Exhibit 99.1

August 20, 2012

Dear Genius Brands Shareholder,

When we launched the Baby Genius® brand over a decade ago, we were living in a world dominated by large national brick and mortar retailers. The sale of products and content over the Internet was still just emerging and mobile apps as we know them did not exist. Today, we are in a very different environment, one that offers tremendous opportunities to companies that own well established brands, copyrights, and content that can be streamed, downloaded and sold directly to customers over the Internet to mobile and desktop devices.

Genius Brands is emerging as a global media company with a well-known character driven brand, products and content spanning toys, mobile apps, music, video entertainment, digital content, education, and more. We believe we are very uniquely positioned to thrive and grow in the new digital age precisely because we have a brand that has grown in recognition since we created it over 10 years ago.

This belief is backed up by our most recently reported financial results. Revenues for our second quarter ended June 30, 2012 grew by 96% to $1,641,798, as compared to revenues of $835,736 in the same period of 2011. Our annual revenues for fiscal 2011 grew by 51% to $6,023,010 over fiscal 2010 revenues of $3,972,663. In the second quarter of 2012, losses narrowed and shareholders’ equity increased to $487,075.

Based upon the strength of our brand recognition, we have signed deals with many companies to license and market our branded products. JAKKS Pacific, our worldwide master toy licensee, has just begun distributing a line of 20 Baby Genius® musical and early learning toys. The toys started to become available through select retailers including Babies “R” Us this month and we anticipate you will see the wider national roll-out of our toy line in time for the 2012 holiday season. We expect to see this relationship grow through the term of our five-year agreement with JAKKS to include a broader and international distribution of our Baby Genius® toys. Our agreement with Wendy’s® for the distribution of Baby Genius® board books has our content in their Kids Meals, for the under 3 age category, nationally in 2012. Additionally, Groupon has already sold over a half million of our products online and has generated approximately 30 million brand impressions. Now, most recently, through agreements with Nokia and Microsoft we will be launching mobile apps and additional products yet to be announced in conjunction with two of the largest technology companies in the world.

5820 Oberlin Dr, Ste 203

San Diego, CA 92121

Telephones: 858.450.2900 Facsimile: 858.450.2907

Our recently announced partnership with Nokia to launch our Ready, Play, Learn™ series of entertaining and educational mobile apps for preschoolers is a turning point in the development of Genius Brands.

According to Nokia, every day more than 1.3 billion people use Nokia to capture and share experiences. Through our deal with them we hope to make Genius Brands apps available for this growing network of more than 1.3 billion people. We are working closely with the team at Nokia and Microsoft to develop products that we believe will be of value to consumers and may span across multiple Windows® platforms including tablets and PCs. In this manner we are leveraging our brand that is recognized and established as a provider of children’s content onto digital platforms that offer high profit margins, recurring revenues, and virtually instant global distribution.

Our strategy to build shareholder value today and in the near term is quite simple. We are executing on:

We have clearly demonstrated our ability to build brand awareness both independently and in collaboration with companies like Wendy’s® and Groupon, as well as with Comcast where our kids videos have been the number one children’s video-on-demand for five consecutive years. In fact, 70% of moms in the U.S. recognize the Baby Genius® brand according to a study conducted by a third party and commissioned by Genius Brands.

We have been developing high quality music CDs and DVDs for over a decade that have sold in the top brick and mortar retailers in the country. These same skills in creating wonderful characters that both entertain and educate are directly transferable onto digital platforms. We are excited to bring our core strength in content creation to these new platforms including mobile apps, e-books, electronic games, and e-learning programs. Digital content, once produced, has minimal reproduction and shipping costs, and therefore offers very high margins to companies like us that own their content.

We believe that as we invest in further digital content development and distribution, the wider availability of our branded products and the enormous increase in brand impressions leads to a strengthening of our licensing opportunities. JAKKS Pacific for toys and Suncape for sunglasses are just some of the licensing agreements we have in place. In these licensing agreements, we allow trusted manufacturers of high quality children’s products to use our name brand and our characters. Our brand recognition helps them sell more products and in return, we are paid a royalty fee. Because we do not manufacture or market the product ourselves, this royalty fee costs us little or nothing in operating expenses, thus resulting in very high margins on this segment of our revenues. We believe we are now positioned better than ever to increase the number of our licensing deals and resulting royalty revenues.

5820 Oberlin Dr, Ste 203

San Diego, CA 92121

Telephones: 858.450.2900 Facsimile: 858.450.2907

The first market we are immediately pursuing for digital content is the rapidly growing new frontier of mobile apps, estimated by Forrester Research to reach $38 billion per year by 2015. With the relationships we have built with two leaders in this industry, Nokia and Microsoft, we believe that we are positioned for solid success. We will be making our apps, for children in the pre-kindergarten age category, available on a ‘try and buy’ basis priced at $.99 and up. According to 2010 U.S. Census Bureau figures, there are 16 million children between the ages of two and five now in the U.S. International markets and other age categories further expand this number. Capturing and monetizing even a small fraction of this market may make a meaningful contribution to our company and shareholder value.

Genius Brands is a beneficiary of how the Internet and digital technology have completely changed the retail landscape. We believe the institutional investors who recently funded us recognize this and are betting on our success in executing on our opportunities. We look forward to a year of growth together with all of our investors.

We would like to thank all of our loyal shareholders for your support. If you have not tried our products yet, we encourage you to visit a Babies “R” Us store to see our Baby Genius® toy line or visit our website at www.babygenius.com to purchase any of our DVDs or CDs.

Sincerely,

Klaus Moeller

Chief Executive Officer and Chairman of the Board

Company Overview

Genius Brands International, Inc. is an emerging global media company with a well-known character driven brand, products and content spanning toys, mobile apps, music, videos, and digital educational content. The Baby Genius^® brand is recognized by 70% of moms in the U.S., according to a recent study conducted by a third party commissioned by Genius Brands. The Company recently signed an agreement with Nokia to launch its Ready, Play, Learn^TM series of entertaining and educational mobile apps for preschoolers. Genius Brands is pursuing a growth strategy by leveraging its core Baby Genius^® brand into an expanding line of educational toys and digital programs, and growing the Genius family through brands like Kid Genius^® and Little Genius®.