Genius Brands International, Inc. (OTCQB: GNUS)

Genius Brands International, Inc. (OTCQB: GNUS)

Company Overview

Genius Brands International, Inc. is the developer and marketer of entertainment products including the award winning Baby Genius(R) line of music and education-based products and characters. The Company is developing and marketing a growing line of Genius branded products that entertain and educate the whole family. Baby Genius(R) awards include: Mom’s Choice Award, The National Parenting Center Seal of Approval, The Toy Insider Best Toddler Toys, Dr. Toy 100 Best Children’s Products, NAPPA Honors Award, iParenting Excellent Product Award, Creative Child Preferred Choice Award, Latino DVD Awards, iParenting Media Award, Film Advisory Board Award of Excellence, Kids First! Quality Children’s Media Endorsement, Parents Magazine 2002 “Video of the Year,” and Best “Under 3″ QSR Program 2004/2005 from Restaurant Magazine. Baby Genius(R) products are available at most major retailers and have international exposure in over 40 countries.

Wendy's, now the nation's second largest burger chain, is giving out GNUS books with Wendy's Kids Meals.

Investment Highlights

A Top Brand in Early Childhood Edutainment

A study has shown that 70% of moms in the U.S. know the Baby Genius® brand. Baby Genius® products have won dozens of awards including the
Mom’s Choice Award in 2010 and The National Parenting Seal of Approval in 2009. Baby Genius® videos have been the #1 video-on-demand on Comcast
and Cox cable networks for the past several years. In a 12-month campaign with Wendy’s, 6,500 restaurants are giving away Baby Genius books with
kids meals.

Retail Distribution Networks Into Major National Retailers

Baby Genius® products and entertainment content from other studios are sold through multiple distribution networks. The Company’s sales channels include major national retailers. DVDs and CDs are sold in over 8,000 retail stores nationwide.

Digital, Online and Direct to Consumer Channels

Direct-to-consumer sales through marketing and social commerce sites such as Groupon and Living Social have contributed significantly to sales
momentum. Baby Genius® had 30,000,000 unique impressions from Groupon alone in 2011. These impressions were from targeted customer demographics. Genius Brands has released its first two apps for iOS and will soon be announcing the Company’s expansion into additional digital
platforms. The Company seeks to further increase sales of its content and its distributed third party products through digital distribution channels.

Assets in Intellectual Property, Copyrights & Trademarks

Genius Brands owns a growing portfolio of brands, characters, and music which it licenses to children’s products manufacturers and marketers to generate the Company’s high margin revenues. Brand names include Baby Genius®, Kid Genius®, Little Genius®, 123 Favorites® and Wee Worship®. The Company owns 99% of its content including over 500 songs.

Revenue-Driving New Product Lines Set To Launch in Q3 of 2012

Genius Brands signed a licensing agreement with JAKKS Pacific’s Tollytots® division for a line of 20 musical and early learning toys with the music,
characters and themes from the Baby Genius® series of videos and music. Genius Brands is working with several other companies to launch new products featuring Baby Genius® including an electronic early learning aid. The Company has created a kindergarten readiness program, scheduled to launch in the next 12 months.

Products & Markets

Children’s Edutainment & Toy Industry

Genius Brands develops and markets products for young children and infants in the “edutainment” market. These products provide both education and entertainment for the wellbeing of young children. According to In-Stat, the worldwide edutainment toy market will reach $9 billion in 2012.

Genius Brands’ Products

Genius Brands creates character-driven, high quality toys and digital content. The Company’s products are similar to hugely popular brands that have enjoyed a longevity of success like Sesame Street and Baby Einstein. Genius Brands owns 99% of its content and continues to innovate with new characters, music, and educational methodology. Baby Genius® characters are well known and are the basis for royalty incomes. Genius Brands currently develops and sells DVDs and CDs. The Company also generates high margin royalty revenues from licensing agreements for toys, books, electronic early learning aids, sippy cups, amusement plush toys, and mobile apps.

Leveraging Distribution Networks for Entertainment Products

Genius Brands’ distribution network is a core strength that supports its proprietary, flagship Genius brand of products. The Company also generates revenues by opportunistically leveraging its sales channels and relationships with studios to distribute other entertainment related products including DVDs for children and adults.

Growth Through Brand Extension and New Product Line Launches

The Company is set to leverage its distribution channels and the Genius brand into new demographic categories which were previously untapped by Genius Brands. These include educational and edutainment products for prekindergarten, kindergarten, and school-aged children.

Leadership

Klaus Moeller, Chief Executive Officer and Chairman of the Board

Klaus Moeller was elected to serve on the board of directors of the Company at inception and has acted as its Chief Executive Officer and Chairman of the Board since that time. In May 2008, he was also appointed interim Chief Financial Officer of the Company, a position he held until April 26, 2011. Mr. Moeller currently sits on the Board of Directors of U.K.-based Western Canon, Inc., which owns and operates an art gallery in Beverly Hills, California, a position he has held since 2008. Previously, Mr. Moeller acted as a member of the Board of Directors of Pro-Stars, Inc., a position he held from April 2, 2003 until dissolution of the company in 2008 following the sale of substantially all of its assets to Dreams, Inc. Mr. Moeller also acted as Chief Financial Officer and Chairman of the Board for Pro-Stars. Mr. Moeller acted as the Chief Executive Officer and Chairman of the Board of a Delaware corporation, Celebrity, Inc., a privately held company in the business of selling celebrity-related artwork from its inception in 2006 until dissolution of the company in 2008. Mr. Moeller was a Founder and the Chief Executive Officer, Chairman of the Board and a Director of Genius Products, Inc. from 1998 to 2005. Mr. Moeller served as Interim Chief Financial Officer of Genius from May 2001 until August of 2004. Mr. Moeller grew up and was educated in Germany, England, and Portugal. He worked as an auditor for Eluma S.A. in Sao Paulo Brazil for the Ted Bates Advertising Agency and BHF Bank in Frankfurt. Mr. Moeller is nominated because he has extensive experience in governance and leadership roles on the boards of the other public companies on which he has served, as well as extensive background in finance, both as an auditor and as chief executive officer and chief financial officer at Genius Products Inc.

Michael G. Meader, President and Director

Michael G. Meader was elected to serve on the board of directors of the Company at inception and also acted as Chief Operating Officer and Secretary of the Company upon inception. He was appointed as President of the Company on August 27, 2008 and resigned his positions as Chief Operating Officer and Secretary at that time. In his capacity as President of Pacific Entertainment Corporation, Mr. Meader is in charge of the day-to-day operations of the Company. Mr. Meader has a long history of experience in marketing and sales of entertainment products. Prior to January 2006, he acted as President (2001-2005), Executive Vice President of Distributions (1998-2000) for, and helped found, Genius Products, Inc. Prior to founding Genius Products, Inc, from 1995 to 1997, Mr. Meader acted as Executive Vice President of the Book and Music Division of ARAMARK Corporation. From 1991 through 1994, Mr. Meader acted as Secretary (1991-1992) and then Executive Vice President of the Music Division (1993-1994) for Meader Distributing. Mr. Meader has a B.S. degree in hotel administration from the University of Wisconsin, and studied international business at the University of St. Thomas. He was a member of the Scholastic Society and graduated with honors. Mr. Meader is nominated because of his expertise in entertainment and distribution organizations.

Larry Balaban, Chief Creative Officer and Secretary and Director

Larry Balaban is currently Chief Creative Officer and Secretary of Pacific Entertainment Corporation, positions he has held since August 27, 2008. Prior to becoming Chief Creative Officer, Mr. Balaban acted as Director and President for the Company since its inception in January 2006. Outside the production studio, Larry is a well-respected licensor who was named one of the “40 Under 40” most important people in the licensing industry by License Magazine in 2003. For the past five years, he has held a seat on the board of directors of the Coalition for Quality Children’s Media, home of the Kids First!® Community-based jury that evaluates, rates and endorses children’s entertainment. Larry Balaban was a founder and Head of Production of Genius Products, Inc., from 1998 to 2005. He was also the President of Mr. B Productions, a non-traditional marketing firm based in New York City, specializing in TV production, target marketing and membership programs. From 1994-1997, Larry Balaban was President of Virtual Reality Productions, where he specialized in marketing, and coordinated specialized audio productions for licensed Products including Star Trek(TM), The Simpson’s and the X-Files. Mr. Balaban is nominated because of his extensive business experience in entertainment and licensing.

Howard Balaban, Executive Vice President of New Business Development and Director

Howard Balaban is currently Executive Vice President of New Business Development. He is also a Director of the Company, a position he has held since April, 2006. He had served as Executive Vice President of New Business Development of Genius Products from 2001-2006. He was previously appointed Senior Vice President of Sales in January 1999-2000 after having rendered sales and marketing consulting services from 1997-2000 for Genius Products and several other companies. From 1994-1997, Mr. Balaban was Chief Executive Officer of Future Call Inc, a prepaid telephone card company that he co-founded with William Shatner and held the rights to all Star Trek properties and many others such as, The Simpsons, X Files, and major Soap Operas associated with prepaid phone cards. From 1991-1995, he was the Chief Executive Officer of 3B Telecommunications, a company he co-founded and which acted as a master agent for telecom networks reselling phone time and telecom services. Mr. Balaban is the President, director and sole owner of a privately held entertainment corporation known as Balaban Entertainment Corp., a position he has held since its inception in 2004. Mr. Balaban is nominated because of his business experience in entertainment and marketing.

Jeanene Morgan, Chief Financial Officer

Jeanene Morgan was appointed as the Company’s Chief Operating and Accounting Officer in December 2010 and her title was subsequently changed to Chief Financial Officer in April 2011. Prior to such appointment, Ms. Morgan acted as the Company’s Controller from February 2009, during which time she acted as a consultant through Morgan Consulting, a provider of project management and financial consulting for numerous organizations and clients, including audit support, GAAP compliance and structuring of internal financial and reporting controls. From 2004 to 2010, Ms. Morgan co-owned and operated Ascent, Inc. a media booking agency located in Oxnard, California which specialized in television placement for long and short form infomercials. As President of Ascent, Ms. Morgan was responsible for preparation of financial statements, business plans and tax reporting, including implementation of client reporting and development of new business proposals and presentations. From 2002 to 2004, Ms. Morgan acted as Plant Controller to Rexam Beverage Can Company in Chatsworth, California, where she was responsible for corporate accounting and GAAP compliance and implemented a SAP inventory management module. Ms. Morgan acted as Chief Financial Officer of Thaon Communications, Inc., a publicly traded company from February 2002 until its acquisition by Practice Xpert Services, Inc. in April 2003. In that position she was responsible for ongoing fiscal operations, including accounting and cash management for three operating units as well as the publicly traded parent organization, and SEC compliance. During her tenure at Thaon, two subsidiaries of that company, CastPro.com, LLC and PTMS filed a Chapter 7 bankruptcy in November and December of 2002, respectively. Ms. Morgan has an M.B.A. in International Management from the University of Dallas and a B.S. in Business Administration from Hawaii Pacific University.

Denise Kovac, Marketing Director, Head of Direct Response Division

Throughout her career, Denise Kovac served in top level executive positions at a number of other companies including COO of Your Baby Can, LLC; President of Thane Direct, USA; President of Bay Street Brands; and Vice President of Sales at Fitness Quest / Warner Vision where she also managed sales for Atlantic Records, Electra Records and Rhino Records divisions. At her own consulting firm, Managed Full Service Marketing, Kovac successfully developed the Hercules Hook and Nicer Dicer brands, and managed Elysee Skin Care for HSN. Other brands that are part of Kovac’s career include: Dick Clark’s Greatest Hits of the 50′s, Grammy’s Greatest Moments, Country Grammy’s, Buns of Steel, Abs of Steel, Jane Fonda’s Step Aerobics, Sheena Easton’s 6 Second Abs, Joe Montana’s Fit One, Sugar Ray Leonard’s Slam Man, California Beauty, and Klear Action, among many others.