Quarterly report pursuant to Section 13 or 15(d)

9. Accrued Liabilities

9. Accrued Liabilities
6 Months Ended
Jun. 30, 2014
Payables and Accruals [Abstract]  
Accrued Liabilities

As of June 30, 2014 and December 31, 2013, the Company has the following accrued liabilities:


    6/30/2014     12/31/2013  
Accrued Salaries and Wages                
Accrued Salaries and Wages   $ 62,788     $ 59,958  
Disputed Trade Payables                
Disputed Trade Payables (a)     925,000       925,000  
Services Advance                
Services Advance (b)     741,758        
Accrued Expenses                
Allowance for Sales Returns     28,672       43,000  
Distribution Arrangements Payable     17,674       13,905  
Deferred Revenue     58,759        
Royalties Payable     4,953       9,638  
Music Advances (c)     672,000       450,000  
Other Accrued Expenses     110,497       187,996  
Total Accrued Expenses     892,555       704,539  
Total Accrued Liabilities   $ 2,622,101     $ 1,689,497  


  (a) As part of the Merger, the Company assumed certain liabilities from a previous member of A Squared which has claimed certain liabilities totaling $925,000. The Company disputes the basis for this liability and has not heard from the claimant for two years.


  (b) During the first quarter of 2014, the Company entered into an exclusive long-term agreement with Sony DADC, the optical disc manufacturing and fulfillment arm of Sony, to provide all CD, DVD and BD replication, packaging and distribution to Genius Brands International’s direct customers. Under the terms of the long-term, exclusive supply chain services agreement, the Company will order a minimum level of disc replication, packaging and distribution services for its content across all physical media, including DVD, CD, and Blu-ray from Sony DADC. As consideration for these minimum order levels, the Company will receive a total of $1,500,000, $750,000 of which was received during the first quarter of 2014 with the remaining $750,000 due by January 17, 2015.


  (c) In the Merger, the Company assumed from A Squared an April 2013 agreement for an advance of $450,000 for the music rights of certain A Squared properties. During the second quarter of 2014, the Company executed an agreement with the same counterparty for another music advance of $250,000 covering the properties held by the Company prior to the Merger.  Pursuant to ASC 928-430-25-1, the Company began recognizing revenue under these agreements on May 1, 2014.