Document:

Exhibit 4.13

 

DESCRIPTION OF THE REGISTRANT’S
SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

 

As of March 29, 2020,
Genius Brands International, Inc. (“Genius Brands,” “we,” “us” or the “Company”)
had one class of securities registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”): Common Stock, par value $0.001 per share (“Common Stock”). Each of the Company’s securities registered
under Section 12(b) of the Exchange Act are listed on The Nasdaq Capital Market.

 

General

 

The
following is a summary of all material characteristics of our capital stock as set forth in our articles of
incorporation, as amended, and bylaws, as amended. The summary does not purport to be complete and is qualified in its entirety
by reference to our articles of incorporation, as amended, and
bylaws, as amended, which are incorporated by reference as exhibits to the Annual Report on Form 10-K to which this description
is an exhibit. 

 

Authorized Capital Stock

 

Our authorized capital
stock consists of 243,333,334 shares of capital stock, of which 233,333,334 are shares of Common Stock, and 10,000,000 are shares
of preferred stock, par value $0.001 per share.

 

Capital Stock Issued and Outstanding

 

As of March 29, 2020,
we have issued and outstanding:

 

	·	29,592,229 shares of Common Stock;
	·	430 shares of Series A Preferred Stock (as defined below) which are convertible into 2,047,619 shares of Common Stock;
	·	options to purchase 1,289,866 shares of Common Stock, at a weighted average exercise price of $7.18 per share; and
	·	warrants to
    purchase 63,559,020 shares of our Common Stock, at a weighted average exercise price of $0.51 per share.

 

Common Stock

 

The holders of our
Common Stock are entitled to one vote per share. In addition, the holders of our Common Stock will be entitled to receive ratably
such dividends, if any, as may be declared by our Board of Directors out of legally available funds; however, the current policy
of our Board of Directors is to retain earnings, if any, for operations and growth. Upon liquidation, dissolution or winding-up,
the holders of our Common Stock will be entitled to share ratably in all assets that are legally available for distribution. The
holders of our Common Stock will have no preemptive, subscription, redemption or conversion rights. The rights, preferences and
privileges of holders of our Common Stock will be subject to, and may be adversely affected by, the rights of the holders of any
series of preferred stock, which may be designated solely by action of our board of directors and issued in the future.

 

 

 

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Preferred Stock

 

Our Board of Directors
is authorized, subject to any limitations prescribed by law, without further vote or action by our 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 our Board of
Directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive
rights.

 

Series A Convertible Preferred Stock

 

We have designated
six thousand (6,000) shares of preferred stock as 0% Series A Convertible Preferred Stock (“Series A Preferred Stock”).
Each share of Series A Preferred Stock is convertible into shares of our Common Stock based on a conversion calculation equal to
the Base Amount divided by the conversion price. The Base Amount is defined as the sum of (i) the aggregate stated value of the
Series A Preferred Stock to be converted and (ii) all unpaid dividends thereon. The stated value of each share of the Series A
Preferred Stock is $1,000 and the conversion price is currently $0.21 per share, subject to adjustment in the event of stock splits,
dividends and recapitalizations.

 

We are prohibited from
effecting a conversion of the Series A Preferred Stock to the extent that as a result of such conversion, the holder would beneficially
own more than 9.99% in the aggregate of the issued and outstanding shares of our Common Stock, calculated immediately after giving
effect to the issuance of shares of Common Stock upon conversion of the Series A Preferred Stock. The shares of Series A Preferred
Stock possess no voting rights except as required by law.

 

Nevada Anti-Takeover Law and Certain
Charter and Bylaw Provisions

 

Some features of the
Nevada Revised Statutes, which are further described below, may have the effect of deterring third parties from making takeover
bids for control of our company or may be used to hinder or delay a takeover bid. This would decrease the chance that our stockholders
would realize a premium over market price for their shares of Common Stock as a result of a takeover bid.

 

Acquisition of Controlling Interest

 

The Nevada Revised
Statutes contain provisions governing acquisition of a controlling interest of a Nevada corporation. These provisions provide generally
that any person or entity that acquires a certain percentage of the outstanding voting shares of a Nevada corporation may be denied
voting rights with respect to the acquired shares, unless the holders of a majority of the voting power of the corporation, excluding
shares as to which any of such acquiring person or entity, an officer or a director of the corporation, or an employee of the corporation
exercises voting rights, elect to restore such voting rights in whole or in part. These provisions apply whenever a person or entity
acquires shares that, but for the operation of these provisions, would bring voting power of such person or entity in the election
of directors within any of the following three ranges:

 

	·	20% or more but less than 33 1/3%;
	·	33 1/3% or more but less than or equal to 50%; or
	·	more than 50%.

 

 

 

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The stockholders or
board of directors of a corporation may elect to exempt the stock of the corporation from these provisions through adoption of
a provision to that effect in the articles of incorporation or bylaws of the corporation.

 

These provisions are
applicable only to a Nevada corporation, which:

 

	·	has 200 or more stockholders of record, at least 100 of whom have addresses in Nevada appearing on the stock ledger of the corporation; and
	·	does business in Nevada directly or through an affiliated corporation.

 

On November 20, 2013,
we amended our bylaws to provide that the provisions of NRS 78.378 and 78.3793 (“Acquisition of a Controlling Interest”)
shall not apply to the Company or to any acquisition of a controlling interest in the Company by any existing or future stockholder.

 

Combination with Interested Stockholder

 

The Nevada
Revised Statutes contain provisions governing combination of a Nevada corporation that has 200 or more stockholders of record
with an interested stockholder. As of March 29, 2020, we had 177 stockholders of
record, not including persons or entities that hold our stock in nominee or “street name” through various
brokerage firms.

 

A corporation affected
by these provisions may not engage in a combination within two years after the interested stockholder first became an interested
stockholder, unless either (i) the combination or transaction by which the interested stockholder first became an interested stockholder
is approved by the board of directors before the interested stockholder first became an interested stockholder, or (ii) the combination
is approved by the board of directors and by the affirmative vote of the corporation’s stockholders representing at least
60% of the outstanding voting power of the corporation not beneficially owned by the interested stockholder or the interested stockholder’s
affiliates. Generally, if approval is not obtained, then after the expiration of the two-year period, the business combination
may be consummated with the approval of the board of directors of the combination or transaction by which the interested stockholder
first became an interested stockholder before the person became an interested stockholder, or a majority of the voting power held
by disinterested stockholders, or if the consideration to be received per share by disinterested stockholders is at least equal
to the highest of:

 

	·	the highest price per share paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or within two years immediately before, or in the transaction in which he, she or it became an interested stockholder, whichever is higher;
	·	the market value per share on the date of announcement of the combination or the date the person became an interested stockholder, whichever is higher; or
	·	if higher for the holders of preferred stock, the highest liquidation value of the preferred stock, if any.

 

Generally, these provisions
define an interested stockholder as a person who is the beneficial owner, directly or indirectly, of 10% or more of the voting
power of the outstanding voting shares of a corporation. Generally, these provisions define combination to include any merger or
consolidation with an interested stockholder, or any sale, lease, exchange, mortgage, pledge, transfer or other disposition, in
one transaction or a series of transactions, with an interested stockholder of assets of the corporation having:

 

	·	an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation;
	·	an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation; or
	·	representing 10% or more of the earning power or net income of the corporation.

 

 

 

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Articles of Incorporation and Bylaws

 

Pursuant to our Articles
of Incorporation, the existence of authorized but unissued common stock and undesignated preferred stock may enable our board of
directors to make more difficult or to discourage an attempt to obtain control of our Company by means of a merger, tender offer,
proxy contest or otherwise, and thereby to protect the continuity of management. If, in the due exercise of its fiduciary
obligations, the board of directors were to determine that a takeover proposal was not in our best interest, such shares could
be issued by the board of directors without stockholder approval in one or more transactions that might prevent or render more
difficult or costly the completion of the takeover transaction by diluting the voting or other rights of the proposed acquirer
or insurgent stockholder group, by putting a substantial voting block in institutional or other hands that might undertake to support
the position of the incumbent board of directors, by effecting an acquisition that might complicate or preclude the takeover, or
otherwise.

 

In addition, our Articles
of Incorporation grants our board of directors broad power to establish the rights and preferences of authorized and unissued shares
of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution
to holders of shares of common stock. The issuance also may adversely affect the rights and powers, including voting rights, of
those holders and may have the effect of delaying, deterring or preventing a change in control of our Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	4Exhibit

Exhibit 4.6

DESCRIPTION OF CAPITAL STOCK

The following is a summary of the material terms of our capital stock. This discussion does not purport to be complete and you are strongly encouraged to read our Amended and Restated Certificate of Incorporation, as amended, Third Amended and Restated Bylaws, and the applicable provisions of the Delaware General Corporation Law.
Authorized and Outstanding Capital Stock
Our Amended and Restated Certificate of Incorporation, as amended, provides that we are authorized to issue a total of 59,005,000 shares of capital stock, consisting of 44,000,000 shares of common stock, $0.01 par value per share, and 15,005,000 shares of preferred stock, $0.01 par value per share, of which 5,000 shares are designated as Series A Redeemable Preferred Stock (“Series A Preferred Stock”), 155,000 shares are designated as Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”), 55,000 shares are designated as Series C Cumulative Redeemable Preferred Stock (“Series C Preferred Stock”), 100 shares are designated as Series D Cumulative Redeemable Preferred Stock (“Series D Preferred Stock”), 90,000 shares are designated as Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”), 54,750 shares are designated as Series E-1 Cumulative Redeemable Preferred Stock (“Series E-1 Preferred Stock”), and 240,500 shares are designated as Series F Cumulative Redeemable Preferred Stock (“Series F Preferred Stock”).
As of March 24, 2020, we had outstanding 37,892,603 shares of our common stock held by 59 holders of record (as of March 27, 2020) and outstanding options (including vested and unvested options) to purchase 407,024 shares of our common stock. We also had outstanding 704,362 restricted stock units, each of which represents the right to receive one share of our common stock on the applicable settlement date. As of March 24, 2020, there were no outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series E-1 Preferred Stock, or Series F Preferred Stock.
General
Shares of our common stock have the following rights, preferences, and rights:
		
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	Voting rights. Each outstanding share of common stock entitles its holder to one vote on all matters submitted to a vote of our stockholders, including the election of directors. There are no cumulative voting rights. Generally, all matters to be voted on by stockholders must be approved by a majority of the votes entitled to be cast by all shares of common stock present or represented by proxy.

		
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	Dividends. Holders of common stock are entitled to receive dividends out of funds legally available for the payment of dividends, at such times and in such amounts as our board of directors may determine in its sole discretion.

		
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	Liquidation. In the event of a liquidation, dissolution, or winding up of our affairs, whether voluntary or involuntary, after payment or provisions for payment of our debts and liabilities and all preferential amounts to which the holders of our preferred stock are entitled, the holders of our common stock shall be entitled to share ratably the remaining assets of the Company available for distribution.

		
	•
	Rights and preferences. Our common stock has no preemptive, redemption, conversion, or subscription rights. The voting, dividend, and liquidation rights of the holders of our common stock are subject to and qualified by the rights, power, rights, preferences, and priorities of the holders of our preferred stock.

Registration Rights
On February 26, 2019, we entered into an Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) with Elliott Associates, L.P., Elliott International, L.P., Brockdale Investments LP, Thayer Equity Investors V, L.P., TC Roadrunner-Dawes Holdings, L.L.C., TC Sargent Holdings, L.L.C., HCI Equity Partners III, L.P., and HCI Co-Investors III, L.P., which amended and restated the Registration Rights Agreement, dated as of May 2, 2017, between our company and the parties thereto. The A&R Registration Rights Agreement provides that, upon the request of a registration rights holder, we will register under the Securities Act of 1933, as amended, or the Securities Act, the shares of our common stock held by such registration rights holder for sale in accordance with its intended method of disposition, and will take other actions as are necessary to permit the sale of the shares in various jurisdictions. In addition, the A&R Registration Rights Agreement provides piggyback registration rights to the registration rights holders in the event it proposes to register any of its equity securities under the Securities Act. All fees, costs, and expenses of underwritten registrations will be borne by us, other than underwriting discounts, selling commissions, and legal fees which will be borne by the registration rights holders in connection with the sale of their shares. Our obligation to register the shares and take other actions is subject to certain 

restrictions on, among other things, the frequency of requested registrations, the number of shares to be registered, and the duration of these rights. In addition, the A&R Registration Rights Agreement provides the registration rights holders with unlimited registration rights on Form S-1.
Anti-Takeover Effects of Certain Provisions of Our Certificate of Incorporation and Bylaws
Our Amended and Restated Certificate of Incorporation, as amended, which we refer to as the Certificate of Incorporation, and Third Amended and Restated Bylaws, which we refer to as the Bylaws, contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and that may have the effect of delaying, deferring, or preventing a future takeover or change in control of our Company unless the takeover or change in control is approved by our board of directors. These provisions include the following:
Advance notice procedures for stockholder proposals. Our Certificate of Incorporation and Bylaws establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board. Stockholders at our annual meeting may only consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of our board or by a stockholder who was a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has given to our secretary timely written notice, in proper form, of the stockholder's intention to bring that business before the meeting.
The foregoing provisions of our Certificate of Incorporation and Bylaws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors and to discourage certain types of transactions that may involve an actual or threatened change in control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares, and, as a consequence, they also may inhibit fluctuations in the market price of the common stock that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management or delaying or preventing a transaction that might benefit you or other minority stockholders
Limitations on Liability and Indemnification of Officers and Directors
Our Certificate of Incorporation and Bylaws limit the liability of directors to the fullest extent permitted by the Delaware General Corporation Law. In addition, our Certificate of Incorporation and Bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by law. We have entered into indemnification agreements with our current directors and executive officers and expect to enter into similar indemnification agreements with any new directors or executive officers.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. The transfer agent's address is 620115th Avenue, Brooklyn, NY 11219 and its telephone number is (718) 921-8200.
Listing
Our common stock is listed on the New York Stock Exchange under the symbol “RRTS”.

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