LOS ANGELES--(BUSINESS WIRE)--Oct. 19, 2009-- EMAK Worldwide, Inc. (OTC: EMAK) announced today that its Board of Directors has approved and EMAK has consummated an exchange transaction for its Series AA Senior Cumulative Convertible Preferred Stock held by Crown EMAK Partners, LLC (“Crown”) in order to better align the interests of Crown with all Common stockholders.

The Series AA Preferred was exchanged by Crown for a new Series B Senior Convertible Preferred Stock, which has substantially equivalent terms, but will allow Crown to vote with Common stockholders on an as-converted basis in the election of Common Directors. With the exchange Crown has surrendered the right to appoint its own members to EMAK’s Board, unless and until there is a change of control. Like the Series AA Preferred, the new Series B Preferred is redeemable upon the option of the holder in the event of a change of control.

“Over the years Crown has been diligent in working with us as a partner implementing our long-term strategic plans. This transaction levels the playing field for all of our stockholders and gives Crown an equal voice in governance,” said Jim Holbrook, EMAK’s Chief Executive Officer.

On an as-converted basis, Crown’s Series B Preferred voting rights represent approximately 2.8 million shares, or 28 percent, of Common shares outstanding. There are no material changes to the economics of the Series B Preferred. The shares will not carry a dividend, and the conversion price of $9.00 per share is unchanged; however, in the event of a change of control, the redemption payment due Crown will accrue interest if the Company fails to meet its redemption payment obligation within six months.

About EMAK Worldwide, Inc.

EMAK Worldwide, Inc. is the parent company of a family of marketing services agencies including Equity Marketing, Logistix, Neighbor and Upshot. Its agencies are experts in “consumer activation” by offering strategy-based marketing programs that directly impact consumer behavior. The agencies provide strategic planning and research, consumer insight development, entertainment marketing, design and manufacturing of custom promotional products, kids marketing, event marketing, shopper marketing and environmental branding. The Company’s blue-chip clients include Kellogg, Kohl’s, Kraft, Macy’s, Procter & Gamble and Safeway, among others. Headquartered in Los Angeles, EMAK has offices in Chicago and Hong Kong. More information about EMAK Worldwide is available on the Company’s website at www.emak.com.

Certain expectations and projections regarding the future performance of EMAK Worldwide, Inc. discussed in this news release are forward-looking and are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These expectations and projections are based on currently available competitive, financial and economic data along with the Company’s operating plans and are subject to future events and uncertainties. Management cautions the reader that the following factors, among others, could cause the Company’s actual consolidated results of operations and financial position in 2009 and thereafter to differ significantly from those expressed in forward-looking statements: the Company’s dependence on a single customer; the significant quarter-to-quarter variability in the Company’s revenues and net income; the Company’s dependence on the popularity of licensed entertainment properties and the ability to license, develop and market new products; the Company’s dependence on foreign manufacturers; the Company’s need for additional working capital; the negative results of litigation, governmental proceedings or environmental matters; and the potential negative impact of past or future acquisitions. The Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The risks highlighted herein should not be assumed to be the only items that could affect the future performance of the Company.

Source: EMAK Worldwide, Inc.

At EMAK Worldwide, Inc.:
Media and investor inquiries:
Jim Holbrook
Chief Executive Officer
323-932-4068