issues securities to new investors whereby the Investors reasonably believe that the terms and conditions appurtenant to such issuance or sale are more favorable to that which were received by the Investors. In connection with the Private Placement, the Company's pre-Merger officers and directors executed lockup agreements pursuant to which they agreed to refrain from selling or transferring the shares of securities of the Company for a period of beginning on the closing date of the Merger and ending 90 days after the effective date of the Company's registration statement filed pursuant to the Financing Registration Rights Agreement (as discussed below), subject to certain leak-out provisions.

In connection with the Private Placement, the Company and the Investors entered into a Registration Rights Agreement (the "Financing Registration Rights Agreement") pursuant to which the Company agreed to file a "resale" registration statement with the Securities and Exchange Commission (the "SEC") covering all shares of Common Stock sold in the Private Placement within 90 days of the closing of the Private Placement (the "Filing Date"). The Company has agreed to maintain the effectiveness of the registration statement from the effective date until all securities have been sold or are otherwise able to be sold pursuant to . . .



Item 3.02 Unregistered Sales of Equity Securities.

Merger

The information set forth in Item 2.01 is incorporated by reference herein.

Private Placement

The information set forth in Item 2.01 is incorporated by reference herein.

Consulting Agreements

The information set forth in Item 2.01 is incorporated by reference herein.

Bridge Conversion

On November 15, 2013, the Company issued an aggregate of 44,861,260 shares of Common Stock to holders of its 12% convertible promissory notes, in the aggregate principal amount of $530,000, plus accrued but unpaid interest of $13,718.51 (the "Bridge Notes") in connection with the automatic conversion of the Bridge Notes upon consummation of the Merger, which qualified as an "Acquisition Transaction" under the terms of the Bridge Notes.

Salary Conversions

The information set forth in Item 2.01 is incorporated by reference herein.

Debt Conversions

On November 15, 2013, the Company issued an aggregate of 7,323,707shares of Common Stock to Klaus Moeller, Michael Meader, Larry Balaban and Howard Balaban in consideration for the cancellation of an aggregate of $256,329.76 in loans and accrued but unpaid interest thereon made to the Company by such individuals.

Debenture Conversion

On November 15, 2013, the Company issued an aggregate of 92,943,387 shares of Common Stock to holders of its 16% senior secured convertible debentures, in the aggregate principal amount of $1,088,333.32, plus accrued but unpaid interest in the aggregate amount of $38,140.54 (the "Debentures"), in connection with the automatic conversion of the Debentures upon consummation of the Merger, which qualified as an "Acquisition Transaction" under the terms of the Debentures, as amended.

The securities referenced above were issued to "accredited investors," as such term is defined in the Securities Act of 1933, as amended (the "Securities Act") and were offered and sold in reliance on the exemption from registration afforded by Section 4(2) and Regulation D (Rule 506) under the Securities Act of 1933 and corresponding provisions of state securities laws.



Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The information set forth in Item 2.01 is incorporated by reference herein.



Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On November 15, 2013, the Company's Board of Directors approved an amendment to the Company's bylaws (the "Bylaw Amendment") in order to "opt-out" of Section 78.378 et seq. of the Nevada Revised Statutes.

The foregoing description of the Bylaw Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the Bylaw Amendment filed as Exhibit 3.1 hereto and which is incorporated herein by reference.

On November 15, 2013, the Company's Board of Directors approved for submission to the Company's stockholders, an amendment to the Company's Articles of Incorporation, as amended, in order to classify the Company's Board of Directors into two classes, such that 25% of the Board shall be elected annually and 75% of the Board shall be elected every three years.



Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired. In accordance with Item 9.01(a), (i) audited financial statements for the fiscal years ended December 31, 2012 and 2011, and (ii) unaudited financial statements for the nine-month interim period ended September 30, 2013 will be filed within 71 days of the filing of this Current Report.

(b) Pro Forma Financial Information. In accordance with Item 9.01(b), our pro forma financial statements will be filed within 71 days of the filing of this Current Report.

(d) Exhibits.

The following is filed as an Exhibit to this Current Report on Form 8-K.

Exhibit No. Description




3.1       Amendment to Bylaws dated November 15, 2013*
10.1      Agreement and Plan of Reorganization between Genius Brands
          International, Inc., A Squared Entertainment LLC, A Squared Holdings
          LLC and A2E Acquisition LLC dated November 15, 2013*
10.2      Registration Rights Agreement dated November 15, 2013 between Genius
          Brands International, Inc. and A Squared Holdings LLC*
10.3      Form of Securities Purchase Agreement*
10.4      Form of Registration Rights Agreement between Genius Brands
          International, Inc. and the Investors signatory thereto*
10.5      Employment Agreement dated November 15, 2013 between Genius Brands
          International, Inc. and Andrew Heyward*
10.6      Employment Agreement dated November 15, 2013 between Genius Brands
          International, Inc. and Amy Moynihan Heyward*
10.7      Termination Agreement dated November 15, 2013 between Genius Brands
          International, Inc. and Klaus Moeller*
10.8      Salary Conversion Agreement dated November 14, 2013 between Genius
          Brands International, Inc. and Klaus Moeller*
10.9      Salary Conversion Agreement dated November 14, 2013 between Genius
          Brands International, Inc. and Jeanene Morgan*
10.10     Salary Conversion Agreement dated November 14, 2013 between Genius
          Brands International, Inc. and Larry Balaban*
10.11     Salary Conversion Agreement dated November 14, 2013 between Genius
          Brands International, Inc. and Howard Balaban*
10.12     Salary Conversion Agreement dated November 14, 2013 between Genius
          Brands International, Inc. and Michael Meader*
10.13     Engagement Letter dated November 15, 2013 between Genius Brands
          International, Inc. and ROAR LLC*
10.14     Consulting Agreement dated November 15, 2013 between Genius Brands
          International, Inc. and Girlilla Marketing LLC*
99.1      A Squared Holdings, LLC Consolidated Audited Financial Statements for
          the fiscal years ended December 31, 2012 and 2011
99.2      A Squared Entertainment, LLC Unaudited Financial Statements for the
          Nine Months ended September 30, 2013
99.3      Unaudited Pro Forma Condensed Combined Financial Information

*Incorporated by reference to the Current Report on Form 8-K filed with the Securities and Exchange Commission on November 20, 2013.

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