The label was first created in 2006 to promote a collective of artists and musicians working under the name Pencilbrain. But in 2006 founder and president Z.T.Tosha decided to expand on the label by releasing new artists outside of the collective. In less than a year Pencilbrain Records has expanded to include artists from the U.S.A, France, U.K, Greece, the Netherlands, and South America. Pencilbrain Records now represents some of the best new artists, songwriters and producers as well as writers of film, TV and commercial scores.

The Pencilbrain Records model increases the potential return on investment for each artist signed by aligning the interests of the artist, manager, label, and publisher into a single entity that splits all revenue sources. This model is based on lowering the cost of production, distribution, and promotion for all parties to minimize the risk of financing a new act.
The Pencilbrain Records is not unlike what bands are already doing within their own companies, and similar to the model of an independent record label with a publishing arm. The major change is the integration of management and touring into the business mix in a shared manner. This way the company can take an integrated and synchronized marketing approach across all the revenue possibilities and try and maximize income and opportunity. This model is particularly interesting in light of the negative effects of free music distribution via P2P networks on recording and mechanical income. By maximizing the revenue potential by including touring, publishing, and merchandising in the mix, the company can try new creative marketing approaches that leverage freely distributed music to drive other income streams.