Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-54389 | |
Entity Registrant Name | GENIUS BRANDS INTERNATIONAL, INC. | |
Entity Central Index Key | 0001355848 | |
Entity Tax Identification Number | 20-4118216 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 190 N. Canon Dr | |
Entity Address, Address Line Two | 4th Floor | |
Entity Address, City or Town | Beverly Hills | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90210 | |
City Area Code | 310 | |
Local Phone Number | 273-4222 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | GNUS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 319,139,256 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and Cash Equivalents | $ 7,093 | $ 2,058 |
Restricted Cash | 0 | 8,002 |
Investments in Marketable Securities (amortized cost of $97,530) | 89,873 | 112,523 |
Accounts Receivable, net | 9,327 | 7,632 |
Tax Credits Receivable | 26,350 | 0 |
Notes & Accounts Receivable from Related Party | 2,695 | 1,276 |
Other Receivable | 3,077 | 969 |
Prepaid Expenses and Other Assets | 5,143 | 3,725 |
Total Current Assets | 143,558 | 136,185 |
Noncurrent Assets: | ||
Property and Equipment, net | 2,380 | 449 |
Operating Lease Right of Use Assets, net | 8,639 | 2,785 |
Finance Lease Right of Use Assets, net | 2,183 | 0 |
Film and Television Costs, net | 14,982 | 2,940 |
Investment in Your Family Entertainment AG | 12,480 | 6,695 |
Intangible Assets, net | 33,774 | 9,733 |
Goodwill | 35,748 | 15,227 |
Other Assets | 247 | 69 |
Total Assets | 253,991 | 174,083 |
Current Liabilities: | ||
Accounts Payable | 4,855 | 7,192 |
Participations Payable | 3,243 | 2,438 |
Accrued Expenses | 1,793 | 535 |
Accrued Salaries and Wages | 2,492 | 799 |
Deferred Revenue | 10,794 | 432 |
Margin Loan | 62,372 | 6,392 |
Production Facilities, net | 19,283 | 0 |
Bank Indebtedness | 2,092 | 0 |
Operating Lease Liability | 1,071 | 664 |
Finance Lease Liability | 1,795 | 0 |
Warrant Liability | 421 | 855 |
Due to Related Party | 37 | 63 |
Other Current Liabilities | 932 | 1,761 |
Total Current Liabilities | 111,180 | 21,131 |
Noncurrent Liabilities: | ||
Deferred Revenue | 3,369 | 3,492 |
Operating Lease Liability | 7,935 | 2,460 |
Finance Lease Liability | 687 | 0 |
Contingent Earn Out | 1,345 | 1,340 |
Other Noncurrent Liabilities | 1,017 | 1,007 |
Total Liabilities | 125,533 | 29,430 |
Commitments and contingent liabilities (Note 21) | ||
Stockholders’ Equity | ||
Common Stock, $0.001 par value, 400,000,000 shares authorized 318,097,275 and 303,379,122 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 318 | 303 |
Additional Paid in Capital | 762,633 | 739,495 |
Treasury Stock, 6,993 and 0 shares of common stock as of September 30, 2022 and December 31, 2021, respectively, at cost | (3) | 0 |
Accumulated Deficit | (624,936) | (595,848) |
Accumulated Other Comprehensive Loss | (11,417) | (1,221) |
Total Genius Brands International, Inc. Stockholders' Equity | 126,595 | 142,729 |
Non-Controlling Interests in Consolidated Subsidiaries | 1,863 | 1,924 |
Total Stockholders' Equity | 128,458 | 144,653 |
Total Liabilities and Stockholders’ Equity | 253,991 | 174,083 |
Series A Preferred Stock [Member] | ||
Stockholders’ Equity | ||
Preferred Stock, Value, Issued | 0 | 0 |
Series B Preferred Stock [Member] | ||
Stockholders’ Equity | ||
Preferred Stock, Value, Issued | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 400,000,000 | 400,000,000 |
Common Stock, shares issued | 318,097,275 | 303,379,122 |
Common Stock, shares outstanding | 318,097,275 | 303,379,122 |
Treasury Stock, common shares | 6,993 | 0 |
Series A Preferred Stock [Member] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 1 | 1 |
Preferred stock shares issued | 1 | 1 |
Preferred stock shares outstanding | 1 | 1 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues: | ||||
Total Revenues | $ 19,679 | $ 1,872 | $ 43,244 | $ 5,278 |
Operating Expenses: | ||||
Marketing and Sales | 880 | 1,188 | 2,012 | 3,331 |
Direct Operating Costs | 13,875 | 634 | 28,865 | 2,152 |
General and Administrative | 10,363 | 9,884 | 36,327 | 23,932 |
Total Operating Expenses | 25,118 | 11,706 | 67,204 | 29,415 |
Loss from Operations | (5,439) | (9,834) | (23,960) | (24,137) |
Other Income (Expense): | ||||
Interest Expense | (782) | (2) | (1,256) | (20) |
Other Income (Expense), Net | (5,020) | 583 | (2,733) | (68,750) |
Net Other Income (Expense) | (5,802) | 581 | (3,989) | (68,770) |
Loss Before Income Tax Expense | (11,241) | (9,253) | (27,949) | (92,907) |
Provision for Tax Expense | 0 | 0 | 0 | 0 |
Net Loss | (11,241) | (9,253) | (27,949) | (92,907) |
Net Loss (Income) Attributable to Non-Controlling Interests | 23 | 0 | (1,139) | 0 |
Net Loss Attributable to Genius Brands International, Inc. | $ (11,218) | $ (9,253) | $ (29,088) | $ (92,907) |
Net Loss per Share (Basic) | $ (0.04) | $ (0.03) | $ (0.09) | $ (0.31) |
Net Loss per Share (Diluted) | $ (0.04) | $ (0.03) | $ (0.09) | $ (0.31) |
Weighted Average Shares Outstanding (Basic) | 317,282,770 | 300,321,658 | 312,243,439 | 296,001,742 |
Weighted Average Shares Outstanding (Diluted) | 317,282,770 | 300,321,658 | 312,243,439 | 296,001,742 |
Production Services [Member] | ||||
Revenues: | ||||
Total Revenues | $ 9,095 | $ 0 | $ 19,113 | $ 0 |
Content Distribution [Member] | ||||
Revenues: | ||||
Total Revenues | 9,106 | 599 | 18,049 | 874 |
License [Member] | ||||
Revenues: | ||||
Total Revenues | 280 | 91 | 2,816 | 1,497 |
Media Advisory Advertising Services [Member] | ||||
Revenues: | ||||
Total Revenues | $ 1,198 | $ 1,182 | $ 3,266 | $ 2,907 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net Loss | $ (11,241) | $ (9,253) | $ (27,949) | $ (92,907) |
Other Comprehensive Income (Loss): | ||||
Change in Unrealized Losses on Marketable Securities | (1,967) | (219) | (6,562) | (377) |
Realized Losses on Marketable Securities Reclassified from AOCI into Earnings | 37 | 25 | 160 | 25 |
Foreign Currency Translation Adjustment | (2,354) | (91) | (3,794) | 20 |
Total Other Comprehensive Loss | (4,284) | (285) | (10,196) | (332) |
Total Comprehensive Net Loss | (15,525) | (9,538) | (38,145) | (93,239) |
Less: Comprehensive Income (Loss) Attributable to Non-Controlling Interests | 23 | 0 | (1,139) | 0 |
Total Comprehensive Net Loss Attributable to Genius Brands International, Inc. | $ (15,502) | $ (9,538) | $ (39,284) | $ (93,239) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholder's Equity (unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 258 | $ 588,501 | $ (469,557) | $ (5) | $ 119,197 | |||
Beginning balance, shares at Dec. 31, 2020 | 258,438,514 | |||||||
Shares Issued for ChizComm acquisition | $ 2 | 3,525 | 3,527 | |||||
Shares Issued for ChizComm acquisition, shares | 1,980,658 | |||||||
Proceeds From Warrant Exchange, net | $ 40 | 57,225 | 57,265 | |||||
Proceeds From Warrant Exchange, net, shares | 39,740,500 | |||||||
Issuance of Common Stock for Services | 241 | 241 | ||||||
Issuance of Common Stock for Services, shares | 161,986 | |||||||
Share Based Compensation | 2,573 | 2,573 | ||||||
Warrant Incentive | 69,138 | 69,138 | ||||||
Net Loss | (76,259) | (76,259) | ||||||
Ending balance, value at Mar. 31, 2021 | $ 300 | 721,203 | (545,816) | (5) | 175,682 | |||
Ending balance, shares at Mar. 31, 2021 | 300,321,658 | |||||||
Issuance of Common Stock for Services | $ 1 | 728 | 729 | |||||
Issuance of Common Stock for Services, shares | 469,677 | |||||||
Share Based Compensation | 2,994 | 2,994 | ||||||
Other Comprehensive Loss | (47) | (47) | ||||||
Net Loss | (7,395) | (7,395) | ||||||
Ending balance, value at Jun. 30, 2021 | $ 301 | 724,925 | (553,211) | (52) | 171,963 | |||
Ending balance, shares at Jun. 30, 2021 | 300,791,335 | |||||||
Share Based Compensation | 5,553 | 5,553 | ||||||
Other Comprehensive Loss | (285) | (285) | ||||||
Net Loss | (9,253) | (9,253) | ||||||
Ending balance, value at Sep. 30, 2021 | $ 301 | 730,478 | (562,464) | (337) | 167,978 | |||
Ending balance, shares at Sep. 30, 2021 | 300,791,335 | |||||||
Beginning balance, value at Dec. 31, 2021 | $ 303 | 739,495 | (595,848) | (1,221) | 1,924 | 144,653 | ||
Beginning balance, shares at Dec. 31, 2021 | 303,379,122 | |||||||
Issuance of Common Stock for Services | 311 | 311 | ||||||
Issuance of Common Stock for Services, shares | 386,196 | |||||||
Issuance of Common Stock for Vested Restricted Stock Units | $ 1 | (1) | ||||||
Issuance of Common Stock for Vested Restricted Stock Units, shares | 603,648 | |||||||
Share Based Compensation | 4,491 | 4,491 | ||||||
Other Comprehensive Loss | (3,384) | (3,384) | ||||||
Net Loss | (4,531) | (31) | (4,562) | |||||
Ending balance, value at Mar. 31, 2022 | $ 304 | 744,296 | (600,379) | (4,605) | 1,893 | 141,509 | ||
Ending balance, shares at Mar. 31, 2022 | 304,368,966 | |||||||
Beginning balance, value at Dec. 31, 2021 | $ 303 | 739,495 | (595,848) | (1,221) | 1,924 | 144,653 | ||
Beginning balance, shares at Dec. 31, 2021 | 303,379,122 | |||||||
Ending balance, value at Sep. 30, 2022 | $ 318 | 762,633 | $ (3) | (624,936) | (11,417) | 1,863 | 128,458 | |
Ending balance, shares at Sep. 30, 2022 | 318,097,275 | 1 | (6,993) | |||||
Beginning balance, value at Mar. 31, 2022 | $ 304 | 744,296 | (600,379) | (4,605) | 1,893 | 141,509 | ||
Beginning balance, shares at Mar. 31, 2022 | 304,368,966 | |||||||
Shares Issued for Wow Acquisition | $ 11 | 11,543 | 11,554 | |||||
Shares Issued for Wow Acquisition, shares | 11,057,085 | 1 | ||||||
Fair Value of Replacement Options Related to Wow Acquisition | 1,213 | 1,213 | ||||||
Issuance of Common Stock for Services | $ 1 | 441 | 442 | |||||
Issuance of Common Stock for Services, shares | 736,667 | |||||||
Issuance of Common Stock for Vested Restricted Stock Units | $ 1 | (1) | ||||||
Issuance of Common Stock for Vested Restricted Stock Units, shares | 1,072,398 | |||||||
Share Based Compensation | 4,245 | 4,245 | ||||||
Other Comprehensive Loss | (2,528) | (2,528) | ||||||
Distributions to Non-Controlling Interests | (1,200) | (1,200) | ||||||
Net Loss | (13,341) | 1,193 | (12,148) | |||||
Ending balance, value at Jun. 30, 2022 | $ 317 | 761,737 | (613,720) | (7,133) | 1,886 | 143,087 | ||
Ending balance, shares at Jun. 30, 2022 | 317,235,116 | 1 | ||||||
Issuance of Common Stock for Vested Restricted Stock Units, Net of Shares Withheld for Taxes | $ 1 | (1) | $ (3) | (3) | ||||
Issuance of Common Stock for Vested Restricted Stock Units, Net of Shares Withheld for Taxes, shares | 862,159 | (6,993) | ||||||
Purchase of Treasury Stock Not Yet Settled | (285) | (285) | ||||||
Share Based Compensation | 1,182 | 1,182 | ||||||
Other Comprehensive Loss | (4,284) | (4,284) | ||||||
Net Loss | (11,216) | (23) | (11,239) | |||||
Ending balance, value at Sep. 30, 2022 | $ 318 | $ 762,633 | $ (3) | $ (624,936) | $ (11,417) | $ 1,863 | $ 128,458 | |
Ending balance, shares at Sep. 30, 2022 | 318,097,275 | 1 | (6,993) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows from Operating Activities: | ||
Net Loss | $ (27,949) | $ (92,907) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Amortization of Film and Television Costs | 5,100 | 1,073 |
Depreciation and Amortization of Property, Equipment & Intangible Assets | 1,857 | 426 |
Amortization of Right of Use Asset | 1,345 | 202 |
Share Based Compensation Expense | 9,918 | 11,120 |
Amortization of Premium on Marketable Securities | 807 | 334 |
Loss on Revaluation of Equity Investment in Your Family Entertainment AG | 1,170 | 0 |
Loss on Foreign Currency Transactions | 2,584 | 0 |
Gain on Warrant Revaluation | (434) | (103) |
Interest Incurred on Debt | 1,190 | 0 |
Realized Loss on Marketable Securities | 160 | 25 |
Warrant Incentive Expense | 0 | 69,139 |
Stock Issued for Services | 312 | 41 |
Other | 73 | (78) |
Decrease (Increase) in Operating Assets: | ||
Accounts Receivable, net | 5,942 | 3,047 |
Other Receivables | 272 | (179) |
Tax Credits Earned (less capitalized) | (8,166) | 0 |
Tax Credits Received | 3,874 | 0 |
Film and Television Costs, net | (7,388) | (4,810) |
Prepaid Expenses & Other Assets | (326) | (654) |
Increase (Decrease) in Operating Liabilities: | ||
Accounts Payable | (3,828) | (2,886) |
Accrued Salaries & Wages | 215 | 183 |
Accrued Expenses | (1,057) | (325) |
Accrued Production Costs | (1,654) | 0 |
Participations Payable | (498) | 788 |
Deferred Revenue | (6,472) | (494) |
Lease Liability | (365) | (136) |
Due to Related Party | (25) | 229 |
Other Liabilities | 506 | 0 |
Net Cash Used in Operating Activities | (22,837) | (15,965) |
Cash Flows from Investing Activities: | ||
Cash Payment for Wow, net of Cash Acquired | (37,311) | 0 |
Cash Payment for Equity Investment in YFE | (9,540) | 0 |
Cash Payment for Ameba, net of Cash Acquired | (3,893) | 0 |
Cash Payment for ChizComm, net of cash acquired | 0 | (7,789) |
Investment in Stan Lee Universe, LLC | 0 | (1,000) |
Investment in Marketable Securities | 0 | (305,387) |
Note Receivable from Related Party | (1,419) | 0 |
Proceeds from Principal Collections on Marketable Securities | 6,445 | 1,762 |
Proceeds from Sales of Marketable Securities | 8,836 | 177,110 |
Purchase of Property & Equipment | (459) | (209) |
Investment in Intangible Assets | (21) | (9) |
Net Cash Used in Investing Activities | (37,362) | (135,522) |
Cash Flows from Financing Activities: | ||
Proceeds from Margin Loan | 63,165 | 0 |
Repayments of Margin Loan | (7,802) | 0 |
Proceeds from Production Facilities | 7,455 | 0 |
Repayments of Production Facilities | (3,984) | (1,100) |
(Repayment)/Proceeds from Bank Indebtedness | 760 | 0 |
Finance Lease Payments | (920) | 0 |
Distributions to Noncontrolling Interests | (1,200) | 0 |
Debt Issuance Costs | (33) | 0 |
(Repayment)/Proceeds from Note Payable | (19) | 116 |
Shares Withheld for Taxes on Vested Restricted Shares | (3) | 0 |
Repayment of Payroll Protection Program | 0 | (366) |
Proceeds from Warrant Exchange, net | 0 | 57,265 |
Net Cash Provided by Financing Activities | 57,419 | 55,915 |
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (187) | 0 |
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash | (2,967) | (95,572) |
Beginning Cash, Cash Equivalents and Restricted Cash | 10,060 | 100,456 |
Ending Cash, Cash Equivalents and Restricted Cash | 7,093 | 4,884 |
Schedule of Non-Cash Financing and Investing Activities | ||
Shares issued for Wow Acquisition | 11,554 | 0 |
FV of Replacement Options Granted Related to Wow Acquisition | 1,213 | 0 |
Liability for Treasury Stock Not Yet Settled | 285 | |
Shares issued for ChizComm acquisition | 0 | 3,527 |
Liability for Acquisition Earnout Shares | 0 | 7,210 |
Issuance of Common Stock for Services | $ 0 | $ 728 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | Note 1: Organization and Business Organization and Nature of Business Genius Brands International, Inc. (“we,” “us,” “our,” or the “Company”) is a publicly traded (NASDAQ:GNUS) global content and brand management company that creates, produces, licenses, and broadcasts timeless and educational, multimedia animated content for children. Led by experienced industry personnel, the Company distributes its content primarily on streaming platforms and television and licenses its properties for a broad range of consumer products based on the Company’s characters. The Company is a leading “work for hire” producer for many of the streaming outlets and IP holders. In the children’s media sector, the Company’s portfolio features “content with a purpose” for toddlers to tweens, providing enrichment as well as entertainment. The Company’s programs, along with those programs it acquires and/or licenses, are being broadcast in the United States on the Company’s wholly-owned advertisement supported video on demand (“AVOD”) service, Kartoon Channel! Kartoon Channel! Kidaverse Ameba TV Stan Lee’s Superhero Kindergarten Llama Llama Rainbow Rangers, KC Pop Quiz Shaq’s Garage Baby Genius Thomas Edison’s Secret Lab®, Warren Buffett’s Secret Millionaires Club The Company also licenses its programs to other services worldwide, in addition to the operation of its own channels, including but not limited to Netflix, HBO Max, Paramount+, Nickelodeon, and satellite, cable and terrestrial broadcasters around the world. Through the Company’s recent investment in Germany’s Your Family Entertainment (“YFE”) Kartoon Channel! Worldwide The Company also recently acquired WOW Unlimited Media Inc. (“Wow”), and through that acquisition, established an affiliate relationship with Mainframe Studios, which is one of the largest animation producers in the world. In addition, Wow owns Frederator Networks Inc. (“Frederator”) and its Channel Frederator Network YouTube The Company owns a select amount of valuable IP, including among them a controlling interest in Stan Lee Universe (“SLU”), through which it controls the name, likeness, signature, and all consumer product and IP rights to Stan Lee (the “Stan Lee Assets”). The Company plans to launch a Stan Lee Centennial program of merchandise set to coincide with Stan Lee’s 100 th The Company also owns Beacon Media, the largest media buying service for children in North America. Beacon represents over 30 major toy companies, including Playmobile, Bandai Toys, Bazooka, Moose Toys, and JAKKS Pacific. In addition, the Company recently acquired the Canadian company Ameba TV (“Ameba”), which distributes a profitable SVOD channel for kids and is now expected to become the backbone of the newly launched SVOD channel of Kartoon Channel!, Kartoon Channel! Kidaverse The combination of the Company, its investment in YFE, its acquired companies Wow, Ameba and Beacon Media provide the Company with world class animation production studios, a catalogue representing thousands of hours of premium global content for children, a broadcast system for delivering that content and an in-house Consumer Products Licensing infrastructure to fully exploit the content. Recent Investments On January 13, 2022, the Company completed its acquisition of the issued and outstanding shares of Ameba and gained access to its kid-safe SVOD platform technology and 13,000 episodes of content. Refer to Note 3 for additional details. On April 6, 2022, the Company completed its acquisition of Wow. On October 26, 2021, the Company’s wholly-owned subsidiary, 1326919 B.C. LTD., a corporation existing under the laws of the Province of British Columbia and Wow, entered into an Arrangement Agreement to effect a plan of arrangement under the arrangement provisions of Part 9, Division 5 of the Business Corporations Act 38.3 million 11,057,000 Following the initial equity investment in YFE during the fourth quarter of 2021, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by YFE shareholders. Upon the expiration of the offer on February 14, 2022, the Company purchased an additional 2,637,717 5.7 million 2,574,000 0.6 million 914,284 2.7 million 6,857,132 48.0 Liquidity During the nine months ended September 30, 2022, the Company’s cash, cash equivalents and restricted cash decreased by $ 3.0 million As of September 30, 2022, the Company held marketable securities with a fair value of $ 89.9 million 22.7 million The Company borrowed an additional $ 63.2 million 7.8 million 4.2 million 0.65 2.65 61.2 million 1.54 43.4 million 0.6 million Upon the acquisition of Wow, the Company assumed certain credit facilities (the “Facilities”) with a Canadian bank. The Facilities are comprised of: (i) a $ 5.0 million 3.9 million 8.0 million 6.2 million 0.5 million 0.4 million Historically, the Company has incurred net losses. For the three months ended September 30, 2022 and 2021, the Company reported net losses of $11.2 million and $9.3 million, respectively. For the nine months ended September 30, 2022 and 2021, the Company reported net losses of $29.1 million and $92.9 million, respectively. The Company reported net cash used in operating activities of $22.8 million and $16.0 million for the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, the Company had an accumulated deficit of $624.9 million and total stockholders’ equity of $128.5 million. As of September 30, 2022, the Company had current assets of $143.6 million, including cash and cash equivalents of $7.1 million and current liabilities of $111.2 million. The Company had working capital of $ 32.4 million 115.1 million |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2: Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2021 has been derived from audited statements. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“US GAAP”) for complete financial statements and should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on April 6, 2022. The accompanying condensed consolidated financial statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Loss, Statements of Stockholders' Equity, and Statements of Cash Flows for all periods presented. Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Segments The Company determined its operating segments on the same basis that it assesses performance and makes operating decisions. The Company principally operates in two distinct business segments: the Content Production & Distribution Segment, which produces and distributes children’s content, and the Media Advisory & Advertising Services Segment, which provides media and advertising services. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company has identified its Chief Executive Officer as the CODM. The segments are organized around the products and services provided to customers and represent the Company’s reportable segments. Prior to the acquisition of the Beacon Media Group (formerly “ChizComm”), the Company’s operations were comprised of a single segment. The accounting policies for each segment are the same as for the Company as a whole. Refer to Note 23 for additional information. Principles of Consolidation and Basis of Presentation The Company’s condensed consolidated financial statements include the accounts of Genius Brands International, Inc. and its wholly-owned subsidiaries. The Company consolidates all majority-owned subsidiaries, investments in entities in which it has controlling influence and variable interest entities where the Company has been determined to be the primary beneficiary. Minority interests are recorded as non-controlling interests. Non-consolidated investments are accounted for using the equity method or the fair value option when the Company has the ability to significantly influence the operating decisions of the investee. When the Company does not have the ability to significantly influence the operating decisions of an investee, these equity securities are classified as either marketable investment securities or other investments and recorded at fair value with changes recognized within other Income (expense) on the consolidated statements of operations and comprehensive income (loss). All significant intercompany accounts and transactions have been eliminated in consolidation. Business Combinations The Company accounts for transactions that are classified as business combinations in accordance with the Financial Accounting Standards Boards’ (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) Variable Interest Entities The Company holds an interest in Stan Lee University (“SLU”), an entity that is considered a variable interest entity (“VIE”). The variable interest relates to 50% ownership in the entity that is comprised of the Stan Lee Assets (as defined below) and that requires additional financial support from the Company to continue operations. The Company’s total net cash investment in SLU as of September 30, 2022, is $ 0.8 million 0.4 million In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and the Company’s decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important. In determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all of its economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings (losses), subordination of the Company’s interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of the Company’s economic interests is a matter that requires the exercise of professional judgment. The Company continuously assesses whether it is the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in the Company consolidating its collaborators or partners. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Foreign Currency The Company considers the U.S. dollar to be its functional currency for its United States based operations. The Company considers the Canadian dollar to be its functional currency for its Canada based operations. Accordingly, the financial information is translated from the Canadian dollar to the U.S. dollar for inclusion in the Company’s consolidated financial statements. Revenue and expenses are translated at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss), net in stockholders’ equity. Foreign exchange transaction gains and losses are included in other income (expense), net in the condensed consolidated statements of operations. Cash and Cash Equivalents The Company considers all highly liquid debt instruments with initial maturities of three months or less to be cash equivalents. As of September 30, 2022 and December 31, 2021, the Company had cash and cash equivalents of $ 7.1 million 2.1 million Tax Credits Receivable The Federal and certain Provincial governments in Canada provide programs that are designed to assist film and television production in the form of refundable tax credits or other incentives. Estimated amounts receivable in respect of refundable tax credits are recorded as an offset to the related production operating cost, or to investment in film and television programming when the conditions for eligibility of production assistance based on the government’s criteria are met, the qualifying expenditures are made and there is reasonable assurance of realization. Determination of when and if the conditions of eligibility have been met is based on management’s judgment, and the amount recognized is based on management’s estimates of qualifying expenditures. The ultimate collection of previously recorded estimates is subject to ordinary course audits from the Canada Revenue Agency (“CRA”) and Provincial agencies. Changes in administrative policies by the CRA or subsequent review of eligibility documentation may impact the collectability of these estimates. The Company continuously reviews the results of these audits to determine if any circumstances arise that in management’s judgment would result in a previously recognized amount to be considered no longer collectible. The Company classifies the tax credits receivable as current based on their normal operating cycle. Government assistance, in the form of refundable tax credits, is relied upon as a key component of production financing. These amounts are claimed from the CRA through the submission of income tax returns and can take up to 18 to 24 months from the date of the first tax credit dollar being earned to being received. As this financing is fundamental to the Company’s ability to produce animated productions and generate revenue in the normal course of business, the normal operating cycle for such assets is considered to be a 12-to-24-month period, or the time it takes for the CRA to assess and refund the tax credits earned. As of September 30, 2022, the Company had recorded $ 26.4 million Marketable Debt Securities The Company purchases high quality, investment grade securities from diverse issuers. Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. Currently, the Company classifies its investments in marketable securities as “available-for-sale” and records these investments at fair value. The securities are available to support current operations and, accordingly, the Company classifies the investments as current assets without regard to their contractual maturity. Unrealized gains or losses on available-for-sale securities for which the Company expects to fully recover the amortized cost basis are recognized in accumulated other comprehensive (loss) income, a component of stockholders’ equity. If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized as a loss in the condensed consolidated statements of operations. The Company reports accrued interest receivable separately from the available-for-sale securities and has elected not to measure an allowance for credit losses for accrued interest receivables. Uncollectible accrued interest is written off when the Company determines that no additional interest payments will be received. Classified within Other Receivables on the condensed consolidated balance sheets, approximately $ 0.4 million Interest earned on investment securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums accounted for by the level yield method with no pre-payment anticipated. Equity-Method Investments When the Company does not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial policies, the investment is accounted for either (i) under the equity method of accounting or (ii) at fair value by electing the fair value option available under U.S. GAAP. Significant influence generally exists when the firm owns 20% to 50% of the entity’s common stock or in-substance common stock. In general, the Company accounts for investments acquired at fair value. See Note 5 for further information about the Company’s investment in YFE’s equity securities accounted for under the fair value option. Allowance for Doubtful Accounts Accounts receivable are presented on the balance sheets net of estimated uncollectible amounts. The carrying amounts of trade accounts receivable and unbilled accounts receivable represents the maximum credit risk exposure of these assets. The Company evaluates its accounts receivable balances on a quarterly basis to determine collectability based on an assessment of past events, current economic conditions, and forecasts of future events. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. The Company limits its exposure to this credit risk through a credit approval process and credit monitoring procedures. In addition, Wow’s contracts with customers usually require upfront and milestone payments throughout the production process. The Company’s customer base is mainly comprised of major Canadian, American, and worldwide studios, distributors, broadcasters, toy companies and AVOD and SVOD platforms that have been customers for several years. Property and Equipment Property and equipment are recorded at cost. Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Maintenance, repairs, and renewals, which neither materially add to the value of the assets nor appreciably prolong their lives, are charged to expense as incurred. Gains and losses from any dispositions of property and equipment are reflected in the consolidated statements of operations. Right of Use Leased Assets The Company determines at contract inception whether the arrangement is a lease based on its ability to control a physically distinct asset and determines the classification of the lease as either operating or finance under FASB ASC 842, Leases (“ASC 842”) Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company estimates the incremental borrowing rate to reflect the profile of collateralized borrowing over the expected term of the leases based on the information available on the lease commencement date or for leases existing upon the date of initial adoption of ASC 842, the date of adoption. The implicit rates within the Company’s existing finance leases are determinable and therefore used to determine the present value of finance lease payments. The operating lease ROU asset also includes any lease payments made prior to lease commencement date and excludes lease incentives. Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. Lease expense is recognized on a straight-line basis over the lease term in the consolidated statements of operations. Lease incentives are recognized as a reduction to the lease expense on a straight-line basis over the underlying lease term. Film and Television Costs The Company capitalizes production costs for episodic series produced in accordance with FASB ASC 926-20, Entertainment-Films - Other Assets - Film Costs Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of the Company’s business, some titles are more successful or less successful than anticipated. Management reviews its ultimate revenue for productions in development and cost estimates on a title-by-title basis, when an event or change in circumstances indicates that the fair value of the production may be less than its unamortized cost. This may result in a change in the rate of amortization of film costs and participations and/or a write-down of all or a portion of the unamortized costs of the film or television production to its estimated fair value. These write-downs are included in amortization expense within Direct Operating Expenses on the Company’s condensed consolidated statements of operations. There were no events or changes in circumstances that would indicate a change in fair value of productions and therefore the Company has not recorded any impairment charges during the nine months ended September 30, 2022 or 2021. The Company expenses all capitalized costs that exceed the initial market firm commitment revenue in the period of delivery of the episodes. Additionally, for episodic series, from time to time, the Company develops additional content, improved animation and bonus songs/features for its existing content. After the initial release of the episodic series, the costs of significant improvement to existing products are capitalized while routine and periodic alterations to existing products are expensed as incurred. Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the estimated fair value of net assets acquired in business combinations accounted for by the acquisition method. In accordance with FASB ASC 350, Intangibles Goodwill and Other Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods. Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions. Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values. Other intangible assets have been acquired, either individually or with a group of other assets, and were initially recognized and measured based on fair value. Annual amortization of these intangible assets is computed based on the straight-line method over the remaining economic life of the asset. Debt and Attached Equity-Linked Instruments The Company measures issued debt on an amortized cost basis, net of debt premium/discount and debt issuance costs amortized using the effective interest rate method or the straight-line method when the latter does not lead to materially different results. The Company analyzes freestanding equity-linked instruments including warrants attached to debt to conclude whether the instrument meets the definition of the derivative and whether it is considered indexed to the Company’s own stock. If the instrument is not considered indexed to the Company’s stock, it is classified as an asset or liability recorded at fair value. If the instrument is considered indexed to the Company’s stock, the Company analyzes additional equity classification requirements per FASB ASC 815-40, Contract’s in Entity’s Own Equity When required, the Company also considers the bifurcation guidance for embedded derivatives per ASC 815-15, Embedded Derivatives Treasury stock The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. Borrowing Costs Borrowing costs relate to the issuance of Wow’s interim production financing and are recorded as a reduction to the carrying amount of interim production financing and measured at amortized cost using the effective interest method. Borrowing costs are recognized as part of interest expense in the condensed consolidated statements of operations in the period in which they are incurred. Borrowing costs directly attributable to the acquisition or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time the assets are substantially ready for their intended use or sale. Upon the acquisition of Wow, the Company recorded $ 0.3 million 0.6 million Revenue Recognition The Company accounts for revenue according to standard FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”) Revenue is measured based on the consideration specified in a contract with a customer. Revenue is recognized when a customer obtains control of the products or services in a contract. Judgment is required in determining the timing of whether the transfer of control occurs at a point in time or over time and is discussed below. The Company evaluates each contract to identify separate performance obligations as a contract with a customer may have one or more performance obligations. Consideration in a contract with multiple performance obligations is allocated to the separate performance obligations based on their stand-alone selling prices. If a stand-alone selling price is not determinable, the Company estimates the stand-alone selling price using an adjusted market assessment approach. The Company’s main sources of revenue are derived from animation production services provided to third parties, the sale of licenses for the distribution of films and television programs, advertising revenues, and merchandising and licensing sales. Gross versus Net Revenue Presentation The Company evaluates individual arrangements with third parties to determine whether the Company acts as principal or agent under the terms. To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items. To the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any expenses incurred in providing agency services. Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement. The most significant factors that the Company considers include identification of the primary obligor, as well as which party has credit risk, general and inventory risk and the latitude or ability in establishing prices. The Company has identified the following material and distinct performance obligations. · Provide animation production services. · License rights to exploit Functional Intellectual Property (“functional IP” is defined as intellectual property that has significant standalone functionality, such as the ability be played or aired. Functional IP derives a substantial portion of its utility from its significant standalone functionality). · License rights to exploit Symbolic Intellectual Property (“symbolic IP” is intellectual property that is not functional as it does not have significant standalone use and substantially all of the utility of symbolic IP is derived from its association with the entity’s past or ongoing activities, including its ordinary business activities, such as the Company’s licensing and merchandising programs associated with its animated content). · Provide media and advertising services to clients. · Fixed and variable fee advertising and subscription-based revenue generated from the Genius Brands Kartoon Channel! YouTube · Options to renew or extend a contract at fixed terms. (While this performance obligation is not significant for the Company’s current contracts, it could become significant in the future). · Options on future seasons of content at fixed terms. (While this performance obligation is not significant for the Company’s current contracts, it could become significant in the future). Production Services Animation Production Services For revenue from animation production services, the customer controls the output throughout the production process. Each production is made to an individual customer’s specifications and if the contract is terminated by the customer, the Company is entitled to be reimbursed for any costs incurred to date, and for any prepaid commitments made, plus the agreed contractual mark-up. Revenue and the associated costs of such contracts are recognized over time on a percentage of completion basis - i.e. as the project is being produced, prior to it being delivered to the customer. The percentage-of-completion is calculated based upon the proportion of costs incurred cumulatively to total expected costs. Changes in revenue recognized as a result of adjustments to total expected costs are recognized in profit or loss on a prospective basis. Invoices related to these projects are issued based on the achievement of milestones during the project or other contractual terms. The difference between contractual payments received and revenue recognized is recorded as deferred revenue when receipts exceed revenue. When revenue exceeds milestone billings, the Company recognizes this difference as unbilled accounts receivable. Unbilled accounts receivable is transferred to accounts receivable when the Company has an unconditional right to consideration. When the outcome of an arrangement cannot be estimated reliably, revenue is recognized only to the extent of the expenses incurred that are recoverable. Content Distribution Film and Television Licensing The Company recognizes revenue related to licensed rights to exploit functional IP in two ways; for minimum guarantees, the Company recognizes fixed revenue upon delivery of content and the start of the license period and for functional IP contracts with a variable component, the Company estimates revenue such that it is probable there will not be a material reversal of revenue in future periods. The Company recognizes revenue related to licensed rights to exploit symbolic IP substantially similarly to functional IP. Although it has a different recognition pattern from functional IP, the valuation method is substantially the same, depending on the nature of the license. Invoices related to these projects are issued based on the achievement of milestones during the project or other contractual terms. The difference between contractual payments received and revenue recognized is recorded as deferred revenue when receipts exceed revenue. When revenue exceeds milestone billings, the Company recognizes this difference as unbilled accounts receivable. Unbilled accounts receivables are transferred to accounts receivable when the Company has an unconditional right to consideration. Advertising revenues The Company sells advertising and subscriptions on its wholly-owned AVOD service, Kartoon Channel! Kartoon Channel! Kidaverse Ameba TV Upon the acquisition of Wow, the Company generates advertising revenue from Frederator’s owned and operated YouTube YouTube Licensing & Royalties Merchandising and licensing The Company enters into merchandising and licensing agreements that allow customers to produce merchandise utilizing certain of the Company’s intellectual property. For minimum guaranteed amounts that make up a contract, revenue is recognized over time, over the term of the license period commencing on the date at which the customer can use and benefit from the licensed content. Variable consideration in excess of non-refundable guaranteed amounts, such as royalties and other contractual payments are recognized as revenue when the amounts are known and become due provided collectability is reasonably assured. Invoices are issued based on the contractual terms of an agreement and are usually payable within 30-45 days. Product Sales The Company recognizes revenue related to product sales when the Company completes its performance obligation, which is when the goods are transferred to the buyer. Media Advisory & Advertising Services Media and Advertising Services The Company provides media and advertising services to clients. Revenue is recognized when the services are performed. When the Company purchases advertising for clients on linear and across digital and streaming platforms and receives a commission, the commissions are recognized as revenue in the month the advertising is displayed. Direct Operating Costs Direct operating costs include costs of the Company’s product sales, non-capitalizable film costs, film and television cost amortization expense, impairment expenses related to film and television costs, and participation expense related to agreements with various animation studios, post-production studios, writers, directors, musicians or other creative talent with which the Company is obligated to share net profits of the properties on which they have rendered services. Upon the acquisition of Wow, the Company also includes salaries and related service production employee costs as part of its direct operating costs. Share-Based Compensation The Company issues stock-based awards to employees and non-employees that are generally in the form of stock options or restricted stock units (“RSUs”). Share-based compensation cost is recorded for all options and awards of unvested stock based on the grant-date fair value of the award. The fair value of stock options is estimated at the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which requires management to make assumptions with respect to the fair value on the grant date. The assumptions are as follows: (i) the expected term assumption of the award is based on the Company’s historical exercise and post-vesting behavior (ii) the expected volatility assumption is based on historical and implied volatilities of the Company’s common stock calculated based on a period of time generally commensurate with the expected term of the award; (iii) the risk-free interest rates are based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent expected term; (iv) and the expected dividend yields of the Company’s stock are based on history and expectations of future dividends payable. In the case of RSUs the fair value is calculated based on the Company’s underlying common stock on the date of grant. The Company recognizes compensation expense over the requisite service period ratably, using the graded attribution method, which is in-substance, recognizing multiple awards based on the vesting schedule. The Company has elected to account for forfeitures when they occur. The Company issues authorized shares available for issuance under the Company’s 2015 Incentive Plan and the Company’s 2020 Incentive Plan upon employees’ exercise of their stock options. Earnings Per Share Basic earnings (loss) per share of common stock (“EPS”) is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding, plus the assumed exercise of all dilutive securities using the treasury stock or “as converted” method, as appropriate. During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are antidilutive. Income Taxes Deferred income tax assets and liabilities are recognized based on differences between the financial statement and tax basis of assets and liabilities using presently enacted tax rates. At each balance sheet date, the Company evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets and records a valuation allowance that reduces the deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. Concentration of Risk The Company maintains its cash in bank deposit accounts which, at times, may exceed the Federal Deposit Insurance Corporation’s (“FDIC”) or the Canadian Deposit Insurance Corporation’s (“CDIC”) insured amounts. Bal |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Note 3: Acquisitions Ameba On January 13, 2022, the Company completed the acquisition of Ameba, pursuant to a Stock Purchase Agreement (the “SPA”) by and between the Company and Tony Havelka, a resident of the Province of Manitoba (the “Seller”), in which the Company acquired from the Seller all of the issued and outstanding equity interests of Ameba. Concurrently, pursuant to an Asset Purchase Agreement (the “APA”) by and among the Company, the Seller and Tek Gear Inc., a corporation owned by the Seller, the Company acquired from the Seller a proprietary software platform (the “Technology”) that powers the Ameba SVOD deliveries. The transactions contemplated by the SPA and the APA are referred to as the “Ameba Acquisition.” Consideration paid by the Company in the transaction at closing consisted of $ 3.8 million 0.3 million 4.1 million 3.9 million Transaction costs incurred relating to the Ameba Acquisition, including legal and accounting, totaled $ 0.1 million The Ameba acquisition facilitates the Company’s expansion into SVOD with its technology and content essential to the launch of the ad-free subscription-based Kartoon Channel! Kidaverse The Company has determined that the Ameba Acquisition constitutes a business acquisition as defined by ASC 805. Accordingly, the assets acquired, and the liabilities assumed in the transaction were recorded at their estimated acquisition fair values, while transaction costs associated with the acquisition were expensed as incurred pursuant to the purchase method of accounting in accordance with ASC 805. The Company’s preliminary purchase price allocation was based on an evaluation of the available data to determine the appropriate fair values based on the requirements of ASC 820 and represents managements best estimates. The following table summarizes the consideration paid, including the Net Working Capital Adjustment (in thousands): Total purchase price consideration paid Amount SPA cash consideration at closing $ 3,500 APA cash consideration at closing 300 Net working capital adjustment 269 Total $ 4,069 The net working capital calculation was finalized as $ 268,657 As of September 30, 2022, the accounting for the acquisition is preliminary, as the Company is finalizing its valuation and determination of the intangible assets. The Company has engaged a third-party valuation firm to assist with the purchase price allocation, which will be completed in subsequent quarters. The preliminary purchase price allocation is based upon an estimate of the fair value of the assets acquired and the liabilities assumed by the Company on January 13, 2022 as follows (in thousands): Assets acquired and liabilities assumed Cash $ 176 Accounts Receivable 238 Prepaids Expenses 25 Trade Name 23 Digital Network 2,804 Technology 300 Goodwill 673 Accounts Payable and Accrued Expenses (140 ) Tax Liability (30 ) Total Consideration $ 4,069 The identifiable intangible assets acquired of $ 3.1 million 18 3 3 Kartoon Channel! is not deductible for tax purposes. The valuation and allocation of the preliminary purchase price shown in the above table was based upon a preliminary valuation and estimates and assumptions, especially with respect to intangible assets, that are subject to change within the purchase price allocation period generally one year from the acquisition date, including the Company’s evaluation of certain income tax positions, with corresponding adjustments to goodwill. Valuation Methodology The digital network was valued by performing a discounted cash flow analysis. This method includes discounting the projected cash flows associated with the current digital network content, based primarily upon historical revenue and projections over its expected life and considers the operating expenses and contributory asset charges associated with servicing such network. Projected cash flows attributable to the digital network was discounted to the present value at a rate commensurate with the perceived risk. The useful life of the digital network is estimated based primarily upon the present value of cash flows attributable to the digital network. The Ameba trade name was valued using the relief-from-royalty method. This method is an income approach that estimates the portion of a company’s earnings attributable to an asset based on the royalty rate the company would have paid for the use of the asset if it did not own it. Royalty payments are estimated by applying a royalty rate to the prospective revenue attributable to the intangible asset. The resulting annual royalty payments are tax-affected and then discounted to present value. The useful life of the trade name is based on the estimated time it will take for the Company to rebrand the Ameba trade name and logo with the Company branded Kartoon Channel! Kidaverse The technology was valued at cost as the Company determined that the cost approximated the fair value. The assumptions used in forecasting cash flows for each of the identified intangible assets included consideration of the following: · Historical performance including sales and profitability. · Expense estimates. · Contributory asset charges. · Estimated economic life of asset. · Acquisition of new customers. · Attrition of existing customers. Wow Unlimited Media On April 6, 2022, the Company completed the acquisition of Wow. On October 26, 2021, the Company’s wholly-owned subsidiary, 1326919 B.C. LTD., a corporation existing under the laws of the Province of British Columbia and Wow, entered into an Arrangement Agreement to effect a plan of arrangement under the arrangement provisions of Part 9, Division 5 of the Business Corporations Act 38.3 million 11,057,085 The plan of arrangement and final agreement, together with the acquisition of Wow’s Mainframe Studios and its subsidiary Frederator, are referred to as the “Wow Acquisition.” Final consideration paid by the Company in the transaction at closing consisted of $ 38.3 million 11.6 million 2,409,515 1.2 million 0.3 million 1.6 million total consideration of $ 52.7 million 50.1 million Transaction costs incurred relating to the Wow Acquisition, including banks, legal and accounting, totaled $ 3.1 million 0.3 million The Wow Acquisition facilitates the Company’s expansion as a global animation and children’s digital media company. With Wow’s content, ongoing production projects and the addition of two studios that can also be leveraged for in-house production of the Company’s properties, will drive cost synergies, facilitate further expansion into the global children’s entertainment market and strengthen financial growth. Frederator, with its owned and operated channels on YouTube Kartoon Channel The Company has determined that the Wow Acquisition constitutes a business acquisition as defined by ASC 805. Accordingly, the assets acquired, and the liabilities assumed in the transaction were recorded at their estimated acquisition fair values, while transaction costs associated with the acquisition were expensed as incurred pursuant to the purchase method of accounting in accordance with ASC 805. The Company’s preliminary purchase price allocation was based on an evaluation of the available data to determine the appropriate fair values based on the requirements of ASC 820 and represents managements best estimates. The following table summarizes the consideration paid: Schedule of total purchase price consideration paid Amount Cash $ 38,310 Genius Common Stock Issued 10,832 Shares Issued Exchangeable for Genius Common Stock 722 Stock Option Value of Replacement Options- Pre-Combination Vested Options 1,213 Severance Payments 1,044 Bonuses 529 Total $ 52,650 As of September 30, 2022, the accounting for the acquisition is preliminary, as the Company is finalizing its valuation and determination of the intangible assets. The Company has engaged a third-party valuation firm to assist with the purchase price allocation, which will be completed in subsequent quarters. The preliminary purchase price allocation is based upon the estimate of the fair value of the assets acquired and the liabilities assumed by the Company on April 6, 2022 as follows (in thousands): Schedule of fair value of the assets acquired and the liabilities assumed Cash and cash equivalents $ 2,573 Accounts Receivable 34,237 Other Receivables 78 Prepaid Expenses and Other 1,245 Property and Equipment 1,936 ROU Assets 10,311 IP (In-Process) 4,600 IP (Proprietary Productions) 5,684 Tradename 7,631 Customer Relationships 16,064 Networks and Platforms 803 Goodwill 21,399 Accounts Payable (1,547 ) Participations Payable (1,380 ) Bank Debt (1,475 ) Accrued Liabilities (3,825 ) Interim Production Facilities (16,930 ) Deferred Revenue (18,080 ) Lease Liabilities (10,614 ) Other Liabilities (60 ) Total Consideration $ 52,650 The identifiable intangible assets acquired of $ 34.8 million 8 7.6 million 0.8 million 16 21.4 million Kartoon Channel! is not deductible for tax purposes. The valuation and allocation of the preliminary purchase price shown in the above table was based upon a preliminary valuation and estimates and assumptions, especially with respect to intangible assets, that are subject to change within the purchase price allocation period generally one year from the acquisition date, including the Company’s evaluation of certain income tax positions, with corresponding adjustments to goodwill. Valuation Methodology The Networks and Platforms were valued by performing a discounted cash flow analysis, specifically the multi-period excess earnings method. This method involves quantifying the amount of residual (or excess) cash flows generated by the current digital network content, based primarily upon historical revenue and projections over its expected life, and considers the operating expenses and contributory asset charges associated with servicing such network. Projected cash flows attributable to the networks are discounted to present value at a rate commensurate with the perceived risk. The significant assumptions used in this model included the customer attrition rate, acquisition rate of new customers, weighted average cost of capital, and expense estimates. The useful life of the networks is estimated based primarily upon the present value of cash flows attributable to the digital network. The significant assumptions used in this method included the royalty rate and weighted average cost of capital. The Tradenames were valued using the relief-from-royalty method. The relief-from-royalty method is one of the methods under the income approach wherein estimates of a company’s earnings attributable to the intangible asset are based on the royalty rate the company would have paid for the use of the asset if it did not own it. Royalty payments are estimated by applying a royalty rate to the prospective revenue attributable to the intangible asset. The resulting annual royalty payments are tax-affected and then discounted to present value. Supplemental Pro Forma Information The following unaudited supplemental pro forma information summarizes the Company’s results of operations as if the acquisitions were completed at the beginning of the periods presented (in thousands, except for share and per share data): Supplemental pro forma information Three Months Ended Genius Brands Consolidated (including Wow and Ameba results) Wow Ameba September 30, 2022 September 30, 2021 September 30, 2021 (1) September 30, 2021 Total Revenues $ 19,679 $ 18,091 $ 16,033 $ 186 Net Income (Loss) $ (11,218 ) $ (8,338 ) $ 833 $ 82 Net Loss per Share of Common Stock (Basic and Diluted) $ (0.04 ) $ (0.03 ) $ – $ – Weighted Average Shares Outstanding (Basic and Diluted) 317,282,770 300,321,658 – – Nine months Ended Genius Brands Consolidated (including Wow and Ameba results) Wow Ameba Wow Ameba September 30, 2022 September 30, 2021 September 30, 2022 (1) September 30, 2022 September 30, 2021 (1) September 30, 2021 Total Revenues $ 61,346 $ 48,927 $ 53,242 $ 1,274 $ 43,130 $ 519 Net Income (Loss) $ (28,144 ) $ (90,388 ) $ 158 $ (22 ) $ 2,272 $ 247 Net Loss per Share of Common Stock (Basic and Diluted) $ (0.09 ) $ (0.31 ) $ – $ – $ – $ – Weighted Average Shares Outstanding (Basic and Diluted) 312,243,439 296,001,742 – – – – (1) |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entity | Note 4: Variable Interest Entity In July 2020, the Company entered into a binding term sheet with POW, Inc. (“POW!”) in which the Company 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” (“SLU”). POW! and the Company executed an Operating Agreement for the joint venture, effective as of June 1, 2021, with activity commencing during the fourth quarter of 2021. The purpose of the acquisition was to enable the Company 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 (the “Stan Lee Assets”), from which Genius Brands plans to develop and license multiple properties each year. The Company contributed $ 2.0 million 2.0 million Pursuant to the guidance under ASC 810, the Company concluded that SLU qualifies as a variable interest entity (“VIE”). The Company consolidates the results of SLU as it was determined that the Company is the primary beneficiary due to having the power through the collaboration to direct the activities that most significantly impact the entity’s economic performance and the Company is required to fund over half of the economic support of the entity. Accordingly, the Company recorded the total fair value of the Stan Lee Assets in SLU of $ 4.0 million During the three and nine months ended September 30, 2022, SLU generated $ 46,947 2.3 million 1.2 million 1.2 million 0.8 million 0.4 million There were no changes in facts and circumstances that occurred during the three or nine months ended September 30, 2022 that would result in a re-evaluation of the VIE assessment. |
Investment in Equity Interest
Investment in Equity Interest | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Equity Interest | Note 5: Investment in Equity Interest On December 1, 2021, the Company completed a $ 6.8 million 3.4 million 2,281,269 3,000,000 Following the initial equity investment in YFE during the fourth quarter of 2021, the Company participated in a mandatory tender offer for the remaining publicly traded shares held by YFE shareholders. Upon the expiration of the offer on February 14, 2022, the Company purchased an additional 2,637,717 2,574,000 304,631 914,284 2.7 million 6,857,132 48.0 29.0 The Company has elected to apply the fair value option for its investment in YFE (Level 1) as YFE is a publicly traded company on the Frankfurt Exchange, therefore its trading price is readily available and relied upon by investors. The Company recognizes changes in the fair value of its investment in YFE as unrealized gains (losses), net in the accompanying consolidated statements of operations with other income (loss), net. The Company revalues the investment in YFE securities as of the end of each reporting period. During the three and nine months ended September 30, 2022, the Company recorded a total loss of $ 5.4 million 3.8 million 1.3 million 2.6 million Wow has a 63% membership interest in Ratchet Productions, LLC (“RPLLC”), a privately-owned company registered in Colorado. Wow accounts for its interest using the equity method of accounting. Prior to the Wow Acquisition, in 2016, Wow determined that its investment in RPLLC was impaired and reduced its investment to $ 0 0 |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Securities | |
Marketable Securities | Note 6: Marketable Securities The Company classifies and accounts for its marketable debt securities as available-for-sale and the securities are stated at fair value. The investments in marketable securities had an adjusted cost basis of $97.5 million and a market value of $89.9 million as of September 30, 2022. The balances consisted of the following securities (in thousands) Summary of investment in marketable security Adjusted Cost Unrealized Gain/(Loss) Fair Value Corporate Bonds $ 44,822 $ (2,968 ) $ 41,854 U.S. Treasury 20,922 (1,437 ) 19,485 Mortgage-Backed 6,285 (760 ) 5,525 U.S. agency and government sponsored securities 13,116 (1,495 ) 11,621 U.S. states and municipalities 11,818 (988 ) 10,830 Asset-Backed 567 (9 ) 558 Total $ 97,530 $ (7,657 ) $ 89,873 The investments in marketable securities had an adjusted cost basis of $113.8 million and a market value of $112.5 million as of December 31, 2021. The balances consisted of the following securities (in thousands) Adjusted Cost Unrealized Gain/(Loss) Fair Value Corporate Bonds $ 47,864 $ (529 ) $ 47,335 U.S. Treasury 24,410 (257 ) 24,153 Mortgage-Backed 7,504 (143 ) 7,361 U.S. agency and government sponsored securities 14,675 (87 ) 14,588 U.S. states and municipalities 11,871 (189 ) 11,682 Asset-Backed 6,456 (50 ) 6,406 Commercial paper 998 – 998 Total $ 113,778 $ (1,255 ) $ 112,523 The Company reported the net unrealized losses in accumulated other comprehensive (loss) income, a component of stockholders' equity. The decline in fair value is largely due to changes in interest rates and other market conditions and is expected to recover as the securities approach maturity. The Company has evaluated these securities and determined that no allowance is necessary based on the credit quality and the low risk of loss due to the security type. The Company holds sixty-two available-for-sale securities, all of which are in an unrealized loss position as of September 30, 2022. The unrealized losses and fair values of available-for-sale securities that have been in an unrealized loss position for a period greater than 12 months as of September 30, 2022 are as follows (in thousands): Schedule of unrealized losses and fair values of available for sale securities Gross Unrealized Loss Fair Value Corporate Bonds $ (2,375 ) $ 34,365 U.S. Treasury (1,456 ) 19,489 Mortgage-Backed (829 ) 5,528 U.S. agency and government sponsored securities (1,493 ) 11,625 U.S. states and municipalities (781 ) 8,020 Asset-Backed (10 ) 558 Total $ (6,944 ) $ 79,585 As of December 31, 2021, the Company had not yet held marketable securities in an unrealized loss position for greater than twelve months. A net realized loss of $ 36,332 159,624 The contractual maturities of the Company’s marketable investments as of September 30, 2022 were as follows (in thousands) Summary of contractual maturity Fair Value Due within 1 year $ 8,889 Due after 1 year through 5 years 70,060 Due after 5 years through 10 years 3,752 Due after 10 years 7,172 Total $ 89,873 The Company may sell certain of its marketable debt securities prior to their stated maturities for reasons including, but not limited to, managing liquidity, credit risk, duration and asset allocation. The Company did not sell any securities during the three or nine months ended September 30, 2022 that resulted in material gains or losses. |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 7: Property and Equipment, Net The Company has property and equipment as follows (in thousands) Schedule of property and equipment, net September 30, 2022 December 31, 2021 Furniture and Equipment $ 221 $ 181 Computer Equipment 290 173 Leasehold Improvements 2,008 44 Software 254 177 Production Equipment 23 23 Property and Equipment, Gross 2,796 598 Less Accumulated Depreciation (416 ) (149 ) Property and Equipment, Net $ 2,380 $ 449 During the three months ended September 30, 2022 and 2021, the Company recorded depreciation expense of $ 86,980 23,665 0.2 million 53,494 |
Right of Use Leased Assets
Right of Use Leased Assets | 9 Months Ended |
Sep. 30, 2022 | |
Right Of Use Leased Assets | |
Right of Use Leased Assets | Note 8: Right of Use Leased Assets Right of use assets consisted of the following (in thousands) Schedule of right of use asset September 30, 2022 December 31, 2021 Office Lease Assets $ 9,683 $ 3,351 Equipment Lease Assets 3,056 13 Right of Use Assets, Gross 12,739 3,364 Accumulated Amortization (1,917 ) (579 ) Right of Use Assets, Net $ 10,822 $ 2,785 During the three months ended September 30, 2022 and 2021, the Company recorded ROU asset amortization expense of $ 0.7 million 0.1 million 1.3 million 0.2 million |
Film and Television Costs, Net
Film and Television Costs, Net | 9 Months Ended |
Sep. 30, 2022 | |
Other Industries [Abstract] | |
Film and Television Costs, Net | Note 9: Film and Television Costs, Net During the nine months ended September 30, 2022, Film and Television Costs increased by $ 12.0 million 4.4 million Shaq’s Garage Rainbow Rangers Superhero Kindergarten During the three months ended September 30, 2022 and 2021, the Company recorded Film and Television Cost amortization expense of $ 2.8 million 0.2 million 5.1 million 1.1 million The following table highlights the activity in Film and Television Costs as of September 30, 2022 and December 31, 2021 (in thousands): Schedule of film and television costs activity Film and Television Costs, Net as of December 31, 2020 $ 11,828 Additions to Film and Television Costs 10,650 Film Amortization Expense (19,538 ) Film and Television Costs, Net as of December 31, 2021 2,940 Additions to Film and Television Costs 17,708 Disposals (11 ) Film Amortization Expense (5,100 ) Foreign Currency Translation Adjustment (555 ) Film and Television Costs, Net as of September 30, 2022 $ 14,982 |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net and Goodwill | Note 10: Intangible Assets, Net and Goodwill Intangible Assets, Net The Company had the following intangible assets (in thousands) with their weighted average remaining amortization period (in years) Intangible Assets, Net Schedule of intangible assets Weighted Average Remaining Amortization Period September 30, 2022 December 31, 2021 Customer Relationships 9 $ 22,199 $ 6,120 Digital Networks 17 3,537 – Trade names 69 11,654 4,000 Technology 2 293 – Non-Compete 2 60 60 Other Intangible Assets (a) 2 322 301 Intangible Assets, Gross 38,065 10,481 Less Accumulated Amortization (2,364 ) (772 ) Foreign Currency Translation Adjustment (1,927 ) 24 Intangible Assets, Net $ 33,774 $ 9,733 __________________ (a) Represents the remaining unamortized logo and website intangible assets related to the merger with A Squared. During the three months ended September 30, 2022 and 2021, the Company recorded amortization expense of $ 0.7 million 0.1 million 1.7 million 0.4 million Pursuant to ASC 350-30, General Intangibles Other than Goodwill Expected future intangible asset amortization as of September 30, 2022 is as follows (in thousands): Expected future intangible asset amortization Fiscal Year: 2022 $ 684 2023 2,733 2024 2,709 2025 2,602 2026 2,597 Thereafter 22,449 Total $ 33,774 Goodwill In 2013, the Company recognized $ 10.4 million 9.7 million 4.8 million 4.9 million As a result of the Ameba Acquisition during the first quarter of 2022, the Company recorded goodwill of $ 0.7 million As a result of the Wow Acquisition during the second quarter of 2022, the Company recorded goodwill of $ 21.4 million As Beacon Communications and Wow are incorporated as Canadian companies with CAD being their functional currency, goodwill will change each period due to currency exchange differences. The Company will perform its annual review of goodwill during the fourth quarter of 2022. There were no events or changes in circumstances that would indicate an impairment in goodwill during the nine months ended September 30, 2022. The following table summarizes the changes in the carrying amount of goodwill by reportable segment (in thousands) Schedule of goodwill Content Production & Distribution Media Advisory & Advertising Services Total Goodwill as of December 31, 2021 $ 10,366 $ 4,861 $ 15,227 Acquisition of Ameba 673 – 673 Acquisition of Wow 21,398 – 21,398 Foreign Currency Translation Adjustment (1,546 ) (4 ) (1,550 ) Goodwill as of September 30, 2022 $ 30,891 $ 4,857 $ 35,748 |
Deferred Revenue
Deferred Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue | Note 11: Deferred Revenue As of September 30, 2022 and December 31, 2021, the Company had total short term and long term deferred revenue of $ 14.2 million 3.9 million 10.6 million |
Supplemental Financial Statemen
Supplemental Financial Statement Information | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Statement Information | Note 12: Supplemental Financial Statement Information Other Income (Expense), Net Components of other income (expense), net are summarized as follows (in thousands) Schedule of other income (expense) Three Months Ended Nine months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Gain (Loss) on Warrant Revaluation (a) $ 166 $ 420 $ 434 $ 103 Loss on Foreign Exchange (b) (1,336 ) 5 (2,596 ) (3 ) Loss on Marketable Securities Investments (c) (36 ) (25 ) (160 ) (25 ) Gain (Loss) on Revaluation of Equity Investment in YFE(d) (4,071 ) – (1,170 ) – Interest Income (e) 257 183 759 314 Warrant Incentive Expense (f) – – – (69,139 ) Interest Expense (g) (782 ) (2 ) (1,256 ) (20 ) Net Other Income (Expense) $ (5,802 ) $ 581 $ (3,989 ) $ (68,770 ) (a) The gain on warrant revaluation is related to the change in fair value of outstanding warrants that were determined to be derivative liabilities attached to previously issued and converted convertible notes. (b) For the three and nine months ended September 30, 2022 loss on foreign exchange primarily relates to the foreign exchange loss on the investment in YFE’s equity securities accounted for under the fair value option. For the three and nine months ended September 30, 2021 loss on foreign exchange related to foreign currency denominated monetary transactions. (c) The Company started investing in marketable securities during the three months ended June 30, 2021. The net realized loss on marketable securities recognized during the three and nine months ended September 30, 2022 reflects the loss in the investments in available-for-sale securities that will not be recovered due to prepayments of principals on certain mortgage-backed securities. (d) The loss on revaluation of the equity investment in YFE is the change in fair value recognized on the Company’s investments in YFE accounted for using the fair value option. The loss is a result of the change in YFE’s stock price at the end of the current reporting period. (e) Interest Income received during the three and nine months ended September 30, 2022 and 2021 primarily consists of cash interest received on the investments in marketable securities, net amortization of premiums. (f) The Warrant Incentive Expense is related to the fair value of new warrants that were issued in 2021 to certain existing warrant holders in exchange for previously issued outstanding warrants. (g) Interest expense during the three and nine months ended September 30, 2022 primarily consists of $0.4 million and $0.6 million, respectively, of interest incurred on the Company’s margin loan collateralized by its marketable security investments and $0.3 million and $0.6 million, respectively, of interest incurred on its production facilities loan and bank indebtedness assumed as part of the Wow Acquisition. |
Bank Indebtedness and Productio
Bank Indebtedness and Production Facilities | 9 Months Ended |
Sep. 30, 2022 | |
Bank Indebtedness And Production Facilities | |
Bank Indebtedness and Production Facilities | Note 14: Bank Indebtedness and Production Facilities The Company assumed the following bank indebtedness instruments and production facilities as part of the Wow Acquisition. Revolving Demand Facility Draws under the $5.0 million CAD revolving demand facility can be made in Canadian or US dollars at the option of the Company by way of bank prime rate loans, Canadian Bankers’ Acceptances, USD LIBOR, or letters of credit and can be repaid at any time without penalty and without notice . Canadian or US dollar bank prime borrowings bear interest at a rate equal to bank prime plus 2.00% per annum. For other draws under the revolving facility, the respective loans bear interest at a rate equal to Canadian Bankers’ Acceptances or USD LIBOR plus 3.75% per annum. As of September 30, 2022, the Company had an outstanding balance of $2.1 million USD on the revolving demand facility, included as Bank Indebtedness within current liabilities on the Company’s condensed consolidated balance sheet. As of September 30, 2022, the Company was in compliance with all covenants under the revolving demand facility. Equipment Lease Line Each transaction under the $8.0 million CAD equipment lease line has specific financing terms in respect of the leased equipment such as term, finance amount, rate, and payment terms. The finance rates for these equipment leases range from 4%- 4.5% with remaining lease terms of 17-31 months as of the Wow Acquisition date. The Company has recorded right of use assets and lease liabilities for the leased equipment acquired in respect of these draws. The Company has drawn down a total of $7.9 million CAD ($6.0 million USD), with an outstanding balance as of September 30, 2022 of $2.2 million CAD ($1.6 million USD), net of repayments, included within current and noncurrent finance lease liabilities on the Company’s condensed consolidated balance sheet. Treasury Risk Management Facility Advances under the treasury risk management facility are subject to market rates as determined by the lender’s treasury department or derivatives group at the time of the drawdown request. The maximum term for foreign exchange forward contracts and interest rate swaps is one year. As of September 30, 2022, there were no outstanding amounts drawn under the treasury risk management facility. Interim Financing Facilities The Company’s interim financing facilities for specific productions bear interest at rates ranging from bank prime plus 1.25% - 1.75% per annum. The interim production financing facilities are generally repayable on demand and are generally secured by a combination of federal and provincial tax credits, other government incentives, production service agreements and license agreements. As of September 30, 2022, the Company had an outstanding balance of $19.3 million USD recorded as Production Facilities, net within current liabilities on the Company’s condensed consolidated balance sheet. |
Margin Loan
Margin Loan | 9 Months Ended |
Sep. 30, 2022 | |
Disclosure Margin Loan Abstract | |
Margin Loan | Note 15: Margin Loan The Company borrowed an additional $ 63.2 million 7.8 million 0.6 million |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 16: Stockholders’ Equity Common Stock As of September 30, 2022, the total number of authorized shares of common stock was 400,000,000 As of September 30, 2022, and December 31, 2021, there were 318,097,275 303,379,122 On February 18, 2022, the Company issued 350,000 0.3 million On February 24, 2022, the Company issued 36,196 65,515 On April 7, 2022, the Company issued 10,365,823 10.8 million 691,262 0.7 million During the nine months ended September 30, 2022, the Company issued 2,538,205 1.6 million Preferred Stock The Company has 10,000,001 shares of preferred stock authorized with a par value of $0.001 per share. The Board of Directors is authorized, subject to any limitations prescribed by law, without further vote or action by the Company’s stockholders, to issue from time-to-time shares of preferred stock in one or more series. Each series of preferred stock will have such number of shares, designations, preferences, voting powers, qualifications and special or relative rights or privileges as shall be determined by the Company’s Board of Directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights. In connection with the Company’s acquisition of Wow, certain eligible Canadian shareholders, noteholders and optionholders of Wow elected to receive the Exchangeable Shares in the capital of the Wow Exchange Co. Inc. (“ExchangeCo”) instead of shares of the Company’s common stock to which they were otherwise entitled. The shares of ExchangeCo are exchangeable into shares of the Company’s common stock in accordance with their terms. Holders of the ExchangeCo shares are entitled to defined voting rights (the “Voting Rights”) in the Company pursuant to a voting and exchange trust agreement (the “Voting Agreement”) dated April 6, 2022 between the Company, ExchangeCo, 1329258 B.C. Ltd. and Computershare Trust Company of Canada (the “Voting Trustee”). The Voting Trustee holds a single share of Series B Preferred Stock in the capital of the Company (the “Special Voting Share”), which grants the Voting Trustee that number of votes at the meetings of the Company’s shareholders as is equal to the number of shares of the Company’s common stock that at such time have not been delivered pursuant to the tender of ExchangeCo shares. The Voting Trustee is required to exercise each vote attached to the Special Voting Share only as directed by the relevant holder of the underlying Company shares of common stock and, in the absence of any instructions, will not exercise voting rights with respect to the applicable shares. As of September 30, 2022 and December 31, 2021, there were 0 shares of Series A Convertible Preferred Stock outstanding. As of September 30, 2022 and December 31, 2021, there was 1 share of Series B Preferred Stock outstanding. Treasury Stock During the three months ended September 30, 2022, 6,993 In addition, during the three months ended September 30, 2022, the Company agreed to settle the lawsuit, Harold Chizick and Jennifer Chizick v. Genius Brands International, Inc., ChizComm Ltd, pursuant to a settlement agreement (the “Settlement Agreement”) dated October 6, 2022 (the “Settlement Date”). Pursuant to the Settlement Agreement, the Company agreed to purchase the 419,336 0.68 1.31 834,479 285,148 549,330 |
Stock Options
Stock Options | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Options | Note 17: Stock Options On September 18, 2015, the Company adopted the Genius Brands International, Inc. 2015 Incentive Plan (the “2015 Plan”). The total number of shares that can be issued under the 2015 Plan is 2,167,667 On September 1, 2020, the Company adopted the Genius Brands International, Inc. 2020 Incentive Plan (the “2020 Plan”). On August 4, 2020, the Board of Directors voted to adopt the 2020 Plan. The shares available for issuance under the 2020 Plan was approved by stockholders on August 27, 2020. The 2020 Plan as approved by the stockholders increased the maximum number of shares available for issuance up to an aggregate of 32,167,667 During the nine months ended September 30, 2022, the Company granted options to purchase 1,985,294 1.3 million In addition, as part of the Wow Acquisition, the Company granted replacement options to purchase 1,733,100 676,415 1.5 million 1.2 million 1,967,528 0.3 million The fair value of the options granted during the nine months ended September 30, 2022 were calculated using the BSM option pricing model based on the following assumptions: Schedule of assumptions used 3/17/2022 Options 4/6/22 Replacement Options 6/23/22 Options 7/11/22 Options Exercise Price $ 0.90 $ 0.51 1.66 $ 0.78 $ 0.68 Dividend Yield 0 0 0 0 Volatility 104 114 123 113 99.9 Risk-free interest rate 0.41 2.67 2.70 3.14 3.05 Expected life of options 5.0 3.0 4.3 5.0 5.0 The following table summarizes the stock option activity during the nine months ended September 30, 2022: Schedule of stock option activity Number of Shares Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Outstanding at December 31, 2021 10,197,312 7.96 $ 1.75 Granted 4,394,809 4.74 $ 1.06 Exercised – – $ – Forfeited/Cancelled (1,082,915 ) 3.06 $ 1.62 Expired – – $ – Outstanding at September 30, 2022 13,509,206 6.74 $ 1.51 Unvested at September 30, 2022 4,361,195 6.61 $ 1.33 Vested and exercisable at September 30, 2022 9,148,011 6.80 $ 1.60 During the three months ended September 30, 2022 and 2021, the Company recognized $ 0.5 million 0.9 million 1.3 million 2.8 million 1.8 million 0 0.64 |
Restricted Stock Units
Restricted Stock Units | 9 Months Ended |
Sep. 30, 2022 | |
Restricted Stock Units | |
Restricted Stock Units | Note 18: Restricted Stock Units During the nine months ended September 30, 2022, the Company granted 1,086,667 1.0 million 500,000 390,000 Per terms of the restricted stock agreements, for certain employees the Company paid the employee’s related taxes associated with the employee’s vested stock and decreased the freely tradable shares issued to the employee by a corresponding value, resulting in a share issuance net of taxes to the employee. The value of the shares netted for employee taxes represents treasury stock repurchased. An aggregate of 4,426,064 6,993 2,553 The following table summarizes the Company’s RSU activity during the nine months ended September 30, 2022: Schedule of restricted stock units Restricted Stock Units Weighted- Average Remaining Contractual Life Weighted- Average Grant Date Fair Value per Share Unvested at December 31, 2021 15,383,234 4.34 $ 1.40 Granted 1,886,667 4.53 $ 0.88 Vested (4,088,301 ) 3.96 $ 1.26 Forfeited/Cancelled – – $ – Unvested at September 30, 2022 13,181,600 3.62 $ 1.37 During the three months ended September 30, 2022 and 2021, the Company recognized $ 0.3 million 4.6 million 8.7 million 8.3 million 2.2 million |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2022 | |
Warrants | |
Warrants | Note 19: Warrants The Company had warrants outstanding to purchase up to 44,843,429 45,511,965 74.1 million 2.24 As of September 30, 2022, 892,857 0.4 million 99.97 4.23 On August 11, 2022, 668,536 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 20: Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes ASC 740 provides guidance on the accounting for uncertainty in income taxes recognized in a company’s financial statements. ASC 740 requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. The Company includes interest and penalties arising from the underpayment of income taxes in the statements of operation in the provision for income taxes. As of September 30, 2022 and December 31, 2021, the Company had no accrued interest or penalties related to uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdiction and in the states of California, Massachusetts and New Jersey and will start filing in New York. The Company is currently subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities since inception of the Company. The Company is subject to US income taxes on a stand-alone basis. The Company, the Beacon Media Group (formerly ChizComm) and Wow file separate stand-alone tax returns in each jurisdiction in which they operate. Beacon Communications, Wow and Ameba are corporations operating in Canada and are subject to Canadian income taxes on its stand-alone taxable income. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Note 21: Commitment and Contingencies The following is a schedule of future minimum contractual obligations as of September 30, 2022 (in thousands) Schedule of future minimum lease payments 2022 2023 2024 2025 2026 Thereafter Total Operating Leases $ 435 $ 1,629 $ 1,692 $ 1,741 $ 1,758 $ 6,040 $ 13,295 Finance Leases 460 1,499 456 – – – 2,415 Employment Contracts 1,692 3,311 971 427 – – 6,401 Consulting Contracts 1,467 482 – – – – 1,949 Debt 64,470 19,057 24 24 18 – 83,593 $ 68,524 $ 25,978 $ 3,143 $ 2,192 $ 1,776 $ 6,040 $ 107,653 Leases On January 30, 2019, the Company entered into an operating lease for 5,838 square feet of general office space at 190 N. Canon Drive, Suite 400, Beverly Hills, CA 90210 pursuant to a 96-month lease that commenced on August 1, 2019. The Company pays rent of $0.4 million annually, subject to annual escalations of 3.5%. On February 1, 2021, as part of the ChizComm Acquisition, the Company assumed an operating lease that was entered into on May 19, 2019 for 6,845 square feet of general office space located at 245 Fairview Mall Drive, Suites 202 and 301, Toronto, Ontario M2J 4T1 pursuant to an 84-month lease which commenced on October 1, 2019. The Company pays rent of $95,830 annually, subject to annual escalations 5% to 7%. Also, as part of the ChizComm Acquisition, the Company assumed an operating lease that was entered into on April 30, 2019 for 3,379 square feet of general office space located at One International Boulevard, 11 th On March 2, 2021, the Company entered into an operating lease for 4,765 square feet of general office space located at 1050 Wall Street West, Suite 665, Lyndhurst NJ, 07071 pursuant to an 89-month lease which commenced on October 1, 2021. The Company pays rent of $0.1 million annually subject to annual escalations of 2.5%. On April 6, 2022, as part of the Wow Acquisition, the Company assumed an operating lease for 45,119 square feet of general office space located at 2025 West Broadway, Suite 200, Vancouver, B.C., V6J 1Z6. The right of use asset and lease liability were revalued on the acquisition date based on the remaining lease term of 117 months with payments of $81,769 per month, subject to escalations of 7% each of the third and fifth years. The lease liability and right of use asset were determined to be $6.6 million, utilizing a discount rate of 11.5 0.5 million Also, as part of the Wow Acquisition, the Company assumed various equipment finance leases, the majority of which are under Master Line of Credit Agreements with certain banking institutions. As the rates were implicit in the leases, the Company determined that the carrying value of the leases as of the acquisition date equaled the fair value. As determined by utilizing the implicit rate in the leases that ranged from 3.7%- 14.5% with remaining lease terms of 10-33 months and monthly payments of $1,346-$57,362 as of the Wow Acquisition date 3.5 million As of September 30, 2022, the weighted-average lease term for the Company’s operating leases are 95 10.39 27 5.11 As of December 31, 2021, the weighted-average lease term for operating leases was 70 24.9 Rental expenses incurred for operating and finance leases during the three months ended September 30, 2022 and 2021 were $ 0.9 million 0.1 million 2.0 million 0.4 million Other Funding Commitments The Company enters into various agreements associated with its individual properties. Some of these agreements call for the potential future payment of royalties or “profit” participations for either (i) the use of third party intellectual property, in which the Company is obligated to share net profits with the underlying rights holders on a certain basis as defined in the respective agreements or (ii) services rendered by animation studios, post-production studios, writers, directors, musicians or other creative talent for which the Company is obligated to share with these service providers a portion of the net profits of the properties on which they have rendered services, as defined in each respective agreement. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 22: Related Party Transactions Pursuant to his employment agreements dated December 7, 2020, Andy Heyward, the Company’s CEO, is entitled to an Executive Producer fee of $12,500 per one-half hour episode for each episode he provides services as an executive producer . 0.6 million 0.2 million 55,000 Pursuant to his employment agreement dated April 7, 2022, whereas Michael Hirsh was appointed as the CEO of Wow and its Frederator and Mainframe Studio subsidiaries, a member of the Company’s Executive Committee and a member of the Company’s Board of Directors, is entitled to an Executive Producer fee of $12,400 per one-half hour for each episode of any audio-visual production produced by Wow and any of its subsidiaries during the term of his employment, up to 52 episodes per year . On July 21, 2020, the Company entered into a merchandising and licensing agreement with Andy Heyward Animation Art (“AHAA”), whose principal is Andy Heyward. The Company entered into a customary merchandise license agreement with AHAA for the use of characters and logos related to Warren Buffett’s Secret Millionaires Club Stan Lee’s Mighty 7 0 On September 30, 2021, the Company entered into a Loan Agreement and Promissory Note with POW! in the amount of $ 1,250,000 9 78,660 26,221 During the three months ended September 30, 2022, the Company and YFE completed an asset exchange transaction pursuant to a License and Distribution Agreement (the “Agreement”) signed on June 27, 2022. The Agreement includes multiple elements, including (i) broadcast rights and (ii) distribution rights. Stefan Piëch, a member of the Company’s Board of Directors since June 23, 2022, is the chief executive officer of YFE. The Company currently has a 48.0 28.2 5 On July 19, 2022, the Company entered into a Shareholder Loan Agreement with YFE in the amount of USD $ 1.3 million 5 11,639 |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Note 23: Segment Reporting The Company’s CODM uses revenue and net earnings to evaluate the profitability and performance of each operating segment. All other financial information is reviewed by the CODM on a consolidated basis. The CODM does not evaluate the operating segments using asset information and it is therefore not disclosed. All expenses directly attributable to each reportable segment is included in operating results for each segment. However, the CODM does not evaluate the expenses by operating segment and, therefore, it is not separately presented. The following table presents the revenue and net earnings within the Company’s two operating segments for the three and nine months ended September 30, 2022 and 2021 (in thousands) Segment information by revenues and net earnings Three Months Ended Nine months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Total Revenues: Content Production & Distribution $ 18,481 $ 690 $ 39,978 $ 2,371 Media Advisory & Advertising Services 1,198 1,182 3,266 2,907 Total Revenue $ 19,679 $ 1,872 $ 43,244 $ 5,278 Net Loss: Content Production & Distribution (10,831 ) (8,872 ) (27,735 ) (91,702 ) Media Advisory & Advertising Services (387 ) (381 ) (1,353 ) (1,205 ) Total Net Operating Loss $ (11,218 ) $ (9,253 ) $ (29,088 ) $ (92,907 ) Geographic Information The following table provides information about disaggregated revenue by geographic area for the three and nine months ended September 30, 2022 and 2021 (in thousands) Schedule of segments by geographic area Three Months Ended Nine months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Total Revenues: United States $ 14,451 $ 1,210 $ 31,267 $ 3,690 Canada 4,690 662 10,464 1,588 United Kingdom 538 – 1,513 – Total Revenue $ 19,679 $ 1,872 $ 43,244 $ 5,278 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 24: Subsequent Events On October 4, 2022, Andy Heyward was paid $55,000 for his third quarter discretionary bonus. On October 6, 2022, pursuant to the Settlement Agreement, 419,336 shares of the Company’s common stock were purchased at the market price of $0.68 per share, plus a premium of $1.31 per share, for a total purchase price of $834,479. The cost of $285,148 was recorded as treasury stock. On October 10, 2022, the Company received a notification of exercise from a holder of certain warrants with a put option exercisable on October 25, 2022. The put option was exercisable for a fixed rate of $250,000 for the 500,000 warrants held. The Company paid the amount on October 10, 2022. On October 21, 2022, the Company issued 100,000 shares of common stock to a nonemployee for vested RSUs valued at $62,000. On November 1, 2022, Andy Heyward was paid $50,000 for producer fees. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated balance sheet as of December 31, 2021 has been derived from audited statements. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“US GAAP”) for complete financial statements and should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on April 6, 2022. The accompanying condensed consolidated financial statements include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to state fairly the Condensed Consolidated Balance Sheets, Statements of Operations, Statements of Comprehensive Loss, Statements of Stockholders' Equity, and Statements of Cash Flows for all periods presented. Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Segments | Segments The Company determined its operating segments on the same basis that it assesses performance and makes operating decisions. The Company principally operates in two distinct business segments: the Content Production & Distribution Segment, which produces and distributes children’s content, and the Media Advisory & Advertising Services Segment, which provides media and advertising services. These segments are reflective of how the Company’s Chief Operating Decision Maker (“CODM”) reviews operating results for the purposes of allocating resources and assessing performance. The Company has identified its Chief Executive Officer as the CODM. The segments are organized around the products and services provided to customers and represent the Company’s reportable segments. Prior to the acquisition of the Beacon Media Group (formerly “ChizComm”), the Company’s operations were comprised of a single segment. The accounting policies for each segment are the same as for the Company as a whole. Refer to Note 23 for additional information. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The Company’s condensed consolidated financial statements include the accounts of Genius Brands International, Inc. and its wholly-owned subsidiaries. The Company consolidates all majority-owned subsidiaries, investments in entities in which it has controlling influence and variable interest entities where the Company has been determined to be the primary beneficiary. Minority interests are recorded as non-controlling interests. Non-consolidated investments are accounted for using the equity method or the fair value option when the Company has the ability to significantly influence the operating decisions of the investee. When the Company does not have the ability to significantly influence the operating decisions of an investee, these equity securities are classified as either marketable investment securities or other investments and recorded at fair value with changes recognized within other Income (expense) on the consolidated statements of operations and comprehensive income (loss). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Business Combinations | Business Combinations The Company accounts for transactions that are classified as business combinations in accordance with the Financial Accounting Standards Boards’ (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”) |
Variable Interest Entities | Variable Interest Entities The Company holds an interest in Stan Lee University (“SLU”), an entity that is considered a variable interest entity (“VIE”). The variable interest relates to 50% ownership in the entity that is comprised of the Stan Lee Assets (as defined below) and that requires additional financial support from the Company to continue operations. The Company’s total net cash investment in SLU as of September 30, 2022, is $ 0.8 million 0.4 million In evaluating whether the Company has the power to direct the activities of a VIE that most significantly impact its economic performance, the Company considers the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and the Company’s decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important. In determining whether the Company has the right to receive benefits or the obligation to absorb losses that could potentially be significant to the VIE, the Company evaluates all of its economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings (losses), subordination of the Company’s interests relative to those of other investors, contingent payments, as well as other contractual arrangements that have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of the Company’s economic interests is a matter that requires the exercise of professional judgment. The Company continuously assesses whether it is the primary beneficiary of a variable interest entity as changes to existing relationships or future transactions may result in the Company consolidating its collaborators or partners. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. |
Foreign Currency | Foreign Currency The Company considers the U.S. dollar to be its functional currency for its United States based operations. The Company considers the Canadian dollar to be its functional currency for its Canada based operations. Accordingly, the financial information is translated from the Canadian dollar to the U.S. dollar for inclusion in the Company’s consolidated financial statements. Revenue and expenses are translated at average exchange rates prevailing during the period, and assets and liabilities are translated at exchange rates in effect at the balance sheet date. Resulting translation adjustments are included as a component of accumulated other comprehensive income (loss), net in stockholders’ equity. Foreign exchange transaction gains and losses are included in other income (expense), net in the condensed consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid debt instruments with initial maturities of three months or less to be cash equivalents. As of September 30, 2022 and December 31, 2021, the Company had cash and cash equivalents of $ 7.1 million 2.1 million |
Tax Credits Receivable | Tax Credits Receivable The Federal and certain Provincial governments in Canada provide programs that are designed to assist film and television production in the form of refundable tax credits or other incentives. Estimated amounts receivable in respect of refundable tax credits are recorded as an offset to the related production operating cost, or to investment in film and television programming when the conditions for eligibility of production assistance based on the government’s criteria are met, the qualifying expenditures are made and there is reasonable assurance of realization. Determination of when and if the conditions of eligibility have been met is based on management’s judgment, and the amount recognized is based on management’s estimates of qualifying expenditures. The ultimate collection of previously recorded estimates is subject to ordinary course audits from the Canada Revenue Agency (“CRA”) and Provincial agencies. Changes in administrative policies by the CRA or subsequent review of eligibility documentation may impact the collectability of these estimates. The Company continuously reviews the results of these audits to determine if any circumstances arise that in management’s judgment would result in a previously recognized amount to be considered no longer collectible. The Company classifies the tax credits receivable as current based on their normal operating cycle. Government assistance, in the form of refundable tax credits, is relied upon as a key component of production financing. These amounts are claimed from the CRA through the submission of income tax returns and can take up to 18 to 24 months from the date of the first tax credit dollar being earned to being received. As this financing is fundamental to the Company’s ability to produce animated productions and generate revenue in the normal course of business, the normal operating cycle for such assets is considered to be a 12-to-24-month period, or the time it takes for the CRA to assess and refund the tax credits earned. As of September 30, 2022, the Company had recorded $ 26.4 million |
Marketable Debt Securities | Marketable Debt Securities The Company purchases high quality, investment grade securities from diverse issuers. Management determines the appropriate classification of securities at the time of purchase and reevaluates such designation as of each balance sheet date. Currently, the Company classifies its investments in marketable securities as “available-for-sale” and records these investments at fair value. The securities are available to support current operations and, accordingly, the Company classifies the investments as current assets without regard to their contractual maturity. Unrealized gains or losses on available-for-sale securities for which the Company expects to fully recover the amortized cost basis are recognized in accumulated other comprehensive (loss) income, a component of stockholders’ equity. If the Company intends to sell a debt security, or it is more likely than not that it would be required to sell a debt security before the recovery of its amortized cost basis, the entire difference between the security's amortized cost basis and its fair value at the balance sheet date would be recognized as a loss in the condensed consolidated statements of operations. The Company reports accrued interest receivable separately from the available-for-sale securities and has elected not to measure an allowance for credit losses for accrued interest receivables. Uncollectible accrued interest is written off when the Company determines that no additional interest payments will be received. Classified within Other Receivables on the condensed consolidated balance sheets, approximately $ 0.4 million Interest earned on investment securities is reported in interest income, net of applicable adjustments for accretion of discounts and amortization of premiums accounted for by the level yield method with no pre-payment anticipated. |
Equity-Method Investments | Equity-Method Investments When the Company does not have a controlling financial interest in an entity but can exert significant influence over the entity’s operating and financial policies, the investment is accounted for either (i) under the equity method of accounting or (ii) at fair value by electing the fair value option available under U.S. GAAP. Significant influence generally exists when the firm owns 20% to 50% of the entity’s common stock or in-substance common stock. In general, the Company accounts for investments acquired at fair value. See Note 5 for further information about the Company’s investment in YFE’s equity securities accounted for under the fair value option. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable are presented on the balance sheets net of estimated uncollectible amounts. The carrying amounts of trade accounts receivable and unbilled accounts receivable represents the maximum credit risk exposure of these assets. The Company evaluates its accounts receivable balances on a quarterly basis to determine collectability based on an assessment of past events, current economic conditions, and forecasts of future events. The Company records an allowance for estimated uncollectible accounts in an amount approximating anticipated losses. Individual uncollectible accounts are written off against the allowance when collection of the individual accounts appears doubtful. The Company limits its exposure to this credit risk through a credit approval process and credit monitoring procedures. In addition, Wow’s contracts with customers usually require upfront and milestone payments throughout the production process. The Company’s customer base is mainly comprised of major Canadian, American, and worldwide studios, distributors, broadcasters, toy companies and AVOD and SVOD platforms that have been customers for several years. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the assets, which range from two to ten years. Maintenance, repairs, and renewals, which neither materially add to the value of the assets nor appreciably prolong their lives, are charged to expense as incurred. Gains and losses from any dispositions of property and equipment are reflected in the consolidated statements of operations. |
Right of Use Leased Assets | Right of Use Leased Assets The Company determines at contract inception whether the arrangement is a lease based on its ability to control a physically distinct asset and determines the classification of the lease as either operating or finance under FASB ASC 842, Leases (“ASC 842”) Lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company estimates the incremental borrowing rate to reflect the profile of collateralized borrowing over the expected term of the leases based on the information available on the lease commencement date or for leases existing upon the date of initial adoption of ASC 842, the date of adoption. The implicit rates within the Company’s existing finance leases are determinable and therefore used to determine the present value of finance lease payments. The operating lease ROU asset also includes any lease payments made prior to lease commencement date and excludes lease incentives. Lease terms may include options to extend or terminate the lease when the Company is reasonably certain that it will exercise the option. Lease expense is recognized on a straight-line basis over the lease term in the consolidated statements of operations. Lease incentives are recognized as a reduction to the lease expense on a straight-line basis over the underlying lease term. |
Film and Television Costs | Film and Television Costs The Company capitalizes production costs for episodic series produced in accordance with FASB ASC 926-20, Entertainment-Films - Other Assets - Film Costs Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of the Company’s business, some titles are more successful or less successful than anticipated. Management reviews its ultimate revenue for productions in development and cost estimates on a title-by-title basis, when an event or change in circumstances indicates that the fair value of the production may be less than its unamortized cost. This may result in a change in the rate of amortization of film costs and participations and/or a write-down of all or a portion of the unamortized costs of the film or television production to its estimated fair value. These write-downs are included in amortization expense within Direct Operating Expenses on the Company’s condensed consolidated statements of operations. There were no events or changes in circumstances that would indicate a change in fair value of productions and therefore the Company has not recorded any impairment charges during the nine months ended September 30, 2022 or 2021. The Company expenses all capitalized costs that exceed the initial market firm commitment revenue in the period of delivery of the episodes. Additionally, for episodic series, from time to time, the Company develops additional content, improved animation and bonus songs/features for its existing content. After the initial release of the episodic series, the costs of significant improvement to existing products are capitalized while routine and periodic alterations to existing products are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill represents the excess of purchase price over the estimated fair value of net assets acquired in business combinations accounted for by the acquisition method. In accordance with FASB ASC 350, Intangibles Goodwill and Other Changes in future results, assumptions, and estimates after the measurement date may lead to an outcome where additional impairment charges would be required in future periods. Specifically, actual results may vary from the Company’s forecasts and such variations may be material and unfavorable, thereby triggering the need for future impairment tests where the conclusions may differ in reflection of prevailing market conditions. Further, continued adverse market conditions could result in the recognition of additional impairment if the Company determines that the fair values of its reporting units have fallen below their carrying values. Other intangible assets have been acquired, either individually or with a group of other assets, and were initially recognized and measured based on fair value. Annual amortization of these intangible assets is computed based on the straight-line method over the remaining economic life of the asset. |
Debt and Attached Equity-Linked Instruments | Debt and Attached Equity-Linked Instruments The Company measures issued debt on an amortized cost basis, net of debt premium/discount and debt issuance costs amortized using the effective interest rate method or the straight-line method when the latter does not lead to materially different results. The Company analyzes freestanding equity-linked instruments including warrants attached to debt to conclude whether the instrument meets the definition of the derivative and whether it is considered indexed to the Company’s own stock. If the instrument is not considered indexed to the Company’s stock, it is classified as an asset or liability recorded at fair value. If the instrument is considered indexed to the Company’s stock, the Company analyzes additional equity classification requirements per FASB ASC 815-40, Contract’s in Entity’s Own Equity When required, the Company also considers the bifurcation guidance for embedded derivatives per ASC 815-15, Embedded Derivatives |
Treasury stock | Treasury stock The Company records the repurchase of shares of its common stock at cost on the trade date of the transaction. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. |
Borrowing Costs | Borrowing Costs Borrowing costs relate to the issuance of Wow’s interim production financing and are recorded as a reduction to the carrying amount of interim production financing and measured at amortized cost using the effective interest method. Borrowing costs are recognized as part of interest expense in the condensed consolidated statements of operations in the period in which they are incurred. Borrowing costs directly attributable to the acquisition or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time the assets are substantially ready for their intended use or sale. Upon the acquisition of Wow, the Company recorded $ 0.3 million 0.6 million |
Revenue Recognition | Revenue Recognition The Company accounts for revenue according to standard FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”) Revenue is measured based on the consideration specified in a contract with a customer. Revenue is recognized when a customer obtains control of the products or services in a contract. Judgment is required in determining the timing of whether the transfer of control occurs at a point in time or over time and is discussed below. The Company evaluates each contract to identify separate performance obligations as a contract with a customer may have one or more performance obligations. Consideration in a contract with multiple performance obligations is allocated to the separate performance obligations based on their stand-alone selling prices. If a stand-alone selling price is not determinable, the Company estimates the stand-alone selling price using an adjusted market assessment approach. The Company’s main sources of revenue are derived from animation production services provided to third parties, the sale of licenses for the distribution of films and television programs, advertising revenues, and merchandising and licensing sales. Gross versus Net Revenue Presentation The Company evaluates individual arrangements with third parties to determine whether the Company acts as principal or agent under the terms. To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items. To the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any expenses incurred in providing agency services. Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement. The most significant factors that the Company considers include identification of the primary obligor, as well as which party has credit risk, general and inventory risk and the latitude or ability in establishing prices. The Company has identified the following material and distinct performance obligations. · Provide animation production services. · License rights to exploit Functional Intellectual Property (“functional IP” is defined as intellectual property that has significant standalone functionality, such as the ability be played or aired. Functional IP derives a substantial portion of its utility from its significant standalone functionality). · License rights to exploit Symbolic Intellectual Property (“symbolic IP” is intellectual property that is not functional as it does not have significant standalone use and substantially all of the utility of symbolic IP is derived from its association with the entity’s past or ongoing activities, including its ordinary business activities, such as the Company’s licensing and merchandising programs associated with its animated content). · Provide media and advertising services to clients. · Fixed and variable fee advertising and subscription-based revenue generated from the Genius Brands Kartoon Channel! YouTube · Options to renew or extend a contract at fixed terms. (While this performance obligation is not significant for the Company’s current contracts, it could become significant in the future). · Options on future seasons of content at fixed terms. (While this performance obligation is not significant for the Company’s current contracts, it could become significant in the future). Production Services Animation Production Services For revenue from animation production services, the customer controls the output throughout the production process. Each production is made to an individual customer’s specifications and if the contract is terminated by the customer, the Company is entitled to be reimbursed for any costs incurred to date, and for any prepaid commitments made, plus the agreed contractual mark-up. Revenue and the associated costs of such contracts are recognized over time on a percentage of completion basis - i.e. as the project is being produced, prior to it being delivered to the customer. The percentage-of-completion is calculated based upon the proportion of costs incurred cumulatively to total expected costs. Changes in revenue recognized as a result of adjustments to total expected costs are recognized in profit or loss on a prospective basis. Invoices related to these projects are issued based on the achievement of milestones during the project or other contractual terms. The difference between contractual payments received and revenue recognized is recorded as deferred revenue when receipts exceed revenue. When revenue exceeds milestone billings, the Company recognizes this difference as unbilled accounts receivable. Unbilled accounts receivable is transferred to accounts receivable when the Company has an unconditional right to consideration. When the outcome of an arrangement cannot be estimated reliably, revenue is recognized only to the extent of the expenses incurred that are recoverable. Content Distribution Film and Television Licensing The Company recognizes revenue related to licensed rights to exploit functional IP in two ways; for minimum guarantees, the Company recognizes fixed revenue upon delivery of content and the start of the license period and for functional IP contracts with a variable component, the Company estimates revenue such that it is probable there will not be a material reversal of revenue in future periods. The Company recognizes revenue related to licensed rights to exploit symbolic IP substantially similarly to functional IP. Although it has a different recognition pattern from functional IP, the valuation method is substantially the same, depending on the nature of the license. Invoices related to these projects are issued based on the achievement of milestones during the project or other contractual terms. The difference between contractual payments received and revenue recognized is recorded as deferred revenue when receipts exceed revenue. When revenue exceeds milestone billings, the Company recognizes this difference as unbilled accounts receivable. Unbilled accounts receivables are transferred to accounts receivable when the Company has an unconditional right to consideration. Advertising revenues The Company sells advertising and subscriptions on its wholly-owned AVOD service, Kartoon Channel! Kartoon Channel! Kidaverse Ameba TV Upon the acquisition of Wow, the Company generates advertising revenue from Frederator’s owned and operated YouTube YouTube Licensing & Royalties Merchandising and licensing The Company enters into merchandising and licensing agreements that allow customers to produce merchandise utilizing certain of the Company’s intellectual property. For minimum guaranteed amounts that make up a contract, revenue is recognized over time, over the term of the license period commencing on the date at which the customer can use and benefit from the licensed content. Variable consideration in excess of non-refundable guaranteed amounts, such as royalties and other contractual payments are recognized as revenue when the amounts are known and become due provided collectability is reasonably assured. Invoices are issued based on the contractual terms of an agreement and are usually payable within 30-45 days. Product Sales The Company recognizes revenue related to product sales when the Company completes its performance obligation, which is when the goods are transferred to the buyer. Media Advisory & Advertising Services Media and Advertising Services The Company provides media and advertising services to clients. Revenue is recognized when the services are performed. When the Company purchases advertising for clients on linear and across digital and streaming platforms and receives a commission, the commissions are recognized as revenue in the month the advertising is displayed. |
Direct Operating Costs | Direct Operating Costs Direct operating costs include costs of the Company’s product sales, non-capitalizable film costs, film and television cost amortization expense, impairment expenses related to film and television costs, and participation expense related to agreements with various animation studios, post-production studios, writers, directors, musicians or other creative talent with which the Company is obligated to share net profits of the properties on which they have rendered services. Upon the acquisition of Wow, the Company also includes salaries and related service production employee costs as part of its direct operating costs. |
Share-Based Compensation | Share-Based Compensation The Company issues stock-based awards to employees and non-employees that are generally in the form of stock options or restricted stock units (“RSUs”). Share-based compensation cost is recorded for all options and awards of unvested stock based on the grant-date fair value of the award. The fair value of stock options is estimated at the date of grant using the Black-Scholes-Merton (“BSM”) option pricing model, which requires management to make assumptions with respect to the fair value on the grant date. The assumptions are as follows: (i) the expected term assumption of the award is based on the Company’s historical exercise and post-vesting behavior (ii) the expected volatility assumption is based on historical and implied volatilities of the Company’s common stock calculated based on a period of time generally commensurate with the expected term of the award; (iii) the risk-free interest rates are based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent expected term; (iv) and the expected dividend yields of the Company’s stock are based on history and expectations of future dividends payable. In the case of RSUs the fair value is calculated based on the Company’s underlying common stock on the date of grant. The Company recognizes compensation expense over the requisite service period ratably, using the graded attribution method, which is in-substance, recognizing multiple awards based on the vesting schedule. The Company has elected to account for forfeitures when they occur. The Company issues authorized shares available for issuance under the Company’s 2015 Incentive Plan and the Company’s 2020 Incentive Plan upon employees’ exercise of their stock options. |
Earnings Per Share | Earnings Per Share Basic earnings (loss) per share of common stock (“EPS”) is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted EPS is calculated by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding, plus the assumed exercise of all dilutive securities using the treasury stock or “as converted” method, as appropriate. During periods of net loss, all common stock equivalents are excluded from the diluted EPS calculation because they are antidilutive. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are recognized based on differences between the financial statement and tax basis of assets and liabilities using presently enacted tax rates. At each balance sheet date, the Company evaluates the available evidence about future taxable income and other possible sources of realization of deferred tax assets and records a valuation allowance that reduces the deferred tax assets to an amount that represents management’s best estimate of the amount of such deferred tax assets that more likely than not will be realized. |
Concentration of Risk | Concentration of Risk The Company maintains its cash in bank deposit accounts which, at times, may exceed the Federal Deposit Insurance Corporation’s (“FDIC”) or the Canadian Deposit Insurance Corporation’s (“CDIC”) insured amounts. Balances on interest bearing deposits at banks in the United States are insured by the FDIC up to $250,000 per account and deposits in banks in Canada are insured by the CDIC up to $100,000 CAD. As of September 30, 2022, the Company had fifteen accounts with an uninsured balance in bank deposit accounts of $ 3.0 million 1.1 The Company has a managed account and a brokerage account with a financial institution. The managed account maintains the Company’s investments in marketable securities of $ 89.9 million 112.5 million 250,000 The Company also has an account with a German bank that manages its foreign transactions with YFE. The cash balance as of September 30, 2022 held at the German institution was $ 2.7 million 5.5 million The Company’s investment portfolio consists of investment-grade securities diversified among security types, industries and issuers. The Company’s policy limits the amount of credit exposure to any one security issue or issuer and the Company believes no significant concentration of credit risk exists with respect to these investments. For the three months ended September 30, 2022, the Company had four customers, whose total revenue exceeded 10 83 For the nine months ended September 30, 2022, the Company had four customers whose total revenue exceeded 10 74 10 28 For the three months ended September 30, 2021, the Company had one customer whose total revenue exceeded 10 13 For the nine months ended September 30, 2021, the Company had one customer, whose total revenue exceeded 10 22 10 59 There is significant financial risk associated with a dependence upon a small number of customers. The Company periodically assesses the financial strength of these customers and establishes allowances for any anticipated bad debt. As of September 30, 2022 and December 31, 2021, the Company recorded an allowance for bad debt of $ 87,710 22,080 |
Fair value of Financial Instruments | Fair value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820, Fair Value Measurement · Level 1 - Observable inputs such as quoted prices for identical instruments in active markets; · Level 2 - Inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3 - Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments that are not measured at fair value on the condensed consolidated statements of operations are represented by cash, receivables, payables, accrued liabilities, bank indebtedness, the Company’s margin loan and interim production financing. The carrying amounts of cash, restricted cash, receivables, payables, accrued liabilities, bank indebtedness and the Company’s margin loan approximate fair value due to the short-term nature of the instruments. The fair values of the Company’s liability-classified derivative warrants are revalued at the end of each reporting period determined using the BSM model (Level 2) with standard valuation inputs. Refer to Note 19 for additional details. The investment in YFE is also revalued at the end of each reporting period based on the trading price of YFE (Level 1). Refer to Note 5 for additional details. Upon acquisition of Wow, the Company assumed foreign currency forward contracts that are not traded in active markets. These are fair valued using observable forward exchange rates at the measurement dates and interest rates corresponding to the maturity of the contracts. The fair values of the available-for-sale securities are generally based on quoted market prices, where available. These fair values are obtained primarily from third-party pricing services, which generally use Level 1 or Level 2 inputs for the determination of fair value to facilitate fair value measurements and disclosures. Level 2 securities primarily include corporate securities, securities from states, municipalities and political subdivisions, mortgage-backed securities, United States Government securities, foreign government securities, and certain other asset-backed securities. For securities not actively traded, the pricing services may use quoted market prices of comparable instruments or a variety of valuation techniques, incorporating inputs that are currently observable in the markets for similar securities. The following table summarizes the marketable securities measured at fair value by level within the fair value hierarchy as of September 30, 2022 (in thousands): Schedule of marketable security measured at fair value Level 1 Level 2 Total Fair Value Marketable investments: Corporate Bonds $ 30,530 $ 11,324 $ 41,854 U.S. Treasury 19,485 – 19,485 Mortgage-Backed – 5,525 5,525 U.S. agency and government sponsored securities – 11,621 11,621 U.S. states and municipalities – 10,830 10,830 Asset-Backed – 558 558 Total $ 50,015 $ 39,858 $ 89,873 Fair values were determined for each individual security in the investment portfolio. The Company’s marketable securities are considered to be available-for-sale investments as defined under FASB ASC 320, Investments – Debt and Equity Securities Financial and nonfinancial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs and include the Company’s contingent earn-out liability, goodwill and film and television costs as of September 30, 2022. There were no significant events that occurred or circumstances that resulted in an adjustment to the fair value of those assets and liabilities measured on a non-recurring basis during the nine months ended September 30, 2022. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" (“ASU 2021-08”). |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of marketable security measured at fair value | Schedule of marketable security measured at fair value Level 1 Level 2 Total Fair Value Marketable investments: Corporate Bonds $ 30,530 $ 11,324 $ 41,854 U.S. Treasury 19,485 – 19,485 Mortgage-Backed – 5,525 5,525 U.S. agency and government sponsored securities – 11,621 11,621 U.S. states and municipalities – 10,830 10,830 Asset-Backed – 558 558 Total $ 50,015 $ 39,858 $ 89,873 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Total purchase price consideration paid | Total purchase price consideration paid Amount SPA cash consideration at closing $ 3,500 APA cash consideration at closing 300 Net working capital adjustment 269 Total $ 4,069 |
Assets acquired and liabilities assumed | Assets acquired and liabilities assumed Cash $ 176 Accounts Receivable 238 Prepaids Expenses 25 Trade Name 23 Digital Network 2,804 Technology 300 Goodwill 673 Accounts Payable and Accrued Expenses (140 ) Tax Liability (30 ) Total Consideration $ 4,069 |
Schedule of total purchase price consideration paid | Schedule of total purchase price consideration paid Amount Cash $ 38,310 Genius Common Stock Issued 10,832 Shares Issued Exchangeable for Genius Common Stock 722 Stock Option Value of Replacement Options- Pre-Combination Vested Options 1,213 Severance Payments 1,044 Bonuses 529 Total $ 52,650 |
Schedule of fair value of the assets acquired and the liabilities assumed | Schedule of fair value of the assets acquired and the liabilities assumed Cash and cash equivalents $ 2,573 Accounts Receivable 34,237 Other Receivables 78 Prepaid Expenses and Other 1,245 Property and Equipment 1,936 ROU Assets 10,311 IP (In-Process) 4,600 IP (Proprietary Productions) 5,684 Tradename 7,631 Customer Relationships 16,064 Networks and Platforms 803 Goodwill 21,399 Accounts Payable (1,547 ) Participations Payable (1,380 ) Bank Debt (1,475 ) Accrued Liabilities (3,825 ) Interim Production Facilities (16,930 ) Deferred Revenue (18,080 ) Lease Liabilities (10,614 ) Other Liabilities (60 ) Total Consideration $ 52,650 |
Supplemental pro forma information | Supplemental pro forma information Three Months Ended Genius Brands Consolidated (including Wow and Ameba results) Wow Ameba September 30, 2022 September 30, 2021 September 30, 2021 (1) September 30, 2021 Total Revenues $ 19,679 $ 18,091 $ 16,033 $ 186 Net Income (Loss) $ (11,218 ) $ (8,338 ) $ 833 $ 82 Net Loss per Share of Common Stock (Basic and Diluted) $ (0.04 ) $ (0.03 ) $ – $ – Weighted Average Shares Outstanding (Basic and Diluted) 317,282,770 300,321,658 – – Nine months Ended Genius Brands Consolidated (including Wow and Ameba results) Wow Ameba Wow Ameba September 30, 2022 September 30, 2021 September 30, 2022 (1) September 30, 2022 September 30, 2021 (1) September 30, 2021 Total Revenues $ 61,346 $ 48,927 $ 53,242 $ 1,274 $ 43,130 $ 519 Net Income (Loss) $ (28,144 ) $ (90,388 ) $ 158 $ (22 ) $ 2,272 $ 247 Net Loss per Share of Common Stock (Basic and Diluted) $ (0.09 ) $ (0.31 ) $ – $ – $ – $ – Weighted Average Shares Outstanding (Basic and Diluted) 312,243,439 296,001,742 – – – – (1) |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Marketable Securities | |
Summary of investment in marketable security | Summary of investment in marketable security Adjusted Cost Unrealized Gain/(Loss) Fair Value Corporate Bonds $ 44,822 $ (2,968 ) $ 41,854 U.S. Treasury 20,922 (1,437 ) 19,485 Mortgage-Backed 6,285 (760 ) 5,525 U.S. agency and government sponsored securities 13,116 (1,495 ) 11,621 U.S. states and municipalities 11,818 (988 ) 10,830 Asset-Backed 567 (9 ) 558 Total $ 97,530 $ (7,657 ) $ 89,873 The investments in marketable securities had an adjusted cost basis of $113.8 million and a market value of $112.5 million as of December 31, 2021. The balances consisted of the following securities (in thousands) Adjusted Cost Unrealized Gain/(Loss) Fair Value Corporate Bonds $ 47,864 $ (529 ) $ 47,335 U.S. Treasury 24,410 (257 ) 24,153 Mortgage-Backed 7,504 (143 ) 7,361 U.S. agency and government sponsored securities 14,675 (87 ) 14,588 U.S. states and municipalities 11,871 (189 ) 11,682 Asset-Backed 6,456 (50 ) 6,406 Commercial paper 998 – 998 Total $ 113,778 $ (1,255 ) $ 112,523 |
Schedule of unrealized losses and fair values of available for sale securities | Schedule of unrealized losses and fair values of available for sale securities Gross Unrealized Loss Fair Value Corporate Bonds $ (2,375 ) $ 34,365 U.S. Treasury (1,456 ) 19,489 Mortgage-Backed (829 ) 5,528 U.S. agency and government sponsored securities (1,493 ) 11,625 U.S. states and municipalities (781 ) 8,020 Asset-Backed (10 ) 558 Total $ (6,944 ) $ 79,585 |
Summary of contractual maturity | Summary of contractual maturity Fair Value Due within 1 year $ 8,889 Due after 1 year through 5 years 70,060 Due after 5 years through 10 years 3,752 Due after 10 years 7,172 Total $ 89,873 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | Schedule of property and equipment, net September 30, 2022 December 31, 2021 Furniture and Equipment $ 221 $ 181 Computer Equipment 290 173 Leasehold Improvements 2,008 44 Software 254 177 Production Equipment 23 23 Property and Equipment, Gross 2,796 598 Less Accumulated Depreciation (416 ) (149 ) Property and Equipment, Net $ 2,380 $ 449 During the three months ended September 30, 2022 and 2021, the Company recorded depreciation expense of $ 86,980 23,665 0.2 million 53,494 |
Right of Use Leased Assets (Tab
Right of Use Leased Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Right Of Use Leased Assets | |
Schedule of right of use asset | Schedule of right of use asset September 30, 2022 December 31, 2021 Office Lease Assets $ 9,683 $ 3,351 Equipment Lease Assets 3,056 13 Right of Use Assets, Gross 12,739 3,364 Accumulated Amortization (1,917 ) (579 ) Right of Use Assets, Net $ 10,822 $ 2,785 |
Film and Television Costs, Net
Film and Television Costs, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Industries [Abstract] | |
Schedule of film and television costs activity | Schedule of film and television costs activity Film and Television Costs, Net as of December 31, 2020 $ 11,828 Additions to Film and Television Costs 10,650 Film Amortization Expense (19,538 ) Film and Television Costs, Net as of December 31, 2021 2,940 Additions to Film and Television Costs 17,708 Disposals (11 ) Film Amortization Expense (5,100 ) Foreign Currency Translation Adjustment (555 ) Film and Television Costs, Net as of September 30, 2022 $ 14,982 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets Weighted Average Remaining Amortization Period September 30, 2022 December 31, 2021 Customer Relationships 9 $ 22,199 $ 6,120 Digital Networks 17 3,537 – Trade names 69 11,654 4,000 Technology 2 293 – Non-Compete 2 60 60 Other Intangible Assets (a) 2 322 301 Intangible Assets, Gross 38,065 10,481 Less Accumulated Amortization (2,364 ) (772 ) Foreign Currency Translation Adjustment (1,927 ) 24 Intangible Assets, Net $ 33,774 $ 9,733 __________________ (a) Represents the remaining unamortized logo and website intangible assets related to the merger with A Squared. |
Expected future intangible asset amortization | Expected future intangible asset amortization Fiscal Year: 2022 $ 684 2023 2,733 2024 2,709 2025 2,602 2026 2,597 Thereafter 22,449 Total $ 33,774 |
Schedule of goodwill | Schedule of goodwill Content Production & Distribution Media Advisory & Advertising Services Total Goodwill as of December 31, 2021 $ 10,366 $ 4,861 $ 15,227 Acquisition of Ameba 673 – 673 Acquisition of Wow 21,398 – 21,398 Foreign Currency Translation Adjustment (1,546 ) (4 ) (1,550 ) Goodwill as of September 30, 2022 $ 30,891 $ 4,857 $ 35,748 |
Supplemental Financial Statem_2
Supplemental Financial Statement Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of other income (expense) | Schedule of other income (expense) Three Months Ended Nine months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Gain (Loss) on Warrant Revaluation (a) $ 166 $ 420 $ 434 $ 103 Loss on Foreign Exchange (b) (1,336 ) 5 (2,596 ) (3 ) Loss on Marketable Securities Investments (c) (36 ) (25 ) (160 ) (25 ) Gain (Loss) on Revaluation of Equity Investment in YFE(d) (4,071 ) – (1,170 ) – Interest Income (e) 257 183 759 314 Warrant Incentive Expense (f) – – – (69,139 ) Interest Expense (g) (782 ) (2 ) (1,256 ) (20 ) Net Other Income (Expense) $ (5,802 ) $ 581 $ (3,989 ) $ (68,770 ) |
Stock Options (Tables)
Stock Options (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of assumptions used | Schedule of assumptions used 3/17/2022 Options 4/6/22 Replacement Options 6/23/22 Options 7/11/22 Options Exercise Price $ 0.90 $ 0.51 1.66 $ 0.78 $ 0.68 Dividend Yield 0 0 0 0 Volatility 104 114 123 113 99.9 Risk-free interest rate 0.41 2.67 2.70 3.14 3.05 Expected life of options 5.0 3.0 4.3 5.0 5.0 |
Schedule of stock option activity | Schedule of stock option activity Number of Shares Weighted- Average Remaining Contractual Life Weighted- Average Exercise Price Outstanding at December 31, 2021 10,197,312 7.96 $ 1.75 Granted 4,394,809 4.74 $ 1.06 Exercised – – $ – Forfeited/Cancelled (1,082,915 ) 3.06 $ 1.62 Expired – – $ – Outstanding at September 30, 2022 13,509,206 6.74 $ 1.51 Unvested at September 30, 2022 4,361,195 6.61 $ 1.33 Vested and exercisable at September 30, 2022 9,148,011 6.80 $ 1.60 |
Restricted Stock Units (Tables)
Restricted Stock Units (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Restricted Stock Units | |
Schedule of restricted stock units | Schedule of restricted stock units Restricted Stock Units Weighted- Average Remaining Contractual Life Weighted- Average Grant Date Fair Value per Share Unvested at December 31, 2021 15,383,234 4.34 $ 1.40 Granted 1,886,667 4.53 $ 0.88 Vested (4,088,301 ) 3.96 $ 1.26 Forfeited/Cancelled – – $ – Unvested at September 30, 2022 13,181,600 3.62 $ 1.37 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Schedule of future minimum lease payments 2022 2023 2024 2025 2026 Thereafter Total Operating Leases $ 435 $ 1,629 $ 1,692 $ 1,741 $ 1,758 $ 6,040 $ 13,295 Finance Leases 460 1,499 456 – – – 2,415 Employment Contracts 1,692 3,311 971 427 – – 6,401 Consulting Contracts 1,467 482 – – – – 1,949 Debt 64,470 19,057 24 24 18 – 83,593 $ 68,524 $ 25,978 $ 3,143 $ 2,192 $ 1,776 $ 6,040 $ 107,653 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment information by revenues and net earnings | Segment information by revenues and net earnings Three Months Ended Nine months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Total Revenues: Content Production & Distribution $ 18,481 $ 690 $ 39,978 $ 2,371 Media Advisory & Advertising Services 1,198 1,182 3,266 2,907 Total Revenue $ 19,679 $ 1,872 $ 43,244 $ 5,278 Net Loss: Content Production & Distribution (10,831 ) (8,872 ) (27,735 ) (91,702 ) Media Advisory & Advertising Services (387 ) (381 ) (1,353 ) (1,205 ) Total Net Operating Loss $ (11,218 ) $ (9,253 ) $ (29,088 ) $ (92,907 ) |
Schedule of segments by geographic area | Schedule of segments by geographic area Three Months Ended Nine months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Total Revenues: United States $ 14,451 $ 1,210 $ 31,267 $ 3,690 Canada 4,690 662 10,464 1,588 United Kingdom 538 – 1,513 – Total Revenue $ 19,679 $ 1,872 $ 43,244 $ 5,278 |
Organization and Business (Deta
Organization and Business (Details Narrative) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Apr. 06, 2022 USD ($) shares | Apr. 05, 2022 USD ($) shares | Mar. 09, 2022 USD ($) shares | Dec. 02, 2021 shares | Feb. 14, 2022 USD ($) shares | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 CAD ($) shares | Sep. 30, 2022 CAD ($) | Dec. 31, 2021 USD ($) | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Cash | $ 38,300,000 | |||||||||
Number of shares issued | shares | 11,057,000 | |||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 304,631 | |||||||||
Increase in outstanding shares | shares | 6,857,132 | 6,857,132 | ||||||||
Cash and cash equivalents | $ 3,000,000 | |||||||||
Marketable Securities, Noncurrent | $ 89,900,000 | 89,900,000 | $ 112,500,000 | |||||||
Decrease in marketable securities | 22,700,000 | |||||||||
Margin Deposit Assets | 63,200,000 | 63,200,000 | ||||||||
Repayment of margin loan | 7,800,000 | |||||||||
Additional borrowings | $ 4,200,000 | $ 4,200,000 | ||||||||
Federal Funds Purchased, Average Rate Paid | 0.65% | 0.65% | ||||||||
Weighted Average Interest Rate on Overdrawn Demand Deposit | 2.65% | 2.65% | 2.65% | |||||||
Margin loan balance | $ 61,200,000 | $ 43,400,000 | ||||||||
Weighted average interest rate | 1.54% | 1.54% | ||||||||
Interest Expense | $ 600,000 | |||||||||
Revolving demand facility | 3,900,000 | $ 5,000,000 | ||||||||
Property, Plant and Equipment, Other, Gross | 6,200,000 | 6,200,000 | $ 8,000,000 | |||||||
Treasury risk management facility | 400,000 | 400,000 | $ 500,000 | |||||||
[custom:WorkingCapital-0] | $ 32,400,000 | $ 32,400,000 | $ 115,100,000 | |||||||
Y E E [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 48% | 48% | 48% | 29% | ||||||
Y F E Common Stock [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of shares issued | shares | 914,284 | 2,281,269 | 2,637,717 | |||||||
Stock Issued During Period, Value, New Issues | $ 2,700,000 | $ 5,700,000 | ||||||||
Debt Conversion, Converted Instrument, Shares Issued | shares | 2,574,000 | |||||||||
Debt Conversion, Converted Instrument, Amount | $ 600,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Net Investment Income [Line Items] | ||
Marketable investments | $ 89,873 | $ 112,523 |
Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 50,015 | |
Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 39,858 | |
Corporate Bond Securities [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 41,854 | 47,335 |
Corporate Bond Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 30,530 | |
Corporate Bond Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 11,324 | |
US Treasury Securities [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 19,485 | 24,153 |
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 19,485 | |
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 0 | |
Collateralized Mortgage-Backed Securities [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 5,525 | 7,361 |
Collateralized Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 0 | |
Collateralized Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 5,525 | |
U S Agency And Government Sponsored Securities [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 11,621 | 14,588 |
U S Agency And Government Sponsored Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 0 | |
U S Agency And Government Sponsored Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 11,621 | |
US Treasury Notes Securities [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 10,830 | 11,682 |
US Treasury Notes Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 0 | |
US Treasury Notes Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 10,830 | |
Asset-Backed Securities [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 558 | $ 6,406 |
Asset-Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | 0 | |
Asset-Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Net Investment Income [Line Items] | ||
Marketable investments | $ 558 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 06, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | ||||||
Marketing and operational services | $ 400,000 | |||||
Cash and Cash Equivalents | $ 7,100,000 | 7,100,000 | $ 2,100,000 | |||
Tax credit receivables | 26,400,000 | 26,400,000 | ||||
Production financing | 300,000 | 600,000 | ||||
Cash, Uninsured Amount | 3,000,000 | 3,000,000 | 1,100 | |||
Marketable securities | 89,900,000 | 89,900,000 | 112,500,000 | |||
Cash | $ 38,300,000 | |||||
Cash balance | 2,700,000 | 2,700,000 | ||||
Customers deposit | 5,500,000 | 5,500,000 | ||||
Allowance for doubtful accounts | $ 87,710 | $ 87,710 | 22,080 | |||
Revenue Benchmark [Member] | Four Customer [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 10% | 10% | ||||
Revenue Benchmark [Member] | Customer [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 83% | 13% | 74% | 22% | ||
Revenue Benchmark [Member] | One Customer [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 10% | 10% | ||||
Accounts Receivable [Member] | Customer [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 28% | 59% | ||||
Accounts Receivable [Member] | Two Customer [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 10% | |||||
Accounts Receivable [Member] | Three Customer [Member] | Customer Concentration Risk [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration risk percentage | 10% | |||||
S P I C [Member] | ||||||
Product Information [Line Items] | ||||||
Cash | $ 250,000 | $ 250,000 | ||||
Other Receivables [Member] | ||||||
Product Information [Line Items] | ||||||
Interest income | 400,000 | 400,000 | $ 400,000 | |||
Variable Interest Entities [Member] | ||||||
Product Information [Line Items] | ||||||
Investments and Cash | $ 800,000 | $ 800,000 |
Acquisition (Details - Purchase
Acquisition (Details - Purchase consideration) - USD ($) $ in Thousands | 9 Months Ended | |
Jan. 13, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Total | $ 38,310 | |
Ameba Acquisition [Member] | ||
Business Acquisition [Line Items] | ||
Total | $ 4,069 | |
Stock Purchase Agreements [Member] | ||
Business Acquisition [Line Items] | ||
Cash consideration at closing | 3,500 | |
Asset Purchase Agreement [Member] | ||
Business Acquisition [Line Items] | ||
Cash consideration at closing | 300 | |
Net working capital adjustment | $ 269 |
Acquisition (Details - Allocati
Acquisition (Details - Allocation of purchase consideration) - USD ($) | Sep. 30, 2022 | Apr. 07, 2022 | Jan. 13, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cash and Equivalents | $ 2,573,000 | $ 176,000 | |||
Accounts Receivable | 34,237,000 | 238,000 | |||
Prepaids Expenses | 1,245,000 | 25,000 | |||
Goodwill | $ 35,748,000 | 673,000 | $ 15,227,000 | $ 10,400,000 | |
Accounts Payable and Accrued Expenses | (1,547,000) | (140,000) | |||
Tax Liability | (30,000) | ||||
Total Consideration | $ 21,400,000 | 21,399,000 | 4,069,000 | ||
Trade Names [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets acquired | $ 7,631,000 | 23,000 | |||
Digital Network [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets acquired | 2,804,000 | ||||
Technology [Member] | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets acquired | $ 300,000 |
Acquisition (Details - Consider
Acquisition (Details - Consideration Paid) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Cash | $ 38,310 |
Genius Common Stock Issued | 10,832 |
Shares Issued Exchangeable for Genius Common Stock | 722 |
Stock Option Value of Replacement Options- Pre-Combination Vested Options | 1,213 |
Severance Payments | 1,044 |
Bonuses | 529 |
Total | $ 52,650 |
Acquisition (Details - Assets A
Acquisition (Details - Assets Acquired Liabilities Consideration) - USD ($) | Sep. 30, 2022 | Apr. 07, 2022 | Jan. 13, 2022 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cash and cash equivalents | $ 2,573,000 | $ 176,000 | |
Accounts Receivable | 34,237,000 | 238,000 | |
Other Receivables | 78,000 | ||
Prepaid Expenses and Other | 1,245,000 | 25,000 | |
Property and Equipment | 1,936,000 | ||
ROU Assets | 10,311,000 | ||
IP (In-Process) | 4,600,000 | ||
IP (Proprietary Productions) | 5,684,000 | ||
Goodwill | $ 21,400,000 | 21,399,000 | 4,069,000 |
Accounts Payable | (1,547,000) | (140,000) | |
Participations Payable | 1,380,000 | ||
Bank Debt | (1,475,000) | ||
Accrued Liabilities | (3,825,000) | ||
Interim Production Facilities | (16,930,000) | ||
Deferred Revenue | (18,080,000) | ||
Lease Liabilities | (10,614,000) | ||
Other Liabilities | (60,000) | ||
Total Consideration | 52,650,000 | ||
Trade Names [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets acquired | 7,631,000 | $ 23,000 | |
Customer Relationships [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets acquired | 16,064,000 | ||
Networks And Platforms [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets acquired | $ 803,000 |
Acquisition (Details -Supplemen
Acquisition (Details -Supplemental pro forma information) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Total Revenues | $ 19,679 | $ 18,091 | $ 61,346 | $ 48,927 |
Net Income (Loss) | $ (11,218) | $ (8,338) | $ (28,144) | $ (90,388) |
Net Loss per Share of Common Stock (Basic and Diluted) | $ (0.04) | $ (0.03) | $ (0.09) | $ (0.31) |
Weighted Average Shares Outstanding (Basic and Diluted) | 317,282,770 | 300,321,658 | 312,243,439 | 296,001,742 |
Wow Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Total Revenues | $ 16,033 | $ 186 | $ 53,242 | $ 43,130 |
Net Income (Loss) | $ 833 | $ 82 | $ 158 | $ 2,272 |
Net Loss per Share of Common Stock (Basic and Diluted) | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted Average Shares Outstanding (Basic and Diluted) | 0 | 0 | 0 | 0 |
Ameba Acquisition [Member] | ||||
Business Acquisition [Line Items] | ||||
Total Revenues | $ 1,274 | $ 519 | ||
Net Income (Loss) | $ (22) | $ 247 | ||
Net Loss per Share of Common Stock (Basic and Diluted) | $ 0 | $ 0 | ||
Weighted Average Shares Outstanding (Basic and Diluted) | 0 | 0 |
Acquisitions (Details Narrative
Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 07, 2022 | Apr. 06, 2022 | Jan. 13, 2022 | Apr. 06, 2021 | Jan. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Cash paid for acquisition, gross | $ 52,700,000 | $ 4,100,000 | |||||
Cash acquired | 50,100,000 | 3,900,000 | |||||
General and administrative expenses | $ 3,100,000 | $ 100,000 | |||||
Net working capital | $ 268,657,000 | ||||||
Net identifiable assets acquired | $ 34,800,000 | $ 3,100,000 | |||||
Useful life | 8 years | 18 years | |||||
Number of shares issued | 11,057,000 | ||||||
Fair value of common stock | $ 11,600,000 | ||||||
Options granted | 2,409,515 | ||||||
Fair value of vested options | $ 1,200,000 | ||||||
Fair value of future services | 300,000 | ||||||
Severance cost | 1,600,000 | ||||||
Stock-based compensation | $ 300,000 | ||||||
Tradenames | 7,600,000 | ||||||
Goodwill acquisition | $ 21,399,000 | $ 4,069,000 | 21,400,000 | ||||
Networks And Platforms [Member] | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Tradenames | 800,000 | ||||||
Wow Acquisition [Member] | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Cash paid for acquisition, gross | $ 38,300,000 | ||||||
Number of shares issued | 11,057,085 | ||||||
Trade Names [Member] | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Useful life | 16 years | 3 years | |||||
Technology [Member] | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Useful life | 3 years | ||||||
Stock Purchase Agreement [Member] | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Cash paid for acquisition, gross | $ 3,800,000 | ||||||
Asset Purchase Agreement [Member] | |||||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||||
Cash paid for acquisition, gross | $ 300,000 |
Variable Interest Entity (Detai
Variable Interest Entity (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Intangible asset to be amortized | $ 2,800,000 | $ 200,000 | $ 5,100,000 | $ 1,100,000 | |
Net income | (11,218,000) | $ (9,253,000) | (29,088,000) | $ (92,907,000) | |
Investments | 12,480,000 | 12,480,000 | $ 6,695,000 | ||
Marketing and operational services | 400,000 | ||||
Stan Lee Universe [Member] | |||||
Intangible Assets, Current | 2,000,000 | 2,000,000 | |||
Acquisition cost | 2,000,000 | ||||
Intangible asset to be amortized | 4,000,000 | ||||
Net income | 46,947 | 2,300,000 | |||
Distributions to noncontrolling interest | 1,200,000 | ||||
Investment cash received | 1,200,000 | ||||
Investments | $ 800,000 | 800,000 | |||
Stan Lee Universe L L C [Member] | |||||
Marketing and operational services | $ 400,000 |
Investment in Equity Interest (
Investment in Equity Interest (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Apr. 06, 2022 | Apr. 05, 2022 | Mar. 09, 2022 | Dec. 02, 2021 | Feb. 14, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Investment | $ 12,480,000 | $ 12,480,000 | $ 6,695,000 | |||||
Number of shares issued | 11,057,000 | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 304,631 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Period Increase (Decrease) | 6,857,132 | |||||||
Foreign currency translation rate | 1,300,000 | $ 2,600,000 | ||||||
Ratchet Productions L L C [Member] | ||||||||
Investment | $ 0 | 0 | ||||||
Impairment of investment | $ 0 | |||||||
Y E E [Member] | ||||||||
Noncontrolling Interest, Ownership Percentage by Parent | 48% | 48% | 29% | |||||
Y F E Common Stock [Member] | ||||||||
Investment | $ 6,800,000 | |||||||
Cash | $ 3,400,000 | |||||||
Number of shares issued | 914,284 | 2,281,269 | 2,637,717 | |||||
Received shares | 3,000,000 | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 2,574,000 | |||||||
Stock Issued During Period, Value, New Issues | $ 2,700,000 | $ 5,700,000 | ||||||
Other income loss | $ 5,400,000 | $ 3,800,000 |
Marketable Securities (Details
Marketable Securities (Details - Marketable Securities) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Net Investment Income [Line Items] | ||
Adjusted Cost | $ 97,530 | $ 113,778 |
Unrealized Loss | (7,657) | (1,255) |
Fair Value | 89,873 | 112,523 |
Corporate Bond Securities [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 44,822 | 47,864 |
Unrealized Loss | (2,968) | (529) |
Fair Value | 41,854 | 47,335 |
US Treasury Securities [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 20,922 | 24,410 |
Unrealized Loss | (1,437) | (257) |
Fair Value | 19,485 | 24,153 |
Collateralized Mortgage-Backed Securities [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 6,285 | 7,504 |
Unrealized Loss | (760) | (143) |
Fair Value | 5,525 | 7,361 |
U S Agency And Government Sponsored Securities [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 13,116 | 14,675 |
Unrealized Loss | (1,495) | (87) |
Fair Value | 11,621 | 14,588 |
US Treasury Notes Securities [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 11,818 | 11,871 |
Unrealized Loss | (988) | (189) |
Fair Value | 10,830 | 11,682 |
Asset-Backed Securities [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 567 | 6,456 |
Unrealized Loss | (9) | (50) |
Fair Value | $ 558 | 6,406 |
Commercial Paper [Member] | ||
Net Investment Income [Line Items] | ||
Adjusted Cost | 998 | |
Unrealized Loss | 0 | |
Fair Value | $ 998 |
Marketable Securities (Detail_2
Marketable Securities (Details - Unrealized losses) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Net Investment Income [Line Items] | |
Gross unrealized loss | $ (6,944) |
Fair Value | 79,585 |
Corporate Bond Securities [Member] | |
Net Investment Income [Line Items] | |
Gross unrealized loss | (2,375) |
Fair Value | 34,365 |
US Treasury Securities [Member] | |
Net Investment Income [Line Items] | |
Gross unrealized loss | (1,456) |
Fair Value | 19,489 |
Collateralized Mortgage-Backed Securities [Member] | |
Net Investment Income [Line Items] | |
Gross unrealized loss | (829) |
Fair Value | 5,528 |
U S Agency And Government Sponsored Securities [Member] | |
Net Investment Income [Line Items] | |
Gross unrealized loss | (1,493) |
Fair Value | 11,625 |
US Treasury Notes Securities [Member] | |
Net Investment Income [Line Items] | |
Gross unrealized loss | (781) |
Fair Value | 8,020 |
Asset-Backed Securities [Member] | |
Net Investment Income [Line Items] | |
Gross unrealized loss | (10) |
Fair Value | $ 558 |
Marketable Securities (Detail_3
Marketable Securities (Details - Contractual maturities) $ in Thousands | Sep. 30, 2022 USD ($) |
Net Investment Income [Line Items] | |
Fair Value | $ 89,873 |
Due After One Year Through Five Years [Member] | |
Net Investment Income [Line Items] | |
Fair Value | 70,060 |
Due In One Years [Member] | |
Net Investment Income [Line Items] | |
Fair Value | 8,889 |
Due After Five Years Through Ten Years [Member] | |
Net Investment Income [Line Items] | |
Fair Value | 3,752 |
Due After Ten Years [Member] | |
Net Investment Income [Line Items] | |
Fair Value | $ 7,172 |
Marketable Securities (Detail_4
Marketable Securities (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Marketable Securities | ||
Gain (Loss) on Sales of Mortgage-Backed Securities (MBS) | $ 36,332 | $ 159,624 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,796 | $ 598 |
Less Accumulated Depreciation | (416) | (149) |
Property and Equipment, Net | 2,380 | 449 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 221 | 181 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 290 | 173 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,008 | 44 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 254 | 177 |
Production Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 23 | $ 23 |
Property and Equipment, Net (_2
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 86,980 | $ 23,665 | $ 200,000 | $ 53,494 |
Right of Use Leased Asset (Deta
Right of Use Leased Asset (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Right of use asset, gross | $ 12,739 | $ 3,364 |
Total accumulated amortization | (1,917) | (579) |
Right of use asset, net | 10,822 | 2,785 |
Office Lease [Member] | ||
Right of use asset, gross | 9,683 | 3,351 |
Equipment Lease Assets [Member] | ||
Right of use asset, gross | $ 3,056 | $ 13 |
Right of Use Leased Assets (Det
Right of Use Leased Assets (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Right Of Use Leased Assets | ||||
Amortization expense | $ 700,000 | $ 100,000 | $ 1,300,000 | $ 200,000 |
Film and Television Costs, Ne_2
Film and Television Costs, Net (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Other Industries [Abstract] | ||
Film and Television Costs, ending balance | $ 2,940 | $ 11,828 |
Additions to Film and Television Costs | 17,708 | 10,650 |
Film Amortization Expense | (5,100) | (19,538) |
Disposals | (11) | |
Foreign Currency Translation Adjustment | (555) | |
Film and Television Costs, ending balance | $ 14,982 | $ 2,940 |
Film and Television Costs, Ne_3
Film and Television Costs, Net (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Industries [Abstract] | ||||
Net of amortization expense | $ 12,000,000 | |||
Increase in film and television costs | 4,400,000 | |||
Film amortization expense | $ 2,800,000 | $ 200,000 | $ 5,100,000 | $ 1,100,000 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill (Details - Intangibles) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | ||
Indefinite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 38,065 | $ 10,481 | |
Less Accumulated Amortization | (2,364) | (772) | |
Foreign Currency Translation Adjustment | (1,927) | 24 | |
Net Intangible Assets | $ 33,774 | 9,733 | |
Customer Relationships [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 9 years | ||
Intangible assets | $ 22,199 | 6,120 | |
Digital Networks [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 17 years | ||
Intangible assets | $ 3,537 | 0 | |
Trade Names [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 69 years | ||
Intangible assets | $ 11,654 | 4,000 | |
Technology [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 2 years | ||
Intangible assets | $ 293 | 0 | |
Noncompete Agreements [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | 2 years | ||
Intangible assets | $ 60 | 60 | |
Other Intangible Assets [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
Weighted Average Remaining Amortization Period | [1] | 2 years | |
Intangible assets | [1] | $ 322 | $ 301 |
[1]Represents the remaining unamortized logo and website intangible assets related to the merger with A Squared. |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill (Details - future amortization) $ in Thousands | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 684 |
2023 | 2,733 |
2024 | 2,709 |
2025 | 2,602 |
2026 | 2,597 |
Thereafter | 22,449 |
Total | $ 33,774 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill (Details - Goodwill) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill at beginning | $ 15,227 |
Acquisition of Ameba | 673 |
Acquisition of wow | 21,398 |
Foreign Currency Translation Adjustment | (1,550) |
Goodwill at end | 35,748 |
Content Production Distribution [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill at beginning | 10,366 |
Acquisition of Ameba | 673 |
Acquisition of wow | 21,398 |
Foreign Currency Translation Adjustment | (1,546) |
Goodwill at end | 30,891 |
Media Advertising Services [Member] | |
Indefinite-Lived Intangible Assets [Line Items] | |
Goodwill at beginning | 4,861 |
Acquisition of Ameba | 0 |
Acquisition of wow | 0 |
Foreign Currency Translation Adjustment | (4) |
Goodwill at end | $ 4,857 |
Intangible Assets, Net and Go_6
Intangible Assets, Net and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 13, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Amortization expense | $ 700,000 | $ 100,000 | $ 1,700,000 | $ 400,000 | ||
Goodwill | 35,748,000 | $ 10,400,000 | 35,748,000 | $ 10,400,000 | $ 673,000 | $ 15,227,000 |
Impairment charge | 4,800,000 | |||||
Goodwill impairment | 4,900,000 | |||||
Beacon Media Group [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Goodwill | 9,700,000 | 9,700,000 | ||||
Ameba Acquisition [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Goodwill | 700,000 | 700,000 | ||||
Wow Acquisition [Member] | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Goodwill | $ 21,400,000 | $ 21,400,000 |
Deferred Revenue (Details Narra
Deferred Revenue (Details Narrative) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue from Contract with Customer [Abstract] | ||
Deferred revenue, current | $ 14,200,000 | $ 3,900,000 |
Deferred revenue, current | $ 10,600,000 |
Supplemental Financial Statem_3
Supplemental Financial Statement Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Gain (Loss) on Warrant Revaluation (a) | $ 166 | $ 420 | $ 434 | $ 103 | |
Loss on Foreign Exchange (b) | [1] | (1,336) | 5 | (2,596) | (3) |
Loss on Marketable Securities Investments (c) | (36) | (25) | (160) | (25) | |
Gain (Loss) on Revaluation of Equity Investment in YFE(d) | (4,071) | 0 | (1,170) | 0 | |
Interest Income (e) | [2] | 257 | 183 | 759 | 314 |
Warrant Incentive Expense (f) | [3] | 0 | 0 | 0 | (69,139) |
Interest Expense (g) | [4] | (782) | (2) | (1,256) | (20) |
Net Other Income (Expense) | $ (5,802) | $ 581 | $ (3,989) | $ (68,770) | |
[1]For the three and nine months ended September 30, 2022 loss on foreign exchange primarily relates to the foreign exchange loss on the investment in YFE’s equity securities accounted for under the fair value option. For the three and nine months ended September 30, 2021 loss on foreign exchange related to foreign currency denominated monetary transactions.[2]Interest Income received during the three and nine months ended September 30, 2022 and 2021 primarily consists of cash interest received on the investments in marketable securities, net amortization of premiums.[3]The Warrant Incentive Expense is related to the fair value of new warrants that were issued in 2021 to certain existing warrant holders in exchange for previously issued outstanding warrants.[4]Interest expense during the three and nine months ended September 30, 2022 primarily consists of $0.4 million and $0.6 million, respectively, of interest incurred on the Company’s margin loan collateralized by its marketable security investments and $0.3 million and $0.6 million, respectively, of interest incurred on its production facilities loan and bank indebtedness assumed as part of the Wow Acquisition. |
Margin Loan (Details Narrative)
Margin Loan (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Line of Credit Facility [Line Items] | ||||
Interest Expense, Debt | $ 782,000 | $ 2,000 | $ 1,256,000 | $ 20,000 |
Margin Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Proceeds from Lines of Credit | 63,200,000 | |||
Repayments of Lines of Credit | 7,800,000 | |||
Interest Expense, Debt | $ 600,000 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Apr. 07, 2022 | Apr. 06, 2022 | Apr. 06, 2021 | Feb. 18, 2022 | Feb. 24, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | ||||||||
Shares authorized | 400,000,000 | 400,000,000 | 400,000,000 | |||||
Common stock outstanding | 318,097,275 | 318,097,275 | 303,379,122 | |||||
Number of shares issued, shares | 11,057,000 | |||||||
Treasury stock shares withheld for taxes | 6,993 | 6,993 | ||||||
Non escrow shares | 419,336 | |||||||
Market price | $ 0.68 | $ 0.68 | ||||||
Purchase price | $ 834,479 | |||||||
Legal expense | $ 549,330 | |||||||
Chiz Comm Ltd [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Market price | $ 1.31 | $ 1.31 | ||||||
Other current liabilities | $ 285,148 | $ 285,148 | ||||||
Wow Acquisition [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued, shares | 11,057,085 | |||||||
Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued, shares | 10,365,823 | 350,000 | 36,196 | 2,538,205 | ||||
Number of shares issued, value | $ 10,800,000 | $ 300,000 | $ 65,515 | $ 1,600,000 | ||||
Common Stock [Member] | Wow Acquisition [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Number of shares issued, shares | 691,262 | |||||||
Number of shares issued, value | $ 700,000 |
Stock Options (Details - Assump
Stock Options (Details - Assumptions) - Share-Based Payment Arrangement, Option [Member] - $ / shares | 1 Months Ended | |||
Jul. 11, 2022 | Apr. 06, 2022 | Jun. 23, 2022 | Mar. 17, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Exercise price | $ 0.68 | $ 0.78 | $ 0.90 | |
Dividend yield | 0% | 0% | 0% | 0% |
Volatility | 99.90% | 113% | 104% | |
Risk-free interest rate | 3.05% | 3.14% | 0.41% | |
Expected life | 5 years | 5 years | 5 years | |
Minimum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Exercise price | $ 0.51 | |||
Volatility | 114% | |||
Risk-free interest rate | 2.67% | |||
Expected life | 3 years | |||
Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Exercise price | $ 1.66 | |||
Volatility | 123% | |||
Risk-free interest rate | 2.70% | |||
Expected life | 4 years 3 months 18 days |
Stock Options (Details-Option a
Stock Options (Details-Option activity) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Options, Granted | 676,415 |
Equity Option [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Options outstanding, beginning balance | 10,197,312 |
Weighted Average Remaining Contractual Life, beginning balance | 7 years 11 months 15 days |
Weighted Average Exercise Price per Share, beginning balance | $ / shares | $ 1.75 |
Number of Options, Granted | 4,394,809 |
Weighted average remaining contractual life, options granted | 4 years 8 months 26 days |
Weighted Average Exercise Price, Options Granted | $ / shares | $ 1.06 |
Number of Options, Exercised | 0 |
Weighted Average Exercise Price, Options Exercised | $ / shares | $ 0 |
Number of Options, Forfeited | (1,082,915) |
Weighted average remaining contractual life, options Forfeited | 3 years 21 days |
Weighted Average Exercise Price, Options Forfeited | $ / shares | $ 1.62 |
Number of Options, Expired | 0 |
Weighted Average Exercise Price, Options Expired | $ / shares | $ 0 |
Number of Options outstanding, ending balance | 13,509,206 |
Weighted Average Remaining Contractual Life, ending balance | 6 years 8 months 26 days |
Weighted Average Exercise Price per Share, ending balance | $ / shares | $ 1.51 |
Number of Options, Unvested | 4,361,195 |
Weighted- Average Remaining Contractual Life, Unvested | 6 years 7 months 9 days |
Weighted Average Exercise Price per Share Unvested | $ / shares | $ 1.33 |
Number of Options, exercisable | 9,148,011 |
Weighted- Average Remaining Contractual Life, Exercisable | 6 years 9 months 18 days |
Weighted Average Exercise Price per Share, Exercisable | $ / shares | $ 1.60 |
Stock Options (Details Narrativ
Stock Options (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Apr. 06, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 27, 2020 | Sep. 18, 2015 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 2,409,515 | ||||||
Fair market value | $ 1,500,000 | ||||||
Number of Options, Granted | 676,415 | ||||||
Number of Options, vested | $ 1,200,000 | ||||||
Number of vested shares | 1,967,528 | ||||||
Share-based compensation | $ 300,000 | ||||||
Unvested share based compensation | $ 1,800,000 | $ 1,800,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 0 | $ 0 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0.64 | ||||||
Equity Option [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Number of Options, Granted | 4,394,809 | ||||||
Number of Options, vested | $ 300,000 | ||||||
Share-based compensation | $ 500,000 | $ 900,000 | $ 1,300,000 | $ 2,800,000 | |||
Equity Option [Member] | Employees [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 1,985,294 | ||||||
Fair market value | $ 1,300,000 | ||||||
Options Held [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Number of Options, Granted | 1,733,100 | ||||||
Plan 2015 [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Shares available for future issuance | 2,167,667 | ||||||
Plan 2020 [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Shares available for future issuance | 32,167,667 |
Restricted Stock Units (Details
Restricted Stock Units (Details - RSU Activity) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
RSUs Outstanding shares, beginning | 15,383,234 | |
Weighted Average Remaining Contractual Life | 3 years 7 months 13 days | 4 years 4 months 2 days |
Exercise Prices Per Share, beginning | $ 1.40 | |
RSUs Granted | 1,886,667 | |
RSUs Granted | 4 years 6 months 10 days | |
RSUs Granted | $ 0.88 | |
RSUs Vested | (4,088,301) | |
RSUs Vested | 3 years 11 months 15 days | |
RSUs Vested | $ 1.26 | |
RSUs Forfeited | 0 | |
RSUs Forfeited | $ 0 | |
RSUs Outstanding shares, ending | 13,181,600 | 15,383,234 |
Weighted Average Exercise Price Per Share, ending | $ 1.37 | $ 1.40 |
Restricted Stock Units (Detai_2
Restricted Stock Units (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Apr. 06, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | |||||||
Treasury stock shares withheld for taxes | 6,993 | 6,993 | |||||
Treasury stock | $ 2,553,000 | $ 2,553,000 | |||||
Share-based compensation | $ 300,000 | ||||||
Unvested share based compensation | 1,800,000 | 1,800,000 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-based compensation | 300,000 | $ 4,600,000 | 8,700,000 | $ 8,300,000 | |||
Unvested share based compensation | $ 2,200,000 | $ 2,200,000 | |||||
Restricted Stock Units (RSUs) [Member] | Certain Employees And Officers [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,086,667 | ||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 1,000,000 | ||||||
Restricted Stock Units (RSUs) [Member] | Former Employee [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 500,000 | ||||||
Stock Issued During Period, Value, Restricted Stock Award, Gross | $ 390,000 | ||||||
Restricted Stock [Member] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||
Number of shares issued | 4,426,064 | 4,426,064 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 9 Months Ended | ||
Aug. 11, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrant exercise price | $ 2.24 | ||
Warrants issued | 892,857 | ||
Decrease in liability | $ 400,000 | ||
Warrants expired | 668,536 | ||
Warrant [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrants outstanding | 44,843,429 | 45,511,965 | |
Warrant outstanding, value | $ 74,100,000 | ||
Volatility | 99.97% | ||
Interest rate | 4.23% |
Commitment and Contingencies (D
Commitment and Contingencies (Details - Minimum lease commitments) | Sep. 30, 2022 USD ($) |
Other Commitments [Line Items] | |
Total | $ 3,500,000 |
Employment Agreements [Member] | |
Other Commitments [Line Items] | |
Other commitment 2022 | 1,692,000 |
Other commitment 2023 | 3,311,000 |
Other commitment 2024 | 971,000 |
Other commitment 2025 | 427,000 |
Other commitment 2026 | 0 |
Other commitment Thereafter | 0 |
Total | 6,401,000 |
Consulting Contracts [Member] | |
Other Commitments [Line Items] | |
Other commitment 2022 | 1,467,000 |
Other commitment 2023 | 482,000 |
Other commitment 2024 | 0 |
Other commitment 2025 | 0 |
Other commitment 2026 | 0 |
Other commitment Thereafter | 0 |
Total | 1,949,000 |
Debt [Member] | |
Other Commitments [Line Items] | |
Other commitment 2022 | 64,470,000 |
Other commitment 2023 | 19,057,000 |
Other commitment 2024 | 24,000 |
Other commitment 2025 | 24,000 |
Other commitment 2026 | 18,000 |
Other commitment Thereafter | 0 |
Total | 83,593,000 |
All Commitments [Member] | |
Other Commitments [Line Items] | |
Other commitment 2022 | 68,524,000 |
Other commitment 2023 | 25,978,000 |
Other commitment 2024 | 3,143,000 |
Other commitment 2025 | 2,192,000 |
Other commitment 2026 | 1,776,000 |
Other commitment Thereafter | 6,040,000 |
Total | 107,653,000 |
Operating Leases [Member] | |
Other Commitments [Line Items] | |
Operating lease 2022 | 435,000 |
Operating lease 2023 | 1,629,000 |
Operating lease 2024 | 1,692,000 |
Operating lease 2025 | 1,741,000 |
Operating lease 2026 | 1,758,000 |
Operating lease Thereafter | 6,040,000 |
Total | 13,295,000 |
Operating lease 2022 | 460,000 |
Operating lease 2023 | 1,499,000 |
Operating lease 2024 | 456,000 |
Operating lease 2025 | 0 |
Operating lease 2026 | 0 |
Operating lease Thereafter | 0 |
Total | $ 2,415,000 |
Commitment and Contingencies _2
Commitment and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 06, 2022 | Dec. 31, 2021 | |
Weighted-average discount rate | 10.39% | 10.39% | 24.90% | |||
Lease obligations | $ 3,500,000 | $ 3,500,000 | ||||
Weighted-average lease term for operating leases | 95 years | 95 years | 70 years | |||
Weighted-average lease term for operating leases | 27 years | 27 years | ||||
Weighted-average discount rate | 5.11% | 5.11% | ||||
Rental expenses | $ 900,000 | $ 100,000 | $ 2,000,000 | $ 400,000 | ||
Vancouver Lease [Member] | ||||||
Weighted-average discount rate | 11.50% | |||||
Operating Lease, Liability | $ 500,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 27 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Jul. 19, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||||
Discretionary bonus | $ 55,000 | $ 55,000 | $ 55,000 | $ 55,000 | $ 55,000 | ||
Reimbursement expenses percentage | 5% | ||||||
Accrued interest | $ 1,300,000 | ||||||
Fixed annualized rate | 5% | ||||||
Loan amount | $ 11,639 | $ 11,639 | $ 11,639 | ||||
Y F E [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership interest | 48% | 48% | 48% | ||||
Mr Piech [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership interest | 28.20% | 28.20% | 28.20% | ||||
Andy Heyward [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Producers fees | $ 600,000 | 200,000 | |||||
Andy Heyard Animation [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Royalty income | $ 0 | ||||||
POW [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Loans payable | $ 1,250,000 | $ 1,250,000 | |||||
Related Party Transaction, Rate | 9% | ||||||
Interest Receivable, Current | $ 78,660 | $ 78,660 | $ 78,660 | $ 26,221 |
Segment Reporting (Details - Se
Segment Reporting (Details - Segment Reporting) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 19,679 | $ 1,872 | $ 43,244 | $ 5,278 |
Total Operating Loss | (11,218) | (9,253) | (29,088) | (92,907) |
Content Production Distribution [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 18,481 | 690 | 39,978 | 2,371 |
Total Operating Loss | (10,831) | (8,872) | (27,735) | (91,702) |
Media Advertising Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,198 | 1,182 | 3,266 | 2,907 |
Total Operating Loss | $ (387) | $ (381) | $ (1,353) | $ (1,205) |
Segment Reporting (Details - Di
Segment Reporting (Details - Disaggregated Revenue) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 19,679 | $ 1,872 | $ 43,244 | $ 5,278 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 14,451 | 1,210 | 31,267 | 3,690 |
CANADA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | 4,690 | 662 | 10,464 | 1,588 |
UNITED KINGDOM | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenues | $ 538 | $ 0 | $ 1,513 | $ 0 |