Spin Master Ltd.

topped with grass seeds which grew to emulate hair, funded with their own $10,000 investment. With Anton selling the item on the street and to specialty retailers, the operation quickly expanded to a small facility in downtown Toronto. This initial success served as the springboard for Spin Master's entry into the toy business. Spin Master has achieved significant growth over the past two decades, transforming itself from a small, single product toy company into a leading global, diversified, multi-platform and highly innovative children's entertainment company. The business has progressed through key stages, from start up growth, building the base, Bakugan growth, refocusing to diversified growth; operating now across all toy industry super categories. In 1998, Spin Master launched its Air Hogs brand, the first products designed to be easily flown by children and required limited assembly. The brand came to the company from two British inventors based on an innovative design involving a miniature engine powered by compressed air. It has come to represent affordable, technologically-advanced and innovative vehicles and aircrafts with hobby-grade remote control performance, designed and priced for the mass market. From 2002 - 2007, Spin Master expanded its international footprint, establishing sales and distribution offices across western Europe. The company also opened its Los Angeles marketing and design hub, allowing the company to access deep local toy design, marketing and engineering talent. During this time of growth, Spin Master made its first significant acquisition, acquiring X-Concepts, Inc, maker of Tech Deck. This growth allowed expansion of the company's licensing capabilities and relationships with major entertainment companies. In late 2007, Spin Master launched the most successful product in its history, Bakugan. The Bakugan brand started out as an inventor's sketch of a ball that could be opened up to reveal a character inside. The brand immediately attracted a large following among five to ten year old boys and the richness of the Bakugan characters, story and game play provided Spin Master the opportunity to extend the brand with the co-development of a global animated television series. This success resulted in taking the technology to a girls property called Zoobles, achieve significant associated third-party merchandising revenue and further expand its operations. But as Bakugan approached the end of its product life cycle and the company experienced a significant decline in sales it needed to take swift action to right size the business, reorganize and reduce operating risk. The roles of its founders were refined and the company strategically complimented its executive management team with the addition of executives, including a new Global President and Chief Operating Officer, Ben Gadbois. These swift actions put Spin Master back on course for growth. Today, the company has resumed its history of growth, with a renewed focus on diversification and increased operational and financial discipline. It has expanded into a number of new toy categories, organically and through acquisitions. The company's acquisition of Spy Gear expanded the company's offering in boys action and outdoor toys, The acquisition of Meccano provided an entry into the building sets category and the acquisition of Cardinal Games has made Spin Master the #2 manufacturer in the games & puzzles category in North America. Spin Master has since made a number of key acquisitions including EG Games, Etch A Sketch, Toca Boca/Sago Mini, Swimways, Marbles, Aerobie, Perplexus and most recently GUND. In July 2015, Spin Master completed its public offering and began trading on the Toronto Stock Exchange. Since 2000, Spin Master has received 103 TIA Toy of The Year (TOTY) nominations with 28 wins across a variety of product categories, including 13 TOTY nominations for Innovative Toy of the Year, more than any of its competitors. The company's continued investment and support of its entertainment division has also yielded meaningful results. To date, Spin Master has produced six television series, including 2007 success, Bakugan Battle Brawlers, and current hit PAW Patrol, which is broadcast in over 160 countries and territories globally. When Spin Master began to chart it's course in the children's entertainment industry, the founders recognized that in order to compete successfully with the established brands of larger companies, they had to design and market innovative products that would "wow" consumers and disrupt the traditional toy market. With the inspiration of its founders, who remain actively engaged in the business today Spin Master has maintained a deeply rooted culture of creativity, partnership and passion.