##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 000-27915
 GENIUS PRODUCTS, INC.
 (Exact name of registrant as specified in its charter)
 DELAWARE
    
    33-0852923(State or other jurisdiction 
of incorporation or organization)
    
    (IRS Employer
Identification No.)
 2230 BROADWAY
SANTA MONICA, CA 90404
(Address of principal executive offices)
 (310) 453-1222
(Registrants telephone number, including area code)
 (Former name, former address and former fiscal year,
if changed since last report)
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




---



##### 



GENIUS PRODUCTS, INC. AND SUBSIDIARIES
 INDEX
 PAGEPART I FINANCIAL INFORMATIONItem 1 Financial Statements
    
    
    4Condensed consolidated Balance Sheets at June 30, 2008 (unaudited) and December 31, 2007
    
    
    4Condensed consolidated Statements of Operations for the Three Months Ended June 30,
2008 and 2007 (unaudited), and for the Six Months Ended June 30, 2008 and 2007
(unaudited)
    
    
    5Condensed consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008
and 2007 (unaudited)
    
    
    6Notes to Condensed consolidated Financial Statements (unaudited)
    
    
    7Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3 Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4 Controls and Procedures
    
    
    21PART II OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    23Item 1A Risk Factors
    
    
    23Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    23Item 3 Defaults Upon Senior Securities
    
    
    23Item 4 Submission of Matters to a Vote of Security Holders
    
    
    23Item 5 Other Information
    
    
    23Item 6 Exhibits
    
    
    24SIGNATURES
    
    
    25EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



NOTICE ABOUT FORWARD-LOOKING STATEMENTS
   
 3




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 GENIUS PRODUCTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE AND PAR VALUE INFORMATION)
 June 30,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,831
    
    
    $
    1,757Prepaid expenses and other current assets
    
    
    110
    
    
    
    110Notes Receivable from Distributor
    
    
    8,506
    
    
    
    Total current assets
    
    
    10,447
    
    
    
    1,867Notes Receivable from Distributor
    
    
    
    
    
    
    8,191Investment in Distributor
    
    
    24,630
    
    
    
    73,823Total assets
    
    $
    35,077
    
    
    $
    83,881LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accrued Expenses
    
    
    6
    
    
    
    Accounts payable to Distributor, net
    
    
    292
    
    
    
    198Total current liabilities
    
    
    298
    
    
    
    198Deferred tax liability
    
    
    
    
    
    
    11,406Total liabilities
    
    
    298
    
    
    
    11,604Commitments and contingenciesStockholders equity:Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares outstanding
    
    
    
    
    
    
    Series W preferred stock, $.0001 par value; 100
shares authorized and outstanding
    
    
    
    
    
    
    Common stock, $.0001 par value; 300,000,000 shares authorized;
67,609,094 and 67,709,094 shares outstanding, respectively
    
    
    7
    
    
    
    7Additional paid-in capital
    
    
    110,431
    
    
    
    112,293Accumulated deficit
    
    
    (75,659
    )
    
    
    (40,023
    )Total stockholders equity
    
    
    34,779
    
    
    
    72,277Total liabilities and stockholders equity
    
    $
    35,077
    
    
    $
    83,881
  4




---



##### Table of Contents



GENIUS PRODUCTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
 (UNAUDITED)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Operating expenses:Impairment of investment in Distributor
    
    $
    38,775
    
    
    $
    
    
    
    $
    38,775
    
    
    $
    Selling, general and administrative
    
    
    469
    
    
    
    655
    
    
    
    890
    
    
    
    1,111Equity in net loss from Distributor
    
    
    3,174
    
    
    
    1,021
    
    
    
    7,961
    
    
    
    3,249Total operating expenses
    
    
    42,418
    
    
    
    1,676
    
    
    
    47,626
    
    
    
    4,360Loss from operations
    
    
    (42,418
    )
    
    
    (1,676
    )
    
    
    (47,626
    )
    
    
    (4,360
    )Interest and other income, net
    
    
    117
    
    
    
    67
    
    
    
    243
    
    
    
    117Loss before provision for income taxes
    
    
    (42,301
    )
    
    
    (1,609
    )
    
    
    (47,383
    )
    
    
    (4,243
    )Benefit (Provision) for income taxes
    
    
    11,897
    
    
    
    294
    
    
    
    11,406
    
    
    
    160Net loss
    
    $
    (30,404
    )
    
    $
    (1,315
    )
    
    $
    (35,977
    )
    
    $
    (4,083
    )Basic and diluted EPSNet loss per share
    
    $
    (0.45
    )
    
    $
    (0.02
    )
    
    $
    (0.53
    )
    
    $
    (0.06
    )Basic and diluted weighted average shares
    
    
    67,635,468
    
    
    
    66,069,255
    
    
    
    67,679,424
    
    
    
    65,136,522
  5




---



##### Table of Contents



GENIUS PRODUCTS, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (IN THOUSANDS)
 (UNAUDITED)
 Six Months Ended June 30,2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (35,977
    )
    
    $
    (4,083
    )Adjustments to reconcile net loss to net cash provided by operating activitiesImpairment of investment in Distributor
    
    
    38,775
    
    
    
    Equity in net loss from Distributor
    
    
    7,961
    
    
    
    3,249Operating expenses paid by Distributor
    
    
    750
    
    
    
    609Stock compensation expense
    
    
    142
    
    
    
    551Deferred tax benefit
    
    
    (11,406
    )
    
    
    (161
    )Changes in assets and liabilities:(Increase) decrease in prepaid expenses, notes receivable and deposits
    
    
    (315
    )
    
    
    83Decrease in accounts payable
    
    
    
    
    
    
    (59
    )Increase in Distributor payable
    
    
    94
    
    
    
    Increase in accrued expenses and other
    
    
    6
    
    
    
    32Net cash provided by operating activities
    
    
    30
    
    
    
    221Cash flows from financing activities:Proceeds from exercise of options
    
    
    44
    
    
    
    1,411Proceeds from exercise of warrants
    
    
    
    
    
    
    1,833Net cash provided by financing activities
    
    
    44
    
    
    
    3,244Net increase in cash and cash equivalents
    
    
    74
    
    
    
    3,465Cash and cash equivalents at beginning of period
    
    
    1,757
    
    
    
    3,745Cash and cash equivalents at end of period
    
    $
    1,831
    
    
    $
    7,210
  6




---



##### Table of Contents



GENIUS PRODUCTS, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (UNAUDITED)
 NOTE 1.  NATURE OF BUSINESS
        
    
    Theatrical/Independent Films (includes Independent Film Channel (IFC®) , RHI
Entertainment (Hallmark library), The Weinstein Company®  and Wellspring)
    
    Sports (includes ESPN® and World Wrestling Entertainment®)
    
    Lifestyle (includes Animal Planet, The Learning Channel (TLC) and Wellspring)
    
    Family/Faith (includes Classic Media, Discovery Kids, and Sesame Workshop®)
 7




---



##### Table of Contents



NOTE 2.   BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 BASIS OF PRESENTATION
        8




---



##### Table of Contents



9




---



##### Table of Contents



NOTE 3.  FAIR VALUE MEASUREMENTS
 Fair Value Measurements
  NOTE 4.  INVESTMENT IN DISTRIBUTOR (GENIUS PRODUCTS, LLC)
  10




---



##### Table of Contents



GENIUS PRODUCTS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
 (UNAUDITED)
 Three Months Ended
    
    
    Six Months EndedJune 30, 2008
    
    
    June 30, 2007
    
    
    June 30, 2008
    
    
    June 30, 2007Revenues, net of sales, returns, discounts and allowances of $51,750 and $32,411 for the three
months ended June 30, 2008 and 2007, respectively, and $80,756 and $64,083 for the six months
ended June 30, 2008 and 2007, respectively
    
    $
    74,637
    
    
    $
    112,653
    
    
    $
    172,848
    
    
    $
    195,770Total cost of revenues
    
    
    (75,696
    )
    
    
    (99,891
    )
    
    
    (177,691
    )
    
    
    (176,046
    )Gross profit (loss)
    
    
    (1,059
    )
    
    
    12,762
    
    
    
    (4,843
    )
    
    
    19,724Total operating expenses
    
    
    (10,887
    )
    
    
    (10,385
    )
    
    
    (21,547
    )
    
    
    (19,483
    )(Loss) Income from operations
    
    
    (11,946
    )
    
    
    2,377
    
    
    
    (26,390
    )
    
    
    241Interest income (expense), net
    
    
    210
    
    
    
    (264
    )
    
    
    (787
    )
    
    
    (527
    )Net income (loss )
    
    $
    (11,736
    )
    
    $
    2,113
    
    
    $
    (27,177
    )
    
    $
    (286
    )
 11




---



##### Table of Contents



GENIUS PRODUCTS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
 December 31,June 30, 2008
    
    
    2007(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    427
    
    
    $
    3,102Restricted cash  short term
    
    
    13,412
    
    
    
    7,765Accounts receivable, net of allowance for doubtful accounts of $2,839 and $4,311
and sales returns of $45,809 and $68,159
    
    
    42,584
    
    
    
    123,295Inventories, net of reserves for obsolescence of $12,989 and $13,257
    
    
    11,418
    
    
    
    11,282Prepaid expenses and other current assets
    
    
    606
    
    
    
    1,110Total current assets
    
    
    68,447
    
    
    
    146,554Restricted cash  long term
    
    
    3,186
    
    
    
    3,323Property and equipment, net of accumulated depreciation of $667 and $455
    
    
    4,246
    
    
    
    953Royalty advances, net of uncollectible
advances of $9,954 and $5,112
    
    
    35,389
    
    
    
    31,492Film library, net of accumulated amortization of $9,707 and $6,452
    
    
    14,482
    
    
    
    14,403Goodwill
    
    
    87,512
    
    
    
    87,512Other intangible assets, net of accumulated amortization of $13,667 and $9,675
    
    
    7,604
    
    
    
    11,596Deferred financing fees
    
    
    1,323
    
    
    
    1,654Deposits and other
    
    
    2,635
    
    
    
    2,968Total assets
    
    $
    224,824
    
    
    $
    300,455LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    23,885
    
    
    $
    31,477Notes payable
    
    
    15,981
    
    
    
    31,297Notes payable to Genius Products, Inc.
    
    
    8,506
    
    
    
    Remittance to TWC
    
    
    61,666
    
    
    
    78,759Remittance to other licensors
    
    
    23,155
    
    
    
    20,000Accrued advertising and marketing
    
    
    16,045
    
    
    
    24,515Other accrued expenses
    
    
    12,944
    
    
    
    20,910Deferred revenue
    
    
    16,148
    
    
    
    8,492Total current liabilities
    
    
    178,330
    
    
    
    215,450Long term liabilities:Notes payable to Genius Products, Inc.
    
    
    
    
    
    
    8,191Long term notes payable
    
    
    1,599
    
    
    
    627Long term capital lease
    
    
    29
    
    
    
    30Total long term liabilities
    
    
    1,628
    
    
    
    8,848Total members equity
    
    
    44,866
    
    
    
    76,157Total liabilities and members equity
    
    $
    224,824
    
    
    $
    300,455
 12




---



##### Table of Contents



Six Months Ended June 30,2008
    
    
    2007Genius Products, Inc. 30% share of net loss from the Distributor
    
    $
    8,153
    
    
    $
    86Adjustments for basis differences
    
    
    1,031
    
    
    
    2,221(Benefit)/Expense for stock compensation for Distributor employees
    
    
    (1,129
    )
    
    
    942Genius Products, Inc. 30% share of interest on the Distributors notes payable
    
    
    (94
    )
    
    
    Equity in net loss from Distributor
    
    $
    7,961
    
    
    $
    3,249
  Severance
costs charged to G&A expense during the second fiscal quarter
2008
    
    $
    426,527Severance costs paid during the second fiscal quarter
2008
    
    
    (341,861
    )Accrued severance balance at June 30, 2008
    
    $
    84,667
 NOTE 5. CONTINGENCIES
   Guarantors Accounting and Disclosure Requirements for Guarantees,
   Falcon Picture Group Matter
 13




---



##### Table of Contents



Entertainment Resource Matter
  NOTE 6. NOTES RECEIVABLE FROM RELATED PARTY
    NOTE 7. STOCKHOLDERS EQUITY
     14




---



##### Table of Contents



WeightedAverage
    
    
    AggregateWarrants
    
    
    Exercise
    
    
    IntrinsicOutstanding
    
    
    Price
    
    
    ValueDecember 31, 2007
    
    
    10,425,958
    
    
    $
    2.45Cancelled
    
    
    (668,038
    )June 30, 2008
    
    
    9,757,920
    
    
    $
    2.53
    
    
    $
    Warrants exercisable, June 30, 2008
    
    
    9,757,920
    
    
    $
    2.53
    
    
    $
    
  Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    averageexercise price of
    
    
    
    
    
    
    exercise price ofWarrants
    
    
    Average
    
    
    warrants
    
    
    Warrants
    
    
    warrantsoutstanding
    
    
    remaining life
    
    
    outstanding
    
    
    exercisable
    
    
    exercisableUnder $1.50
    
    
    275,718
    
    
    
    0.10
    
    
    $
    1.40
    
    
    
    275,718
    
    
    $
    1.40$1.50 - $1.99
    
    
    170,723
    
    
    
    2.26
    
    
    
    1.88
    
    
    
    170,723
    
    
    
    1.88$2.00 - $2.99
    
    
    7,664,479
    
    
    
    2.09
    
    
    
    2.48
    
    
    
    7,664,479
    
    
    
    2.48$3.00 - $3.99
    
    
    1,647,000
    
    
    
    0.75
    
    
    
    3.00
    
    
    
    1,647,000
    
    
    
    3.009,757,920
    
    
    
    1.81
    
    
    $
    2.53
    
    
    
    9,757,920
    
    
    $
    2.53
 NOTE 8.  STOCK-BASED COMPENSATION
  WeightedAverage
    
    
    AggregateOptions
    
    
    Exercise
    
    
    IntrinsicOutstanding
    
    
    Price
    
    
    ValueDecember 31, 2007
    
    
    17,770,041
    
    
    $
    1.82Exercised
    
    
    (50,000
    )
    
    
    0.89Canceled
    
    
    (173,666
    )
    
    
    1.81June 30, 2008
    
    
    17,546,375
    
    
    $
    1.83
    
    
    $
    Options exercisable, June 30, 2008
    
    
    15,132,566
    
    
    $
    1.79
    
    
    $
    
  15




---



##### Table of Contents



Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    averageexercise price of
    
    
    
    
    
    
    exercise price ofOptions
    
    
    Average
    
    
    options
    
    
    Options
    
    
    optionsoutstanding
    
    
    remaining life
    
    
    outstanding
    
    
    exercisable
    
    
    exercisableUnder $1.50
    
    
    1,900,752
    
    
    
    3.57
    
    
    $
    0.67
    
    
    
    1,900,752
    
    
    $
    0.67$1.50 - $1.99
    
    
    10,573,373
    
    
    
    6.49
    
    
    
    1.72
    
    
    
    9,156,064
    
    
    
    1.69$2.00 - $2.99
    
    
    3,917,500
    
    
    
    6.47
    
    
    
    2.15
    
    
    
    2,921,000
    
    
    
    2.10$3.00 - $3.99
    
    
    793,750
    
    
    
    5.58
    
    
    
    3.00
    
    
    
    793,750
    
    
    
    3.00$4.00 + over
    
    
    361,000
    
    
    
    4.08
    
    
    
    5.07
    
    
    
    361,000
    
    
    
    5.0717,546,375
    
    
    
    6.08
    
    
    $
    1.83
    
    
    
    15,132,566
    
    
    $
    1.79
  Three Months Ended
    
    Six Months EndedJune 30, 2008
    
    June 30, 2008Risk free interest rate
    
    
    3.8
    %
    
    
    3.6
    %Expected dividend yield
    
    
    
    
    
    
    Expected volatility
    
    
    74.5
    %
    
    
    73.7
    %Expected life (in years)
    
    
    6.0
    
    
    
    6.0
 
   NOTE 9.  INCOME TAXES
  16




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  NATURE OF BUSINESS
        
    
    Theatrical/Independent Films (includes Independent Film Channel (IFC®) ,
RHI Entertainment (Hallmark
 17




---



##### Table of Contents



library), The Weinstein Company® and Wellspring)
    
    Sports (includes ESPN® and World Wrestling Entertainment®)
    
    Lifestyle (includes Animal Planet, The Learning Channel (TLC) and
Wellspring)
    
    Family/Faith (includes Classic Media, Discovery Kids, and Sesame
Workshop®)
   CRITICAL ACCOUNTING POLICIES
        18




---



##### Table of Contents



RESULTS OF OPERATIONS OF GENIUS PRODUCTS, INC.
   Revenues
   19




---



##### Table of Contents



The Great Debaters, The
Diary of the Dead Cassandras Dream. Hannibal Rising, Black
Christmas, Arthur and the Invisibles, Bobby, Miss
Potter.
    Costs and expenses
 Cost of Revenues
        20




---



##### Table of Contents



Operating Expenses
    Other Income and Expense
  LIQUIDITY AND CAPITAL RESOURCES
    21




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
      
    
    Timely and routine financial statement close/reporting process and the entity level controls surrounding this process.We were unable to execute a timely financial close, nor were we able to properly accumulate certain analyses and
reconciliations in a consistent and accurate manner, allowing for the proper application of GAAP. In addition management
did not adequately supervise the financial close and reporting process which resulted in material post-closing
adjustments.  Furthermore, the Company was unable to timely and properly calculate its computation of its equity in the net
loss of the Distributor.
 
    
    Calculation of expenses related to stock compensation.Management did not adequately supervise the accumulation,
analysis, and computation of stock compensation during the quarter
as the Company and Distributor lacked the appropriate financial
personnel to undertake this computation.
 
    
    Formal processes over change management and access procedures related to our information technology systems.We were unable to properly implement and maintain an effective information technology operating
environment. In addition, we did not properly maintain access or program change controls related to our
critical information technology systems including the General Ledger system and Order Processing/Management
system.
 
    
    Calculation of provision for income taxes and related oversight of this process.
 22




---



##### Table of Contents



We did not properly supervise and review the calculation of the Companys tax provision that was performed
by an outside third party. This lack of supervision and review by management resulted in a material
post-closing adjustment prior to the issuance of the financial statements.
  
    
    Revenue recognition process; specifically, our controls in the
areas of allocating and tracking Market Development Funds (MDF)
Spending.The Distributor has not fully implemented a formalized process and
related controls to determine the appropriate classification of
MDF related expenses.  Due to this weakness, there is a reasonable
possibility that the Distributor could materially record revenue
improperly or misclassify MDF related expenses in its statements
of operations.
 
    
    Licensor participations expense and related liabilities, and film library amortization.The analyses and models utilized by the Distributor to calculate licensor
participation expense and film library amortization and impairment pursuant to the
provisions of SOP 00-2 Accounting by Producers or Distributors of Filmsutilized
incorrect data and assumptions which resulted in material adjustments.
 
    
    Managements estimation and forecasting process as it relates to
inventory obsolescence reserve, and sales returns and price
protection reserves.In calculating the Distributors reserves, management utilized
incorrect projections which resulted in material adjustments being
recorded.
  Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 FALCON PICTURE GROUP MATTER
  ENTERTAINMENT RESOURCE MATTER
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  23




---



##### Table of Contents



ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 3.1
    
    Amended and Restated Certificate of Incorporation of the Registrant (Incorporated by
reference to Exhibit 3.1 to the Registrants Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 20, 2006).3.2
    
    Amended Bylaws of the Registrant (Incorporated by reference to Exhibit 3.2 to the
Registrants Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on
March 31, 2005).4.1
    
    Specimen Certificate for Common Stock (Incorporated by reference to Exhibit 4.8 to the
Registrants Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on
April 14, 2000).10.1
    
    Severance Agreement, effective as of May 9, 2008, by and among John Mueller, Genius Products,
Inc. and Genius Products, LLC (Incorporated by reference to Exhibit 10.1 to the Registrants
Current Report on Form 8-K filed with the Securities and Exchange Commission on May 30, 2008).31.1
    
    Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act.*31.2
    
    Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act.*32.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act.*32.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act.*
 
 *
    
    Filed herewith. 24




---



##### Table of Contents



SIGNATURES
  GENIUS PRODUCTS, INC.,
a Delaware corporationDated:  August 11, 2008
    By:
    /s/ Trevor DrinkwaterTrevor DrinkwaterPresident and Chief Executive Officer
(Principal Executive Officer)Dated:  August 11, 2008
    By:
    /s/ Edward J. ByrnesEdward J. ByrnesChief Financial Officer
(Principal Financial and Accounting Officer) 25