Dolphin Entertainment (DLPN) 10-K 9 Apr 18 2017 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2017	Mar. 29, 2018	Jun. 30, 2017
Document And Entity Information
Entity Registrant Name	Dolphin Entertainment, Inc.
Entity Central Index Key	1,282,224
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 45,037,830
Entity Common Stock, Shares Outstanding		11,229,144
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current
Cash and cash equivalents	$ 5,296,873	$ 662,546
Restricted cash		1,250,000
Accounts receivable, net of allowance for doubtful accounts of $366,277 and $0, respectively	3,700,618	3,668,646
Other current assets	422,118	2,665,781
Total Current Assets	9,419,609	8,246,973
Capitalized production costs	1,075,645	4,654,013
Intangible assets, net of $1,043,255 of amortization	8,506,745
Goodwill	12,778,860
Property, equipment and leasehold improvements	1,110,776	35,188
Investments	220,000
Deposits	485,508	1,261,067
Total Assets	33,597,143	14,197,241
Current
Accounts payable	1,097,006	677,249
Other current liabilities	6,487,819	2,958,523
Line of credit	750,000
Put Rights	2,446,216
Warrant liability		14,011,254
Accrued Compensation	2,500,000	2,250,000
Debt	3,987,220	18,743,069
Loan from related party	1,708,874	684,326
Deferred revenue	48,449	46,681
Convertible notes payable	800,000
Note payable	300,000	300,000
Total current liabilities	20,125,584	39,671,102
Noncurrent
Warrant liability	1,441,831	6,393,936
Put Rights	3,779,794
Convertible notes payable	75,000
Note payable	600,000
Deferred tax	187,537
Other noncurrent liabilities	1,311,040
Total noncurrent liabilities	7,395,202	6,393,936
Total Liabilities	27,520,786	46,065,038
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.015 par value, 200,000,000 shares authorized, 10,565,789 and 7,197,761, respectively, issued and outstanding at December 31, 2017 and 2016.	158,487	107,967
Preferred Stock, Series C, $0.001 par value, 50,000, 50,000 at December 31, 2017 and 2016	1,000	1,000
Additional paid in capital	98,816,550	67,835,440
Accumulated deficit	(92,899,680)	(99,812,204)
Total Stockholders' Equity (Deficit)	6,076,357	(31,867,797)
Total Liabilities and Stockholders' Equity (Deficit)	$ 33,597,143	$ 14,197,241

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Accounts receivable	$ 366,277	$ 0
Intangible assets, net	$ 1,043,255	$ 1,043,255
Stockholders' Equity
Common stock, par value	$ 0.015	$ 0.015
Common stock, authorized	200,000,000	200,000,000
Common stock, issued	10,565,789	7,197,761
Common stock, Outstanding	10,565,789	7,197,761
Series C Preferred Stock
Stockholders' Equity
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, issued shares	50,000	50,000
Preferred stock, outstanding shares	50,000	50,000

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Entertainment publicity	$ 16,458,929
Production and distribution	5,954,115	9,367,222
Membership		28,403
Total revenues	22,413,044	9,395,625
Expenses:
Direct costs	4,638,710	10,661,241
Distribution and marketing	1,111,994	11,322,616
Selling, general and administrative	3,156,097	1,225,464
Depreciation and amortization	1,254,643	20,225
Legal and professional	1,806,448	2,405,754
Payroll	11,550,078	1,462,589
Total expenses	23,517,970	27,097,889
Loss before other expenses	(1,104,926)	(17,702,264)
Other Income (Expenses):
Other income		9,660
Extinguishment of debt	4,012,277	(9,601,933)
Acquisition costs	(749,440)
Loss on disposal of furniture, office equipment and leasehold improvements	(28,025)
Warrant issuance expense		(7,372,593)
Change in fair value of warrant liability	9,018,359	2,195,542
Change in fair value of put rights and contingent consideration	(2,301,914)
Interest expense	(1,594,940)	(4,718,091)
Total other income (expense)	8,356,317	(19,487,415)
Income (loss) before income taxes	7,251,391	(37,189,679)
Income taxes	338,867
Net income (loss)	6,912,524	(37,189,679)
Deemed dividend on preferred stock		5,247,227
Net income (loss) attributable to common shareholders	$ 6,912,524	$ (42,436,906)
Income (Loss) per Share:
Basic	$ 0.72	$ (9.66)
Diluted	$ (0.20)	$ (9.66)
Weighted average number of shares used in per share calculation
Basic	9,586,986	4,389,096
Diluted	10,608,828	4,389,096

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ 6,912,524	$ (37,189,679)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,254,643	20,225
Amortization of capitalized production costs	3,356,785	7,822,549
Impairment of capitalized production costs	269,444	2,075,000
Bad debt	330,714
Loss on extinguishment of debt	2,723	9,601,933
Warrant issuance		7,394,850
Loss on disposal of fixed assets	28,025
Change in fair value of warrant liability	(9,018,359)	(2,195,542)
Change in fair value of put rights and contingent consideration	2,443,261
Stock based compensation (2017 Plan)	330,065
Gain on extinguishment of debt	(4,500,000)
Changes in operating assets and liabilities:
Accounts receivable	1,343,958	(3,668,646)
Other current assets	2,243,667
Prepaid expenses		161,250
Related party receivable		72,518
Capitalized production costs	(47,861)	619,206
Deposits	821,122	(863,998)
Deferred revenue	1,768	(1,371,687)
Accrued compensation	250,000	185,000
Accounts payable	381,521	(1,393,296)
Deferred tax	187,537
Other current liabilities	1,260,641	3,757,873
Other noncurrent liabilities	507,371
Net Cash Provided by (Used in) Operating Activities	8,359,549	(14,972,444)
CASH FLOWS FROM INVESTING ACTIVITIES:
Restricted cash	1,250,000	(1,250,000)
Payment of working capital adjustment (42West)	(185,031)
Purchase of fixed assets	(227,040)
Acquisition of 42West, net of cash acquired	13,626
Net Cash Provided by (Used in) Investing Activities	851,555	(1,250,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan and Security agreements		12,500,000
Repayment of Loan and Security agreements		(410,000)
Warrant		50,000
Proceeds from the sale of common stock	500,000	7,500,000
Proceeds from the sale of common stock and warrants (unit) in Offering	3,945,284
Proceeds from line of credit	750,000
Proceeds from notes payable	2,175,000
Repayment of notes payable	(700,000)
Repayment of debt	(10,255,849)	(4,263,602)
Employee shares withheld for taxes	(481,546)
Proceeds from the exercise of warrants	35,100
Exercise of put rights	(1,225,000)
Advances from related party	1,388,000	320,000
Repayment to related party	(707,766)	(1,204,093)
Net Cash Provided by (Used in) Financing Activities	(4,576,777)	14,492,305
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	4,634,327	(1,730,139)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	662,546	2,392,685
CASH AND CASH EQUIVALENTS, END OF PERIOD	5,296,873	662,546
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Interest Paid	77,263	156,666
SUPPLEMENTAL DISCLOSURES OF NON CASH FLOW INFORMATION:
Conversion of related party debt and interest to shares of common stock		3,073,410
Conversion of debt into shares of common stock		3,164,000
Conversion of loan and security agreements, including interest, into shares of common stock		22,091,388
Conversion of loan and security agreements converted to warrants to purchase shares of common stock		7,034,990
Payment of certain accounts payable with shares of common stock	58,885
Issuance of shares of Common Stock pursuant to 2017 Plan	330,065
Issuance of shares of Common Stock related to the 42West Acquisition	$ 14,320,351

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($)	Preferred Stock	Common Stock	Additional Paid-In Capital	Noncontrolling Interest	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2015	$ 232,043	$ 30,709	$ 26,510,949	$ 2,977,808	$ (62,615,428)	$ (32,863,918)
Beginning Balance, Shares at Dec. 31, 2015	217,150	2,047,309
Net loss for the twelve months ended					(37,189,679)	(37,189,679)
Income attributable to the non controlling interest				7,097	(7,097)
Return of capital to noncontrolling member				(14,200)		(14,200)
Acquisition of 25% interest in Dolphin Kids Clubs LLC			(921,122)	(2,970,705)		(3,891,827)
Issuance of common stock during the period, Shares		187,572
Issuance of common stock during the period, Amount		$ 2,814	1,872,189			1,875,003
Extinguishment of debt, Shares		3,078,980
Extinguishment of debt, Amount		$ 46,185	37,236,640			37,282,824
Issuance of common stock for convertible debt, Shares		316,400
Issuance of common stock for convertible debt, Amount		$ 4,746	$ 3,159,254			$ 3,164,000
Preferred Stock deemed dividend related to exchange of Series A for Series B Preferred Stock, Shares	50,000		(5,227,247)			(5,127,247)
Preferred Stock deemed dividend related to exchange of Series A for Series B Preferred Stock, Amount	$ 100,000					$ (5,227,247)
Issuance of Series B Preferred, Shares	(165,000)	1,567,500
Issuance of Series B Preferred, Amount	$ (330,000)	$ 23,513	$ 6,246,734			5,940,247
Shares retired from exercise of puts, Shares	(52,150)
Shares retired from exercise of puts, amount	$ (1,043)		(1,041,957)			(1,043,000)
Ending Balance, Amount at Dec. 31, 2016	$ 1,000	$ 107,967	67,835,440		(99,812,204)	(31,867,797)
Ending Balance, Shares at Dec. 31, 2016	50,000	7,197,761
Net loss for the twelve months ended					6,912,524	6,912,524
Issuance of common stock during the period, Shares		50,000
Issuance of common stock during the period, Amount		$ 750	499,250			500,000
Sale of common stock and warrants (unit) through an offering pursuant to a Registration Statement on Form S-1, shares		1,215,000
Sale of common stock and warrants (unit) through an offering pursuant to a Registration Statement on Form S-1, amount		$ 18,225	3,927,059			3,945,284
Issuance of shares from partial exercise of Warrant E and exercise of Warrants J and K, shares		1,332,885
Issuance of shares from partial exercise of Warrant E and exercise of Warrants J and K		$ 19,993	9,960,107			9,980,100
Issuance of shares for payment of services, Shares		6,140
Issuance of shares for payment of services, Amount		$ 92	61,487			61,579
Issuance of shares related to acquisition of 42West, Shares		837,415
Issuance of shares related to acquisition of 42West, Amount		$ 12,562	14,307,789			14,320,351
Shares issuable for contingent consideration			3,644,251			3,644,251
Shares issued per equity compensation plan, Shares		59,320
Shares issued per equity compensation plan, Shares, Amount		$ 890	329,175			330,065
Preferred Stock deemed dividend related to exchange of Series A for Series B Preferred Stock, Amount
Shares retired from exercise of puts, Shares		(132,859)
Shares retired from exercise of puts, amount		$ (1,993)	(1,748,007)			(1,750,000)
Effect of reverse stock split on cumulative amount of par value, Shares		127
Effect of reverse stock split on cumulative amount of par value, Amount		$ 1	(1)
Ending Balance, Amount at Dec. 31, 2017	$ 1,000	$ 158,487	$ 98,816,550		$ (92,899,680)	$ 6,076,357
Ending Balance, Shares at Dec. 31, 2017	50,000	10,565,789

Consolidated Statements of Cha7

Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Statement of Stockholders' Equity [Abstract]
Interest percentage in acquisition for Dolphin Kids Clubs LLC		25.00%
Extinguishment of debt price	$ 5

1. BASIS OF PRESENTATION AND OR

1. BASIS OF PRESENTATION AND ORGANIZATION	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
1. BASIS OF PRESENTATION AND ORGANIZATION	NOTE 1 — BASIS OF PRESENTATION AND ORGANIZATION Dolphin Entertainment, Inc. (the “Company,” “Dolphin,” “we,” “us” or “our”), formerly Dolphin Digital Media, Inc., is a leading independent entertainment marketing and premium content development company. Through its recent acquisition of 42West, LLC (“42West”) the Company provides expert strategic marketing and publicity services to all of the major film studios, and many of the leading independent and digital content providers, as well as for hundreds of A-list celebrity talent, including actors, directors, producers, recording artist, athletes and authors. The strategic acquisition of 42West brings together premium marketing services with premium content production, creating significant opportunities to serve respective constituents more strategically and to grow and diversify the Company’s business. Dolphin’s content production business is a long established, leading independent producer, committed to distributing premium, best-in-class film and digital entertainment. Dolphin produces original feature films and digital programming primarily aimed at family and young adult markets. The accompanying consolidated financial statements include the accounts of Dolphin, and all of its wholly-owned and majority-owned and controlled subsidiaries, including Dolphin Films, Inc. (“Dolphin Films”), Dolphin Kids Clubs, LLC, Cybergeddon Productions, LLC, Dolphin SB Productions LLC, Dolphin Max Steel Holdings LLC, Dolphin JB Believe Financing, LLC, Dolphin JOAT Productions, LLC and 42West. Effective March 7, 2016, the Company acquired Dolphin Films from Dolphin Entertainment, LLC. (“DE LLC”), a company wholly owned by William O’Dowd, CEO, President and Chairman of the Board of Dolphin. At the time of the acquisition, Mr. O’Dowd was also the majority shareholder of Dolphin. The acquisition from DE LLC was a transfer between entities under common control. As such, the Company recorded the assets, liabilities and deficit of Dolphin Films on its consolidated balance sheets at DE LLC’s historical basis instead of fair value. Transfers of businesses between entities under common control require prior periods to be retrospectively adjusted to furnish comparative information. Accordingly, the accompanying financial statements and related notes of the Company have been retrospectively adjusted to include the historical balances of DE LLC’s prior to the effective date of the acquisition. On May 9, 2016, the Company filed an amendment to its Articles of Incorporation with the Secretary of State of the State of Florida to effectuate a 1-to-20 reverse stock split. The reverse stock split was approved by the Board of Directors and a majority of the Company’s shareholders and became effective May 10, 2016. The number of shares of common stock in the accompanying audited consolidated financial statements and all related footnotes has been adjusted to retrospectively reflect the reverse stock split. On March 30, 2017, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), by and among the Company and Leslee Dart, Amanda Lundberg, Allan Mayer and the Beatrice B. Trust (the “Sellers”). Pursuant to the Purchase Agreement, the Company acquired from the Sellers 100% of the membership interests of 42West, and 42West became a wholly owned subsidiary of the Company (the “42West Acquisition”). The consideration paid by the Company in connection with the 42West Acquisition was approximately $18.7 million in shares of common stock of the Company, par value $0.015 (the “Common Stock”), based on the Common Stock’s 30-trading-day average stock price prior to the closing date of $9.22 per share (less certain working capital and closing adjustments, transaction expenses and payments of indebtedness), plus the potential for the sellers to earn up to approximately 1.0 million additional shares of Common Stock based on achieving certain financial targets that were achieved during the year ended December 31, 2017. See Note 4 for additional information regarding the acquisition. On June 29, 2017, the Company’s shareholders approved a change in the name of the Company to Dolphin Entertainment, Inc. Effective July 6, 2017, the Company amended its Articles of Incorporation to (i) change the Company’s name to Dolphin Entertainment, Inc.; (ii) cancel previous designations of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock; (iii) reduce the number of Series C Convertible Preferred Stock outstanding in light of the 1-to-20 reverse stock split from 1,000,000 to 50,000 shares; and (iv) clarify the voting rights of the Series C Convertible Preferred Stock that, except as required by law, holders of Series C Convertible Preferred Stock will only have voting rights once the independent directors of the Board determine that an optional conversion threshold has occurred. On September 13, 2017, the Company filed with the Florida Department of State Articles of Amendment to the Company’s Amended and Restated Articles of Incorporation to effectuate a reverse stock split of the Company’s Common Stock, on a two (2) old for one (1) new basis (the “Reverse Stock Split”), providing that the Reverse Stock Split would become effective under Florida law on September 14, 2017. Immediately after the Reverse Stock Split the number of authorized shares of Common Stock was reduced from 400,000,000 shares to 200,000,000. As a result, each shareholder’s percentage ownership interest in the Company and proportional voting power remained unchanged. Any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share of Common Stock. Shareholder approval of the Reverse Stock Split was not required. All consolidated financial statements and per share amounts have been retroactively adjusted for the above amendment to authorized shares and the reverse stock split. On December 20, 2017, the Company’s Registration Statement on Form S-1 was declared effective by the SEC for our underwritten registered offering (the “2017 Public Offering”) of common stock and warrants. The Company’s shares of Common Stock started trading on the Nasdaq Capital Market on December 21, 2017, and the transaction formally closed on December 26, 2017. In connection with the 2017 Public Offering, the Company sold an aggregate of 1,215,000 units each consisting of one share of Common Stock and one warrant to purchase one share of Common Stock at a purchase price of $4.74 per share. Each warrant expires three years following the date of issuance. The aggregate net proceeds received by the Company from the 2017 Public Offering, net of underwriting discounts and commissions and offering expenses, were $4.2 million. The Company enters into relationships or investments with other entities, and in certain instances, the entity in which the Company has a relationship or investment may qualify as a variable interest entity (“VIE”). A VIE is consolidated in the financial statements if the Company is deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. The Company has included Max Steel Productions, LLC formed on July 8, 2013 in the State of Florida and JB Believe, LLC formed on December 4, 2012 in the State of Florida in its consolidated financial statements as VIE’s.

2. GOING CONCERN

2. GOING CONCERN	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
2. GOING CONCERN	NOTE 2 — GOING CONCERN The accompanying consolidated financial statements have been prepared in conformity U.S generally accepted accounting principles (“U.S. GAAP”) and contemplate the continuation of the Company as a going concern. Although the Company has net income of $6,912,524 for the year ended December 31, 2017, it incurred losses of $37,189,679 for the year ended December 31, 2016. The Company has recorded accumulated deficit of $92,899,680 and $99,812,204, respectively and a working capital deficit of $10,705,975 and $31,424,129, respectively, as of December 31, 2017 and 2016 and therefore does not have adequate capital to fund its obligations as they come due or to maintain or develop its operations. The Company is dependent upon funds from private investors, proceeds from debt securities, securities convertible into shares of its Common Stock, sales of shares of Common Stock and support of certain stockholders. If the Company is unable to obtain funding from these sources within the next 12 months, it could be forced to liquidate. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. In this regard, management is planning to raise any necessary additional funds through loans and additional issuance of its Common Stock, securities convertible into the Company’s Common Stock, debt securities, as well as available bank and non-bank financing, or a combination of such financing alternatives. There is no assurance that the Company will be successful in raising additional capital. Such issuances of additional securities would further dilute the equity interests of our existing shareholders, perhaps substantially. The Company currently has the rights to several scripts and intends to obtain financing to produce one of the scripts during 2018 and release it in 2019. It expects to earn a producer and overhead fee for each of these productions. There can be no assurances that such productions will be released or fees will be realized in future periods. With the acquisition of 42West, the Company is currently exploring opportunities to expand the services currently being offered by 42West to the entertainment community and reducing expenses by identifying certain costs that can be combined with the Company’s. There can be no assurance that the Company will be successful in selling these services to clients or reducing expenses. The Company has filed a Form S-3 with the Securities and Exchange Commission under which it may sell up to $30,000,000 of equity securities. There can be no assurance that the Company will be successful in selling equity securities to raise additional funds.

3. SUMMARY OF SIGNIFICANT ACCOU

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates made by management in the preparation of the financial statements relate to ultimate revenue and costs for investment in digital and feature film projects; estimates of sales returns and other allowances and provisions for doubtful accounts and impairment assessments for investment in digital and feature film projects. Actual results could differ from such estimates. Statement of Comprehensive Income In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 220, Comprehensive Income Cash and cash equivalents Cash and cash equivalents consist of cash deposits at financial institutions. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Restricted Cash Restricted cash represents amounts held as collateral required under the Company’s loan and security agreement. Proceeds from this loan were used for the distribution and marketing costs of the Company’s feature film. See Note 8 for further discussion. As of December 31, 2016, the Company maintained $1,250,000 in a separate bank account restricted for this purpose. The funds were disbursed to the lender during 2017. Contracts in the Company’s Equity From time to time, the Company issues contracts related to its own equity securities, such as warrants and convertible notes. The Company evaluates whether a standalone contract (such as a warrant), or an embedded feature of a contract (such as the conversion feature of a convertible note) should be classified in stockholders’ deficit or as a liability in the Company’s consolidated balance sheet. The determination is made in accordance with the requirements of ASC Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging A warrant is classified as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or contains certain provisions that may alter either the number of shares issuable under the warrant or the exercise price of the warrant, including, among other things, a provision that could require a reduction to the then current exercise price each time the Company subsequently issues equity, warrants, and/or conversion options at less than the current conversion price (also known as a full ratchet down round provision). If a warrant is not indexed to the Company’s equity, it must be classified as a derivative liability. A convertible debt instrument in its entirety must be classified as a liability under ASC 480 and carried at fair value in the financial statements if it has a mandatory conversion feature. A conversion feature of a convertible debt instrument or certain convertible preferred stock, is separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, would meet certain characteristics in the definitions in ASC 815 of both an embedded derivative and a derivative, generally including, among other conditions, if the conversion feature must be settled in cash or a financial instrument that is readily convertible to cash. When a warrant or a separated conversion feature is classified as a derivative liability, the liability is initially and subsequently reported on the balance sheet at its fair value, and subsequent increases or decreases in the fair value are recorded through the statement of operations. When a conversion feature does not meet the definition of a derivative per ASC 815, it must be assessed further to determine whether a beneficial conversion feature exists, which exists when the effective exercise price is lower than the fair value of the Company’s related equity instrument on the date of issuance. If it contains a beneficial conversion feature, the amount of the beneficial conversion feature reduces the balance of the convertible debt instrument, creating a debt discount which is amortized over the term of the debt to interest expense in the consolidated statement of operations. The classification of a warrant or conversion feature must be reassessed at each financial reporting date, as a change in circumstances may necessitate reclassification of the warrant or conversion feature. The Company has classified certain warrants issued during 2016 as derivative liabilities due to the existence of full-ratchet down round provisions in the warrants see Note 17. Certain warrants issued during 2017 have been classified as equity. Gross versus Net Revenue The Company’s motion pictures are primarily distributed and marketed by third party distributors. The Company evaluates its arrangements with third parties to determine whether revenue should be reported under each individual arrangement on a gross or net basis by determining whether the Company acts as the principal or agent under the terms of each arrangement. To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items. Conversely, to the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any related expenses. Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement. The most significant factors that the Company considers include identification of the primary obligor, as well as which party has general and physical inventory risk, credit risk and discretion in the supplier selection. The Company’s primary distribution arrangements, which are those for its theatrical release, are recorded on a gross basis as a result of the evaluation previously described. Revenue Recognition Entertainment publicity Entertainment Publicity revenue consists of fees from the performance of professional services and billings for direct costs reimbursed by clients. The revenues are directly dependent upon the publicity and corporate communications requirements of the Company’s existing clients and its ability to win new clients. The Company’s revenue from this segment is typically lowest in the first quarter and highest in the fourth quarter. This reflects the seasonal spending of its clients, with a higher demand for project work prior to award season (e.g. The Academy Awards) that is typically completed during the fourth quarter. As is customary in the industry, the agreements with the clients generally provide for termination by either party on relatively short notice, usually 30 days. Some of the contracts may include incentive compensation for our clients’ nominations of certain Academy Awards. Fees are generally recognized on a straight-line or monthly basis which approximates the proportional performance on such contracts. Direct costs reimbursed by clients are billed as pass-through revenue with no mark-up. Content production Revenue from motion pictures and web series are recognized in accordance with guidance ASC 926-60 “ Revenue Recognition – Entertainment-Films” Additionally, because third parties are the principal distributors of the Company’s movies, the amount of revenue that is recognized from films in any given period is dependent on the timing, accuracy and sufficiency of the information received from its distributors. As is typical in the film industry, the Company’s distributors may make adjustments in future periods to information previously provided to the Company that could have a material impact on the Company’s operating results in later periods. Furthermore, management may, in its judgment, make material adjustments to the information reported by its distributors in future periods to ensure that revenues are accurately reflected in the Company’s financial statements. To date, the distributors have not made, nor has the Company made, subsequent material adjustments to information provided by the distributors and used in the preparation of the Company’s historical financial statements. In general, the Company records revenue when persuasive evidence of an arrangement exists, products have been delivered or services have been rendered, the selling price is fixed and determinable, and collectability is reasonably assured. Capitalized Production Costs Capitalized production costs represent the costs incurred to develop and produce a motion picture or a web series. These costs primarily consist of salaries, equipment and overhead costs, capitalized interest as well as the cost to acquire rights to scripts. Production costs are stated at the lower of cost, less accumulated amortization and tax credits, if applicable, or fair value. These costs are capitalized in accordance with FASB ASC Topic 926-20-50-2 “Other Assets – Film Costs”. Unamortized capitalized production costs are evaluated for impairment each reporting period on a title-by-title basis. If estimated remaining revenue is not sufficient to recover the unamortized capitalized production costs for that title, the unamortized capitalized production costs will be written down to fair value. The Company is responsible for certain contingent compensation, known as participations, paid to certain creative participants such as writers, directors and actors. Generally, these payments are dependent on the performance of the motion picture or web series and are based on factors such as total revenue as defined per each of the participation agreements. The Company is also responsible for residuals, which are payments based on revenue generated from secondary markets and are generally paid to third parties pursuant to a collective bargaining, union or guild agreement. The Company has entered into a fifteen year distribution agreement for its motion picture, Max Steel Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates are likely to differ to some extent in the future from actual results. Management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized deferred production costs to its estimated fair value. Management estimates the ultimate revenue based on existing contract negotiations with domestic distributors and international buyers as well as management’s experience with similar productions in the past. Amortization of film costs, participation and residuals and/or write downs of all or a portion of the unamortized deferred production costs to its estimated fair value is recorded in direct costs. An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less amortization expense of deferred productions costs, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher amortization expense of deferred production costs, and also periodically results in an impairment requiring a write-down of the deferred production costs to fair value. These write-downs are included in production expense within the consolidated statements of operations. For the year ended December 31, 2016, the Company amortized $7,822,549 of capitalized production costs related to Max Steel Investment Investment represents an investment in equity securities of The Virtual Reality Company (“VRC”), a privately held company. The Company’s $220,000 investment in VRC represents less than a 1% noncontrolling ownership interest in VRC and there is no market for VRC’s common stock. Accordingly, the Company accounts for its investment under the cost method. Under the cost method, the investor’s share of earnings or losses is not included in the balance sheet or statement of operations. The net accumulated earnings of the investee subsequent to the date of investment are recognized by the investor only to the extent distributed by the investee as dividends. However, impairment charges are recognized in the statement of operations, if factors come to our attention that indicate that a decrease in value of the investment has occurred that is other than temporary. Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. Except for those described above in Capitalized Production Costs, there were no impairment charges for long lived assets during the years ended December 31, 2017 and 2016. Property, Equipment and Leasehold Improvements Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method. The Company recorded depreciation expense of $211,138 and $20,226, respectively for the years ended December 31, 2017 and 2016. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. Leasehold improvements are amortized over the lesser of the term of the related lease or the estimated useful lives of the assets. The range of estimated useful lives to be used to calculate depreciation and amortization for principal items of property and equipment are as follow: Asset Category Depreciation/ Amortization Period (Years) Furniture and fixtures 5 - 7 Computer and office equipment 3 - 5 Leasehold improvements 5 - 8, not to exceed the lease terms Intangible assets In connection with the acquisition of 42West on March 30, 2017, the Company acquired an estimated $9,110,000 of intangible assets with finite useful lives initially estimated to range from 3 to 14 years. The Company also acquired a favorable lease intangible asset related to the lease agreement of our California office in the amount of $440,000 that will be amortized over the remaining term of the lease. Intangible assets are initially recorded at fair value and are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Goodwill In connection with the acquisition of 42West on March 30, 2017 (See Note 4), the Company recorded a provisional amount of $13,996,337 of goodwill, which management has assigned to the Entertainment Publicity reporting unit. During the nine months between the date of acquisition and December 31, 2017, the Company decreased goodwill in the amount of $1,217,477 to record a working capital adjustment, as provided for in the 42West purchase agreement, record the favorable lease intangible asset and adjust the fair value of certain liabilities as of the acquisition date. These adjustments were considered measurement period adjustments as they related to conditions on the acquisition date. The Company accounts for goodwill in accordance with FASB Accounting Standards Codification No. 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 requires goodwill to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company evaluates goodwill in the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the reporting unit with its carrying value (including goodwill). The Company estimates the fair values of its reporting units using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the estimated fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit, and the Company must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation in acquisition accounting. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. To the extent that the carrying amount of goodwill exceeds its implied fair value, an impairment loss would be recorded. Warrants When the Company issues warrants, it evaluates the proper balance sheet classification of the warrant to determine whether the warrant should be classified as equity or as a derivative liability on the consolidated balance sheets. In accordance with ASC 815-40, Derivatives and Hedging-Contracts in the Entity’s Own Equity (ASC 815-40), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or contains certain provisions that may alter either the number of shares issuable under the warrant or the exercise price of the warrant, including, among other things, a provision that could require a reduction to the then current exercise price each time the Company subsequently issues equity or convertible instruments at a per share price that is less than the current conversion price (also known as a “full ratchet down round provision”). If a warrant is not indexed to the Company’s equity, it is classified as a derivative liability which is carried on the consolidated balance sheet at fair value with any changes in its fair value recognized currently in the statement of operations. The Company classified certain warrants issued during 2016 as derivative liabilities, because they contain full-ratchet down round provisions (see Notes 11 and 17). The Company also had equity classified warrants outstanding at December 31, 2017 and 2016 (see Note 17). Convertible Debt and Convertible Preferred Stock When the Company issues convertible debt or convertible preferred stock, it evaluates the balance sheet classification to determine whether the instrument should be classified either as debt or equity, and whether the conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded derivative” in ASC 815, Derivatives and Hedging. Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements of operations. If a conversion feature does not meet the conditions to be accounted for as a derivative liability, the Company then determines whether the conversion feature is “beneficial”. A conversion feature would be considered beneficial if the conversion feature is “in the money” when the host instrument is issued or, under certain circumstances, later. If convertible debt contains a beneficial conversion feature (“BCF”), the amount of the amount of the proceeds allocated to the BCF reduces the balance of the convertible debt, creating a discount which is amortized over the debt’s term to interest expense in the consolidated statements of operations. When a convertible preferred stock contains a BCF, after allocating the proceeds to the BCF, the resulting discount is either amortized over the period beginning when the convertible preferred stock is issued up to the earliest date the conversion feature may be exercised, or if the convertible preferred stock is immediately exercisable, the discount is fully amortized at the date of issuance. The amortization is recorded similar to a dividend. The Company had no outstanding convertible debt or convertible preferred stock which contain a conversion feature that is accounted for either as a derivative or a beneficial conversion feature at either December 31, 2017 or 2016 or during the years then ended. Stock based compensation In connection with the 42West Acquisition, the Company issued 59,320 shares of restricted Common Stock to certain employees. The shares were issued pursuant the Company’s 2017 Plan. The shares of restricted stock were issued on August 21, 2017 and vested six months after issuance on February 21, 2018. The Company recognized compensation expense related to the restricted stock based on the number of employees who received the shares and were still employed by the Company at December 31, 2017 at the market price of the shares on grant date (August 21, 2017). For the year ended December 31, 2017, the Company recorded $329,967 in its consolidated statement of operation related to stock based compensation. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Observable inputs are based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels, defined as follows: Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 — Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. To account for the acquisition of 42West that occurred on March 30, 2017, the Company made a number of fair value measurements related to the different forms of consideration paid for 42West and of the identified assets acquired and liabilities assumed. In addition, the Company makes fair value measurements of its Put Rights and Contingent Consideration. See Notes 4 and 11 for further discussion and disclosures. Certain warrants issued on December 26, 2017 were measured using the market price of the warrants on that date. Certain warrants issued in 2016 are also measured and carried at fair value on a recurring basis in the consolidated financial statements. See Note 11 for disclosures regarding those fair value measurements. Income Taxes Deferred taxes are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using tax rates in effect for the years in which the differences are expected to reverse. The effects of changes in tax laws on deferred tax balances are recognized in the period the new legislation in enacted. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the likelihood of realization, management considers estimates of future taxable income. We calculate our current and deferred tax position based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. Earnings (Loss) Per Share Basic earnings (loss) per share available to the Company’s common stock shareholders equals net income or loss available to common stock shareholders divided by the weighted-average number of common shares outstanding for the applicable period. Diluted earnings per share equals net income available common stock stockholders divided by the weighted-average number of common shares outstanding, plus any additional common shares that would have been outstanding if potentially dilutive shares had been issued. Diluted earnings per share reflects the potential dilution that would occur if certain potentially dilutive instruments were exercised. The potential issuance of common stock is assumed to occur at the beginning of the year (or at the time of issuance of the potentially dilutive instrument, if later) and the incremental shares are included using the treasury stock method. The proceeds utilized in applying the treasury stock method consist of the amount, if any, to be paid upon exercise. These proceeds are then assumed to be used to purchase common stock at the average market price of the Company’s common stock during the period. The incremental shares (difference between the shares assumed to be issued and the shares assumed to be purchased), to the extent they would have been dilutive, are included in the denominator of the diluted earnings per share calculation. Potentially dilutive instruments are not included in the computation of loss per share because their inclusion is anti-dilutive. Going Concern In accordance with ASC Subtopic 205-40, Going Concern, management evaluates whether relevant conditions and events that, when considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. When relevant conditions or events, considered in the aggregate, initially indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (and therefore they raise substantial doubt about the Company’s ability to continue as a going concern), management evaluates whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are considered only to the extent that 1) it is probable that the plans will be effectively implemented and 2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. See Note 2 related to going concern. Concentration of Risk The Company maintains its cash and cash equivalents with financial institutions and, at times, balances may exceed federally insured limits of $250,000. Additionally, substantially all of the production revenue for the years ended December 31, 2017 and 2016 were derived from one production. Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. These changes did not affect the equity or previously reported net losses. Business Segments The Company operates the following business segments: 1) Entertainment Publicity Division (“EPD”) – This segment primarily provides talent entertainment and targeted marketing, and strategic communication services through 42West. The Company derived a majority of its revenues for 2017 from this segment. 2) Content Production Division (“CPD”) – This segment produces original motion picture and digital content. For the year ended December 31, 2016, the Company derived a majority of its revenues from this segment from the domestic and international distribution of its motion picture, Max Steel Max Steel See Note 19 for Segment Reporting for the year ended December 31, 2017. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 —Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which provides guidance for revenue recognition. This ASU will supersede the revenue recognition requirements in ASC Topic 605, and most industry specific guidance, and replace it with a new Accounting Standards Codification (“ASC”) Topic 606. The FASB has also issued several subsequent ASUs which amend ASU 2014-09. The amendments do not change the core principle of the guidance in ASC 606. The core principle of ASC 606 is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The guidance in ASU 2014-09 also specifies the accounting for some costs to obtain or fulfill a contract with a customer. ASC 606 will require the Company to make significant judgments and estimates. ASC 606 also requires more extensive

4. ACQUISITION

4. ACQUISITION	12 Months Ended
	Dec. 31, 2017
Acquisition Of Dolphin Films Inc.
4. ACQUISITION	NOTE 4 — ACQUISITIONS 42West On March 30, 2017, the Company entered into the Purchase Agreement in respect of the 42West Acquisition pursuant to which the Company acquired 100% of the membership interests of 42West and 42West became a wholly owned subsidiary of the Company. 42West is an entertainment public relations agency offering talent entertainment and targeted marketing, strategic communication services. Pursuant to the Purchase Agreement, the Company agreed to pay a purchase price at closing equal to $18,666,666 (less, the amount of 42West’s transaction expenses paid by the Company and payments by the Company of certain of 42West’s indebtedness) in shares of Common Stock determined based on the Common Stock’s 30-trading-day average stock price immediately prior to the closing date, which was $9.22 per share, plus a contingent earn out of up to an additional 1,012,292 shares of Common Stock (the “Earn Out Consideration”). The Purchase Agreement included a customary working capital adjustment, which resulted in a post-closing adjustment of $646,031 in favor of the sellers. The Company has calculated the total number of shares to be issued for the transaction, not including the Earn Out Consideration, to be approximately 1,818,000 shares of Common Stock. The following shares have been issued through December 31, 2017; (i) on March 30, 2017, the Company issued 615,140 shares of Common Stock to the sellers on the closing date; (ii) on April 13, 2017, the Company issued 172,275 shares of Common Stock to certain 42West employees and a former 42West employee with change in control provisions in their pre-existing employment and termination agreements (the “Change of Control Provisions”); (iii) on April 13, 2017, the Company issued 50,000 shares of Common Stock as a provisional working capital adjustment to the sellers and certain 42West employees and a previous employee with Change of Control Provisions; and (iv) on August 21, 2017, upon the effectiveness of a registration statement on Form S-8 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), the Company issued 59,320 shares of Common Stock as 42West employee bonuses (the “Employee Stock Bonuses”). On August 30, 2017, the Company agreed to make a cash payment of $185,031 to the Principal Sellers to satisfy the remaining amount of the working capital adjustment. The only shares of Common Stock issued that have been registered under the Securities Act are those pertaining to the Employee Stock Bonuses. During the year ended December 31, 2017, the Company agreed to settle certain of the Change of Control Provisions with certain 42West employees by offering a cash payment in lieu of the shares of Common Stock that were issued on April 13, 2017. As a result, the Company will make payments in the aggregate amount of $292,112 on March 30, 2018 and $361,760 on March 29, 2019 to these 42West employees. These amounts have been accrued as of December 31, 2017. The difference between the value of the shares issued on April 13, 2017 at a price of $9.22 per share and the cash payments made to the 42West employees will be paid to the sellers of 42West in shares of Commons Stock at a price of $9.22 per share On January 2, 2018, in accordance with the Purchase Agreement, the Company issued 762,654 shares of Common Stock to the sellers of 42West. It intends to issue an additional 130,452 shares of Common Stock to certain 42West employees that chose to receive shares of Common Stock to satisfy the Change of Control Provisions and to the sellers of 42West. The issuance of 59,320 shares of Common Stock in respect of the Employee Stock Bonuses and the potential issuance of 40,492 shares a part of the Earn Out Consideration to 42West employees with Change of Control Provisions, (the “Employee Earn Out Shares”), are conditioned on the employee remaining employed by the Company up to the date shares become issuable. If an employee does not remain employed for the requisite service period, the shares they forfeit will be allocated among and issued to the sellers of 42West. The Employee Stock Bonuses and the Employee Earn Out Shares are not considered part of the accounting consideration transferred to acquire 42West. The Employee Stock Bonus Shares and the Employee Earn Out Shares will be accounted for under ASC 718 Compensation – Stock Compensation, The Purchase Agreement contains customary representations, warranties, covenants and indemnifications. Also in connection with the 42West Acquisition, on March 30, 2017, the Company entered into put agreements (the “Put Agreements”) with each of the Sellers. Pursuant to the terms and subject to the conditions set forth in the Put Agreements, the Company has granted the sellers the right, but not obligation, to cause the Company to purchase up to an aggregate of 1,187,094 of their shares of Common Stock received as Stock Consideration for a purchase price equal to $9.22 per share during certain specified exercise periods set forth in the Put Agreements up until December 2020 (the “Put Rights”). This amount includes the put rights allowable after earning the Earn Out Consideration achieved during the year ended December 31, 2017. During the year ended December 31, 2017, the sellers exercised their Put Rights, in accordance with the Put Agreements, and caused the Company to purchase 132,859 shares of Common Stock for an aggregate amount of $1,225,000. On each of December 10, December 13 and December 20, 2017, the sellers notified the Company that they would be selling back 56,940 shares of Common Stock. On January 5, 2018, the sellers were paid an aggregate of $525,000 in respect of such shares. Each of Leslee Dart, Amanda Lundberg and Allan Mayer (the “Principal Sellers”) has entered into employment agreements with the Company to continue as employees of the Company for a three-year term after the closing of the 42West Acquisition. Each of the employment agreements of the Principal Sellers contains lock-up provisions pursuant to which each Principal Seller has agreed not to transfer any shares of Common Stock in the first year, except pursuant to an effective registration statement on Form S-1 or Form S-3 promulgated under the Securities Act (an “Effective Registration Statement”) or upon exercise of the Put Rights pursuant to the Put Agreement, and, except pursuant to an Effective Registration Statement, no more than 1/3 of the Initial Consideration and Post-Closing Consideration received by such Principal Seller in the second year and no more than an additional 1/3 of the Initial Consideration and Post-Closing Consideration received by such Principal Seller in the third year, following the closing date. The non-executive employees of 42West were retained as well. In addition, in connection with the 42West Acquisition, on March 30, 2017, the Company entered into a registration rights agreement with the sellers (the “Registration Rights Agreement”) pursuant to which the sellers are entitled to rights with respect to the registration of their shares of Common Stock under the Securities Act. All fees, costs and expenses of underwritten registrations under the Registration Rights Agreement will be borne by the Company. At any time after the one-year anniversary of the Registration Rights Agreement, the Company will be required, upon the request of such sellers holding at least a majority of the Stock Consideration received by the sellers, to file a registration statement on Form S-1 and use its reasonable efforts to affect a registration covering up to 25% of the Stock Consideration received by the sellers. In addition, if the Company is eligible to file a registration statement on Form S-3, upon the request of such sellers holding at least a majority of the Stock Consideration received by the sellers, the Company will be required to use its reasonable efforts to affect a registration of such shares on Form S-3 covering up to an additional 25% of the Stock Consideration received by the sellers. The Company is required to effect only one registration on Form S-1 and one registration statement on Form S-3, if eligible. The right to have the Stock Consideration received by the sellers registered on Form S-1 or Form S-3 is subject to other specified conditions and limitations. The acquisition-date fair value of the consideration transferred totaled $23,327,799, which consisted of the following: Common Stock issued at closing and in April 2017 (787,415 shares) $ 6,693,028 Common Stock issuable in 2018 (980,911 shares) 8,337,740 Contingent Consideration 3,627,000 Put Rights 3,800,000 Sellers’ transaction costs paid at closing 260,000 Working capital adjustment (50,000 shares issued in April 2017 plus paid $185,031 cash in August 2017) 610,031 $ 23,327,799 The fair values of the 787,415 shares of Common Stock issued at closing and in April 2017 and the 980,911 shares of Common Stock to be issued in 2018 were determined based on the closing market price of the Company’s Common Stock on the acquisition date of $8.50 per share. The Earn-Out Consideration arrangement required the Company to pay up to 863,776 shares of Common Stock to the sellers and one former employee of 42West to settle a Change in Control Provision (the “Contingent Consideration”), on achievement of adjusted EBITDA targets (as defined in the Purchase Agreement) based on the operations of 42West over the three-year period beginning January 1, 2017. The fair value of the Contingent Consideration was estimated using a Monte Carlo Simulation model, which incorporated significant inputs that are not observable in the market, and thus represents a Level 3 measurement as defined in ASC 820. The unobservable inputs utilized for measuring the fair value of the Contingent Consideration reflect management’s own assumptions about the assumptions that market participants would use in valuing the Contingent Consideration as of the acquisition date. The key assumptions as of the acquisition date used in applying the Monte Carlo Simulation model are as follows: estimated risk-adjusted EBITDA figures ranging between $3,750,000 and $3,900,000; discount rates ranging between 11.75% and 12.25% applied to the risk-adjusted EBITDA estimates to derive risk-neutral EBITDA estimates; risk-free discount rates ranging from 1.03% to 1.55%, based on U.S. government treasury obligations with terms similar to those of the Contingent Consideration arrangement, applied to the risk-neutral EBITDA estimates; and an annual asset volatility estimate of 72.5%. During the year ended December 31, 2017, the sellers of 42West achieved the financial target to earn an additional 1,012,292 shares of Common Stock of additional consideration, as stated in the Purchase Agreement. Per the terms of the Purchase Agreement, the additional consideration will be paid in equal installments of 337,431 shares of Common Stock over a period of three years. Per the Purchase Agreement, based on the purchase price of $9.22 per share, the Earn Out Consideration is $9.3 million. The market value of these shares was $3,644,251 at December 31, 2017, the date the target was achieved. The fair value of the Put Rights at the acquisition date was estimated using Black-Scholes Option Pricing Model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement as defined in ASC 820. The unobservable inputs utilized for measuring the fair value of the Put Rights reflect management’s own assumptions about the assumptions that market participants would use in valuing the Put Rights as of the acquisition date. The key assumptions in applying the Black Scholes Option Pricing Model are as follows: a discount rate range of 0.12% to 1.70% based on U.S Treasury obligations with a term similar to the exercise period for each of the rights to put shares to the Company as set forth in the Put Option agreements, and an equity volatility estimate of 75% based on the stock price volatility of the Company and certain publicly traded companies operating in the advertising services industry. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date, March 30, 2017. Amounts in the table are provisional estimates that may change, as described below. Cash $ 273,625 Accounts receivable 1,706,644 Property, equipment and leasehold improvements 1,087,962 Other assets 265,563 Indemnification asset 300,000 Favorable lease intangible asset 440,000 Intangible assets 9,110,000 Total identifiable assets acquired 13,183,794 Accounts payable and accrued expenses (731,475 ) Line of credit and note payable (1,025,000 ) Settlement liability (300,000 ) Other liabilities (556,380 ) Tax liabilities (22,000 ) Total liabilities assumed (2,634,855 ) Net identifiable assets acquired 10,548,939 Goodwill 12,778,860 Net assets acquired $ 23,327,799 Of the fair value of the $9,110,000 of acquired identifiable intangible assets, $5,980,000 was assigned to customer relationships (10-14 years useful life), $2,760,000 was assigned to the trade name (10-year useful life), and $370,000 was assigned to non-competition agreements (3-year useful life), that were recognized at fair value on the acquisition date. The intangible assets will be amortized using the straight-line method with the exception of the customer relationship intangible that uses a modified straight-line method. The Company determined that historically the attrition rate for 75% of its customers was relatively low and amortized 75% of the customer relationship intangible using the straight-line method. The other 25% is amortized using an accelerated method based on the expected future revenues of the customers. In addition, the Company recognized a favorable lease intangible asset from the Company’s Los Angeles office lease in the amount of $440,000. The favorable lease intangible asset will be amortized using the straight-line method over the remaining lease term of 57 months. The fair value of accounts receivable acquired is $1,706,644, with the gross contractual amount being $1,941,644. The Company expects $235,000 to be uncollectible. The fair values of property and equipment and leasehold improvements of $1,087,962, and other assets of $265,563, are based on 42West’s carrying values prior to the acquisition, which approximate their fair values. The fair value of the settlement liability of $300,000 relates to 42West’s contingent liability to the Motion Picture Industry Pension Individual Account and Health Plans (collectively the “Plans”), two multiemployer pension funds and one multiemployer welfare fund, respectively, that are governed by the Employee Retirement Income Security Act of 1974, as amended (the “Guild Dispute”). The Plans intend to conduct an audit of 42West’s books and records for the period June 7, 2011 through August 20, 2016 in connection with the alleged contribution obligations of 42West to the Plans. Based on a recent audit for periods prior to June 7, 2011, the Company estimates that the probable amount the Plan may seek to collect from 42West is approximately $300,000, as of the acquisition date, in pension plan contributions, health and welfare plan contributions and union dues once the audit is completed. Accordingly, the Company has recorded a $300,000 settlement accrual liability for the probable amount of the liability it may incur due to the Motion Picture Industry Pension audit of the period from March 25, 2012 through August 20, 2016 (see Note 22). In accordance with the terms of the Purchase Agreement, the Sellers indemnified the Company with respect to the Guild Dispute for losses incurred related the Company’s alleged contribution obligations to the Plans for the period between March 25, 2012 through March 26, 2016. The Company has recorded an indemnification asset related to the recorded settlement liability, measured at fair value on the same basis as the settlement liability. The indemnification asset represents the estimated fair value of the indemnification payment expected to be received from Sellers, related to the indemnification by the Sellers of the estimated settlement liability. Based on the fair values related to certain assets acquired and liabilities assumed discussed above the goodwill amount of $12,778,860 was assigned to the Entertainment Publicity reporting unit, which is at the same level as the Entertainment Publicity segment (see Note 19). The goodwill recognized is attributable primarily to expectations of continued successful efforts to obtain new customers, buyer specific synergies and the assembled workforce of 42West. The goodwill is expected to be deductible for income tax purposes. The Company expensed $749,440 of acquisition related costs in the year ended December 31, 2017, respectively. These costs are included in the consolidated statements of operations in the line item entitled “acquisition costs.” The revenue and net income of 42West included in the consolidated amounts reported in the consolidated statements of operations for the year ended December 31, 2017 are as follows: Revenue $ 16,458,929 Net income $ 2,155,665 The amounts of 42West’s revenue and earnings for the one day between the acquisition date (March 30, 2017) and March 31, 2017 were de minimis. The following represents the pro forma consolidated operations for the year ended December 31, 2017 and 2016 as if 42West had been acquired on January 1, 2016 and its results had been included in the consolidated results of the Company beginning on that date: Pro Forma Consolidated Statements of Operations 2017 2016 Revenues $ 27,102,600 $ 27,959,374 Net income (loss) 8,622,281 (35,719,450 ) The pro forma amounts have been calculated after applying the Company’s accounting policies to the financial statements of 42West and adjusting the combined results of the Company and 42West (a) to reflect the amortization that would have been charged assuming the intangible assets had been recorded on January 1, 2016, (b) to reflect the reversal of 42West’s income taxes as if 42West had filed a consolidated income tax return with the Company beginning January 1, 2016, and (c) to exclude $749,440 of acquisition related costs that were expensed by the Company for the year ended December 31, 2017 by the Company and 42West on a combined basis. The impact of the 42West Acquisition on the actual results reported by the combined company in periods following the acquisition may differ significantly from that reflected in this pro forma information for a number of reasons. As a result, the pro forma information is not necessarily indicative of what the combined company’s financial condition or results of operations would have been had the acquisition been completed on the applicable dates of this pro forma financial information. In addition, the pro forma financial information does not purport to project the future financial condition and results of operations of the combined company. The following table summarizes the original and revised estimated fair values of the assets acquired and liabilities assumed at the acquisition date of March 30, 2017 and the related measurement period adjustments to the fair values recorded during the year ended December 31, 2017: March 31, Measurement Period Adjustments December 31, 2017 Cash $ 273,625 $ — $ 273,625 Accounts receivable 1,706,644 — 1,706,644 Property, equipment and leasehold improvements 1,087,962 — 1,087,962 Other assets 265,563 — 265,563 Indemnification asset — 300,000 300,000 Favorable lease intangible asset — 440,000 440,000 Intangible assets 9,110,000 — 9,110,000 Total identifiable assets acquired 12,443,794 740,000 13,183,794 Accounts payable and accrued expenses (731,475 ) — (731,475 ) Line of credit and note payable (1,025,000 ) — (1,025,000 ) Settlement liability (300,000 ) — (300,000 ) Other liabilities (902,889 ) 346,509 (556,380 ) Tax liabilities (22,000 ) — (22,000 ) Total liabilities assumed (2,981,364 ) 346,509 (2,634,856 ) Net identifiable assets acquired 9,462,430 1,086,509 10,548,939 Goodwill 13,996,337 (1,217,477 ) 12,778,860 Net assets acquired $ 23,458,767 $ (130,968 ) $ 23,327,799 The above fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed. As of March 31, 2017, the Company recorded the identifiable net assets acquired of $9,462,430 as shown in the table above in its consolidated balance sheet. During the year ended December 31, 2017, the Company’s measurement period adjustments of $1,086,509 were made and, accordingly, the Company recognized these adjustments in its December 31, 2017 consolidated balance sheet to reflect the adjusted identifiable net assets acquired of $10,548,939 as shown in the table above. The following is a reconciliation of the initially reported fair value to the adjusted fair value of goodwill: Goodwill originally reported at March 31, 2017 $ 13,996,337 Changes to estimated fair values: Contingent Consideration 86,000 Put Rights (200,000 ) Sellers’ tax liabilities assumed (627,000 ) Favorable lease intangible asset (440,000 ) Deferred rent (346,509 ) Working capital adjustment 610,032 Indemnification asset (300,000 ) 1,217,477 Adjusted goodwill $ 12,778,860 The estimated fair value of Contingent Consideration increased from the originally reported amount primarily due to changes in the estimated risk-adjusted EBITDA figures expected to be achieved during the earn-out period, changes to the risk-free discount rates and recalibration of the asset volatility estimate, which are inputs to the Monte Carlo simulation model used to calculate the fair value. The estimated fair value of the Put Rights decreased from the originally reported amount primarily due to a decrease in the annual asset volatility assumption. The estimated fair values of the working capital adjustment and indemnification asset were initially determined subsequent to the issuance by the Company of its consolidated financial statements for the three months ended March 31, 2017. The estimated fair value of the sellers’ tax liabilities decreased by $627,000 based on the sellers 2017 short year tax return. The favorable lease asset and the deferred rent were adjustments recognized from the lease of the Los Angeles office being below fair value on the date of the acquisition. Dolphin Films On March 7, 2016, the Company, DDM Merger Sub, Inc., a Florida corporation and a direct wholly-owned subsidiary of the Company (“Merger Subsidiary”), Dolphin Entertainment and Dolphin Films completed the merger contemplated by the Agreement and Plan of Merger, dated October 14, 2015 (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Subsidiary merged with and into Dolphin Films (the “Merger”) with Dolphin Films surviving the Merger. As a result of the Merger, the Company acquired Dolphin Films. At the effective time of the Merger, each share of Dolphin Films’ common stock, par value $1.00 per share, issued and outstanding, was converted into the right to receive the consideration for the Merger (the “Merger Consideration”). The Company issued 2,300,000 shares of Series B Convertible Preferred Stock, par value $0.10 per share, and 1,000,000 shares of Series C Convertible Preferred Stock, par value $0.001 per share to Dolphin Entertainment as the Merger Consideration. William O’Dowd is the President, Chairman and Chief Executive Officer of the Company and, as of March 4, 2016, was the beneficial owner of 52.5% of the outstanding Common Stock. In addition, Mr. O’Dowd is the founder, president and sole shareholder of Dolphin Entertainment, which was the sole shareholder of Dolphin Films prior to the Merger. The Merger Consideration was determined as a result of negotiations between Dolphin Entertainment and a special committee of independent directors of the Board of Directors of the Company (the “Special Committee”), with the assistance of separate financial and legal advisors selected and retained by the Special Committee. The Special Committee unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, were fair to and in the best interests of the shareholders of the Company other than Mr. O’Dowd, and that it was advisable for the Company to enter into the Merger Agreement. The Merger was consummated following the approval and adoption of the Merger Agreement by the Company’s shareholders. The Company retrospectively adjusted the historical financial results for all periods to include Dolphin Films as required for transactions between entities under common control.

5. CAPITALIZED PRODUCTION COSTS

5. CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
5. CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS	NOTE 5 — CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS Capitalized Production Costs Capitalized production costs include the unamortized costs of completed motion pictures and digital projects which have been produced by the Company, costs of scripts for projects that have not been developed or produced and costs for projects that are in production. These costs include direct production costs and production overhead and are amortized using the individual-film-forecast method, whereby these costs are amortized and participations and residuals costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the motion picture or web series. Motion Pictures For the years ended December 31, 2017 and 2016, revenues earned from motion pictures were $5,954,115 and $9,367,222, respectively, mainly attributable to Max Steel Believe Max Steel Believe Max Steel Max Steel The Company has purchased scripts, including one from a related party, for other motion picture productions and has capitalized $242,500 and $215,000, respectively, in capitalized production costs as of December 31, 2017 and 2016 associated with these scripts. The Company intends to produce these projects but they were not yet in production as of December 31, 2017. On November 17, 2015, the Company entered into a quitclaim agreement with a distributor for rights to a script owned by the Company. As part of the agreement the Company will receive $221,223 plus interest and a profit participation if the distributor decides to produce the motion picture within 24 months after the execution of the agreement. Per the agreement, if the motion picture is not produced within the 24 months, all rights revert back to the Company. The motion picture was not produced during the 24-month period and the rights have reverted back to the Company. As of December 31, 2017 and 2016, the Company had total capitalized production costs of $1,075,645 and $4,404,930, respectively, net of accumulated amortization, tax incentives and impairment charges, recorded on its consolidated balance sheets related to motion pictures. Digital Productions During the year ended December 31, 2016, the Company produced a new digital project showcasing favorite restaurants of NFL players throughout the country. The Company entered into a co-production agreement and was responsible for financing 50% of the project’s budget. Per the terms of the agreement, the Company is entitled to 50% of the profits of the project, net of any distribution fees. The show was produced throughout several cities in the United States. The show was released on Destination America, a digital cable and satellite television channel, on September 9, 2017 and the Company does not expect to derive any revenues from this initial release. During the years ended December 31, 2017 and 2016, the Company did not earn any revenues related to digital projects. During the year ended December 31, 2017, the Company determined that the fair value of the capitalized costs of the digital project was below the carrying value. As a result, the Company impaired $269,444 of capitalized production costs during the year ended December 31, 2017. During the year ended December 31, 2016, the Company impaired $2,439 of capitalized production costs related to digital productions. As of December 31, 2017 and 2016, respectively, the Company has total capitalized production costs of $0 and $249,083, recorded on its consolidated balance sheet related to the NFL digital project. The Company has assessed events and changes in circumstances that would indicate that the Company should assess whether the fair value of the productions is less than the unamortized costs capitalized and did not identify indicators of impairment, other than those noted above related to Max Steel Accounts Receivable The Company entered into various agreements with foreign distributors for the licensing rights of our motion picture, Max Steel Max Steel Max Steel The Company’s trade accounts receivable related to its entertainment public relations business are recorded at amounts billed to customers, and presented on the balance sheet, net of the allowance for doubtful accounts. The allowance is determined by various factors, including the age of the receivables, current economic conditions, historical losses and other information management obtains regarding the financial condition of customers. As of December 31, 2017, the Company had balances of $1,787,647, net of $139,000 of allowance for doubtful accounts of accounts receivable related to the entertainment PR business. Other Current Assets The Company had balances of $422,118 and $2,665,781 in other current assets on its consolidated balance sheets as of December 31, 2017 and 2016, respectively. As of December 31, 2017, these amounts were primarily composed of prepaid expenses and indemnification asset related to the 42West Acquisition. See Note 4 for further discussion. As of December 31, 2016, these amounts were primarily comprised of tax incentive receivables, and prepaid loan interest. Indemnification asset Prepaid Tax Incentives Prepaid Interest

6. PROPERTY, EQUIPMENT AND LEAS

6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS	12 Months Ended
	Dec. 31, 2017
Property Equipment And Leasehold Improvements
6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS	NOTE 6 — PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Property, equipment and leasehold improvement consists of: December 31, December 31, Furniture and fixtures $ 483,306 $ 65,311 Computers and equipment 432,586 41,656 Leasehold improvements 448,661 7,649 1,364,553 114,616 Less: accumulated depreciation and amortization (253,777 ) (79,428 ) $ 1,110,776 $ 35,188 The Company depreciates furniture and fixtures over a useful life of between five and seven years, computer and equipment over a useful life of between three and five years and amortizes leasehold improvements over the remaining term of the related leases. On June 1, 2017, the Company entered into a sublease agreement for one of its offices in Los Angeles. As part of the sublease agreement, the Company agreed to allow the subtenant to acquire the fixed assets in the office. As a result, the Company wrote off $64,814 of property, equipment and leasehold improvements and $36,789 of accumulated depreciation. This resulted in a loss in the amount of $28,025 that was recorded on the consolidated statement of operations for the year ended December 31, 2017 as loss on disposal of furniture, office equipment and leasehold improvements. The balances as of December 31, 2017 include the provisional amounts of the Company’s newly acquired subsidiary 42West. (See Note 4)

7. INVESTMENT

7. INVESTMENT	12 Months Ended
	Dec. 31, 2017
Investment
7. INVESTMENT	NOTE 7 — INVESTMENT As of December 31, 2017, investments, at cost, consisted of 344,980 shares of common stock of VRC. In exchange for services rendered by 42West to VRC during 2015, 42West received both cash consideration and a promissory note that was convertible into shares of common stock of VRC. On April 7, 2016, VRC closed an equity financing round resulting in common stock being issued to a third-party investor. This transaction triggered the conversion of all outstanding promissory notes into shares of common stock of VRC. The Company’s investment in VRC represents less than 1% noncontrolling ownership interest in VRC. The Company had a balance of $220,000 on its consolidated balance sheet as of December 31, 2017, related to this investment.

8. DEBT

8. DEBT	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
8. DEBT	NOTE 8 — DEBT Loan and Security Agreements First Group Film Funding During the years ended December 31, 2013 and 2014, the Company entered into various loan and security agreements with individual noteholders (the “First Loan and Security Noteholders”) for notes with an aggregate principal amount of $11,945,219 to finance future motion picture projects (the “First Loan and Security Agreements”). During the year ended December 31, 2015, one of the First Loan and Security Noteholders increased its funding under its respective First Loan and Security Agreement for an additional $500,000 note and the Company used the proceeds to repay $405,219 to another First Loan and Security Noteholder. Pursuant to the terms of the First Loan and Security Agreements, the notes accrued interest at rates ranging from 11.25% to 12% per annum, payable monthly through June 30, 2015. During 2015, the Company exercised its option under the First Loan and Security Agreements, to extend the maturity date of these notes until December 31, 2016. In consideration for the Company’s exercise of the option to extend the maturity date, the Company was required to pay a higher interest rate, increasing by 1.25% resulting in rates ranging from 12.50% to 13.25%. The First Loan and Security Noteholders, as a group, were to receive the Company’s entire share of the proceeds from the motion picture productions funded under the First Loan and Security Agreements, on a prorata basis, until the principal investment was repaid. Thereafter, the First Loan and Security Noteholders, as a group, would have the right to participate in 15% of the Company’s future profits from these projects (defined as the Company’s gross revenues of such projects less the aggregate amount of principal and interest paid for the financing of such projects) on a prorata basis based on each First Loan and Security Noteholder’s loan commitment as a percentage of the total loan commitments received to fund specific motion picture productions. On May 31, 2016 and June 30, 2016, the Company entered into debt exchange agreements with certain First Loan and Security Noteholders on substantially similar terms to convert an aggregate of $11,340,000 of principal and $1,811,490 of accrued interest into shares of Common Stock. Pursuant to the terms of such debt exchange agreements, the Company agreed to convert the debt owed to certain First Loan and Security Noteholders into Common Stock at an exchange rate of $10.00 per share and issued 1,315,149 shares of Common Stock. On May 31, 2016, the market price of a share of Common Stock was $13.98 and on June 30, 2016 it was $12.16. As a result, the Company recorded losses on the extinguishment of debt on its consolidated statement of operations of $3,328,366 for the year ended December 31, 2016 based on the difference between the fair value of the Common Stock issued and the carrying amount of outstanding balance of the exchanged notes on the date of the exchange. On December 29, 2016, as part of a global settlement agreement with an investor that was a noteholder under each of a First Loan and Security Agreement, a Web Series Agreement and a Second Loan and Security Agreement, the Company entered into a debt exchange agreement whereby the Company issued Warrant “J” that entitles the warrant holder to purchase shares of Common Stock at a price of $0.03 per share in settlement of $1,160,000 of debt from the note under the First Loan and Security Agreement. The Company did not expense any interest during the year ended December 31, 2017 and expensed $518,767, in interest during the year ended December 31, 2016 related to the First Loan and Security Agreements. The Company did not have any debt outstanding or accrued interest as of December 31,2017 and 2016 related to the First Loan and Security Agreements on its consolidated balance sheets. Web Series Funding During the years ended December 31, 2014 and 2015, the Company entered into various loan and security agreements with individual noteholders (the “Web Series Noteholders”) for an aggregate principal amount of notes of $4,090,000 which the Company used to finance production of its 2015 web series (the “Web Series Loan and Security Agreements”). Under the Web Series Loan and Security Agreements, the Company issued promissory notes that accrued interest at rates ranging from 10% to 12% per annum payable monthly through August 31, 2015, with the exception of one note that accrued interest through February 29, 2016. During 2015, the Company exercised its option under the Web Series Loan and Security Agreements to extend the maturity date of these notes to August 31, 2016. In consideration for the Company’s exercise of the option to extend the maturity date, the Company was required to pay a higher interest rate, increasing 1.25% resulting in interest rates ranging from 11.25% to 13.25%. Pursuant to the terms of the Web Series Loan and Security Agreements, the Web Series Noteholders, as a group, would have had the right to participate in 15% of the Company’s future profits generated by the series (defined as the Company’s gross revenues of such series less the aggregate amount of principal and interest paid for the financing of such series) on a prorata basis based on each Web Series Noteholder’s loan commitment as a percentage of the total loan commitments received to fund the series. During the year ended December 31, 2016, the Company entered into thirteen individual debt exchange agreements (the “Web Series Debt Exchange Agreements”) on substantially similar terms with the Web Series Noteholders. Pursuant to the terms of the Web Series Debt Exchange Agreements, the Company and each Web Series Noteholder agreed to convert an aggregate of $4,204,547 of principal and accrued interest under the Web Series Loan and Security Agreements into an aggregate of 420,455 shares of Common Stock at an exchange price of $10.00 per share as payment in full of each of the notes issued under the Web Series Loan and Security Agreements. Mr. Nicholas Stanham, director of the Company, was one of the Web Series Noteholders that converted his note into shares of Common Stock. For year ended December 31, 2016, the Company recorded a loss on extinguishment of debt in the amount of $ $1,489,582 due to the market price of the Common Stock being between $12.00 and $12.16 per share on the dates of the exchange. During 2016, the Company also entered into a global settlement agreement with another investor that was a Noteholder of a First Loan and Security Agreement, a Web Series Agreement and a Second Loan and Security Agreement. As part of the global settlement agreement, the Company entered into a debt exchange agreement whereby the Company issued Warrant “J” that entitles the warrant holder to purchase shares of Common Stock at a price of $0.03 per share in settlement of $340,000 of debt from the Web Series Loan and Security Agreement. See Note 17 for further discussion of Warrant “J”. The Company did not expense any interest during the year ended December 31, 2017 and expensed $31,487 and in interest during year ended December 31, 2016, related to the Web Series Loan and Security Agreements. The Company did not have any debt outstanding or accrued interest as December 31, 2017 and 2016 related to the Web Series Loan and Security Agreements on its consolidated balance sheets. Second Group Film Funding During the year ended December 31, 2015, the Company entered into various loan and security agreements with individual noteholders (the “Second Loan and Security Noteholders”) for notes with an aggregate principal amount of $9,274,327 to fund a new group of film projects (the “Second Loan and Security Agreements”). Of this total aggregate amount, notes with an aggregate principal amount of $8,774,327 were issued in exchange for debt that had originally been incurred by DE LLC, primarily related to the production and distribution of the motion picture, “ Believe On May 31 and June 30, 2016, the Company entered into various debt exchange agreements on substantially similar terms with certain of the Second Loan and Security Noteholders to convert an aggregate of $4,344,350 of principal and accrued interest into shares of Common Stock. Pursuant to such debt exchange agreements, the Company agreed to convert the debt at an exchange price of $10.00 per share and issued 434,435 shares of Common Stock. On May 31, 2016, the market price of a share of the Common Stock was $13.98 and on June 30, 2016, it was $12.16. As a result, the Company recorded a loss on the extinguishment of debt of $1,312,059 on its consolidated statement of operations for year ended December 31, 2016, due to the difference between the exchange price and the market price of the Common Stock on the dates of exchange. During 2016, the Company repaid one of the Second Loan and Security Noteholders its principal investment of $300,000. On December 29, 2016, as part of a global settlement agreement with an investor that was a noteholder under each of a First Loan and Security Agreement, a Web Series Agreement and a Second Loan and Security Agreement, the Company entered into a debt exchange agreement whereby the Company issued Warrant “J” that entitles the warrant holder to purchase shares of Common Stock at a price of $0.03 per share in settlement of $4,970,990 of debt from the note under the Second Loan and Security Agreement. See Note 17 for further discussion of Warrant “J”. During the year ended December 31, 2017, the Company did not record any interest expense related to the Second Loan and Security Agreements. The Company recorded $715,934 during the year ended December 31, 2016 of interest expense related to the Second Loan and Security Agreements. The Company did not have any debt outstanding or accrued interest as of December 31, 2017 and 2016 related to the Second Loan and Security Agreements on its consolidated balance sheets. The Company accounts for the above agreements in accordance with ASC 470-10-25-2, which requires that cash received from an investor in exchange for the future payment of a specified percentage or amount of future revenue, shall be classified as debt. Prints and Advertising Loan During 2016, Dolphin Max Steel Holding, LLC, a Florida limited liability company (“Max Steel Holding”) and a wholly owned subsidiary of Dolphin Films, entered into a loan and security agreement (the “P&A Loan”) providing for up to $14,500,000 non-revolving credit facility that matures on August 25, 2017. Proceeds of the credit facility in the aggregate amount of $12,500,000 were used to pay a portion of the print and advertising expenses of the domestic distribution of Max Steel Max Steel Max Steel Max Steel Max Steel Max Steel During the year ended December 31, 2017, the Company agreed to allow the lender to apply the balance held as restricted cash to the loan balance. On September 18, 2017, the party associated with the film paid the lender the guaranty of $4,500,000 and the Company recorded the $620,000 backstop in other current liabilities. As December 31, 2017 and 2016, the Company had an outstanding balance of $1,900,970 and $12,500,000, respectively, related to this agreement recorded on the consolidated balance sheets. On its consolidated statement of operations for the years ended December 31, 2017 and 2016, the Company recorded interest expense of $716,796 and $277,924, respectively, related to the P&A Loan. For the year ended December 31, 2017, the Company recorded income of $500,000 in direct costs from loan proceeds that were not used by the distributor for the marketing of the film and returned to the lender and $3,880,000 of gain on extinguishment of debt from the $4,500,000 paid to the lender by the third party guarantor less the $620,000 backstop by the Company. Production Service Agreement During the year ended December 31, 2014, Dolphin Films entered into a financing agreement for the production of one of the Company’s feature films, Max Steel As of December 31, 2017 and 2016 the Company had outstanding balances of $2,086,249 and $6,243,069, respectively, related to this debt on its consolidated balance sheets. Line of Credit The Company’s subsidiary, 42West had a $1,750,000 revolving credit line agreement with City National Bank, which matured on November 1, 2017. Borrowings bore interest at the bank’s prime lending rate plus 0.875%. The debt, including letters of credit outstanding, was collateralized by substantially all of the assets of 42West and guaranteed by the Principal Sellers. During the year ended December 31, 2017, the Company drew $250,000 from the credit line for working capital. The outstanding loan balance as of December 31, 2017 was $750,000. The line of credit was not renewed and subsequent to December 31, 2017, the Company repaid all amounts outstanding under the foregoing credit line and entered into a new line of credit agreement with a different lender. See Note 23 for further details. Payable to Former Member of 42West During 2011, 42West entered into an agreement to purchase the interest of one of its members. Pursuant to the agreement, the outstanding principal shall be payable immediately if 42West sells, assigns, transfers, or otherwise disposes all or substantially all of its assets and/or business prior to December 31, 2018. In connection with the Company’s acquisition of the membership interest of 42West, (Note 4), payment of this redemption was accelerated, with $300,000 paid during April 2017, and the remaining $225,000 to be paid in January 2018. The outstanding balance at December 31, 2017 of $225,000 has been included in other current liabilities on the accompanying consolidated balance sheet.

9. NOTES PAYABLE

9. NOTES PAYABLE	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
9. NOTES PAYABLE	NOTE 9 — NOTES PAYABLE Convertible Notes 2015 Convertible Debt On December 7, 2015, the Company entered into a subscription agreement with an investor to sell up to $7,000,000 in convertible promissory notes of the Company. The promissory note would bear interest on the unpaid balance at a rate of 10% per annum, and became due and payable on December 7, 2016. The promissory note could have been prepaid at any time without a penalty. Pursuant to the subscription agreement, the Company issued a convertible note to the investor in the amount of $3,164,000. At any time prior to the maturity date, the investor had the right, at its option, to convert some or the entire convertible note into Common Stock. The convertible note had a conversion price of $10.00 per share. The outstanding principal amount and all accrued interest were mandatorily and automatically converted into Common Stock, at the conversion price, upon the average market price per share of Common Stock being greater than or equal to the conversion price for twenty trading days. During the year ended December 31, 2016, a triggering event occurred pursuant to the convertible note agreement. As such 316,400 shares of Common Stock were issued in satisfaction of the convertible note payable. For the year ended December 31, 2016, the Company recorded interest expense of $31,207 on its consolidated statements of operations. No interest expense was recorded for the year ended December 31, 2017. 2017 Convertible Debt On July 18, July 26, July 27, July 31, August 30, September 6, September 8 and September 22, 2017, the Company entered into subscription agreements pursuant to which it issued convertible promissory notes, each with substantially similar terms, for an aggregate principal amount of $875,000. Each of the convertible promissory notes matures one year from the date of issue, with the exception of one note in the amount of $75,000 which matures two years from the date of issue, and bear interest at a rate of 10% per annum. The principal and any accrued interest of each of the convertible promissory notes are convertible by the respective holder at a price equal to either (i) the 90-trading day average price per share of common stock as of the date the holder submits a notice of conversion or (ii) if an Eligible Offering (as similarly defined in each of the convertible promissory notes) of common stock is made, 95% of the Public Offering Share price (as similarly defined in each of the convertible promissory notes). Nonconvertible Notes Payable On September 20, 2017, the Company signed a promissory note in the amount of $150,000 with a maturity date of September 20, 2018. The promissory note bears interest at 10% per annum and may be repaid at any time without a penalty. The promissory note is held by an entity of which Allan Mayer, a director and employee of the Company, is the trustee. On December 18, 2017, the Company repaid the principal balance and accrued interest on the promissory note in the aggregate amount of $151,875. On June 14, 2017, the Company signed a promissory note in the amount of $400,000 with a two year term, expiring on June 14, 2019. The promissory note bears interest of 10% per annum and can be prepaid without a penalty after the initial six months. On April 18, 2017, the Company signed a promissory note in the amount of $250,000 with an initial maturity date of October 18, 2017, bearing interest at 10% per annum. The maturity date of the promissory note has been extended to December 15, 2017 with an interest rate of 12%. On December 28, 2017, the Company repaid the principal balance and accrued interest on the promissory note in the aggregate amount of $252,500. On April 10, 2017, the Company signed two promissory notes with an aggregate principal amount of $300,000 on substantially identical terms. Both promissory notes are held by one noteholder, and had an initial maturity date of October 10, 2017, bearing interest at 10% per annum. The maturity date of the promissory note has been extended to December 15, 2017 on substantially identical terms. On December 28, 2017, the Company repaid the principal balance and accrued interest on each of the promissory notes in the aggregate amount of $304,167. On July 5, 2012, the Company signed an unsecured promissory note in the amount of $300,000 bearing 10% interest per annum and payable on demand. During the year ended December 31, 2017, the Company made interest payments on its convertible and nonconvertible promissory notes in the aggregate amount of $77,263. The Company had a balance of $189,309 and $134,794 as of December 31, 2017 and 2016, respectively, of accrued interest recorded in other current liabilities in its consolidated balance sheets, related to these promissory notes. The Company recorded interest expense for the years ended December 31, 2017 and 2016 of $131,778 and $30,082, respectively, related to these promissory notes. As of December 31, 2017 and 2016, the Company had a balance of $1,100,000 and $300,000 on its consolidated balance sheets in current liabilities and $675,000 in noncurrent liabilities relating to these notes payable.

10. LOANS FROM RELATED PARTY

10. LOANS FROM RELATED PARTY	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
10. LOANS FROM RELATED PARTY	NOTE 10 — LOANS FROM RELATED PARTY On December 31, 2011, the Company issued an unsecured revolving promissory note (the “DE Note”) to DE LLC, an entity wholly owned by the Company’s CEO. The DE Note accrued interest at a rate of 10% per annum. DE LLC had the right at any time to demand that all outstanding principal and accrued interest be repaid with a ten-day notice to the Company. On March 4, 2016, the Company entered into a subscription agreement (the “Subscription Agreement”) with DE LLC. Pursuant to the terms of the Subscription Agreement, the Company and DE LLC agreed to convert the $3,073,410 aggregate amount of principal and interest outstanding under the DE Note into 307,341 shares of Common Stock. The shares were converted at a price of $10.00 per share. On the date of the conversion the market price of the shares was $12.00 and as a result the Company recorded a loss on the extinguishment of the debt of $614,682 on the consolidated statement of operations for the year ended December 31, 2016. For the year ended December 31, 2016, the Company recorded interest expense in the amount of $32,008 on its consolidated statement of operations. In addition, DE LLC has previously advanced funds for working capital to Dolphin Films. During the year ended December 31, 2015, Dolphin Films agreed to enter into second Loan and Security Agreements with certain of DE LLC’s debtholders, pursuant to which the debtholders exchanged their DE Notes for notes issued by Dolphin Films totaling $8,774,327. See Note 8 for more details. The amount of debt assumed by Dolphin Films was applied against amounts owed to DE LLC by Dolphin Films. During 2016, Dolphin Films entered into a promissory note with DE LLC (the “New DE Note”) in the principal amount of $1,009,624. The New DE Note is payable on demand and bears interest at 10% per annum. During the year ended December 31, 2017, the Company agreed to include certain script costs and other payables totaling $594,315 that were owed to DE LLC as part of the New DE Note. During the year ended December 31, 2017, the Company received proceeds related to the New DE Note from DE LLC in the amount of $1,388,000 and repaid DE LLC $707,766. As of December 31, 2017 and 2016, Dolphin Films owed DE LLC $1,708,874 and $684,326, respectively, that was recorded on the consolidated balance sheets. Dolphin Films recorded interest expense of $155,852 and $83,551, respectively, for the years ended December 31, 2017 and 2016. As discussed in Note 9, the Company signed a promissory note and received $150,000 from an entity, of which Allan Mayer, director and employee of the Company, is the trustee. The promissory note and accrued interest were repaid on December 18, 2017.

11. FAIR VALUE MEASUREMENTS

11. FAIR VALUE MEASUREMENTS	12 Months Ended
	Dec. 31, 2017
Fair Value Measurements
11. FAIR VALUE MEASUREMENTS	NOTE 11 — FAIR VALUE MEASUREMENTS Warrants During 2016, the Company issued Series G, H, I, J and K Common Stock warrants (the “Warrants”) which are accounted for as derivatives (see Note 17), and for which a liability is recorded in the aggregate and measured at fair value in the consolidated balance sheets on a recurring basis, and the change in fair value from one reporting period to the next is reported as income or expense in the consolidated statements of operations. On March 31, 2017, Warrants J and K were exercised. The Company records the fair value of the liability in the consolidated balance sheets under the caption “Warrant liability” and records changes to the liability against earnings or loss under the caption “Changes in fair value of warrant liability” in the consolidated statements of operations. The carrying amounts at fair value of the aggregate liability for the Warrants recorded on the consolidated balance sheet as of December 31, 2017 and 2016 were $1,441,831 and $20,405,190. Due to the change in the fair value of the Warrant Liability for the period in which the Warrants were outstanding during the years ended December 31, 2017 and 2016, the Company recorded gains on the change in fair value of the warrant liability on its statements of operations of $9,018,359 and $2,195,542, respectively. Warrants outstanding at December 31, 2016 had the following terms: Issuance Number of Initial Per Initial Term Expiration Series G Warrants November 4, 2016 750,000 $ 10.00 1.2 January 31, 2018 Series H Warrants November 4, 2016 250,000 $ 12.00 2.2 January 31, 2019 Series I Warrants November 4, 2016 250,000 $ 14.00 3.2 January 31, 2020 Series J Warrants December 29, 2016 1,085,000 $ 0.03 4 December 29, 2020 Series K Warrants December 29, 2016 85,000 $ 0.03 4 December 29, 2020 Warrants outstanding at December 31, 2017 had the following terms: Issuance Number of Per Share Exercise Remaining Term Expiration Series G Warrants November 4, 2016 750,000 $ 4.12 1.08 January 31, 2019 Series H Warrants November 4, 2016 250,000 $ 4.12 1.08 January 31, 2019 Series I Warrants November 4, 2016 250,000 $ 4.12 2.08 January 31, 2020 The Series G Warrant was amended and restated subsequent to December 31, 2017 and the maturity date was extended to January 31, 2019. January 31, 2019 was used as the one of the key inputs to the Monte Carlo Simulation Model for the year ended December 31, 2017. The Warrants have an adjustable exercise price due to a full ratchet antidilution provision, which would result in a downward adjustment to the exercise price in the event the Company issues Common Stock for a price per share less than the exercise price of the Warrants in effect immediately prior to the financing. Due to the existence of the full ratchet antidilution provision, which creates a path-dependent nature of the exercise prices of the Warrants, the Company concluded it is necessary to measure the fair value of the Warrants using a Monte Carlo Simulation model, which incorporates inputs classified as “level 3” according to the fair value hierarchy in ASC 820, Fair Value. In general, level 3 assumptions utilize unobservable inputs that are supported by little or no market activity in the subject instrument and that are significant to the fair value of the liabilities. The unobservable inputs the Company utilizes for measuring the fair value of the Warrant liability reflects management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. The Company’s management determined the fair value of the warrant liability as of December 31, 2016 by using the following key inputs to the Monte Carlo Simulation model: Inputs Series G Series H Series I Series J Series K Volatility (1) 63.6 % 79.1 % 70.8 % 65.8 % 65.8 % Expected term (years) 1.08 2.08 3.08 4 4 Risk free interest rate .879 % 1.223 % 1.489 % 1.699 % 1.699 % Common stock price $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 Exercise price $ 10.00 $ 12.00 $ 14.00 $ 0.03 $ 0.03 The Company determined the fair values of the Warrants by using the following key inputs to the Monte Carlo Simulation model at December 31, 2017: Inputs Series G Series H Series I Volatility (1) 68.3 % 68.3 % 67.1 % Expected term (years) 1.08 1.08 2.08 Risk free interest rate 1.771 % 1.771 % 1.898 % Common stock price $ 3.60 $ 3.60 $ 3.60 Exercise price $ 4.12 $ 4.12 $ 4.12 (1) The stock volatility assumption represents the range of the volatility curves used in the valuation analysis that the Company has determined market participants would use based on comparison with similar entities. The risk-free interest rate is interpolated where appropriate, and is based on treasury yields. The valuation model also included a level 3 assumption as to dates of potential future financings by the Company that may cause a reset of the exercise price. Because derivative financial instruments are initially and subsequently carried at fair values, the Company’s income or loss will reflect the volatility in changes to these estimates and assumptions. The fair value is most sensitive to changes at each valuation date in the Company’s Common Stock price, the volatility rate assumption, and the exercise price, which could change if the Company were to do a dilutive future financing. For the Warrants, which measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from December 31, 2016 to December 31, 2017: Warrants “G”, “H” and “I” Warrants “J” and “K” Total Beginning fair value balance reported in the consolidated balance sheet at December 31, 2016 $ 6,393,936 $ 14,011,254 $ 20,405,190 Change in fair value (gain) reported in the statements of operations (4,952,105 ) (4,066,254 ) (9,018,359 ) Exercise of “J” and “K” Warrants — (9,945,000 ) (9,945,000 ) Ending fair value balance reported in the consolidated balance sheet at December 31, 2017 $ 1,441,831 $ — $ 1,441,831 On December 26, 2017, the Company issued 1,300,050 warrants as part of the unit in the 2017 Public Offering. The warrants, which measured at fair value categorized within Level 1 of the fair value hierarchy, were valued using the closing market price for the warrants of $0.40 per warrant. The warrants are classified as equity and subsequent fair value measurements are not required. Put Rights In connection with the 42West Acquisition (see Note 4), on March 30, 2017, the Company entered into Put Agreements with each of the sellers. Pursuant to the terms and subject to the conditions set forth in the Put Agreements, the Company has granted the sellers the right, but not obligation, to cause the Company to purchase up to an aggregate of 1,187,094 of their shares of Common Stock received as Stock Consideration for a purchase price equal to $9.22 per share during certain specified exercise periods set forth in the Put Agreements up until December 2020 (the “Put Rights”). This includes the put rights allowable for the Earn Out Consideration that was achieved during the year ended December 31, 2017. During the year months ended December 31, 2017, the sellers exercised their Put Rights, in accordance with the Put Agreements, and caused the Company to purchase 132,859 shares of Common Stock for an aggregate amount of $1,225,000. The Company records the fair value of the liability in the consolidated balance sheets under the caption “Put Rights” and records changes to the liability against earnings or loss under the caption “Changes in fair value of put rights and contingent consideration” in the consolidated statements of operations. The fair value of the Put Rights on the date of acquisition was $3,800,000. The carrying amount at fair value of the aggregate liability for the Put Rights recorded on the consolidated balance sheet at December 31, 2017 is $6,226,010. Due to the change in the fair value of the Put Rights for the period in which the Put Rights were outstanding during the year ended December 31, 2017, the Company recorded a loss of $2,426,010 on the change in fair value of the put rights in the consolidated statement of operations. The Company utilized the Black-Scholes Option Pricing Model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement as defined in ASC 820. The unobservable inputs utilized for measuring the fair value of the Put Rights reflect management’s own assumptions about the assumptions that market participants would use in valuing the Put Rights as of the acquisition date and December 31, 2017. The Company determined the fair value by using the following key inputs to the Black-Scholes Option Pricing Model: Inputs On the date (March 30, As of Equity Volatility estimate 75 % 105.0 % Discount rate based on US Treasury obligations 0.12% - 1.70 % 1.50% - 1.99 % For the Put Rights, which measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from the date of acquisition (March 30, 2017) to December 31, 2017: Beginning fair value balance on the Acquisition Date (March 30, 2017) $ 3,800,000 Change in fair value (loss) reported in the statements of operations 2,426,010 Ending fair value balance reported in the consolidated balance sheet at December 31, 2017 $ 6,226,010 Contingent Consideration In connection with the 42West acquisition (see Note 4), the seller have the potential to earn up to $9,333,333 (1,012,292 shares of Common Stock) on achievement of adjusted EBITDA targets (as defined in the Purchase Agreement) based on the operations of 42West over the three-year period beginning January 1, 2017 (the “Contingent Consideration”). The Company records the fair value of the liability in the consolidated balance sheets under the caption “Contingent Consideration” and records changes to the liability against earnings or loss under the caption “Changes in fair value of put rights and contingent consideration” in the consolidated statements of operations. The fair value of the Contingent Consideration on the date of acquisition was $3,627,000. The sellers of 42West achieved the adjusted EBITDA targets based on the operations of 42West during the year ended December 31, 2017. As a result, the contingent consideration of $9,333,333 was earned. The number of shares to be issued for the contingent consideration is determined by dividing the $9,333,333 by $9.22, which was the per share price of the Common Stock used for determining the consideration payable in connection with the 42West Acquisition. The Company will issue a total of 1,012,292 shares of Common Stock over a period of three years. Based on closing market price of the Company’s common stock on December 29, 2017 of $3.60, the Company recorded $3,644,251 in equity and reduced its liability by the same amount to account for the contingent consideration being earned. For its initial measurement of fair value, the Company utilized a Monte Carlo Simulation model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement as defined in ASC 820. The unobservable inputs utilized for measuring the fair value of the Contingent Consideration reflect management’s own assumptions about the assumptions that market participants would use in valuing the Contingent Consideration as of the acquisition date. The Company determined the fair value on the date of acquisition by using the following key inputs to the Monte Carlo Simulation Model: Inputs On the date (March 30, Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration) 1.03% -1.55 % Annual Asset Volatility Estimate 72.5 % Estimated EBITDA $3,600,000 - $3,900,000 For the Contingent Consideration, which measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from the date of acquisition (March 30, 2017) to December 31, 2017: Beginning fair value balance on the Acquisition Date (March 30, 2017) $ 3,627,000 Change in fair value (gain) reported in the statements of operations 17,251 Additional paid in capital 3,644,251 Ending fair value balance reported in the consolidated balance sheet at December 31, 2017 $ —

12. LICENSING AGREEMENTS - RELA

12. LICENSING AGREEMENTS - RELATED PARTY	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
12. LICENSING AGREEMENTS - RELATED PARTY	NOTE 12 — LICENSING AGREEMENT - RELATED PARTY In 2008, the Company has entered into a ten-year licensing agreement with DE LLC, a related party. Under the license, the Company is authorized to use DE LLC’s brand properties in connection with the creation, promotion and operation of subscription based internet social networking websites for children and young adults. The license requires that the Company pays to DE LLC royalties at the rate of fifteen percent of net sales from performance of the licensed activities. The Company did not use any of the brand properties related to this agreement and as such, there was no royalty expense for the years ended December 31, 2017 and 2016.

13. DEFERRED REVENUE

13. DEFERRED REVENUE	12 Months Ended
	Dec. 31, 2017
Deferred Revenue [Abstract]
13. DEFERRED REVENUE	NOTE 13 — DEFERRED REVENUE During the year ended December 31, 2014, the Company entered into agreements with various entities for the international distribution rights of a motion picture that was in production. As required by the distribution agreements, the Company received $1,418,368 of deposits for these rights that was recorded as deferred revenue on its consolidated balance sheet. During the year ended December 31, 2016, the Company delivered the motion picture to various international distributors and recorded $1,371,687 of revenue from production from these deposits. As of December 31, 2017 and 2016, respectively, the Company has a balance of $48,449 and $46,681 as deferred revenue on its consolidated balance sheets.

14. VARIABLE INTEREST ENTITIES

14. VARIABLE INTEREST ENTITIES	12 Months Ended
	Dec. 31, 2017
Variable Interest Entities
14. VARIABLE INTEREST ENTITIES	NOTE 14 — VARIABLE INTEREST ENTITIES VIEs are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses or the right to receive the residual returns of the entity. The most common type of VIE is a special-purpose entity (“SPE”). SPEs are commonly used in securitization transactions in order to isolate certain assets, and distribute the cash flows from those assets to investors. The legal documents that govern the transaction specify how the cash earned on the assets must be allocated to the SPE’s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE’s, assets by creditors of other entities, including the creditors of the seller of the assets. The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of an entity that most significantly impact the VIE’s economic performance; and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. To assess whether the Company has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and derivative or other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. The Company performs ongoing reassessments of (1) whether entities previously evaluated under the majority voting-interest framework have become VIEs, based on certain triggering events, and therefore would be subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding the Company’s involvement with a VIE cause the Company’s consolidation conclusion to change. The consolidation status of the VIEs with which the Company is involved may change as a result of such reassessments. Changes in consolidation status are applied prospectively with assets and liabilities of a newly consolidated VIE initially recorded at fair value unless the VIE is an entity which was previously under common control, which in that case is consolidated based historical cost. A gain or loss may be recognized upon deconsolidation of a VIE depending on the carrying amounts of deconsolidated assets and liabilities compared to the fair value of retained interests and ongoing contractual arrangements. The Company evaluated certain entities in which it did not have a majority voting interest and determined that it had (1) the power to direct the activities of the entities that most significantly impact their economic performance and (2) had the obligation to absorb losses or the right to receive benefits from these entities. As such the financial statements of Max Steel Productions, LLC and JB Believe, LLC are consolidated in the balance sheets as of December 31, 2017 and 2016, and in the statements of operations and statements of cash flows presented herein for the years ended December 31, 2017 and 2016. These entities were previously under common control and have been accounted for at historical costs for all periods presented. Max Steel Productions LLC As of and for the years ended December 31, JB Believe LLC As of and for the years ended December 31, (in USD) 2017 2016 2017 2016 Assets 8,716,184 12,327,887 — 240,269 Liabilities (12,011,149 ) (15,922,552 ) (6,743,278 ) (7,014,098 ) Revenues 5,889,003 9,233,520 65,112 133,331 Expenses (5,589,303 ) (11,627,444 ) (34,561 ) (395,374 ) Max Steel Productions LLC was initially formed for the purpose of recording the production costs of the motion picture Max Steel. As of December 31, 2017 and 2016, the Company had a balance in capitalized production costs of $833,145 and $4,189,930, respectively, and a balance of $1,821,970, net of allowance for doubtful accounts of $227,280 and $3,668,646, respectively, in accounts receivable related to Max Steel. Max Steel Max Steel As of December 31, 2017 and 2016, there were outstanding balances of $2,086,249 and $6,243,069, respectively, related to this debt. JB Believe LLC, an entity owned by Believe Film Partners LLC, of which the Company owns a 25% membership interest, was formed for the purpose of recording the production costs of the motion picture “ Believe Believe

15. STOCKHOLDERS' EQUITY (DEFIC

15. STOCKHOLDERS' EQUITY (DEFICIT)	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
15. STOCKHOLDERS' EQUITY (DEFICIT)	NOTE 15 — STOCKHOLDERS’ EQUITY (DEFICIT) A. Preferred Stock The Company’s Amended and Restated Articles of Incorporation authorize the issuance of 10,000,000 shares of preferred stock. The Board of Directors has the power to designate the rights and preferences of the preferred stock and issue the preferred stock in one or more series. On February 23, 2016, the Company amended its Articles of Incorporation to designate 1,000,000 preferred shares as “Series C Convertible Preferred Stock” with a $0.001 par value which may be issued only to an “Eligible Series C Preferred Stock Holder”. On May 9, 2017, the Board of Directors of the Company approved the amendment of the Company’s articles of incorporation to reduce the designation of Series C Convertible Preferred Stock to 50,000 shares with a $0.001 par value. The amendment was approved by the Company’s shareholders on June 29, 2017 and the Company filed Amended and Restated Articles of Incorporation with the State of Florida (‘the Second Amended and Restated Articles of Incorporation”) on July 6, 2017. Pursuant to the Second Amended and Restated Articles of Incorporation, each share of Series C Convertible Preferred Stock will be convertible into one share of common stock (one half of a share post-split), subject to adjustment for each issuance of common stock (but not upon issuance of common stock equivalents) that occurred, or occurs, from the date of issuance of the Series C Convertible Preferred Stock (the “issue date”) until the fifth (5th) anniversary of the issue date (i) upon the conversion or exercise of any instrument issued on the issued date or thereafter issued (but not upon the conversion of the Series C Convertible Preferred Stock), (ii) upon the exchange of debt for shares of common stock, or (iii) in a private placement, such that the total number of shares of common stock held by an “Eligible Class C Preferred Stock Holder” (based on the number of shares of common stock held as of the date of issuance) will be preserved at the same percentage of shares of common stock outstanding held by such Eligible Class C Preferred Stock Holder on such date. An Eligible Class C Preferred Stock Holder means any of (i) DE LLC for so long as Mr. O’Dowd continues to beneficially own at least 90% and serves on the board of directors or other governing entity, (ii) any other entity in which Mr. O’Dowd beneficially owns more than 90%, or a trust for the benefit of others, for which Mr. O’Dowd serves as trustee and (iii) Mr. O’Dowd individually. Series C Convertible Preferred Stock will only be convertible by the Eligible Class C Preferred Stock Holder upon the Company satisfying one of the “optional conversion thresholds”. Specifically, a majority of the independent directors of the Board, in its sole discretion, must have determined that the Company accomplished any of the following (i) EBITDA of more than $3.0 million in any calendar year, (ii) production of two feature films, (iii) production and distribution of at least three web series, (iv) theatrical distribution in the United States of one feature film, or (v) any combination thereof that is subsequently approved by a majority of the independent directors of the Board based on the strategic plan approved by the Board. While certain events may have occurred that could be deemed to have satisfied this criteria, the independent directors of the Board have not yet determined that an optional conversion threshold has occurred. Except as required by law, holders of Series C Convertible Preferred Stock will only have voting rights once the independent directors of the Board determine that an optional conversion threshold has occurred. Only upon such determination, will the Series C Convertible Preferred Stock be entitled or permitted to vote on all matters required or permitted to be voted on by the holders of common stock and will be entitled to that number of votes equal to three votes for the number of Conversion Shares (as defined in the Certificate of Designation) into which such Holder’s shares of the Series C Convertible Preferred Stock could then be converted. The Certificate of Designation also provides for a liquidation value of $0.001 per share and dividend rights of the Series C Convertible Preferred Stock on parity with the Company’s Common Stock. Effective July 6, 2017, the Company amended its Articles of Incorporation to among other things cancel previous designations of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock B. Common Stock The Company’s Articles of Incorporation previously authorized the issuance of 200,000,000 shares of Common Stock. 250,000 shares had been designated for the 2012 Omnibus Incentive Compensation Plan (the “2012 Plan”). Shares issuable under the 2012 Plan were not registered pursuant to a registration statement on Form S-8 and, consequently, no awards were granted. under the 2012 Plan. On June 29, 2017, the shareholders of the Company approved the 2017 Plan that replaced the 2012 Plan. Effective February 23, 2016, the Company amended its Amended Articles of Incorporation to increase the number of authorized shares of its Common Stock from 200,000,000 to 400,000,000. Effective September 14, 2017, the Company amended its Amended and Restated Articles of Incorporation to effectuate a 1:2 reverse stock split. As a result, the number of authorized shares of Common Stock was reduced from 400,000,000 to 200,000,000 shares. On February 5, 2016, the Company issued 316,400 shares of Common Stock, at a post-split price of $10.00 per share, in connection with the conversion of the debt per the terms of the convertible debt agreement entered into on December 7, 2015. See Note 9 for further discussion. On March 4, 2016, the Company issued 307,341 shares of Common Stock in connection with a subscription agreement entered into with Dolphin Entertainment LLC for debt and interest on its revolving promissory note. The debt was converted at a post-split price of $10.00 per share. See Note 10 for further discussion. On March 29, 2016, the Company entered into ten debt exchange agreements to convert $2,883,377 of aggregate principal and accrued interest under certain loan and security agreements into 288,338 shares of Common Stock at a post-split conversion price of $10.00 per share. See Note 8 for further discussion. On April 1, 2016, the Company entered into subscription agreements under substantially identical terms with certain private investors (the “Quarterly Investors”), pursuant to which the Company issued and sold to the Quarterly Investors in a private placement (the “Quarterly Placement”) an aggregate of 537,500 shares (the “Initial Subscribed Shares”) of Common Stock (on a post-split basis), at a post-split purchase price of $10.00 per Share (the “Quarterly Purchase Price”). The Quarterly Placement initially provided $5,375,000 of aggregate gross proceeds to the Company. Under the terms of the Agreements, each Quarterly Investor has the option to purchase additional shares of Common Stock at the Quarterly Purchase Price, not to exceed the number of such Quarterly Investor’s Initial Subscribed Shares, during each of the second, third and fourth quarters of 2016 (each, a “Quarterly Subscription”). To exercise a Quarterly Subscription, a Quarterly Investor must deliver notice to the Company of such election during the first ten business days of the applicable quarter, specifying the number of additional shares of Common Stock such Quarterly Investor elects to purchase. If a Quarterly Investor timely delivers such notice to the Company, then the closing of the sale of the applicable number of additional shares of Common Stock must occur on the last business day of the applicable quarter. On June 28, 2016, the Company received $500,000 and issued 50,000 shares of Common Stock related to these agreements. On October 13, 2016, the Company received $600,000 and issued 60,000 shares of Common Stock related to these agreements. On May 9, 2016, the Company filed Articles of Amendment to its Amended Articles of Incorporation to effectuate a 1 to 20 reverse stock split, as previously approved by the Company’s Board of Directors and a majority of its shareholders. The reverse stock split became effective on May 10, 2016. On May 31, 2016, the Company entered into debt exchange agreements under substantially identical terms with certain investors, pursuant to which the Company issued and sold to such investors in a private placement an aggregate of 473,255 shares of Common Stock, in exchange for the cancellation of $4,732,545 of aggregate principal and accrued interest under certain notes held by such investors, at an exchange rate of $10.00 per share. See Note 8 for further discussion. On June 22, 2016, the Company entered into a subscription agreement with an investor, pursuant to which the Company issued and sold to such investor 25,000 shares of Common Stock at a price of $10.00 per Share. This transaction provided $250,000 in proceeds for the Company. On June 30, 2016, the Company entered into a subscription agreement with an investor, pursuant to which the Company issued and sold to such investor 10,000 shares of Common Stock at a price of $10.00 per Share. This transaction provided $100,000 in proceeds for the Company. On June 30, 2016, the Company, entered into debt exchange agreements under substantially identical terms with certain investors pursuant to which the Company issued and sold to such investors in a private placement an aggregate of 1,276,330 shares of Common Stock, in exchange for the cancellation of $12,763,295 of aggregate principal and accrued interest under certain notes held by such investors, at an exchange rate of $10.00 per share. See Note 8 for further discussion. On June 30, 2016, the Company entered into a substantially identical debt exchange agreement as those entered into on March 29, 2016. Pursuant to the terms of the debt exchange agreement, the Company converted an aggregate of $55,640 principal and interest into 5,564 shares of Common Stock at a conversion price of $10.00 per share. See Note 8 for further discussion. On October 3, 2016, October 13, 2016 and October 27, 2016, the Company entered into three substantially identical debt exchange agreements to issue an aggregate of 33,100 shares of Common Stock at an exchange price of $10.00 per share to terminate three Equity Finance Agreements for a cumulative original investment amount of $331,000. On October 3, 2016, the Company entered into a debt exchange agreement and agreed to issue 12,000 shares of the Common Stock at an exchange price of $10.00 per share to terminate the remaining Kids Club Agreement for (i) $10,000 plus (ii) the original investment of $50,000. On October 13, 2016, the Company entered into six substantially identical subscription agreements, pursuant to which the Company issued 12,500 shares at $10.00 per share and received $125,000. On November 15, 2016, the Company entered into a subscription agreement pursuant to which the Company issued and sold to an investor 50,000 shares of Common Stock at a price of $10.00 per Share. This transaction provided $500,000 in proceeds for the Company. On November 22, 2016, the Company entered into a subscription agreement pursuant to which the Company issued and sold to an investor 5,000 shares of Common Stock at a price of $10.00 per Share. This transaction provided $50,000 in proceeds for the Company. On December 15 and December 20, 2016, the Company entered into two substantially identical subscription agreements with two noteholders to convert an aggregate of $1,265,530 principal and interest on the notes into 126,554 shares of Common Stock at a conversion price of $10.00 per share. See Note 8 for further discussion. On February 16, 2017, the Company entered into a subscription agreement pursuant to which the Company issued and sold to an investor 50,000 shares of Common Stock at a price of $10.00 per share. This transaction provided $500,000 in proceeds for the Company. On March 30, 2017, the Company entered into a Membership Interest Purchase Agreement to acquire a 100% membership interest in 42West. The Company issued 615,140 shares of Common Stock at a price of $9.22 per share related to this transaction. See note 4 for further details on the acquisition. On March 30, 2017, KCF Investments LLC and BBCF 2011 LLC exercised Warrants J and K to purchase 1,085,000 and 85,000, respectively, of shares of Common Stock at a purchase price of $0.03 per share. This transaction provided $35,100 in proceeds for the Company. See note 17 for further discussion. On April 13, 2017, the Company issued the following shares of Common Stock as per the 42West Acquisition agreement; (i) 172,275 to certain designated employees and (ii) 50,000 shares as an estimate for the Purchase Consideration withheld on the date of closing related to the working capital. On April 13, 2017, the Company issued 3,254 shares of Common Stock to a consultant for services rendered during the month ended March 31, 2017. The shares were issued at a purchase price of $9.22 per share. On April 13, 2017, T Squared partially exercised Class E Warrants and acquired 162,885 shares of our common stock pursuant to the cashless exercise provision in the related warrant agreement. T Squared had previously paid down $1,675,000 for these shares. On April 14, 2017, the Principal Sellers of 42West, exercised put options in the aggregate amount of 43,382 shares of Common Stock and were paid an aggregate total of $400,000. On May 13, 2017, the Principal Sellers of 42West exercised put options in the aggregate amount of 32,538 shares of Common Stock and were paid an aggregate total of $300,000 on June 2, 2017. On June 22, 2017, one of the Principal Sellers of 42West exercised a put option for 8,134 shares of Common Stock and was paid $75,000 on July 10, 2017. On August 2, 2017, the Company issued 2,886 shares of Common Stock to a consultant for services rendered during the second quarter of 2017. The shares were issued at a purchase price of $10.00 per share. On August 12 and August 15, 2017 each of the Principal Sellers of 42West exercised put options in the aggregate amount of 32,538 shares of Common Stock and were paid an aggregate total of $300,000 on September 1, 2017. On August 21, 2017, the Company issued 59,320 shares of restricted stock to certain employees pursuant to the 2017 Plan. On September 19 and September 20, 2017, two of the Principal Sellers of 42West exercised put options in the aggregate amount of 16,268 shares of Common Stock and were paid an aggregate of $150,000 on October 10, 2017. On December 26, 2017, the Company sold 1,215,000 shares of common stock as part of unit with 1,215,000 warrants to purchase shares of common stock. The unit was sold for a purchase price of $4.13 per unit and the Company received net proceeds (net after transaction costs and underwriter discount) of $4,511,043.75 On December 10, December 13 and December 19, 2017 each of the Principal Sellers of 42West exercised put option in the aggregate amount of 18,980 shares of Common Stock and were paid an aggregate of $525,000 on January 5, 2018. As of December 31, 2017 and 2016, the Company had 10,565,789 and 7,197,761 shares of Common Stock issued and outstanding, respectively. C. Noncontrolling Interest On May 21, 2012, the Company entered into an agreement with a note holder to form Dolphin Kids Clubs, LLC (“Dolphin Kids Clubs”). Under the terms of the agreement, Dolphin converted an aggregate amount of $1,500,000 in notes payable and received an additional $1,500,000 during the year ended December 31, 2012 for a 25% membership interest in the newly formed entity. The Company holds the remaining 75% and thus controlling interest in Dolphin Kids Clubs. The purpose of Dolphin Kids Clubs is to create and operate online kids clubs for selected charitable, educational and civic organizations. The agreement encompasses kids clubs created between January 1, 2012 and December 31, 2016. It was a “gross revenue agreement” and the Company was responsible for paying all associated operating expenses. On December 29, 2016, as part of a global agreement with the 25% member of Dolphin Kids Clubs, the Company entered into a Purchase Agreement and acquired the 25% noncontrolling interest of Dolphin Kids Clubs. In exchange for the 25% interest, the Company issued Warrant “J” that entitles the warrant holder to purchase shares of common stock at a price of $0.03 per share. See notes 11 and 17 for further discussion of Warrant “J”.

16. EARNINGS (LOSS) PER SHARE

16. EARNINGS (LOSS) PER SHARE	12 Months Ended
	Dec. 31, 2017
Loss Per Share
16. EARNINGS (LOSS) PER SHARE	NOTE 16 — EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted income (loss) per share: Year ended 12/31/2017 12/31/2016 Numerator Net income (loss) attributable to Dolphin Entertainment shareholders $ 6,912,524 $ (37,189,679 ) Preferred stock deemed dividend — (5,227,247 ) Numerator for basic earnings per share 6,912,524 (42,416,926 ) Change in fair value of G, H and I warrants (9,018,359 ) — Numerator for diluted earnings per share $ (2,105,835 ) $ (42,416,926 ) Denominator Denominator for basic EPS - weighted-average shares 9,586,986 4,389,097 Effect of dilutive securities: Warrants 1,021,841 — Denominator for diluted EPS - adjusted weighted-average shares assuming exercise of warrants $ 10,608,828 $ 4,389,097 Basic earnings (loss) per share $ 0.72 $ (9.66 ) Diluted earnings (loss) per share $ (0.20 ) $ (9.66 ) Basic income (loss) per share is computed by dividing income or loss attributable to the shareholders of Common Stock (the numerator) by the weighted-average number of shares of Common Stock outstanding (the denominator) for the period. Diluted earnings per share assume that any dilutive warrants were exercised and any dilutive convertible securities outstanding were converted, with related preferred stock dilution requirements and outstanding Common Stock adjusted accordingly. For warrants that are carried as liabilities at fair value, when exercise is assumed in the denominator for diluted earnings per share, the related change in the fair value of the warrants recognized in the consolidated statements of operations for the period, is added back or subtracted from net income during the period. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share, as the inclusion of any other potential shares outstanding would be anti-dilutive. For the year ended December 31, 2017, the Common Stock that is issuable in January 2018 in connection with the 42West Acquisition was assumed to have been issued on March 30, 2017 at arriving at the denominator for basic earnings per share, since the only contingency for receiving the shares was the passage of time. The Company excluded certain common stock equivalents such as shares issuable for contingent consideration, put rights, convertible promissory notes and employee non-vested share awards in the aggregate amount of 1,169,602, as inclusion would be anti-dilutive. If the convertible promissory notes had been included in the denominator, the numerator would have increased by $34,625 to add back income tax expense related to these convertible promissory notes. For the year ended December 31, 2016, the Company reflected the preferred stock deemed dividend of $5,227,247 related to exchange of Series A for Series B Preferred Stock in the numerator for calculating basic and diluted loss per share, as the loss for holders of Common Stock would be increased by that amount. Due to the net losses reported for the year ended December 31, 2016, dilutive common equivalent shares such as warrants were excluded from the computation of diluted loss per share, as inclusion would be anti-dilutive.

17. WARRANTS

17. WARRANTS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
17. WARRANTS	NOTE 17 — WARRANTS A summary of warrants outstanding at December 31, 2016 and issued exercised and expired during the year ended December 31, 2017 is as follows: Warrants: Shares Weighted Avg. Balance at December 31, 2016 2,945,000 $ 5.98 Issued 1,300,050 4.74 Exercised (1,332,885 ) 1.28 Expired — — Balance at December 30, 2017 2,912,165 $ 4.80 On March 10, 2010, T Squared Investments, LLC (“T Squared”) was issued Warrant “E” for 175,000 shares of the Company at an exercise price of $10.00 per share with an expiration date of December 31, 2012. T Squared can continually pay the Company an amount of money to reduce the exercise price of Warrant “E” until such time as the exercise price of Warrant “E” is effectively $0.004 per share. Each time a payment by T Squared is made to Dolphin, a side letter will be executed by both parties that state the new effective exercise price of Warrant “E” at that time. At such time when T Squared has paid down Warrant “E” to an exercise price of $0.004 per share or less, T Squared shall have the right to exercise Warrant “E” via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. During the years ended December 31, 2010 and 2011, T Squared paid down a total of $1,625,000. During the year ended December 31, 2016, T Squared paid $50,000 for the issuance of Warrants G, H and I as described below. Per the provisions of the Warrant Purchase Agreement, the $50,000 was to reduce the exercise price of Warrant “E”. On April 13, 2017, T Squared exercised 162,885 warrants using the cashless exercise provision, in the warrant agreement and received 162,885 shares of the Common Stock. Since T Squared applied the $1,675,000 that it had previously paid the Company to pay down the exercise price of the warrants, the exercise price for the remaining 12,115 warrants was recalculated and is currently $6.20 per share of Common Stock. T Squared did not make any payments during year ended December 31, 2017 to reduce the exercise price of the warrants. During the year ended December 31, 2012, T Squared agreed to amend a provision in a preferred stock purchase agreement (the “Preferred Stock Purchase Agreement”) dated May 2011 that required the Company to obtain consent from T Squared before issuing any Common Stock below the existing conversion price as defined in the Preferred Stock Purchase Agreement. As a result, the Company has extended the expiration date of Warrant “E” (described above) to September 13, 2015 and on September 13, 2012, the Company issued 175,000 warrants to T Squared (“Warrant “F”) with an exercise price of $10.00 per share. Under the terms of Warrant “F”, T Squared has the option to continually pay the Company an amount of money to reduce the exercise price of Warrant “F” until such time as the exercise price of Warrant “F” is effectively $0.004 per share. At such time, T Squared will have the right to exercise Warrant “F” via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. The Company agreed to extend both warrants until December 31, 2018 with substantially the same terms as herein discussed. T Squared did not make any payments during the year ended December 31, 2017 to reduce the exercise price of the warrants. On September 13, 2012, the Company sold 175,000 warrants with an exercise price of $10.00 per share and an expiration date of September 13, 2015 for $35,000. Under the terms of these warrants, the holder has the option to continually pay the Company an amount of money to reduce the exercise price of the warrants until such time as the exercise price is effectively $0.004 per share. At such time, the holder will have the right to exercise the warrants via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. The Company recorded the $35,000 as additional paid in capital. The Company agreed to extend the warrants until December 31, 2018 with substantially the same terms as herein discussed. The holder of the warrants did not make any payments during the year ended December 31, 2017 to reduce the exercise price of the warrants. On November 4, 2016, the Company issued a Warrant “G”, a Warrant “H” and a Warrant “I” to T Squared (“Warrants “G”, “H” and “I”). A summary of Warrants “G”, “H” and “I” issued to T Squared is as follows: Warrants Number of Shares Exercise Original Exercise Fair Value Fair Value Expiration Warrant “G” 750,000 $ 4.12 $ 10.00 $ 800,750 $ 3,300,671 January 31, 2018 Warrant “H” 250,000 $ 4.12 $ 12.00 267,133 1,524,805 January 31, 2019 Warrant “I” 250,000 $ 4.12 $ 14.00 373,948 1,568,460 January 31, 2020 1,250,000 $ 1,441,831 $ 6,393,936 The Warrants “G”, “H” and “I” each contain an antidilution provision which in the event the Company sells grants or issues any shares, options, warrants, or any instrument convertible into shares or equity in any form below the then current exercise price per share of the Warrants “G”, “H” and “I”, then the then current exercise price per share for the warrants that are outstanding will be reduced to such lower price per share. Under the terms of the Warrants “G”, “H” and “I”, T Squared has the option to continually pay the Company an amount of money to reduce the exercise price of any of Warrants “G”, “H” and “I” until such time as the exercise price of Warrant “G”, “H” and/or “I” is effectively $0.02 per share. The Common Stock issuable upon exercise of Warrants “G”, “H” and “I” are not registered and will contain a restrictive legend as required by the Securities Act. At such time when the T Squared has paid down the warrants to an exercise price of $0.02 per share or less T Squared will have the right to exercise the Warrants “G”, “H” and “I” via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. On March 30, 2016, the Company issued shares of Common Stock at a purchase price of $9.22 per share related to the acquisition of 42West (note 4). As a result, the exercise price of each of Warrants “G”, “H” and “I” were reduced to $9.22. On December 26, 2017, the Company issued shares of Common Stock, with a warrant, (the “Unit”) for a purchase price of $4.13, pursuant to an S-1 Registration Statement filed by the Company. As a result, the exercise price of each of Warrants “G”, “H” and “I” were reduced to $4.12. Due to the existence of the antidilution provision, the Warrants “G”, “H” and “I” are carried in the consolidated financial statements as of December 31, 2017 and 2016 as derivative liabilities at fair value (see note 11). On December 29, 2016, in connection with the purchase by the Company of 25% of the outstanding membership interests of Dolphin Kids Club, LLC, the termination of an Equity Finance Agreement and the debt exchange of First Loan and Security Notes, Web Series Notes and Second Loan and Security Notes (See note 8), the Company issued Warrant “J” and Warrant “K” (Warrants “J” and “K”) to the seller. Each of the Warrants “J” and “K” had an exercise price of $0.03 per share and an expiration date of December 29, 2020. The Warrants “J” and “K” each contained an antidilution provision that in the event the Company sells grants or issues any shares, options, warrants, or any instrument convertible into shares or equity in any form below the current exercise price per share of Warrants “J” and “K”, then the current exercise price per share for the Warrants “J” and “K” that are outstanding will be reduced to such lower price per share. The Common Stock issuable upon exercise of Warrants “J” and “K” are not registered and will contain a restrictive legend as required by the Securities Act. At such time as the exercise price is $0.01 per share or less, the holder will have the right to exercise the Warrants “J” and “K” via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. Due to the existence of the antidilution provision, the Warrants “J” and “K” were carried in the consolidated balance sheet as of December 31, 2016 as derivative liabilities at a fair value of $12,993,342 for Warrant “J” and $1,017,912 for Warrant “K” (see note 11). On March 30, 2017, the holders of Warrants J and K exercised their warrants and were issued 1,170,000 shares of Common Stock. The Company received $35,100 of proceeds from the transaction. As discussed above, the Company sold 1,215,000 Units that each contained one (1) Common Stock and one (1) warrant to purchase shares of Common Stock at a purchase price of $4.74. 85,050 warrants were also issued to the underwriter of the Offering to purchase up to 85,050 shares of Common Stock at purchase price of $4.74. The Company determined that each of these warrants should be classified as equity and valued the warrants on the date of issuance using the closing market price for the warrants on December 26, 2017 of $0.40 per warrant. The fair value of the warrants was recorded in additional paid in capital.

18. RELATED PARTY TRANSACTIONS

18. RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
18. RELATED PARTY TRANSACTIONS	NOTE 18 — RELATED PARTY TRANSACTIONS On December 31, 2014, the Company and its CEO renewed his employment agreement for a period of two years commencing January 1, 2015. The agreement stated that the CEO was to receive annual compensation of $250,000 plus bonus. In addition, the CEO was entitled to an annual discretionary bonus as determined by the Company’s Board of Directors. The CEO was eligible to participate in all of the Company’s benefit plans offered to its employees. As part of his agreement, he received a $1,000,000 signing bonus in 2012 that is recorded in accrued compensation on the consolidated balance sheets. Any unpaid and accrued compensation due to the CEO under this agreement will accrue interest on the principal amount at a rate of 10% per annum from the date of this agreement until it is paid. The agreement included provisions for disability, termination for cause and without cause by the Company, voluntary termination by executive and a non-compete clause. The Company accrued $2,500,000 and $2,250,000 of compensation as accrued compensation and $971,809 and $735,211 of interest in other current liabilities on its consolidated balance sheets as of December 31, 2017 and 2016, respectively, in relation to Mr. O’Dowd’s employment. The Company recorded interest expense related to accrued compensation of $236,598 and $212,066, respectively, for the years ended December 31, 2017 and 2016 on the consolidated statements of operations. On October 14, 2015, the Company and Merger Subsidiary, a wholly owned subsidiary of the Company, entered into a merger agreement with Dolphin Films and DE LLC, both entities owned by a related party. Pursuant to the Merger Agreement, Merger Subsidiary agreed to merge with and into Dolphin Films with Dolphin Films surviving the Merger. As a result, during the year ended December 31, 2016, the Company acquired Dolphin Films. As consideration for the Merger, the Company issued 2,300,000 shares of Series B Convertible Preferred Stock (“Series B”), par value $0.10 per share, and 50,000 shares of Series C Convertible Preferred Stock, par value $0.001 per share to DE LLC. On March 30, 2017, in connection with the 42West Acquisition, the Company and Mr. O’Dowd, as personal guarantor, entered into four separate Put Agreements with each of the Sellers of 42West, pursuant to which the Company has granted each of the Sellers the right to cause the Company to purchase up to an aggregate of 1,187,094 of their shares of Common Stock received as Consideration for a purchase price equal to $9.22 per share during certain specified exercise periods up until December 2020, including the put rights allowable for the Earn Out Consideration achieved during the year ended December 31 ,2017. Pursuant to the terms of one such Put Agreement between Mr. Allan Mayer, a member of the board of directors of the Company, and the Company, Mr. Mayer exercised Put Rights and caused the Company to purchase 32,538 shares of Common Stock at a purchase price of $9.22 for an aggregate amount of $300,000, during the period between March 30, 2017 (42West Acquisition date) and December 31, 2017. On December 10, 2017, Mr. Mayer, provided the Company with an Put Exercise Notice for 18,980 shares and was paid $175,000 on January 5, 2018. On March 30, 2017, KCF Investments LLC and BBCF 2011 LLC, entities under the common control of Mr. Stephen L Perrone, an affiliate of the Company, exercised Warrants “J” and “K” and were issued an aggregate of 1,170,000 shares of the Company’s Common Stock at an exercise price of $0.03 per share. As discussed on note 9, on September 20, 2017, the Company signed a promissory, with a term of one year, and received $150,000 in proceeds from Mr. Mayer. On December 18, 2017, the Company repaid the principal balance and accrued interest in the aggregate amount of $151,875. On December 26, 2017, the following related parties purchased Units in the Company offering (a) Mr. O’Dowd purchased 88,500 Units; (b) Mr. Mayer purchased 60,000 Units and (c) Mr. Nicholas Stanham, Director of the Company purchased 12,100 Units.

19. SEGMENT INFORMATION

19. SEGMENT INFORMATION	12 Months Ended
	Dec. 31, 2017
Deferred compensation expense
19. SEGMENT INFORMATION	NOTE 19 — SEGMENT INFORMATION As a result of the 42West Acquisition (see Note 4), the Company has determined that as of the second quarter of 2017, it operates in two reportable segments, the Entertainment Publicity Division (“EPD”) and the Content Production Division (“CPD”). The EPD segment is comprised of 42West and provides clients with diversified services, including public relations, entertainment content marketing and strategic marketing consulting. CPD is comprised of Dolphin Entertainment, Dolphin Films, and Dolphin Digital Studios and specializes in the production and distribution of digital content and feature films. The profitability measure employed by our chief operating decision maker for allocating resources to operating divisions and assessing operating division performance is operating income (loss). Salaries and related expenses include salaries, bonus, commission and other incentive related expenses. Legal and professional expenses primarily include professional fees related to financial statement audits, legal, investor relations and other consulting services, which are engaged and managed by each of the segments. In addition, general and administrative expenses include rental expense and depreciation of property, equipment and leasehold improvements for properties occupied by corporate office employees. In connection with the 42West Acquisition, the Company assigned $9,110,000 of intangible assets, less the amortization during the nine months between the 42West Acquisition date (March 30, 2017) and December 31, 2017 of $973,781, Goodwill of $12,778,860 and Favorable lease intangible asset in the amount of $440,000 less amortization in the amount of $69,474 to the EPD segment. Information presented for the EPD segment is for the period between the 42West Acquisition date (March 30, 2017) and December 31, 2017. Year ended December 31, 2017 Revenue: EPD $ 16,458,929 CPD 5,954,115 Total $ 22,413,044 Segment operating income (loss): EPD $ 2,071,713 CPD (3,176,639 ) Total (1,104,926 ) Interest expense (1,594,940 ) Other income, net 9,951,257 Income before income taxes $ 7,251,391 As of Total assets: EPD $ 26,743,013 CPD 6,854,130 Total $ 33,597,143

20. INCOME TAXES

20. INCOME TAXES	12 Months Ended
	Dec. 31, 2017
Income Tax Disclosure [Abstract]
20. INCOME TAXES	NOTE 20 — INCOME TAXES Income Tax Expense (Benefit) is as follows: December 31, 2017 2016 Current Income Tax Expense (Benefit) Federal $ — $ — State 151,330 — $ 151,330 $ — Deferred Income Tax Expense (Expense) Federal $ 1,799,157 $ (10,854,954 ) ) Federal – Tax Reform 6,049,711 — State (38,910 ) (817,631 ) $ 7,809,958 $ (11,672,585 ) Change in Valuation Allowance (Benefit) Federal $ (7,661,331 ) $ 10,854,954 State 38,910 817,631 $ (7,622,421 ) $ 11,672,585 Income Tax Expense $ 338,867 $ — At December 31, 2017 and 2016, the Company had deferred tax assets and liabilities as a result of temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax values at December 31, 2017 and 2016, are as follows: December 31, 2017 2016 Deferred Tax Assets: Accrued Expenses $ 299,855 $ 177,447 Interest Expense 730,022 329,942 Deferred Rent 114,128 3,418 Accrued Compensation 653,375 829,051 Amortization 132,219 — Other 183,524 — Put Options 638,547 — Capitalized Web Costs 563,596 795,318 Capitalized Production Costs 53,299 1,019,784 Charitable Contributions 273,982 388,644 Net Operating Losses and Credits 8,560,117 16,364,744 Total Deferred Tax Assets $ 12,202,664 $ 19,908,348 Deferred Tax Liability: Fixed Assets (110,049 ) (5,775 ) Total Deferred Tax Liabilities (110,049 ) (5,775 ) Subtotal 12,092,615 ) 19,902,573 Valuation Allowance (12,280,152 ) (19,902,573 ) Net Deferred taxes $ (187,537 ) $ — As of December 31, 2017, the Company has approximately $34,200,000 of net operating loss carryforwards for U.S. federal income tax purposes that begin to expire in 2028. Additionally, the Company has approximately $25,200,000 of net operating loss carryforwards for Florida state income tax purposes that begin to expire in 2029 and approximately $561,800 of California net operating loss carryforwards that begin to expire in 2032. In assessing the ability to realize the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax asset is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. Management believes it is more likely than not that the deferred tax asset will not be realized and has recorded a net valuation allowance of $13,980,219 and $19,902,573 as of December 31, 2017 and 2016, respectively. The Company has $187,537 of Federal income tax expense for the year ended December 31, 2017 and no federal income tax expense or benefit for the year ended December 31, 2016. The Company has 2017 2016 Federal Statutory Tax Rate 34.0 % (34.0 )% Permanent Items Affecting Tax Rate (45.6 )% 4.9 % State Income Taxes, Net of Federal Income Tax Benefit (0.6 )% (2.2 )% Change in State Tax Rate 3.3 % 0.2 % Return to Provision Adjustment 1.3 % (0.1 )% Other 0.3 % (0.2 )% Change in Valuation Allowance (80.4 )% 31.4 % Tax Reform Tax Rate Change 92.3 % — Effective Tax Rate 4.6 % 0.00 % As of December 31, 2017 and 2016, the Company does not have any material unrecognized tax benefits and accordingly has not recorded any interest or penalties related to unrecognized tax benefits. The Company does not believe that unrecognized tax benefits will significantly change within the next twelve months. The Company and its subsidiaries file Federal, Florida, California, North Carolina, New York State and New York City income tax returns. These returns remain subject to examination by taxing authorities for all years after December 31, 2013. Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the basis of certain assets and liabilities for financial and tax reporting. The deferred taxes represent the future tax consequences of those differences, which will either be deductible or taxable when the assets and liabilities are recovered or settled. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act of 2017 tax reform legislation (“the Act”). The Act makes significant changes to tax law including a reduction in the corporate tax rates, increased ability to use bonus depreciation, reduced deductibility for meals and entertainment related expenses, changes to net operating loss carryforwards and carrybacks and a repeal of the corporate alternative minimum tax. The legislation reduced the corporate tax rate from the current gradual rate of 34% to a flat rate of 21%. As a result of the enacted law, the Company was required to revalue its deferred tax assets and liabilities at the enacted rate, reducing the pre-valuation allowance net deferred tax asset by approximately $6,800,000. The tax expense of this re-measurement of deferred tax assets is offset by an equal and offsetting decrease to the valuation allowance. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, we have made reasonable estimates of the effects and recorded provisional amounts in our financial statements as of December 31, 2017. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018. Provisional amounts for the following income tax effects of the Tax Act have been recorded as of December 31, 2017 and are subject to change during 2018.

21. LEASES

21. LEASES	12 Months Ended
	Dec. 31, 2017
Leases [Abstract]
21. LEASES	NOTE 21 — LEASES 42West is obligated under an operating lease agreement for office space in New York, expiring in December 2026. The lease is secured by a standby letter of credit amounting to $677,354, and provides for increases in rent for real estate taxes and building operating costs. The lease also contains a renewal option for an additional five years. 42West is obligated under an operating lease agreement for office space in California, expiring in December 2021. The lease is secured by a cash security deposit of $44,788 and a standby letter of credit amounting to $100,000 at December 31, 2017. The lease also provides for increases in rent for real estate taxes and operating expenses, and contains a renewal option for an additional five years, as well as an early termination option effective as of February 1, 2019. Should the early termination option be executed, the Company will be subject to a termination fee in the amount of approximately $637,000. The Company does not expect to execute such option. On November 1, 2011, the Company entered into a 60 month lease agreement for office space in Miami with an unrelated party. The lease expired on October 31, 2016 and the Company extended the lease until June 30, 2018 with substantially the same terms as the original lease. On June 1, 2014, the Company entered into a 62 month lease agreement for office space in Los Angeles, California. The monthly rent is $13,746 with annual increases of 3% for years 1-3 and 3.5% for the remainder of the lease. The Company is also entitled to four half months of free rent over the life of the agreement. On June 1, 2017, the Company entered into an agreement to sublease the office space in Los Angeles, California. The sublease is effective June 1, 2017 through July 31, 2019 and the Company will receive (i) $14,891.50 per month for the first twelve months, with the first two months of rent abated and (ii) $15,338.25 per month for the remainder of the sublease. Lease Payments Future minimum payments for operating leases in effect at December 31, 2017 were as follows: 2018 $ 1,348,560 2019 1,326,535 2020 1,433,403 2021 1,449,019 2022 912,864 Thereafter 3,762,980 Total $ 10,233,361 Rent expense for the years ended December 31, 2017 and 2016 was $1,314,502 and $220,426, respectively.

22. COMMITMENTS AND CONTINGENCI

22. COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
22. COMMITMENTS AND CONTINGENCIES	NOTE 22 — COMMITMENTS AND CONTINGENCIES Litigation On or about January 25, 2010, an action was filed by Tom David against Winterman Group Limited, Dolphin Digital Media (Canada) Ltd., Malcolm Stockdale and Sara Stockdale in the Superior Court of Justice in Ontario (Canada) alleging breach of a commercial lease and breach of a personal guaranty. On or about March 18, 2010, Winterman Group Limited, Malcolm Stockdale and Sara Stockdale filed a Statement of Defense and Crossclaim. In the Statement of Defense, Winterman Group Limited, Malcolm Stockdale and Sara Stockdale denied any liability under the lease and guaranty. In the Crossclaim filed against Dolphin Digital Media (Canada) Ltd., Winterman Group Limited, Malcolm Stockdale and Sara Stockdale seek contribution or indemnity against Dolphin Digital Media (Canada) Ltd. alleging that Dolphin Digital Media (Canada) agreed to relieve Winterman Group Limited, Malcolm Stockdale and Sara Stockdale from any and all liability with respect to the lease or the guaranty. On or about March 19, 2010, Winterman Group Limited, Malcolm Stockdale and Sara Stockdale filed a Third-Party Claim against the Company seeking contribution or indemnity against the Company, formerly known as Logica Holdings, Inc., alleging that the Company agreed to relieve Winterman Group Limited, Malcolm Stockdale and Sara Stockdale from any and all liability with respect to the lease or the guaranty. The Third-Party Claim was served on the Company on April 6, 2010. On or about April 1, 2010, Dolphin Digital Media (Canada) filed a Statement of Defense and Crossclaim. In the Statement of Defense, Dolphin Digital Media (Canada) denied any liability under the lease and in the Crossclaim against Winterman Group Limited, Malcolm Stockdale and Sara Stockdale, Dolphin Digital Media (Canada) seeks contribution or indemnity against Winterman Group Limited, Malcolm Stockdale and Sara Stockdale alleging that the leased premises were used by Winterman Group Limited, Malcolm Stockdale and Sara Stockdale for their own use. On or about April 1, 2010, Dolphin Digital Media (Canada) also filed a Statement of Defense to the Crossclaim denying any liability to indemnify Winterman Group Limited, Malcolm Stockdale and Sara Stockdale. The ultimate results of these proceedings against the Company cannot be predicted with certainty. On or about March 12, 2012, the Court served a Status Notice on all the parties indicating that since more than (2) years had passed since a defense in the action had been filed, the case had not been set for trial and the case had not been terminated, the case would be dismissed for delay unless action was taken within ninety (90) days of the date of service of the notice. The Company has not filed for a motion to dismiss and no further action has been taken in the case. The ultimate results of these proceedings against the Company could result in a loss ranging from 0 to $325,000. On March 23, 2012, Dolphin Digital Media (Canada) Ltd filed for bankruptcy in Canada. The bankruptcy will not protect the Company from the Third-Party Claim filed against it. However, the Company has not accrued for this loss because it believes that the claims against it are without substance and it is not probable that they will result in loss. As of December 31, 2017, the Company has not received any other notifications related to this action. A putative class action was filed on May 5, 2017, in the United States District Court for the Southern District of Florida by Kenneth and Emily Reel on behalf of a purported nationwide class of individuals who attended the Fyre Music Festival, or the Fyre Festival, in the Bahamas on April 28-30, 2017. The complaint names several defendants, including 42West, along with the organizers of the Fyre Festival, Fyre Media Inc. and Fyre Festival LLC, individuals related to Fyre and another entity called Matte Projects LLC. The complaint alleges that the Fyre Festival was promoted by Fyre as a luxurious experience through an extensive marketing campaign orchestrated by Fyre and executed with the assistance of outside marketing companies, 42West and Matte, but that the reality of the festival did not live up to the luxury experience that it was represented to be. The plaintiffs assert claims for fraud, negligent misrepresentation and for violation of several states’ consumer protection laws. The plaintiffs seek to certify a nationwide class action comprised of “All persons or entities that purchased a Fyre Festival 2017 ticket or package or that attended, or planned to attend, Fyre Festival 2017” and seek damages in excess of $5,000,000 on behalf of themselves and the class. The plaintiffs sought to consolidate this action with five other class actions also arising out of the Fyre Festival (to which 42West is not a party) in a Multi District Litigation proceeding, which request was denied by the panel. On July 28, 2017, 42West filed a motion to dismiss the putative class action. On September 9, 2017, one of the defendants filed a cross-claim against all other named defendants seeking indemnification and contribution. On October 2, 2017, 42West filed a motion to dismiss the cross-claim. On December 29, 2017, the United States District Court for the Southern District of Florida issued an order dismissing without prejudice all claims against 42West. The Company may be subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business. In the opinion of management and based upon the advice of its outside counsels, the liability, if any, from all pending litigations is not expected to have a material effect in the Company’s financial position, results of operations and cash flows. Tax Filings The Company accrued $120,000 for estimated penalties associated with not filing certain information returns. The penalties per return are $10,000 per entity per year. The Company received notification from the Internal Revenue Service concerning information returns for the year ended December 31, 2009. The Company responded with a letter stating reasonable cause for the noncompliance and requested that penalties be abated. During 2012, the Company received a notice stating that the reasonable cause had been denied. The Company decided to pay the penalties and not appeal the decision for the 2009 Internal Revenue Service notification. There is no associated interest expense as the tax filings are for information purposes only and would not result in further income taxes to be paid by the Company. The Company made payments in the amount of $40,000 during the year ended December 31, 2012 related to these penalties. At December 31, 2017 and 2016, the Company had a remainder of $40,000 in accruals related to these late filing penalties which is presented as a component of other current liabilities. Kids Club Effective February 1, 2017, the Company notified US Youth Soccer Association, Inc., with whom it had entered into an agreement to create, design and host the US Youth Soccer Clubhouse website, that it would not renew the agreement. The Company did not record any revenues or expenses related to this website for the years ended December 31, 2017 and 2016. On July 1, 2016, the Company and United Way Worldwide mutually agreed to terminate the agreement and agreement create and host an online kids club to promote United Way’s philanthropic philosophy and encourage literacy programs. Pursuant to the terms of the agreement the Company was responsible for the creation and marketing of the website, developing and managing the sponsorship package, and hiring of certain employees to administer the program. Each school sponsorship package was $10,000 with the Company earning $1,250. The remaining funds were used for program materials and the costs of other partners. Management decided to discontinue the online kids clubs at the end of 2017. The Company recorded revenues of 28,403 related to the online kids clubs during the year ended December 31, 2016. There were no revenues generated by the online kids clubs during the year ended December 31, 2017. Incentive Compensation Plan On June 29, 2017, the shareholders of the Company approved the 2017 Plan which replaced the 2012 Plan. The 2017 Plan was adopted as a flexible incentive compensation plan that would allow us to use different forms of compensation awards to attract new employees, executives and directors, to further the goal of retaining and motivating existing personnel and directors and to further align such individuals’ interests with those of the Company’s shareholders. Under the 2017 Plan, the total number of shares of Common Stock reserved and available for delivery under the 2017 Plan (the “Awards”), at any time during the term of the 2017 Plan, will be 1,000,000 shares of Common Stock. The 2017 Plan imposes individual limitations on the amount of certain Awards, in part with the intention to comply with Section 162(m) of the Code. Under these limitations, in any fiscal year of the Company during any part of which the 2017 Plan is in effect, no participant may be granted (i) stock options or stock appreciation rights with respect to more than 300,000 Shares, or (ii) performance shares (including shares of restricted stock, restricted stock units, and other stock based-awards that are subject to satisfaction of performance goals) that the Committee intends to be exempt from the deduction limitations under Section 162(m) of the Code, with respect to more than 300,000 Shares, in each case, subject to adjustment in certain circumstances. The maximum amount that may be paid out to any one participant as performance units that the Committee intends to be exempt from the deduction limitations under Section 162(m) of the Code, with respect to any 12-month performance period is $1,000,000 (pro-rated for any performance period that is less than 12 months), and with respect to any performance period that is more than 12 months, $2,000,000. On August 21, 2017, the Company issued 59,320 Shares as Awards to certain employees with a vesting period of six months. On December 31, 2017, the Company had recorded compensation expense of $329,175 on its consolidated statement of operations. Employee Benefit Plan The Company’s wholly owned subsidiary, 42West, has a 401(K) profit sharing plan that covers substantially all employees of 42West. Contributions to the plan are at discretion of management. The Company’s contributions were approximately $246,138 for the year ended December 31, 2017. Employment Contracts During the year ended December 31, 2017, the Company renewed two senior level management employment agreements and entered into a new senior level management employment agreement, each with a three-year term. The contracts define each individual’s base compensation along with salary increases. The employment agreements contain provisions for termination and as a result of death or disability and entitles each of the employees to bonuses, commissions, vacations and to participate in all employee benefit plans offered by the Company. As a condition to the closing of the 42West Acquisition described in note 4, each of the three Principal Sellers has entered into employment agreements (the “Employment Agreements”) with the Company and will continue as employees of the Company for a three-year term. Each of the Employment Agreements provides for a base salary with annual increases and bonuses if certain performance targets are met. The Employment Agreements also contain provisions for termination and as a result of death or disability. During the term of the Employment Agreement, the Principal Sellers shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company as well as are entitled to paid vacation in accordance with the Company’s policy. Each of the Employment Agreements contains lock-up provisions pursuant to which each Principal Seller has agreed not to transfer any shares of Common Stock in the first year, no more than 1/3 of the Initial Consideration and Post-Closing Consideration received by such Seller in the second year and no more than an additional 1/3 of the Initial Consideration and Post-Closing Consideration received by such Seller in the third year, following the closing date of the 42West Acquisition. Talent, Director and Producer Participations Per agreements with talent, directors and producers on certain projects, the Company will be responsible for bonus and back end payments upon release of a motion picture and achieving certain box office performance as determined by the individual agreements. The Company cannot estimate the amounts that will be due as these are based on future box office performance. As of December 31, 2017 and 2016, the Company had not recorded any liability related to these participations. Motion Picture Industry Pension Accrual 42West is a contributing employer to the Motion Picture Industry Pension Individual Account and Health Plans (collectively the “Plans”), two multiemployer pension funds and one multiemployer welfare fund, respectively, that are governed by the Employee Retirement Income Security Act of 1974, as amended. The Plans intend to conduct an audit of 42West’s books and records for the period June 7, 2011 through August 20, 2016 in connection with the alleged contribution obligations to the Plans. Based on a recent audit for periods prior to June 7, 2011, 42West expects that the Plan may seek to collect approximately $300,000 in pension plan contributions, health and welfare plan contributions and union dues once the audit is completed. The Company believes the exposure to be probable as of December 31, 2017.

23. SUBSEQUENT EVENTS

23. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
23. SUBSEQUENT EVENTS	NOTE 23 — SUBSEQUENT EVENTS Pursuant to the Purchase Agreement, on January 2, 2018, the Sellers of 42West were issued 762,654 shares of Common Stock as consideration for the purchase of 42West. The purchase price is $9.22 per share. On January 5, 2018, the Company paid an aggregate amount of $525,000 to the Principal Sellers of 42West to repurchase 56,940 shares of Common Stock pursuant to the Put Agreements. On January 5, 2018, the Company paid a former member of 42West $225,000 pursuant to the membership purchase agreement with that member. On January 22, 2018, the Company was notified by the Underwriter of the 2017 Public Offering of December 26, 2017 that it was exercising the over-allotment option under the underwriting agreement for the 2017 Public Offering with respect to 20,750 shares of Common Stock and 175,750 warrants to purchase Common Stock. The closing date of the over-allotment option was January 24, 2018 and the Company received $81,043.69 of proceeds from the sale. On February 27, 2018, the Company signed an amended and restated Warrant G that (i) eliminated the provision that permitted the warrant to be extended beyond its original expiration date of January 31, 2018 if the warrant holder was not able to fully exercise the warrant and remain below a 9.9% ownership threshold, and (ii) provided for a definitive expiration date of the warrant of January 31, 2019. On March 15, 2018, 42West entered into a revolving line of credit agreement with Bank United. The loan matures on March 15, 2020 and bears interest on the outstanding balance at a rate of prime plus 0.25% per annum. The Company is required on annual basis to repay the outstanding balance and not draw funds from the line of credit for a period of 30 consecutive days. The maximum amount that can be drawn on the line of credit is $2,300,000 and is secured by 42West’s current and future inventory, chattel paper, accounts, equipment and general intangibles. On March 19, 2018, the Company entered into three separate put agreements with employees of 42West that have change of control provisions in their employment agreements and received shares of Common Stock on April 13, 2017. The Company agreed to purchase 51,485 shares of Common Stock at a purchase price of $9.22 and up to an additional 105,718 in July 2018. On March 14, 11 and 21, 2018, the sellers of 42West notified the Company that they would be exercising puts pursuant to the Put Agreements in the aggregate amount of 183,296 shares of Common Stock at a purchase price of $9.22 per share. On March 28, 2018, the Company drew on the line of credit an amount of $1,690,000 to satisfy obligations under the Put Agreements. Pursuant to the Put Agreements, on April 2, 2018, the Company purchased 150,758 shares of Common Stock for an aggregate amount of $1,390,000. The Company will purchase 32,538 shares of Common Stock for $300,000 on April 10, 2018 pursuant to the Put Agreements. On March 30, 2018, the Company made payments in the aggregate of $292,112 (less withholding taxes for FICA, Medicare, federal, state and city taxes, as applicable) to certain 42West employees with Change of Control Provisions as discussed in Note 4. On each of January 9, January 31 and February 15, 2018, the Company made repayments of $41,667 on the promissory note to Dolphin Entertainment LLC, an entity wholly owned by our CEO. On April 5, 2018, Amanda Lundberg, Leslee Dart and Allan Mayer each signed amendments to their employment agreements that modified the annual bonus provisions of their respective employment agreements. These amendments eliminated the rights of each of them (i) to be eligible to receive in accordance with the provisions of the Company’s incentive compensation plan, a cash bonus for the calendar year 2017 if certain performance goals were achieved and (ii) to receive an annual bonus, for each year during the term of each such employment agreement, of $200,000 in shares of common stock based on the 30-day trading average market price of such common stock. The amendment provides for each of Amanda Lundberg, Leslee Dart and Allan Mayer to be eligible under the Company’s incentive compensation plan to receive annual cash bonuses beginning with the calendar year 2018 based on the achievement of certain performance goals.

3. SUMMARY OF SIGNIFICANT ACC31

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2017
Notes to Financial Statements
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates made by management in the preparation of the financial statements relate to ultimate revenue and costs for investment in digital and feature film projects; estimates of sales returns and other allowances and provisions for doubtful accounts and impairment assessments for investment in digital and feature film projects. Actual results could differ from such estimates.
Statements of Comprehensive Income	Statement of Comprehensive Income In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 220, Comprehensive Income
Cash and cash equivalents	Cash and cash equivalents Cash and cash equivalents consist of cash deposits at financial institutions. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
Restricted cash	Restricted Cash Restricted cash represents amounts held as collateral required under the Company’s loan and security agreement. Proceeds from this loan were used for the distribution and marketing costs of the Company’s feature film. See Note 8 for further discussion. As of December 31, 2016, the Company maintained $1,250,000 in a separate bank account restricted for this purpose. The funds were disbursed to the lender during 2017.
Contracts in the Company's Equity	Contracts in the Company’s Equity From time to time, the Company issues contracts related to its own equity securities, such as warrants and convertible notes. The Company evaluates whether a standalone contract (such as a warrant), or an embedded feature of a contract (such as the conversion feature of a convertible note) should be classified in stockholders’ deficit or as a liability in the Company’s consolidated balance sheet. The determination is made in accordance with the requirements of ASC Topic 480, Distinguishing Liabilities from Equity Derivatives and Hedging A warrant is classified as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or contains certain provisions that may alter either the number of shares issuable under the warrant or the exercise price of the warrant, including, among other things, a provision that could require a reduction to the then current exercise price each time the Company subsequently issues equity, warrants, and/or conversion options at less than the current conversion price (also known as a full ratchet down round provision). If a warrant is not indexed to the Company’s equity, it must be classified as a derivative liability. A convertible debt instrument in its entirety must be classified as a liability under ASC 480 and carried at fair value in the financial statements if it has a mandatory conversion feature. A conversion feature of a convertible debt instrument or certain convertible preferred stock, is separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, would meet certain characteristics in the definitions in ASC 815 of both an embedded derivative and a derivative, generally including, among other conditions, if the conversion feature must be settled in cash or a financial instrument that is readily convertible to cash. When a warrant or a separated conversion feature is classified as a derivative liability, the liability is initially and subsequently reported on the balance sheet at its fair value, and subsequent increases or decreases in the fair value are recorded through the statement of operations. When a conversion feature does not meet the definition of a derivative per ASC 815, it must be assessed further to determine whether a beneficial conversion feature exists, which exists when the effective exercise price is lower than the fair value of the Company’s related equity instrument on the date of issuance. If it contains a beneficial conversion feature, the amount of the beneficial conversion feature reduces the balance of the convertible debt instrument, creating a debt discount which is amortized over the term of the debt to interest expense in the consolidated statement of operations. The classification of a warrant or conversion feature must be reassessed at each financial reporting date, as a change in circumstances may necessitate reclassification of the warrant or conversion feature. The Company has classified certain warrants issued during 2016 as derivative liabilities due to the existence of full-ratchet down round provisions in the warrants see Note 17. Certain warrants issued during 2017 have been classified as equity.
Gross versus Net Revenue	Gross versus Net Revenue The Company’s motion pictures are primarily distributed and marketed by third party distributors. The Company evaluates its arrangements with third parties to determine whether revenue should be reported under each individual arrangement on a gross or net basis by determining whether the Company acts as the principal or agent under the terms of each arrangement. To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items. Conversely, to the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any related expenses. Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement. The most significant factors that the Company considers include identification of the primary obligor, as well as which party has general and physical inventory risk, credit risk and discretion in the supplier selection. The Company’s primary distribution arrangements, which are those for its theatrical release, are recorded on a gross basis as a result of the evaluation previously described.
Revenue Recognition	Revenue Recognition Entertainment publicity Entertainment Publicity revenue consists of fees from the performance of professional services and billings for direct costs reimbursed by clients. The revenues are directly dependent upon the publicity and corporate communications requirements of the Company’s existing clients and its ability to win new clients. The Company’s revenue from this segment is typically lowest in the first quarter and highest in the fourth quarter. This reflects the seasonal spending of its clients, with a higher demand for project work prior to award season (e.g. The Academy Awards) that is typically completed during the fourth quarter. As is customary in the industry, the agreements with the clients generally provide for termination by either party on relatively short notice, usually 30 days. Some of the contracts may include incentive compensation for our clients’ nominations of certain Academy Awards. Fees are generally recognized on a straight-line or monthly basis which approximates the proportional performance on such contracts. Direct costs reimbursed by clients are billed as pass-through revenue with no mark-up. Content production Revenue from motion pictures and web series are recognized in accordance with guidance ASC 926-60 “ Revenue Recognition – Entertainment-Films” Additionally, because third parties are the principal distributors of the Company’s movies, the amount of revenue that is recognized from films in any given period is dependent on the timing, accuracy and sufficiency of the information received from its distributors. As is typical in the film industry, the Company’s distributors may make adjustments in future periods to information previously provided to the Company that could have a material impact on the Company’s operating results in later periods. Furthermore, management may, in its judgment, make material adjustments to the information reported by its distributors in future periods to ensure that revenues are accurately reflected in the Company’s financial statements. To date, the distributors have not made, nor has the Company made, subsequent material adjustments to information provided by the distributors and used in the preparation of the Company’s historical financial statements. In general, the Company records revenue when persuasive evidence of an arrangement exists, products have been delivered or services have been rendered, the selling price is fixed and determinable, and collectability is reasonably assured.
Capitalized Production Costs	Capitalized Production Costs Capitalized production costs represent the costs incurred to develop and produce a motion picture or a web series. These costs primarily consist of salaries, equipment and overhead costs, capitalized interest as well as the cost to acquire rights to scripts. Production costs are stated at the lower of cost, less accumulated amortization and tax credits, if applicable, or fair value. These costs are capitalized in accordance with FASB ASC Topic 926-20-50-2 “Other Assets – Film Costs”. Unamortized capitalized production costs are evaluated for impairment each reporting period on a title-by-title basis. If estimated remaining revenue is not sufficient to recover the unamortized capitalized production costs for that title, the unamortized capitalized production costs will be written down to fair value. The Company is responsible for certain contingent compensation, known as participations, paid to certain creative participants such as writers, directors and actors. Generally, these payments are dependent on the performance of the motion picture or web series and are based on factors such as total revenue as defined per each of the participation agreements. The Company is also responsible for residuals, which are payments based on revenue generated from secondary markets and are generally paid to third parties pursuant to a collective bargaining, union or guild agreement. The Company has entered into a fifteen year distribution agreement for its motion picture, Max Steel Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates are likely to differ to some extent in the future from actual results. Management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized deferred production costs to its estimated fair value. Management estimates the ultimate revenue based on existing contract negotiations with domestic distributors and international buyers as well as management’s experience with similar productions in the past. Amortization of film costs, participation and residuals and/or write downs of all or a portion of the unamortized deferred production costs to its estimated fair value is recorded in direct costs. An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less amortization expense of deferred productions costs, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher amortization expense of deferred production costs, and also periodically results in an impairment requiring a write-down of the deferred production costs to fair value. These write-downs are included in production expense within the consolidated statements of operations. For the year ended December 31, 2016, the Company amortized $7,822,549 of capitalized production costs related to Max Steel
Investment	Investment Investment represents an investment in equity securities of The Virtual Reality Company (“VRC”), a privately held company. The Company’s $220,000 investment in VRC represents less than a 1% noncontrolling ownership interest in VRC and there is no market for VRC’s common stock. Accordingly, the Company accounts for its investment under the cost method. Under the cost method, the investor’s share of earnings or losses is not included in the balance sheet or statement of operations. The net accumulated earnings of the investee subsequent to the date of investment are recognized by the investor only to the extent distributed by the investee as dividends. However, impairment charges are recognized in the statement of operations, if factors come to our attention that indicate that a decrease in value of the investment has occurred that is other than temporary.
Long-Lived Assets	Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparison of the carrying amount to the future net cash flows which the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. Except for those described above in Capitalized Production Costs, there were no impairment charges for long lived assets during the years ended December 31, 2017 and 2016.
Property, Equipment and Leasehold Improvements	Property, Equipment and Leasehold Improvements Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method. The Company recorded depreciation expense of $211,138 and $20,226, respectively for the years ended December 31, 2017 and 2016. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon. Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized. Leasehold improvements are amortized over the lesser of the term of the related lease or the estimated useful lives of the assets. The range of estimated useful lives to be used to calculate depreciation and amortization for principal items of property and equipment are as follow: Asset Category Depreciation/ Amortization Period (Years) Furniture and fixtures 5 - 7 Computer and office equipment 3 - 5 Leasehold improvements 5 - 8, not to exceed the lease terms
Intangible assets	Intangible assets In connection with the acquisition of 42West on March 30, 2017, the Company acquired an estimated $9,110,000 of intangible assets with finite useful lives initially estimated to range from 3 to 14 years. The Company also acquired a favorable lease intangible asset related to the lease agreement of our California office in the amount of $440,000 that will be amortized over the remaining term of the lease. Intangible assets are initially recorded at fair value and are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
Goodwill	Goodwill In connection with the acquisition of 42West on March 30, 2017 (See Note 4), the Company recorded a provisional amount of $13,996,337 of goodwill, which management has assigned to the Entertainment Publicity reporting unit. During the nine months between the date of acquisition and December 31, 2017, the Company decreased goodwill in the amount of $1,217,477 to record a working capital adjustment, as provided for in the 42West purchase agreement, record the favorable lease intangible asset and adjust the fair value of certain liabilities as of the acquisition date. These adjustments were considered measurement period adjustments as they related to conditions on the acquisition date. The Company accounts for goodwill in accordance with FASB Accounting Standards Codification No. 350, Intangibles—Goodwill and Other (“ASC 350”). ASC 350 requires goodwill to be reviewed for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company evaluates goodwill in the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management conducts a two-step quantitative goodwill impairment test. The first step of the impairment test involves comparing the fair value of the reporting unit with its carrying value (including goodwill). The Company estimates the fair values of its reporting units using a combination of the income, or discounted cash flows approach and the market approach, which utilizes comparable companies’ data. If the fair value of the reporting unit exceeds its carrying value, step two does not need to be performed. If the estimated fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit, and the Company must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a purchase price allocation in acquisition accounting. The residual fair value after this allocation is the implied fair value of the reporting unit goodwill. To the extent that the carrying amount of goodwill exceeds its implied fair value, an impairment loss would be recorded.
Warrants	Warrants When the Company issues warrants, it evaluates the proper balance sheet classification of the warrant to determine whether the warrant should be classified as equity or as a derivative liability on the consolidated balance sheets. In accordance with ASC 815-40, Derivatives and Hedging-Contracts in the Entity’s Own Equity (ASC 815-40), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or contains certain provisions that may alter either the number of shares issuable under the warrant or the exercise price of the warrant, including, among other things, a provision that could require a reduction to the then current exercise price each time the Company subsequently issues equity or convertible instruments at a per share price that is less than the current conversion price (also known as a “full ratchet down round provision”). If a warrant is not indexed to the Company’s equity, it is classified as a derivative liability which is carried on the consolidated balance sheet at fair value with any changes in its fair value recognized currently in the statement of operations. The Company classified certain warrants issued during 2016 as derivative liabilities, because they contain full-ratchet down round provisions (see Notes 11 and 17). The Company also had equity classified warrants outstanding at December 31, 2017 and 2016 (see Note 17).
Convertible Debt and Convertible Preferred Stock	Convertible Debt and Convertible Preferred Stock When the Company issues convertible debt or convertible preferred stock, it evaluates the balance sheet classification to determine whether the instrument should be classified either as debt or equity, and whether the conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded derivative” in ASC 815, Derivatives and Hedging. Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements of operations. If a conversion feature does not meet the conditions to be accounted for as a derivative liability, the Company then determines whether the conversion feature is “beneficial”. A conversion feature would be considered beneficial if the conversion feature is “in the money” when the host instrument is issued or, under certain circumstances, later. If convertible debt contains a beneficial conversion feature (“BCF”), the amount of the amount of the proceeds allocated to the BCF reduces the balance of the convertible debt, creating a discount which is amortized over the debt’s term to interest expense in the consolidated statements of operations. When a convertible preferred stock contains a BCF, after allocating the proceeds to the BCF, the resulting discount is either amortized over the period beginning when the convertible preferred stock is issued up to the earliest date the conversion feature may be exercised, or if the convertible preferred stock is immediately exercisable, the discount is fully amortized at the date of issuance. The amortization is recorded similar to a dividend. The Company had no outstanding convertible debt or convertible preferred stock which contain a conversion feature that is accounted for either as a derivative or a beneficial conversion feature at either December 31, 2017 or 2016 or during the years then ended.
Stock based compensation	Stock based compensation In connection with the 42West Acquisition, the Company issued 59,320 shares of restricted Common Stock to certain employees. The shares were issued pursuant the Company’s 2017 Plan. The shares of restricted stock were issued on August 21, 2017 and vested six months after issuance on February 21, 2018. The Company recognized compensation expense related to the restricted stock based on the number of employees who received the shares and were still employed by the Company at December 31, 2017 at the market price of the shares on grant date (August 21, 2017). For the year ended December 31, 2017, the Company recorded $329,967 in its consolidated statement of operation related to stock based compensation.
Fair Value Measurements	Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are categorized based on whether the inputs are observable in the market and the degree that the inputs are observable. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Observable inputs are based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels, defined as follows: Level 1 — Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 — Inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs. Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. To account for the acquisition of 42West that occurred on March 30, 2017, the Company made a number of fair value measurements related to the different forms of consideration paid for 42West and of the identified assets acquired and liabilities assumed. In addition, the Company makes fair value measurements of its Put Rights and Contingent Consideration. See Notes 4 and 11 for further discussion and disclosures. Certain warrants issued on December 26, 2017 were measured using the market price of the warrants on that date. Certain warrants issued in 2016 are also measured and carried at fair value on a recurring basis in the consolidated financial statements. See Note 11 for disclosures regarding those fair value measurements.
Income Taxes	Income Taxes Deferred taxes are recognized for the future tax effects of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using tax rates in effect for the years in which the differences are expected to reverse. The effects of changes in tax laws on deferred tax balances are recognized in the period the new legislation in enacted. Valuation allowances are recognized to reduce deferred tax assets to the amount that is more likely than not to be realized. In assessing the likelihood of realization, management considers estimates of future taxable income. We calculate our current and deferred tax position based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings (loss) per share available to the Company’s common stock shareholders equals net income or loss available to common stock shareholders divided by the weighted-average number of common shares outstanding for the applicable period. Diluted earnings per share equals net income available common stock stockholders divided by the weighted-average number of common shares outstanding, plus any additional common shares that would have been outstanding if potentially dilutive shares had been issued. Diluted earnings per share reflects the potential dilution that would occur if certain potentially dilutive instruments were exercised. The potential issuance of common stock is assumed to occur at the beginning of the year (or at the time of issuance of the potentially dilutive instrument, if later) and the incremental shares are included using the treasury stock method. The proceeds utilized in applying the treasury stock method consist of the amount, if any, to be paid upon exercise. These proceeds are then assumed to be used to purchase common stock at the average market price of the Company’s common stock during the period. The incremental shares (difference between the shares assumed to be issued and the shares assumed to be purchased), to the extent they would have been dilutive, are included in the denominator of the diluted earnings per share calculation. Potentially dilutive instruments are not included in the computation of loss per share because their inclusion is anti-dilutive.
Going concern	Going Concern In accordance with ASC Subtopic 205-40, Going Concern, management evaluates whether relevant conditions and events that, when considered in the aggregate, indicate that it is probable the Company will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. When relevant conditions or events, considered in the aggregate, initially indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (and therefore they raise substantial doubt about the Company’s ability to continue as a going concern), management evaluates whether its plans that are intended to mitigate those conditions and events, when implemented, will alleviate substantial doubt about the Company’s ability to continue as a going concern. Management’s plans are considered only to the extent that 1) it is probable that the plans will be effectively implemented and 2) it is probable that the plans will mitigate the conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern. See Note 2 related to going concern.
Concentration of Risk	Concentration of Risk The Company maintains its cash and cash equivalents with financial institutions and, at times, balances may exceed federally insured limits of $250,000. Additionally, substantially all of the production revenue for the years ended December 31, 2017 and 2016 were derived from one production.
Reclassifications	Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. These changes did not affect the equity or previously reported net losses.
Business Segments	Business Segments The Company operates the following business segments: 1) Entertainment Publicity Division (“EPD”) – This segment primarily provides talent entertainment and targeted marketing, and strategic communication services through 42West. The Company derived a majority of its revenues for 2017 from this segment. 2) Content Production Division (“CPD”) – This segment produces original motion picture and digital content. For the year ended December 31, 2016, the Company derived a majority of its revenues from this segment from the domestic and international distribution of its motion picture, Max Steel Max Steel See Note 19 for Segment Reporting for the year ended December 31, 2017.
Recent Acounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 —Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which provides guidance for revenue recognition. This ASU will supersede the revenue recognition requirements in ASC Topic 605, and most industry specific guidance, and replace it with a new Accounting Standards Codification (“ASC”) Topic 606. The FASB has also issued several subsequent ASUs which amend ASU 2014-09. The amendments do not change the core principle of the guidance in ASC 606. The core principle of ASC 606 is that revenue is recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The guidance in ASU 2014-09 also specifies the accounting for some costs to obtain or fulfill a contract with a customer. ASC 606 will require the Company to make significant judgments and estimates. ASC 606 also requires more extensive disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Public business entities are required to apply the guidance of ASC 606 to annual reporting periods beginning after December 15, 2017 (2018 for the Company), including interim reporting periods within that reporting period. Accordingly, the Company will adopt ASU 606 in the first quarter of 2018. ASC 606 requires an entity to apply ASC 606 using one of the following two transition methods: 1. Retrospective approach: Retrospectively to each prior reporting period presented and the entity may elect certain practical expedients. 2. Modified retrospective approach: Retrospectively with the cumulative effect of initially applying ASC 606 recognized at the date of initial application. If an entity elects this transition method it also is required to provide the additional disclosures in reporting periods that include the date of initial application of (a) the amount by which each financial statement line item is affected in the current reporting period by the application ASU 606 as compared to the guidance that was in effect before the change, and (b) an explanation of the reasons for significant changes. The Company substantially completed its assessment of the impact of ASC 606 and adopted ASC 606, following the modified retrospective approach., as of January 1, 2018. The Company’s assessment included examination of the following areas of the new standard: Variable Consideration: Principal vs. Agent: Functional vs Symbolic Intellectual Property: Performance obligation satisfied over time: Based on the Company’s evaluation of the new guidance, the Company believes that revenues for the years ending December 31, 2017 and 2016 were recognized in a manner consistent with the new guidance and that a cumulative adjustment will not be necessary upon implementation in the first quarter of 2018. The Company is currently finalizing its financial statement disclosures in accordance with the requirement of the standard. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740) regarding balance sheet classification of deferred income taxes. ASU 2015-17 simplifies the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. ASU 2015-17 is effective for public companies for annual reporting periods beginning after December 15, 2016 (2017 for the Company), and interim periods within those fiscal years. The guidance may be adopted prospectively or retrospectively and early adoption is permitted. Adoption of ASU 2015-17 did not have an impact on the Company’s financial position, results of operations or cash flows. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 642) intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU will require organizations that lease assets—referred to as “lessees”—to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. Under the new guidance, a lease will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current US GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP—which requires only capital leases to be recognized on the balance sheet –the new ASU will require both types of leases to be recognized on the balance sheet. The ASU also will require disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 (2019 for the Company). For all other organizations, the ASU on leases will take effect for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. Early application will be permitted for all organizations. The Company is currently reviewing the impact that implementing this ASU will have. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2017 (2018 for the Company), and interim periods within those years, with early adoption permitted. The Company does not believe that adoption of this new guidance will have a material effect on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-17 —Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control. The update amends the consolidation guidance on how VIE’s should treat indirect interest in the entity held through related parties. The ASU will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2016 (2017 for the Company), and interim periods within those years, with early adoption permitted. The adoption of ASU 2016-17 did not have an effect on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). ASU 2016-18 provides guidance on the classification of restricted cash and cash equivalents in the statement of cash flows. Although it does not provide a definition of restricted cash or restricted cash equivalents, it states that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for interim and annual reporting periods beginning after December 15, 2017. Upon adoption we expect restricted cash to be included in cash and cash equivalents rather than investing activities in the statement of cash flows. In January 2017, the FASB issued ASU 2017-04 guidance to simplify the accounting for goodwill impairment. The guidance removes the second step of the goodwill impairment test, which requires that a hypothetical purchase price allocation be performed to determine the amount of impairment, if any. Under this new guidance, a goodwill impairment charge will be based on the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for the Company’s fiscal year beginning April 1, 2020, with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the new guidance effective January 1, 2017, with no material impact on the Company’s consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718). This update mandates that entities will apply the modification accounting guidance if the value, vesting conditions or classification of a stock-based award changes. Entities will have to make all of the disclosures about modifications that are required today, in addition to disclosing that compensation expense has not changed. Additionally, the new guidance also clarifies that a modification to an award could be significant and therefore requires disclosure, even if the modification accounting is not required. The guidance will be applied prospectively to awards modified on or after the adoption date and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company is currently evaluating the impact of the provisions of this new standard on its consolidated financial statements. In July 2017, FASB issued ASU No. 2017-11, Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). ASU 2017-11 consists of two parts. The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect The Company is currently evaluating the impact that implementing this ASU will have.

3. SUMMARY OF SIGNIFICANT ACC32

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2017
Summary Of Significant Accounting Policies Tables
Years of Useful Life	The range of estimated useful lives to be used to calculate depreciation and amortization for principal items of property and equipment are as follow: Asset Category Depreciation/ Amortization Period (Years) Furniture and fixtures 5 - 7 Computer and office equipment 3 - 5 Leasehold improvements 5 - 8, not to exceed the lease terms

4. ACQUISITION (Tables)

4. ACQUISITION (Tables)	12 Months Ended
	Dec. 31, 2017
Acquisition Of Dolphin Films Inc. Tables
Schedule of Consideration Transferred	The acquisition-date fair value of the consideration transferred totaled $23,327,799, which consisted of the following: Common Stock issued at closing and in April 2017 (787,415 shares) $ 6,693,028 Common Stock issuable in 2018 (980,911 shares) 8,337,740 Contingent Consideration 3,627,000 Put Rights 3,800,000 Sellers’ transaction costs paid at closing 260,000 Working capital adjustment (50,000 shares issued in April 2017 plus paid $185,031 cash in August 2017) 610,031 $ 23,327,799
Schedule of Assets Acquired and Liabilities Assumed	The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date, March 30, 2017. Amounts in the table are provisional estimates that may change, as described below. Cash $ 273,625 Accounts receivable 1,706,644 Property, equipment and leasehold improvements 1,087,962 Other assets 265,563 Indemnification asset 300,000 Favorable lease intangible asset 440,000 Intangible assets 9,110,000 Total identifiable assets acquired 13,183,794 Accounts payable and accrued expenses (731,475 ) Line of credit and note payable (1,025,000 ) Settlement liability (300,000 ) Other liabilities (556,380 ) Tax liabilities (22,000 ) Total liabilities assumed (2,634,855 ) Net identifiable assets acquired 10,548,939 Goodwill 12,778,860 Net assets acquired $ 23,327,799
Schedule of Amounts Reported In Consolidated Statements of Operations	The revenue and net income of 42West included in the consolidated amounts reported in the consolidated statements of operations for the year ended December 31, 2017 are as follows: Revenue $ 16,458,929 Net income $ 2,155,665
Schedule of Proforma Results of Operations	Pro Forma Consolidated Statements of Operations 2017 2016 Revenues $ 27,102,600 $ 27,959,374 Net income (loss) 8,622,281 (35,719,450 )
Schedule of Original and Revised Estimated Fair Values of Assets Acquired and Liabilities Assumed	The following table summarizes the original and revised estimated fair values of the assets acquired and liabilities assumed at the acquisition date of March 30, 2017 and the related measurement period adjustments to the fair values recorded during the year ended December 31, 2017: March 31, Measurement Period Adjustments December 31, 2017 Cash $ 273,625 $ — $ 273,625 Accounts receivable 1,706,644 — 1,706,644 Property, equipment and leasehold improvements 1,087,962 — 1,087,962 Other assets 265,563 — 265,563 Indemnification asset — 300,000 300,000 Favorable lease intangible asset — 440,000 440,000 Intangible assets 9,110,000 — 9,110,000 Total identifiable assets acquired 12,443,794 740,000 13,183,794 Accounts payable and accrued expenses (731,475 ) — (731,475 ) Line of credit and note payable (1,025,000 ) — (1,025,000 ) Settlement liability (300,000 ) — (300,000 ) Other liabilities (902,889 ) 346,509 (556,380 ) Tax liabilities (22,000 ) — (22,000 ) Total liabilities assumed (2,981,364 ) 346,509 (2,634,856 ) Net identifiable assets acquired 9,462,430 1,086,509 10,548,939 Goodwill 13,996,337 (1,217,477 ) 12,778,860 Net assets acquired $ 23,458,767 $ (130,968 ) $ 23,327,799
Schedule of Reconciliation of Initially Reported Fair Value to Adjusted Fair Value of Goodwill	The following is a reconciliation of the initially reported fair value to the adjusted fair value of goodwill: Goodwill originally reported at March 31, 2017 $ 13,996,337 Changes to estimated fair values: Contingent Consideration 86,000 Put Rights (200,000 ) Sellers’ tax liabilities assumed (627,000 ) Favorable lease intangible asset (440,000 ) Deferred rent (346,509 ) Working capital adjustment 610,032 Indemnification asset (300,000 ) 1,217,477 Adjusted goodwill $ 12,778,860

6 .PROPERTY, EQUIPMENT AND LEAS

6 .PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables)	12 Months Ended
	Dec. 31, 2017
Acquisition Of 42west Details
Schedule of Property, equipment and leasehold	Property, equipment and leasehold improvement consists of: December 31, December 31, Furniture and fixtures $ 483,306 $ 65,311 Computers and equipment 432,586 41,656 Leasehold improvements 448,661 7,649 1,364,553 114,616 Less: accumulated depreciation and amortization (253,777 ) (79,428 ) $ 1,110,776 $ 35,188

11. FAIR VALUE MEASUREMENTS (Ta

11. FAIR VALUE MEASUREMENTS (Tables)	12 Months Ended
	Dec. 31, 2017
Fair Value Measurements Tables
Warrant terms	Warrants outstanding at December 31, 2016 had the following terms: Issuance Number of Initial Per Initial Term Expiration Series G Warrants November 4, 2016 750,000 $ 10.00 1.2 January 31, 2018 Series H Warrants November 4, 2016 250,000 $ 12.00 2.2 January 31, 2019 Series I Warrants November 4, 2016 250,000 $ 14.00 3.2 January 31, 2020 Series J Warrants December 29, 2016 1,085,000 $ 0.03 4 December 29, 2020 Series K Warrants December 29, 2016 85,000 $ 0.03 4 December 29, 2020 Warrants outstanding at December 31, 2017 had the following terms: Issuance Number of Per Share Exercise Remaining Term Expiration Series G Warrants November 4, 2016 750,000 $ 4.12 1.08 January 31, 2019 Series H Warrants November 4, 2016 250,000 $ 4.12 1.08 January 31, 2019 Series I Warrants November 4, 2016 250,000 $ 4.12 2.08 January 31, 2020
Key inputs used in the Monte Carlo Simulation model determining the fair value of the warrants	The Company’s management determined the fair value of the warrant liability as of December 31, 2016 by using the following key inputs to the Monte Carlo Simulation model: Inputs Series G Series H Series I Series J Series K Volatility (1) 63.6 % 79.1 % 70.8 % 65.8 % 65.8 % Expected term (years) 1.08 2.08 3.08 4 4 Risk free interest rate .879 % 1.223 % 1.489 % 1.699 % 1.699 % Common stock price $ 12.00 $ 12.00 $ 12.00 $ 12.00 $ 12.00 Exercise price $ 10.00 $ 12.00 $ 14.00 $ 0.03 $ 0.03 The Company determined the fair values of the Warrants by using the following key inputs to the Monte Carlo Simulation model at December 31, 2017: Inputs Series G Series H Series I Volatility (1) 68.3 % 68.3 % 67.1 % Expected term (years) 1.08 1.08 2.08 Risk free interest rate 1.771 % 1.771 % 1.898 % Common stock price $ 3.60 $ 3.60 $ 3.60 Exercise price $ 4.12 $ 4.12 $ 4.12 (1)
Warrants categorized within Level 3	For the Warrants, which measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from December 31, 2016 to December 31, 2017: Warrants “G”, “H” and “I” Warrants “J” and “K” Total Beginning fair value balance reported in the consolidated balance sheet at December 31, 2016 $ 6,393,936 $ 14,011,254 $ 20,405,190 Change in fair value (gain) reported in the statements of operations (4,952,105 ) (4,066,254 ) (9,018,359 ) Exercise of “J” and “K” Warrants — (9,945,000 ) (9,945,000 ) Ending fair value balance reported in the consolidated balance sheet at December 31, 2017 $ 1,441,831 $ — $ 1,441,831
Fair value by applying Black-Scholes Option Pricing Model	The Company determined the fair value by using the following key inputs to the Black-Scholes Option Pricing Model: Inputs On the date (March 30, As of Equity Volatility estimate 75 % 105.0 % Discount rate based on US Treasury obligations 0.12% - 1.70 % 1.50% - 1.99 %
Schedule of put rights categorized within level 3	For the Put Rights, which measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from the date of acquisition (March 30, 2017) to December 31, 2017: Beginning fair value balance on the Acquisition Date (March 30, 2017) $ 3,800,000 Change in fair value (loss) reported in the statements of operations 2,426,010 Ending fair value balance reported in the consolidated balance sheet at December 31, 2017 $ 6,226,010
Schedule of fair value on date of acquisition	The Company determined the fair value on the date of acquisition by using the following key inputs to the Monte Carlo Simulation Model: Inputs On the date (March 30, Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration) 1.03% -1.55 % Annual Asset Volatility Estimate 72.5 % Estimated EBITDA $3,600,000 - $3,900,000
Reconciliation of fair value from Date of Acquisition	For the Contingent Consideration, which measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from the date of acquisition (March 30, 2017) to December 31, 2017: Beginning fair value balance on the Acquisition Date (March 30, 2017) $ 3,627,000 Change in fair value (gain) reported in the statements of operations 17,251 Additional paid in capital 3,644,251 Ending fair value balance reported in the consolidated balance sheet at December 31, 2017 $ —

14. VARIABLE INTEREST ENTITIES

14. VARIABLE INTEREST ENTITIES (Tables)	12 Months Ended
	Dec. 31, 2017
Variable Interest Entities
Summary financial information for the VIE's	Max Steel Productions LLC As of and for the years ended December 31, JB Believe LLC As of and for the years ended December 31, (in USD) 2017 2016 2017 2016 Assets 8,716,184 12,327,887 — 240,269 Liabilities (12,011,149 ) (15,922,552 ) (6,743,278 ) (7,014,098 ) Revenues 5,889,003 9,233,520 65,112 133,331 Expenses (5,589,303 ) (11,627,444 ) (34,561 ) (395,374 )

16 .EARNINGS (LOSS) PER SHARE (

16 .EARNINGS (LOSS) PER SHARE (Tables)	12 Months Ended
	Dec. 31, 2017
Earnings Loss Per Share Tables
Schedule of basic and diluted income (loss) per share	The following table sets forth the computation of basic and diluted income (loss) per share: Year ended 12/31/2017 12/31/2016 Numerator Net income (loss) attributable to Dolphin Entertainment shareholders $ 6,912,524 $ (37,189,679 ) Preferred stock deemed dividend — (5,227,247 ) Numerator for basic earnings per share 6,912,524 (42,416,926 ) Change in fair value of G, H and I warrants (9,018,359 ) — Numerator for diluted earnings per share $ (2,105,835 ) $ (42,416,926 ) Denominator Denominator for basic EPS - weighted-average shares 9,586,986 4,389,097 Effect of dilutive securities: Warrants 1,021,841 — Denominator for diluted EPS - adjusted weighted-average shares assuming exercise of warrants $ 10,608,828 $ 4,389,097 Basic earnings (loss) per share $ 0.72 $ (9.66 ) Diluted earnings (loss) per share $ (0.20 ) $ (9.66 )

17. WARRANTS (Tables)

17. WARRANTS (Tables)	12 Months Ended
	Dec. 31, 2017
Warrants Tables
Warrants activity	A summary of warrants outstanding at December 31, 2016 and issued exercised and expired during the year ended December 31, 2017 is as follows: Warrants: Shares Weighted Avg. Balance at December 31, 2016 2,945,000 $ 5.98 Issued 1,300,050 4.74 Exercised (1,332,885 ) 1.28 Expired — — Balance at December 30, 2017 2,912,165 $ 4.80
Summary of warrants issued	On November 4, 2016, the Company issued a Warrant “G”, a Warrant “H” and a Warrant “I” to T Squared (“Warrants “G”, “H” and “I”). A summary of Warrants “G”, “H” and “I” issued to T Squared is as follows: Warrants Number of Shares Exercise Original Exercise Fair Value Fair Value Expiration Warrant “G” 750,000 $ 4.12 $ 10.00 $ 800,750 $ 3,300,671 January 31, 2018 Warrant “H” 250,000 $ 4.12 $ 12.00 267,133 1,524,805 January 31, 2019 Warrant “I” 250,000 $ 4.12 $ 14.00 373,948 1,568,460 January 31, 2020 1,250,000 $ 1,441,831 $ 6,393,936

19. SEGMENT INFORMATION (Tables

19. SEGMENT INFORMATION (Tables)	12 Months Ended
	Dec. 31, 2017
Segment Information Tables
Schedule of Salaries and related expenses	Year ended December 31, 2017 Revenue: EPD $ 16,458,929 CPD 5,954,115 Total $ 22,413,044 Segment operating income (loss): EPD $ 2,071,713 CPD (3,176,639 ) Total (1,104,926) Interest expense (1,594,940 ) Other income, net 9,951,257 Income before income taxes $ 7,251,391 As of Total assets: EPD $ 26,743,013 CPD 6,854,130 Total $ 33,597,143

20. INCOME TAXES (Tables)

20. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	Income Tax Expense (Benefit) is as follows: December 31, 2017 2016 Current Income Tax Expense (Benefit) Federal $ — $ — State 151,330 — $ 151,330 $ — Deferred Income Tax Expense (Expense) Federal $ 1,799,157 $ (10,854,954 ) ) Federal – Tax Reform 6,049,711 — State (38,910 ) (817,631 ) $ 7,809,958 $ (11,672,585 ) Change in Valuation Allowance (Benefit) Federal $ (7,661,331 ) $ 10,854,954 State 38,910 817,631 $ (7,622,421 ) $ 11,672,585 Income Tax Expense $ 338,867 $ —
Total net deferred tax assets	Deferred tax values at December 31, 2017 and 2016, are as follows: December 31, 2017 2016 Deferred Tax Assets: Accrued Expenses $ 299,855 $ 177,447 Interest Expense 730,022 329,942 Deferred Rent 114,128 3,418 Accrued Compensation 653,375 829,051 Amortization 132,219 — Other 183,524 — Put Options 638,547 — Capitalized Web Costs 563,596 795,318 Capitalized Production Costs 53,299 1,019,784 Charitable Contributions 273,982 388,644 Net Operating Losses and Credits 8,560,117 16,364,744 Total Deferred Tax Assets $ 12,202,664 $ 19,908,348 Deferred Tax Liability: Fixed Assets (110,049 ) (5,775 ) Total Deferred Tax Liabilities (110,049 ) (5,775 ) Subtotal 12,092,615 ) 19,902,573 Valuation Allowance (12,280,152 ) (19,902,573 ) Net Deferred taxes $ (187,537 ) $ —
Effective tax rate	A reconciliation of the federal statutory tax rate with the effective tax rate from continuing operations is as follows: 2017 2016 Federal Statutory Tax Rate 34.0 % (34.0 )% Permanent Items Affecting Tax Rate (45.6 )% 4.9 % State Income Taxes, Net of Federal Income Tax Benefit (0.6 )% (2.2 )% Change in State Tax Rate 3.3 % 0.2 % Return to Provision Adjustment 1.3 % (0.1 )% Other 0.3 % (0.2 )% Change in Valuation Allowance (80.4 )% 31.4 % Tax Reform Tax Rate Change 92.3 % — Effective Tax Rate 4.6 % 0.00 %

21. LEASES (Tables)

21. LEASES (Tables)	12 Months Ended
	Dec. 31, 2017
Leases [Abstract]
Lease Payments	Future minimum payments for operating leases in effect at December 31, 2017 were as follows: 2018 $ 1,348,560 2019 1,326,535 2020 1,433,403 2021 1,449,019 2022 912,864 Thereafter 3,762,980 Total $ 10,233,361

2. GOING CONCERN (Details Narra

2. GOING CONCERN (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Going Concern Narrative Details
Net loss	$ (6,912,524)	$ 37,189,679
Cash flows from operations	8,359,549	(14,972,444)
Working capital deficit	$ 10,705,975	$ 31,424,129

3. SUMMARY OF SIGNIFICANT ACC43

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment (Details)	12 Months Ended
	Dec. 31, 2017
Furniture and fixtures [Member] | Maximum [Member]
Depreciation/ Amortization Period	5 years
Furniture and fixtures [Member] | Minimum [Member]
Depreciation/ Amortization Period	7 years
Computer and office equipment [Member] | Maximum [Member]
Depreciation/ Amortization Period	3 years
Computer and office equipment [Member] | Minimum [Member]
Depreciation/ Amortization Period	5 years
Leasehold improvements [Member] | Maximum [Member]
Depreciation/ Amortization Period	5 years
Leasehold improvements [Member] | Minimum [Member]
Depreciation/ Amortization Period	8 years

3. SUMMARY OF SIGNIFICANT ACC44

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Impairment charges related to capitalized production costs	$ 3,356,785	$ 7,822,549
Share based compensation	$ 329,967

4. ACQUISITION (Details Narrati

4. ACQUISITION (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Acquisition Of 42west Details Narrative
Customer relationships	$ 5,980,000
Assigned to trade	2,760,000
Assigned to non-competition agreements	370,000
Acquisition related costs	$ 749,440
Common Stock aggregate	1,187,094
Fair value liabilities decreased	$ 627,000

4. ACQUISITION (Details)

4. ACQUISITION (Details) - USD ($)	Dec. 31, 2017	Mar. 31, 2017
Business Combinations [Abstract]
Common Stock issued at closing and in April 2017 (787,415 shares)	$ 6,693,028
Common Stock issuable in 2018 (980,911 shares)	8,337,740
Contingent Consideration	3,627,000
Put Rights	3,800,000
Sellers' transaction costs paid at closing	260,000
Working capital adjustment (50,000 shares issued in April 2017 plus paid $185,031 cash in August 2017)	610,031	$ 610,032
Total acquisition fair value	$ 23,327,799

4. ACQUISITION (Details 1)

4. ACQUISITION (Details 1) - USD ($)	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Cash	$ 5,296,873		$ 662,546
Accounts receivable	3,700,618		3,668,646
Other assets	422,118		2,665,781
Indemnification asset		$ (300,000)
Favorable lease intangible asset		440,000
Intangible assets	8,506,745
Goodwill	12,778,860
Dolphin Digital Media, Inc
Cash	273,625	273,625
Accounts receivable	1,706,644	1,706,644
Property, equipment and leasehold improvements	1,087,962	1,087,962
Other assets	265,563	265,563
Indemnification asset	300,000
Favorable lease intangible asset	440,000
Intangible assets	9,110,000	9,110,000
Total identifiable assets acquired	13,183,794	12,443,794
Accounts payable and accrued expenses	(731,475)	(731,475)
Line of credit and note payable	(1,025,000)	(1,025,000)
Settlement liability	(300,000)	(300,000)
Other liabilities	(556,380)	(902,889)
Tax liabilities	(22,000)	(22,000)
Total liabilities assumed	(2,634,855)	(2,981,364)
Net identifiable assets acquired	10,548,939	9,462,430
Goodwill	12,778,860	13,996,337
Net assets acquired	23,327,799	$ 23,458,767
Acquisition Adjustments
Cash
Accounts receivable
Property, equipment and leasehold improvements
Other assets
Indemnification asset	300,000
Favorable lease intangible asset	440,000
Intangible assets
Total identifiable assets acquired	740,000
Accounts payable and accrued expenses
Line of credit and note payable
Settlement liability
Other liabilities	346,509
Tax liabilities
Total liabilities assumed	346,509
Net identifiable assets acquired	1,086,509
Goodwill	(1,217,477)
Net assets acquired	$ (130,968)

4. ACQUISITION (Details 2)

4. ACQUISITION (Details 2) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue	$ 27,102,600	$ 27,959,374
Net income	8,622,281	$ (35,719,450)
Digital Member
Revenue	16,458,929
Net income	$ 2,155,665

4. ACQUISITION (Details 3)

4. ACQUISITION (Details 3) - USD ($)	Dec. 31, 2017	Mar. 31, 2017	Dec. 31, 2016
Business Combinations [Abstract]
Goodwill originally reported at March 31, 2017		$ 13,996,337
Contingent Consideration		86,000
Put Rights	$ 2,446,216	(200,000)
Sellers' tax liabilities assumed		(627,000)
Favorable lease intangible asset		(440,000)
Deferred rent		(346,509)
Working capital adjustment	$ 610,031	610,032
Indemnification asset		(300,000)
Total		1,217,477
Adjusted goodwill		$ 12,778,860

5. CAPITALIZED PRODUCTION COS50

5. CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Fair value of the capitalized production	$ 2,000,000
Motion picture capital	242,500	$ 215,000
Ending balance	833,145	4,189,930
Net of accumulated amortization	0	249,083
Other current assets	422,118	2,665,781
Tax incentives	0	2,060,883
Prepaid Interest	0	602,697
Motion Pictures
Revenues earned	5,954,115	9,367,222
Amortized capitalized production costs	3,356,785	7,822,550
Accounts Receivables
Ending balance	227,280	3,668,646
Allowance for doubtful accounts	1,787,647
Accounts receivable related to entertainment	139,000
Net of allowance for doubtful accounts	1,821,970
Digital Member
Amortized capitalized production costs	$ 0	249,083
Distribution fees percentage	50.00%
Foreign Distributors [Member]
Ending balance	$ 227,280	$ 2,578,893
Net of allowance for doubtful accounts	$ 727,674

6. PROPERTY, EQUIPMENT AND LE51

6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Property Equipment And Leasehold Improvements Details
Furniture and fixtures	$ 483,306	$ 65,311
Computers and equipment	432,586	41,656
Leasehold improvements	448,661	7,649
Property plant and equipment gross	1,364,553	114,616
Less: accumulated depreciation and amortization	(253,777)	(79,428)
Property plant and equipment net	$ 1,110,776	$ 35,188

8. DEBT (Details Narrative)

8. DEBT (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2016	May 31, 2016
Loss on extinguishment		$ (37,282,824)
Production Service Agreement
Accrued interest	$ 1,455,745	1,147,520
Outstanding balances	2,086,249	6,243,069
Web Series Funding
Accrued interest		420,455
Interest expense	0	31,487
First Group Film Funding
Accrued interest			$ 1,811,490	$ 11,340,000
Interest expense	0	518,767
Second Group Film Funding
Interest expense	0	$ 715,934
Line of Credit
Outstanding balances	750,000
Credit line for working capital	250,000
Payable to Former Member of 42West
Principal investment	300,000
Outstanding balances	$ 225,000

9. NOTES PAYABLE (Details Narra

9. NOTES PAYABLE (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Note payable	$ 600,000
Nonconvertible Notes Payable
Note payable	1,100,000	300,000
Interest Expenses	131,778	30,082
Outstanding balance	$ 189,309	134,794
Convertible Notes
Note payable		$ 31,207

10. LOANS FROM RELATED PARTY (D

10. LOANS FROM RELATED PARTY (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Loans From Related Party Details Narrative
Extinguishment of the debt		$ 614,682
Converted at a price Share	$ 12
Interest expense		32,008
Interest Rates	10.00%
Dolphin Films owed DE	$ 1,708,874	$ 684,326

11. FAIR VALUE MEASUREMENTS (De

11. FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of issued contingent consideration	9,333,333
Common stock price per share	$ 9.22
Stock issued	$ 1,012,292
Liability for contingent consideration	$ 3,644,251
Closing market price	$ 3.60
Put Rights
Put Rights Agreements	132,859
Common Stock for an aggregate amount	$ 1,225,000
Loss on the contingent	230,000
Warrant Member
Carrying amount at fair value	$ 2,774,583	$ 20,405,190

11. FAIR VALUE MEASUREMENTS (56

11. FAIR VALUE MEASUREMENTS (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of common shares	1,250,000
Warrant G
Issuance date	Nov. 4, 2106	Nov. 4, 2106
Number of common shares	750,000	750,000
Initial per share exercise price	$ 4.12	$ 10
Initial term	1 year 29 days	1 year 2 months 12 days
Expiration date	Jan. 31, 2019	Jan. 31, 2018
Warrant H
Issuance date	Nov. 4, 2106	Nov. 4, 2106
Number of common shares	250,000	250,000
Initial per share exercise price	$ 4.12	$ 12
Initial term	1 year 29 days	2 years 2 months 12 days
Expiration date	Jan. 31, 2019	Jan. 31, 2019
Warrant I
Issuance date	Nov. 4, 2106	Nov. 4, 2106
Number of common shares	250,000	250,000
Initial per share exercise price	$ 4.12	$ 14
Initial term	2 years 29 days	3 years 2 months 12 days
Expiration date	Jan. 31, 2020	Jan. 31, 2020
Warrant J
Issuance date		Dec. 29, 2016
Number of common shares		1,085,000
Initial per share exercise price		$ 0.03
Initial term		4 years
Expiration date		Dec. 29, 2020
Warrant K
Issuance date		Dec. 29, 2016
Number of common shares		85,000
Initial per share exercise price		$ 0.03
Initial term		4 years
Expiration date		Dec. 29, 2020

11. FAIR VALUE MEASUREMENTS (57

11. FAIR VALUE MEASUREMENTS (Details 1) - $ / shares		3 Months Ended	12 Months Ended
		Mar. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Volatility		72.50%
Warrant G
Volatility	[1]		68.30%	63.60%
Expected term (years)			1 year 29 days	1 year 29 days
Risk free interest rate			1.771%	0.879%
Common stock price			$ 3.60	$ 12
Exercise price			$ 4.12	$ 10
Warrant H
Volatility	[1]		68.30%	79.10%
Expected term (years)			1 year 29 days	2 years 29 days
Risk free interest rate			1.771%	1.223%
Common stock price			$ 3.60	$ 12
Exercise price			$ 4.12	$ 12
Warrant I
Volatility	[1]		67.10%	70.80%
Expected term (years)			2 years 29 days	3 years 29 days
Risk free interest rate			1.898%	1.489%
Common stock price			$ 3.60	$ 12
Exercise price			$ 4.12	$ 14
Warrant J
Volatility	[1]			65.80%
Expected term (years)				4 years
Risk free interest rate				1.699%
Common stock price				$ 12
Exercise price				$ 0.03
Warrant K
Volatility	[1]			65.80%
Expected term (years)				4 years
Risk free interest rate				1.699%
Common stock price				$ 12
Exercise price				$ 0.03
[1]	Level 3" input.

11 FAIR VALUE MEASUREMENT (Deta

11 FAIR VALUE MEASUREMENT (Details 2)	12 Months Ended
	Dec. 31, 2017USD ($)
Beginning fair value balance reported in the consolidated balance sheet at December 31, 2016	$ 20,405,190
Change in fair value (gain) reported in the statements of operations	(9,018,359)
Exercise of J and K Warrants	(9,945,000)
Ending fair value balance reported in the consolidated balance sheet at December 31, 2017	1,441,831
Warrants G H I
Beginning fair value balance reported in the consolidated balance sheet at December 31, 2016	6,393,936
Change in fair value (gain) reported in the statements of operations	(4,952,105)
Exercise of J and K Warrants
Ending fair value balance reported in the consolidated balance sheet at December 31, 2017	1,441,831
Warrants J K
Beginning fair value balance reported in the consolidated balance sheet at December 31, 2016	14,011,254
Change in fair value (gain) reported in the statements of operations	(4,066,254)
Exercise of J and K Warrants	(9,945,000)
Ending fair value balance reported in the consolidated balance sheet at December 31, 2017

11 FAIR VALUE MEASUREMENT (De59

11 FAIR VALUE MEASUREMENT (Details 3)	Dec. 31, 2017	Mar. 30, 2017
Equity Volatility estimate	105.00%	75.00%
Minimum [Member]
Discount rate based on US Treasury obligations	1.50%	0.12%
Maximum [Member]
Discount rate based on US Treasury obligations	1.99%	1.70%

11 FAIR VALUE MEASUREMENT (De60

11 FAIR VALUE MEASUREMENT (Details 4)	12 Months Ended
	Dec. 31, 2017USD ($)
Change in fair value gain (loss) reported in the statements of operations	$ (9,018,359)
Put Right [Member]
Beginning fair value balance on the Acquisition Date (March 30, 2017)	3,800,000
Change in fair value gain (loss) reported in the statements of operations	2,426,010
Ending fair value balance reported in the consolidated balance sheet at December 31, 2017	6,226,010
Contingent Consideration [Member]
Beginning fair value balance on the Acquisition Date (March 30, 2017)	3,627,000
Change in fair value gain (loss) reported in the statements of operations	17,251
Additional paid in capital	$ 3,644,251

11 FAIR VALUE MEASUREMENT (De61

11 FAIR VALUE MEASUREMENT (Details 5)	3 Months Ended
	Mar. 30, 2017USD ($)
Annual Asset Volatility Estimate	72.50%
Maximum [Member]
Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration)	1.55%
Estimated EBITDA	$ 3,900,000
Minimum [Member]
Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration)	1.03%
Estimated EBITDA	$ 3,600,000

13. DEFERRED REVENUE (Details N

13. DEFERRED REVENUE (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2014
Deferred Revenue Details Narrative
Received deposits			$ 1,418,368
Revenue	$ 1,371,687
Deferred Revenue	$ 46,681	$ 48,449

14. VARIABLE INTEREST ENTITIE63

14. VARIABLE INTEREST ENTITIES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Assets	$ 33,597,143	$ 14,197,241
Liabilities	(27,520,786)	(46,065,038)
Revenues	22,413,044	9,395,625
Expenses	(23,517,970)	(27,097,889)
Accounts receivable	366,277	0
Max Steel Productions, LLC
Assets	8,716,184	12,327,887
Liabilities	(12,011,149)	(15,922,552)
Revenues	5,889,003	9,233,520
Expenses	(5,589,303)	(11,627,444)
Capitalized production costs	833,145	4,189,930
Accounts receivable	227,280	3,668,646
Net of allowance for doubtful accounts	1,821,970
JB Believe, LLC
Assets		240,269
Liabilities	(6,743,278)	(7,014,098)
Revenues	65,112	133,331
Expenses	$ (34,561)	$ (395,374)

15. STOCKHOLDERS' DEFICIT (Deta

15. STOCKHOLDERS' DEFICIT (Details Narrative) - shares	Dec. 31, 2017	Dec. 31, 2016
Common stock, issued	10,565,789	7,197,761
Common stock, Outstanding	10,565,789	7,197,761
Series C Preferred Stock
Preferred stock, issued shares	50,000	50,000
Preferred stock, outstanding shares	50,000	50,000
Employee Incentive Plan	500,000	500,000
Series B Preferred Stock
Preferred stock, issued shares	2,300,000

16. EARNINGS (LOSS) PER SHARE (

16. EARNINGS (LOSS) PER SHARE (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net income (loss) attributable to Dolphin Entertainment shareholders	$ 6,912,524	$ (37,189,679)
Preferred stock deemed dividend		(5,227,247)
Numerator for basic earnings per share	6,912,524	(42,416,926)
Change in fair value of G, H and I warrants	(9,018,359)
Numerator for diluted earnings per share	$ (2,105,835)	$ (42,416,926)
Denominator:
Denominator for basic EPS - weighted - average shares	9,586,986	4,389,097
Effect of dilutive securities:
Warrants	1,021,841
Denominator for diluted EPS - adjusted weighted-average shares assuming exercise of warrants	10,608,828	4,389,097
Basic earnings (loss) per share	$ 0.72	$ (9.66)
Diluted earnings (loss) per share	$ (0.20)	$ (9.66)

16. EARNINGS (LOSS) PER SHARE66

16. EARNINGS (LOSS) PER SHARE (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Earnings Loss Per Share Details Narrative
Preferred stock deemed dividend		$ (5,227,247)

17. WARRANTS (Details)

17. WARRANTS (Details)	12 Months Ended
	Dec. 31, 2017$ / sharesshares
Warrants Details
Number of Warrants, Beginning | shares	2,945,000
Number of Warrants, Issued | shares	1,300,050
Number of Warrants, Exercised | shares	(1,332,885)
Number of Warrants, Expired | shares
Number of Warrants, Ending | shares	2,912,165
Weighted Average Exercise Price, Beginning | $ / shares	$ 5.98
Weighted Average Exercise Price, Issued | $ / shares	4.74
Weighted Average Exercise Price, Exercised | $ / shares	1.28
Weighted Average Exercise Price, Expired | $ / shares
Weighted Average Exercise Price, Ending | $ / shares	$ 4.80

17. WARRANTS (Details 1)

17. WARRANTS (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Number of Shares	1,250,000
Fair Value as of December 31, 2017	$ 1,441,831
Fair Value as of December 31, 2016	$ 6,393,936
Warrant G
Number of Shares	750,000	750,000
Exercise price at December 31, 2017	$ 4.12
Original Exercise Price	$ 10
Fair Value as of December 31, 2017	$ 800,750
Fair Value as of December 31, 2016	$ 3,300,671
Expiration Date	Jan. 31, 2019	Jan. 31, 2018
Warrant H
Number of Shares	250,000	250,000
Exercise price at December 31, 2017	$ 4.12
Original Exercise Price	$ 12
Fair Value as of December 31, 2017	$ 267,133
Fair Value as of December 31, 2016	$ 1,524,805
Expiration Date	Jan. 31, 2019	Jan. 31, 2019
Warrant I
Number of Shares	250,000	250,000
Exercise price at December 31, 2017	$ 4.12
Original Exercise Price	$ 14
Fair Value as of December 31, 2017	$ 373,948
Fair Value as of December 31, 2016	$ 1,568,460
Expiration Date	Jan. 31, 2020	Jan. 31, 2020

18. RELATED PARTY TRANSACTIONS

18. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Officer compensation expense accrued	$ 2,500,000	$ 2,250,000
Interest accrued in other current liabilities	971,809	735,211
Interest expensed	236,598	$ 212,066
Payment of principal balance and accrued interest	$ 151,875
Mr. O Dowd [Member]
Related party purchased units	88,500
Mr. Mayer [Member]
Related party purchased units	60,000
Nicholas Stanham [Member]
Related party purchased units	12,100
Series C Preferred Stock
Preferred Stock Shares Issued	50,000	50,000
Preferred Stock Par Value	$ 0.001	$ 0.001
Series B Preferred Stock
Preferred Stock Shares Issued	2,300,000
Preferred Stock Par Value	$ 0.10

19. SEGMENT INFORMATION (Detail

19. SEGMENT INFORMATION (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue:
EPD	$ 16,458,929
CPD	5,954,115
Total	22,413,044
Segment operating income (loss):
EPD	2,071,713
CPD	(3,176,639)
Total	(1,104,926)
Interest expense	(1,594,940)	$ (4,718,091)
Other income, net	8,356,317	$ (19,487,415)
Income before income taxes	$ 7,251,391

19. SEGMENT INFORMATION (Deta71

19. SEGMENT INFORMATION (Details 1)	Dec. 31, 2017USD ($)
Total assets:
EPD	$ 26,743,013
CPD	6,854,130
Total	$ 33,597,143

20. INCOME TAXES (Details)

20. INCOME TAXES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Current Income Tax Expense (Benefit)
Federal
State	151,330
Current	151,330
Deferred Income Tax Expense (Expense)
Federal	1,799,157	(10,854,954)
Federal - Tax Reform	6,049,711
State	(38,910)	(817,631)
Deferred	7,809,958	(11,672,585)
Change in Valuation Allowance (Benefit)
Federal	(7,661,331)	10,854,954
State	38,910	817,631
Change in valuation allowance	(7,622,421)	11,672,585
Income Tax Expense	$ 338,867

20. INCOME TAXES (Details 1)

20. INCOME TAXES (Details 1) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Deferred Tax Assets:
Accrued Expenses	$ 299,855	$ 177,447
Interest Expense	730,022	329,942
Deferred Rent	114,128	3,418
Accrued Compensation	653,375	829,051
Amortization	132,219
Other	183,524
Put Options	638,547
Capitalized Web Costs.	563,596	795,318
Capitalized Production Costs	53,299	1,019,784
Charitable Contributions	273,982	388,644
Net Operating Losses and Credits	8,560,117	16,364,744
Total Deferred Tax Assets	12,202,664	19,908,348
Deferred Tax Liability:
Fixed assets	(110,049)	(5,775)
Total Deferred Tax Liabilities	(110,049)	(5,775)
Subtotal	12,092,615	19,902,573
Valuation Allowance	(12,280,152)	(19,902,573)
Net Deferred taxes	$ (187,537)

20. INCOME TAXES (Details 2)

20. INCOME TAXES (Details 2)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Income Taxes Details 2
Federal Statutory Tax Rate	(34.00%)	(34.00%)
Permanent Items Affecting Tax Rate	(45.60%)	4.90%
State Income Taxes, Net of Federal Income Tax Benefit	(0.60%)	(2.20%)
Change in State Tax Rate	3.30%	0.20%
Return to Provision Adjustment	1.30%	(0.10%)
Other	0.30%	(0.20%)
Change in Valuation Allowance	(80.40%)	31.40%
Tax Reform Tax Rate Change	92.30%
Effective Tax Rate	4.60%	0.00%

21. LEASES (Details)

21. LEASES (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Leases Details
2,018	$ 1,348,560
2,019	1,326,535
2,020	1,433,403
2,021	1,449,019
2,022	912,864
Thereafter	3,762,980
Total	10,233,361
Rent expense	$ 1,314,502	$ 220,426

22.COMMITMENTS AND CONTINGENCIE

22.COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenues	$ 22,413,044	$ 9,395,625
Tax Filings
Late filing penalties	40,000	40,000
Kids Club
Revenues		$ 28,403
Incentive Compensation Plan
Recorded compensation expense	329,175
Employee Benefit Plan
Contributions	$ 246,138

23. SUBSEQUENT EVENTS (Details

23. SUBSEQUENT EVENTS (Details Narrative) - USD ($)

Apr. 05, 2018

Apr. 02, 2018

Mar. 28, 2018

Mar. 21, 2018

Mar. 15, 2018

Feb. 15, 2018

Jan. 31, 2018

Jan. 22, 2018

Jan. 09, 2018

Jan. 05, 2018

Jan. 02, 2018

Mar. 30, 2018

Dec. 31, 2017

Dec. 31, 2016

Mar. 19, 2018

Subsequent Event [Line Items]

Draw on line of credit

$ 750,000

Repayments of promissory notes

$ 410,000

Subsequent Event [Member]

Subsequent Event [Line Items]

Stock issued for business combination consideration

762,654

Stock issued, price per share

$ 9.22

Payment to principal sellers of business for repurchase of shares

$ 525,000

Number of shares repurchased pursuant to Put Agreements

56,940

Payment to former member of business acquired pursuant to the membership purchase agreement with that member

$ 225,000

Proceeds received from sale of 20,750 shares of Common Stock and 175,750 warrants due to exercising the over-allotment option under the underwriting agreement

$ 81,044

Line of credit interest rate

0.25%

Line of credit maximum borrowing capacity

$ 2,300,000

Line of credit expiration date

Mar. 15, 2020

Number of common shares agreed to be purchased through put agreements

51,485

Number of common shares agreed to be purchased through put agreements, purchase price

$ 9.22

Number of additional common shares agreed to be purchased through put agreements by July 2018

105,718

Number of common shares exercised through put agreement by Sellers

183,296

Number of common shares exercised through put agreement by Sellers, purchase price

$ 9.22

Draw on line of credit

$ 1,690,000

Stock purchased by Company pursuant to put agreements, shares

150,758

Stock purchased by Company pursuant to put agreements, value

$ 1,390,000

Aggregate amount company will pay for put agreements on April 10, 2018

$ 300,000

Payments made to employees pursuant to Change of Control Provisions

$ 292,112

Repayments of promissory notes

$ 41,667

$ 41,667

$ 41,667

Number of shares company will purchase pursuant to put agreements on April 10, 2018

32,538

Eliminated annual bonus in shares per amended employment agreements, value

$ 200,000