Quarterly report pursuant to Section 13 or 15(d)

9. Accrued Liabilities (Details)

9. Accrued Liabilities (Details) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Accrued Salaries and Wages    
Accrued Salaries and Wages $ 62,788 $ 59,958
Disputed Trade Payables    
Disputed Trade Payables 925,000 [1] 925,000 [1]
Services Advance    
Services Advance 741,758 [2] 0 [2]
Accrued Expenses    
Allowance for Sales Returns 28,672 43,000
Distribution Arrangements Payable 17,674 13,905
Deferred Revenue 58,759 0
Royalties Payable 4,953 9,638
Music Advances 672,000 [3] 450,000 [3]
Other Accrued Expenses 110,497 187,996
Total Accrued Expenses 892,555 704,539
Total Accrued Liabilities $ 2,622,101 $ 1,689,497
[1] As part of the Merger, the Company assumed certain liabilities from a previous member of A Squared Entertainment, LLC 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.
[2] 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 Internationals 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.
[3] 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.