SECURITIES AND EXCHANGE COMMISSION FORM 424B3 Prospectus filed pursuant to Rule 424(b)(3) Filing Date: 2006-08-17 SEC Accession No. 0001019687-06-001954 (HTML Version on secdatabase.com) FILER GENIUS PRODUCTS INC Mailing Address Business Address 740 LOMAS SANTA FE 740 LOMAS SANTA FE CIK:1098016| IRS No.: 330852923 | State of Incorp.:NV | Fiscal Year End: 1231 SUITE 210 SUITE 210 Type: 424B3 | Act: 33 | File No.: 333-115613 | Film No.: 061039346 SOLANA BEACH CA 92075 SOLANA BEACH CA 92075 SIC: 7819 Allied to motion picture production 8587938840 Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Filed Pursuant to Rule 424(b)(3) Registration File No. 333-115613 GENIUS PRODUCTS, INC. PROSPECTUS SUPPLEMENT NO. 1 DATED AUGUST 16, 2006 TO THE PROSPECTUS DATED JULY 26, 2006 This Prospectus Supplement No. 1 supplements our prospectus dated July 26, 2006 with the following attached documents: A. Quarterly Report on Form 10-Q filed on August 14, 2006 The attached information modifies and supersedes, in part, the information in the prospectus. Any information that is modified or superseded in the prospectus shall not be deemed to constitute a part of the prospectus except as modified or superseded by this Prospectus Supplement. This Prospectus Supplement should be read in conjunction with the prospectus, which is required to be delivered with this Prospectus Supplement. _________________________________ INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 9 OF THE PROSPECTUS, AS SUPPLEMENTED BY THIS PROSPECTUS SUPPLEMENT. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS SUPPLEMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. _________________________________ The date of this prospectus supplement is August 16, 2006 Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document INDEX TO FILINGS Annex Quarterly Report on Form 10-Q of the registrant filed with the Securities and Exchange Commission on August 14, 2006 A Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ANNEX A Quarterly Report on Form 10-Q filed on August 14, 2006 Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2006 ¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT 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 (IRS Employer of incorporation or organization) Identification No.) 2230 BROADWAY SANTA MONICA, CA 90404 (Address of principal executive offices) (310) 453-1222 (Registrant’s telephone number) 740 LOMAS SANTA FE DRIVE, SUITE 210 SOLANA BEACH, CA 92075 (Former name, former address and former fiscal year, if changed since last report) Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer ¨ an accelerated filer ¨ or a non-accelerated filer x Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ¨ No x There were 61,002,626 shares outstanding of the issuer’s Common Stock as of June 30, 2006. Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GENIUS PRODUCTS, INC. AND SUBSIDIARIES INDEX PAGE PART I FINANCIAL INFORMATION Item 1 Financial Statements Consolidated Balance Sheets at June 30, 2006 (unaudited) and December 31, 2005 (audited) 4 Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2005 and 2006 (unaudited) 5 Consolidated Statements of Cash Flow for the Six Months Ended June 30, 2005 and 2006 (unaudited) 6 Notes to Consolidated Financial Statements (unaudited) 7 Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 Item 3 Quantitative and Qualitative Disclosures About Market Risk 28 Item 4 Controls and Procedures 28 PART II OTHER INFORMATION Item 1 Legal Proceedings 28 Item 1a Risk Factors 29 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 29 Item 3 Defaults Upon Senior Securities 29 Item 4 Submission of Matters to a Vote of Security Holders 29 Item 5 Other Information 29 Item 6 Exhibits 29 SIGNATURES 30 FORWARD-LOOKING STATEMENTS This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to, among other things, our goals, plans and projections regarding our financial position, results of operations, market position, product development and business strategy. These statements may be identified by the use of words such as “will,” “may,” “estimate,” “expect,” “intend,” “plan,” “believe,” “should”, “would”, “could” or the negative of these terms and other terms of similar meaning in connection with any discussion of future operating or financial performance. All forward-looking statements are based on our current views with respect to future events, are Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document based on assumptions and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, increased competitive pressures, including the rise of emerging distribution channels, the risk that The Weinstein Company could terminate Genius Products, LLC’s exclusive distribution rights, the anticipated timing and financial performance of new DVD releases including, Scary Movie 4, Lucky Number Slevin, Pulse and Clerks II and changes in the retail DVD and entertainment industries. Also, these forward-looking statements present our estimates and assumptions only as of the date of this report. For further details and a discussion of these and other risks and uncertainties, see “Forward-Looking Statements” and “Risk Factors” in our most recent Annual Report on Form 10-K. Unless otherwise required by law, we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. 2 Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 3 Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document GENIUS PRODUCTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2005 June 30, 2006 ASSETS (unaudited) Current assets: Cash and cash equivalents $30,597,164 $43,489,769 Accounts receivable, net of allowance for doubtful accounts of $942,361 (June 30, 2006 - $1,238,061) and sales returns of $5,966,428 (June 30, 2006 - $19,658,690) 2,406,658 48,457,391 Inventories, net 5,567,953 18,564,106 Prepaid expenses 703,875 446,718 Notes receivable, related party 750,000 - Total current assets 40,025,650 110,957,984 Restricted cash - 303,353 Property and equipment, net 396,358 736,434 Film library, net of accumulated amortization of $4,027,308 and $4,850,312 19,727,179 22,926,070 Notes receivable, related party 1,712,353 1,712,353 Goodwill 14,487,917 14,487,917 Deposits and other 15,545 206,583 Total assets $76,365,002 $151,330,694 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $9,242,560 $7,591,524 Notes payable 5,379,296 200,000 Remittance due to Licensor - 61,674,457 Accrued expenses 3,307,893 20,346,505 Deferred revenue - 10,549,480 Customer deposits 189,423 189,423 Debentures payable 50,750 - Redeemable common stock 414,471 424,121 Total current liabilities 18,584,393 100,975,510 Deferred tax liability 1,380,338 1,380,338 Deferred gain, related party 1,212,353 1,148,907 Total liabilities 21,177,084 103,504,755 Commitments and contingencies Stockholders’ equity: Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares outstanding - - Common stock, $.0001 par value; 100,000,000 shares authorized; Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 60,438,154 and 61,002,626 shares outstanding 6,044 6,100 Additional paid-in capital 93,919,755 96,211,014 Accumulated deficit (38,737,881 ) (48,391,175 ) Total stockholders’