Note 22: Related Party Transactions

Pursuant to his employment agreements dated November 16, 2018 and November 16, 2020, Mr. Heyward is entitled to an Executive Producer fee of $12,500 per half hour episode for each episode he provides services as an executive producer. The fourth identified series under this employment agreement is Stan Lee’s Superhero Kindergarten. Accordingly, Mr. Heyward is owed $175,000 which is included in Due to Related Party on the Company’s condensed consolidated balance sheet.

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’s Chief Executive Officer. 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 and Stan Lee’s Mighty 7 in connection with certain products to be sold by AHAA. The terms and conditions of such license are customary within the industry, and the Company earns an arm-length industry standard royalty on all sales made by AHAA utilizing the licensed content. During the three and nine months ended September 30, 2021, the Company earned $0 in royalties from this agreement.

As of September 30, 2021, Mr. Heyward was awarded $55,000 as a quarterly bonus and is owed $931 for reimbursable expenses which are included in Due to Related Party on the condensed consolidated balance sheet.