Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 11, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Dolphin Entertainment, Inc. | |
Entity Central Index Key | 0001282224 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 32,179,872 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Incorporation | FL | |
Entity File Number | 001-38331 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Current | ||
Cash and cash equivalents | $ 12,560,206 | $ 2,196,249 |
Restricted cash | 714,089 | 714,089 |
Accounts receivable, net | 2,521,885 | 3,581,155 |
Other current assets | 187,504 | 372,872 |
Total current assets | 15,983,684 | 6,864,365 |
Capitalized production costs, net | 274,575 | 203,036 |
Right-of-use asset | 6,567,094 | 7,435,903 |
Intangible assets, net of accumulated amortization of $5,130,784 and $4,299,794, respectively. | 7,530,549 | 8,361,539 |
Goodwill | 18,072,825 | 17,947,989 |
Property, equipment and leasehold improvements, net | 858,098 | 1,036,849 |
Investments | 220,000 | 220,000 |
Deposits and other assets | 239,746 | 502,045 |
Total Assets | 49,746,571 | 42,571,726 |
Current | ||
Accounts payable | 966,096 | 832,089 |
Other current liabilities | 2,667,019 | 3,387,130 |
Line of credit | 1,700,390 | |
Term loan | 1,100,357 | |
Put rights | 2,663,237 | 2,879,403 |
Accrued compensation | 2,625,000 | 2,625,000 |
Accrued interest | 2,071,073 | 1,986,679 |
Debt | 3,311,198 | |
Paycheck Protection Program loan | 1,041,997 | |
Loan from related party | 1,107,873 | 1,107,873 |
Lease liability | 1,515,458 | 1,610,022 |
Contract liabilities | 370,466 | 309,880 |
Convertible notes payable | 802,500 | 2,383,610 |
Convertible notes payable at fair value | 740,000 | |
Notes payable | 692,743 | 288,237 |
Total current liabilities | 18,363,819 | 22,421,511 |
Noncurrent | ||
Put rights | 124,144 | |
Convertible notes payable | 195,000 | 1,100,000 |
Convertible notes payable at fair value | 1,654,522 | 629,618 |
Warrants liability | 585,559 | 189,590 |
Derivative liability | 170,000 | |
Notes payable | 625,429 | 1,074,122 |
Paycheck Protection Program loan | 1,753,703 | |
Contingent consideration | 800,000 | 330,000 |
Lease liability | 5,659,094 | 6,386,209 |
Other noncurrent liabilities | 570,000 | 570,000 |
Total noncurrent liabilities | 11,843,307 | 10,573,683 |
Total Liabilities | 30,207,126 | 32,995,194 |
Commitments and contingencies (Note 20) | ||
STOCKHOLDERS' EQUITY | ||
Common stock, $0.015 par value, 200,000,000 shares authorized, 31,608,903 and 17,892,900, respectively, issued and outstanding at June 30, 2020 and December 31, 2019 | 474,142 | 268,402 |
Preferred Stock, Series C, $0.001 par value, 50,000 shares authorized, issued and outstanding at June 30, 2020 and December 31, 2019 | 1,000 | 1,000 |
Additional paid in capital | 115,966,906 | 106,465,896 |
Accumulated deficit | (96,902,603) | (97,158,766) |
Total Stockholders' Equity | 19,539,445 | 9,576,532 |
Total Liabilities and Stockholders' Equity | $ 49,746,571 | $ 42,571,726 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Intangible assets, net | $ 5,130,784 | $ 4,299,794 |
Stockholders' Equity | ||
Preferred stock, shares authorized | 10,000,000 | |
Common stock, par value | $ 0.015 | $ 0.015 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 31,608,903 | 17,892,900 |
Common stock, Outstanding | 31,608,903 | 17,892,900 |
Series C Preferred Stock [Member] | ||
Stockholders' Equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, issued shares | 50,000 | 50,000 |
Preferred stock, outstanding shares | 50,000 | 50,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues: | ||||
Entertainment publicity and marketing | $ 5,194,725 | $ 6,273,983 | $ 11,828,525 | $ 12,523,890 |
Content production | 78,990 | |||
Total revenues | 5,194,725 | 6,273,983 | 11,828,525 | 12,602,880 |
Expenses: | ||||
Direct costs | 656,849 | 1,279,657 | 1,285,361 | 2,467,076 |
Selling, general and administrative | 978,527 | 1,071,460 | 2,223,345 | 1,859,623 |
Depreciation and amortization | 496,461 | 478,560 | 1,017,464 | 960,203 |
Legal and professional | 362,853 | 449,061 | 572,314 | 832,732 |
Payroll | 2,879,073 | 4,197,324 | 7,779,939 | 8,510,486 |
Total expenses | 5,373,763 | 7,476,062 | 12,878,423 | 14,630,120 |
Loss before other income (expenses) | (179,038) | (1,202,079) | (1,049,898) | (2,027,240) |
Other income (expenses): | ||||
Gain (loss) on extinguishment of debt | 3,259,866 | (21,287) | ||
Change in fair value of convertible notes and derivative liabilities | (696,420) | 30,000 | (548,961) | 30,000 |
Loss on deconsolidation of Max Steel VIE | (1,484,591) | |||
Change in fair value of warrants | (483,519) | 81,766 | (411,004) | 81,766 |
Change in fair value of put rights | 47,070 | 251,350 | 1,517,810 | 1,778,376 |
Change in fair value of contingent consideration | (573,000) | 360,000 | (470,000) | 90,000 |
Interest expense and debt amortization | (1,058,694) | (317,687) | (1,682,976) | (605,657) |
Total other income (expenses) | (2,764,563) | 405,429 | 180,144 | 1,353,198 |
Net loss | $ (2,943,601) | $ (796,650) | $ (869,754) | $ (674,042) |
Loss per Share: | ||||
Basic | $ (0.12) | $ (0.05) | $ (0.04) | $ (0.04) |
Diluted | $ (0.12) | $ (0.05) | $ (0.09) | $ (0.12) |
Weighted average number of shares used in per share calculation | ||||
Basic | 23,596,206 | 15,969,926 | 21,818,711 | 15,957,085 |
Diluted | 25,299,336 | 19,172,087 | 26,071,775 | 19,671,124 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (869,754) | $ (674,042) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,017,464 | 960,203 |
Loss on deconsolidation of Max Steel VIE | 1,484,591 | |
Beneficial conversion feature of convertible notes payable | 1,227,993 | |
Interest owed on convertible debt settled with shares of common stock upon conversion | 10,812 | |
Amortization of debt discount | 59,726 | 89,206 |
(Gain) loss on extinguishment of debt, net | (3,259,866) | 21,287 |
Bad debt and recovery of account receivable written off, net | 192,471 | (115,784) |
Change in fair value of put rights | (1,517,810) | (1,778,376) |
Change in fair value of contingent consideration | 470,000 | (90,000) |
Change in fair value of warrants | 411,004 | (81,766) |
Change in fair value of notes payable and derivative instruments | 548,961 | (30,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 866,799 | 809,592 |
Other current assets | (114,632) | 6,669 |
Capitalized production costs | (71,539) | (60,454) |
Deposits and other assets | (96,137) | (58,780) |
Contract liability | 60,586 | (330,149) |
Accounts payable | 134,009 | (174,258) |
Lease liability, net | 47,130 | 100,574 |
Other current liabilities | 114,258 | 346,511 |
Other noncurrent liabilities | (217,712) | |
Net Cash Provided by (Used in) Operating Activities | 716,066 | (1,277,279) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (7,723) | (37,929) |
Net Cash (Used in) Investing Activities | (7,723) | (37,929) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayment of the line of credit | (600,033) | |
Proceeds from convertible notes payable | 2,395,000 | 1,110,457 |
Repayment of convertible notes payable | (1,202,064) | |
Proceeds from the issuance of detachable warrants | 89,543 | |
Proceeds from note payable | ||
Repayment of notes payable | (42,803) | (38,942) |
Repayment of debt, net of interest | (99,367) | |
Proceeds from PPP Loans | 2,795,700 | |
Exercise of put rights | (459,700) | (1,365,500) |
Proceeds from sale of common stock through registered direct offering | 7,644,350 | |
Acquisition of The Door | (771,500) | |
Acquisition of Shore Fire | (624,836) | |
Acquisition of Viewpoint | (250,000) | (230,076) |
42West settlement of change of control provisions | (361,760) | |
Net Cash Provided by (used in) Financing Activities | 9,655,614 | (1,667,145) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | 10,363,957 | (2,982,353) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 2,910,338 | 6,274,640 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD | 13,274,295 | 3,292,287 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: | ||
Interest Paid | 208,742 | 151,100 |
SUPPLEMENTAL DISCLOSURES OF NON CASH FLOW INFORMATION: | ||
Conversion of note payable into shares of common stock | 2,650,000 | 75,000 |
Issuance of shares of Common Stock related to the acquisitions | 1,000,000 | |
Liability for contingent consideration for the acquisitions | 800,000 | 460,000 |
Liability for put rights to the Sellers of 42West | $ 2,663,237 | $ 4,708,191 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Reconciliation of cash, cash equivalents and restricted cash | ||
Cash and cash equivalents | $ 12,560,206 | $ 2,559,367 |
Restricted cash | 714,089 | 732,920 |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows | $ 13,274,295 | $ 3,292,287 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning Balance at Dec. 31, 2018 | $ 1,000 | $ 211,849 | $ 105,092,852 | $ (94,529,174) | $ 10,776,527 |
Beginning Balance, shares at Dec. 31, 2018 | 50,000 | 14,123,157 | |||
Net income (loss) | 122,608 | 122,608 | |||
Issuance of shares related to acquisition of The Door | $ 4,615 | 82,554 | 87,169 | ||
Issuance of shares related to acquisition of The Door, shares | 307,692 | ||||
Issuance of shares related to conversion of note payable | $ 798 | 95,489 | 96,287 | ||
Issuance of shares related to conversion of note payable, shares | 53,191 | ||||
Shares retired from exercise of puts | $ (854) | (1,176,646) | (1,177,500) | ||
Shares retired from exercise of puts, shares | (56,940) | ||||
Ending Balance at Mar. 31, 2019 | $ 1,000 | $ 216,408 | 104,094,249 | (94,406,566) | 9,905,091 |
Ending Balance, shares at Mar. 31, 2019 | 50,000 | 14,427,100 | |||
Beginning Balance at Dec. 31, 2018 | $ 1,000 | $ 211,849 | 105,092,852 | (94,529,174) | 10,776,527 |
Beginning Balance, shares at Dec. 31, 2018 | 50,000 | 14,123,157 | |||
Net income (loss) | (674,042) | ||||
Ending Balance at Jun. 30, 2019 | $ 1,000 | $ 215,918 | 103,404,239 | (95,203,216) | 8,417,941 |
Ending Balance, shares at Jun. 30, 2019 | 50,000 | 14,394,562 | |||
Beginning Balance at Dec. 31, 2018 | $ 1,000 | $ 211,849 | 105,092,852 | (94,529,174) | 10,776,527 |
Beginning Balance, shares at Dec. 31, 2018 | 50,000 | 14,123,157 | |||
Net income (loss) | (2,327,900) | ||||
Ending Balance at Dec. 31, 2019 | $ 1,000 | $ 268,402 | 106,465,896 | (97,158,766) | 9,576,532 |
Ending Balance, shares at Dec. 31, 2019 | 50,000 | 17,892,900 | |||
Beginning Balance at Mar. 31, 2019 | $ 1,000 | $ 216,408 | 104,094,249 | (94,406,566) | 9,905,091 |
Beginning Balance, shares at Mar. 31, 2019 | 50,000 | 14,427,100 | |||
Net income (loss) | (796,650) | (796,650) | |||
Shares retired from exercise of puts | $ (490) | (690,010) | (690,500) | ||
Shares retired from exercise of puts, shares | (32,538) | ||||
Ending Balance at Jun. 30, 2019 | $ 1,000 | $ 215,918 | 103,404,239 | (95,203,216) | 8,417,941 |
Ending Balance, shares at Jun. 30, 2019 | 50,000 | 14,394,562 | |||
Beginning Balance at Sep. 30, 2019 | 7,670,350 | ||||
Net income (loss) | (1,327,417) | ||||
Ending Balance at Dec. 31, 2019 | $ 1,000 | $ 268,402 | 106,465,896 | (97,158,766) | 9,576,532 |
Ending Balance, shares at Dec. 31, 2019 | 50,000 | 17,892,900 | |||
Net income (loss) | 2,073,847 | 2,073,847 | |||
Deconsolidation of Max Steel VIE | 1,125,917 | 1,125,917 | |||
Issuance of shares related to acquisition of Viewpoint | $ 3,731 | (3,731) | |||
Issuance of shares related to acquisition of Viewpoint, shares | 248,733 | ||||
Issuance of shares related to financing agreement | $ 750 | (750) | |||
Issuance of shares related to financing agreement, shares | 50,000 | ||||
Issuance of shares related to conversion of note payable | $ 28,167 | 1,147,254 | 1,175,421 | ||
Issuance of shares related to conversion of note payable, shares | 1,877,811 | ||||
Beneficial conversion of convertible promissory note | 301,781 | 301,781 | |||
Shares retired from exercise of puts | $ (488) | (1,636,712) | (1,637,200) | ||
Shares retired from exercise of puts, shares | (32,538) | ||||
Ending Balance at Mar. 31, 2020 | $ 1,000 | $ 300,562 | 106,273,738 | (93,959,002) | 12,616,298 |
Ending Balance, shares at Mar. 31, 2020 | 50,000 | 20,036,906 | |||
Beginning Balance at Dec. 31, 2019 | $ 1,000 | $ 268,402 | 106,465,896 | (97,158,766) | 9,576,532 |
Beginning Balance, shares at Dec. 31, 2019 | 50,000 | 17,892,900 | |||
Net income (loss) | (869,754) | ||||
Ending Balance at Jun. 30, 2020 | $ 1,000 | $ 474,142 | 115,966,906 | (96,902,603) | 19,539,445 |
Ending Balance, shares at Jun. 30, 2020 | 50,000 | 31,608,903 | |||
Beginning Balance at Mar. 31, 2020 | $ 1,000 | $ 300,562 | 106,273,738 | (93,959,002) | 12,616,298 |
Beginning Balance, shares at Mar. 31, 2020 | 50,000 | 20,036,906 | |||
Net income (loss) | (2,943,601) | (2,943,601) | |||
Issuance of shares related to acquisition of Viewpoint | $ 51 | (51) | |||
Issuance of shares related to acquisition of Viewpoint, shares | 3,425 | ||||
Issuance of shares related to conversion of convertible promissory notes | $ 35,543 | 1,260,517 | 1,296,060 | ||
Issuance of shares related to conversion of convertible promissory notes. Shares | 2,369,500 | ||||
Beneficial conversion of convertible promissory note | 856,863 | 856,863 | |||
Issuance of shares related to cashless exercise of warrants | $ 5,655 | 363,820 | 369,475 | ||
Issuance of shares related to cashless exercise of warrants, Shares | 377,016 | ||||
Issuance of earnout share to sellers of 42West | $ 13,993 | (313,993) | (300,000) | ||
Issuance of earnout share to sellers of 42West, shares | 932,866 | ||||
Issuance of shares related to direct registered sale of common stock | $ 118,500 | 7,525,850 | 7,644,350 | ||
Issuance of shares related to direct registered sale of common stock, shares | 7,900,000 | ||||
Shares retired from exercise of puts | $ (162) | 162 | |||
Shares retired from exercise of puts, shares | (10,810) | ||||
Ending Balance at Jun. 30, 2020 | $ 1,000 | $ 474,142 | $ 115,966,906 | $ (96,902,603) | $ 19,539,445 |
Ending Balance, shares at Jun. 30, 2020 | 50,000 | 31,608,903 |
GENERAL
GENERAL | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1 GENERAL Dolphin Entertainment, Inc., a Florida corporation (the Company, Dolphin, we, us or our), is a leading independent entertainment marketing and premium content development company. Through its acquisitions of 42West LLC (42West), The Door Marketing Group, LLC (The Door), Shore Fire Media, Ltd (Shore Fire) and Viewpoint Computer Animation Incorporated (Viewpoint), 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, A-list celebrity talent, including actors, directors, producers, celebrity chefs and recording artists. The Company also provides strategic marketing publicity services and creative brand strategies for prime hotel and restaurant groups. The strategic acquisitions of 42West, The Door, Shore Fire and Viewpoint bring together premium marketing services with premium content production, creating significant opportunities to serve respective constituents more strategically and to grow and diversify the Companys business. Dolphins 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. Impact of COVID-19 On March 11, 2020, the World Health Organization categorized a novel coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place have adversely affected the demand for certain of the services the Company offers resulting in decreased revenues and cash flows. One of our subsidiaries operates in the food and hospitality sector that has been negatively impacted by the orders to either suspend or reduce operations of restaurants and hotels. Another subsidiary represents talent, such as actors, directors and producers. The revenues from these clients has been negatively impacted by the suspension of content production. Conversely, the television and streaming consumption around the globe has increased as well as the demand for consumer products. Revenues from the marketing of these shows and products has somewhat offset the decrease in revenue from the sectors discussed above. The Company expects that the effects of COVID-19 pandemic will continue to negatively impact its results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19. The Company has taken steps such as freezes on hiring, staff reductions, salary reductions and cuts in non-essential spending to mitigate the effects of COVID-19 on the Companys financial results. Between April 19, 2020 and April 23, 2020, the Company and its subsidiaries received five separate unsecured loans for an aggregate amount of $2.8 million (the PPP Loans PPP CARES Act 2020 Registered Direct Offering On June 5, 2020, the Company issued and sold to certain institutional investors in a registered direct offering an aggregate of 7,900,000 shares of its common stock, par value $0.015 (Common Stock), at a price of $1.05 per share. The offering of the shares was made pursuant to the Companys effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. The Company received proceeds of approximately $7.6 million from the issuance and sale of its Common Stock after deducting related offering fees and expenses. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Dolphin, and all of its wholly owned subsidiaries, comprising Dolphin Films, Inc. (Dolphin Films), Dolphin SB Productions LLC, Dolphin Max Steel Holdings, LLC (Max Steel Holdings), Dolphin JB Believe Financing, LLC, Dolphin JOAT Productions, LLC, 42West, The Door, Viewpoint and Shore Fire. 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). The Company consolidates a VIE in its 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 operations 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 in its condensed consolidated financial statements JB Believe, LLC as a VIE. During the six months ended June 30, 2020, the Company analyzed its status as the primary beneficiary of Max Steel Productions LLC (Max Steel VIE) that has previously been consolidated in the financial statements of the Company and determined that it was no longer the primary beneficiary. As a result, the Company deconsolidated the financial statements of Max Steel VIE on a prospective basis from the Companys condensed consolidated financial statements as of June 30, 2020. See Note 13 for further discussion. The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended (the Exchange Act), and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Companys management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read together with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Reclassifications Reclassifications have been made to our condensed consolidated financial statements for the prior period to conform to classifications used in 2020. 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 the expected revenue and costs for investments in digital and feature film projects, estimates of sales returns and other allowances, provisions for doubtful accounts and impairment assessments for investment in feature film projects, goodwill and intangible assets. Actual results could differ materially from such estimates. Additionally, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. However, management has made appropriate accounting estimates on certain accounting matters, which include the allowance for doubtful accounts, carrying value of the goodwill and other intangible assets, carrying amount of certain convertible notes payable and embedded derivatives and warrant liabilities, based on the facts and circumstances available as of the reporting date. The Companys future assessment of the magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in material impacts to the Companys financial statements in future reporting periods. Revision of Prior Period Financial Statements During the preparation of the condensed consolidated financial statements for the three months ended March 31, 2020, the Company identified certain immaterial errors related to its accounting of the 2019 Lincoln Park Note, 2019 Lincoln Park Warrants and the Pinnacle Note (each as defined in Note 9 Notes Payable-Convertible Notes below), which were corrected and reflected in the Companys first quarter, 2020 Form 10-Q. The Company concluded that the conversion feature of the 2019 Lincoln Park Note and the 2019 Lincoln Park Warrants met the definition of a derivative and should have been recorded at fair value at inception and remeasured at each reporting period with changes in the fair value recognized in earnings. The accretion to par value of the 2019 Lincoln Park Note is recorded as interest expense. The Company had originally accounted for the 2019 Lincoln Park Warrants as equity-linked instruments and had not bifurcated the conversion feature in the 2019 Lincoln Park Note. The Company also reviewed the Pinnacle Note that had a down round provision allowing for the repricing of the conversion price upon the Companys issuance of equity securities at a price lower than the Pinnacle Note conversion price. On October 21, 2019, the Company sold shares of Common Stock in a registered public offering, at a price of $0.7828 when the Pinnacle Note conversion price was $3.00. As a result, the conversion price of the Pinnacle Note was repriced to $0.7828. Due to the repricing, the Company should have recorded a beneficial conversion feature on the date of the repricing and amortized the beneficial conversion feature as interest expense over the remaining life of the Pinnacle Note that matured on January 5, 2020. In accordance with SAB No. 99, “ ” “ ” ’ ’ A summary of the revisions to previously reported financial information is as follows: As Reported Adjustment As Adjusted Revised Consolidated Balance Sheet as of June 30, 2019 Convertible note payable (noncurrent) $ 1,044,232 $ (380,636 ) [2] $ 663,596 Warrant liability (noncurrent) $ $ 302,306 [3] $ 302,306 Derivative liability $ $ 150,000 [4] $ 150,000 Total noncurrent liabilities $ 8,559,526 $ 71,670 $ 8,631,196 Total liabilities $ 31,088,896 $ 71,670 $ 31,160,566 Additional paid in capital $ 103,571,126 $ (166,887 ) [5] $ 103,404,239 Accumulated deficit $ (95,298,433 ) $ 95,217 $ (95,203,216 ) Total stockholders' equity $ 8,489,611 $ (71,670 ) $ 8,417,941 Revised Condensed Consolidated Statement of Operations for the three months ended June 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 81,766 [7] $ 81,766 Interest expense $ (301,138 ) $ (16,549 ) [8] $ (317,687 ) Total other income $ 310,211 $ 95,217 $ 405,429 Loss before income taxes/Net loss $ (891,867 ) $ 95,217 $ (796,650 ) Basic net loss per share $ (0.06 ) $ 0.01 $ (0.05 ) Diluted net loss per share $ (0.06 ) $ 0.01 $ (0.05 ) As Reported Adjustment As Adjusted Revised Condensed Consolidated Statement of Operations for the six months ended June 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 81,766 [7] $ 81,766 Interest expense $ (589,108 ) $ (16,549 ) [8] $ (605,657 ) Total other income $ 1,257,981 $ 95,217 $ 1,353,198 Loss before income taxes/Net loss $ (769,259 ) $ 95,217 $ (674,042 ) Basic net loss per share $ (0.05 ) $ 0.01 $ (0.04 ) Diluted net loss per share $ (0.13 ) $ 0.01 $ (0.12 ) Revised Consolidated Balance Sheet as of September 30, 2019 Convertible note payable (noncurrent) $ 1,477,597 $ (330,989 ) [2] $ 1,146,608 Warrant liability (noncurrent) $ $ 228,269 [3] $ 228,269 Derivative liability $ $ 150,000 [4] $ 150,000 Total noncurrent liabilities $ 8,299,494 $ 47,280 $ 8,346,774 Total liabilities $ 29,890,000 $ 47,280 $ 29,937,280 Additional paid in capital $ 103,146,270 $ (166,887 ) [5] $ 102,979,383 Accumulated deficit $ (95,649,264 ) $ 119,607 $ (95,529,657 ) Total stockholders' equity $ 7,717,630 $ (47,280 ) $ 7,670,350 Revised Condensed Consolidated Statement of Operations for the three months ended September 30, 2019 Change in fair value of derivative liability $ $ $ Change in fair value of warrant liability $ $ 74,037 [7] $ 74,037 Interest expense $ (295,556 ) $ (49,647 ) [8] $ (345,203 ) Total other income $ 1,061,340 $ 24,390 $ 1,085,730 Loss before income taxes/Net loss $ (350,831 ) $ 24,390 $ (326,441 ) Basic net loss per share $ (0.02 ) $ $ (0.02 ) Diluted net loss per share $ (0.05 ) $ $ (0.05 ) Revised Condensed Consolidated Statement of Operations for the nine months ended September 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 155,803 [7] $ 155,803 Interest expense $ (884,665 ) $ (66,196 ) [8] $ (950,861 ) Total other income $ 2,319,321 $ 119,607 $ 2,438,928 Loss before income taxes/Net loss $ (1,120,090 ) $ 119,607 $ (1,000,483 ) Basic net loss per share $ (0.07 ) $ 0.01 $ (0.06 ) Diluted net loss per share $ (0.17 ) $ $ (0.17 ) Revised Consolidated Balance Sheet as of December 31, 2019 Convertible note payable (noncurrent) $ 1,907,575 $ (177,957 ) [2] $ 1,729,618 Convertible note payable (current) $ 2,452,960 $ (69,350 ) [9] $ 2,383,610 Warrant liability (noncurrent) $ $ 189,590 [3] $ 189,590 Derivative liability $ $ 170,000 [4] $ 170,000 Total current liabilities $ 22,490,861 $ (69,350 ) $ 22,421,511 Total noncurrent liabilities $ 10,392,050 $ 181,633 $ 10,573,683 Total liabilities $ 32,882,911 $ 112,283 $ 32,995,194 Additional paid in capital $ 105,443,656 $ 1,022,240 [10] $ 106,465,896 Accumulated deficit $ (96,024,243 ) $ (1,134,523 ) $ (97,158,766 ) Total stockholders' equity $ 9,688,815 $ (112,283 ) $ 9,576,532 As Reported Adjustment As Adjusted Revised Condensed Consolidated Statement of Operations for the three months ended December 31, 2019[1] Change in fair value of derivative liability $ $ (20,000 ) [6] $ (20,000 ) Change in fair value of warrant liability $ $ 38,679 [7] $ 38,679 Interest expense $ (321,536 ) $ (1,272,809 ) [11] $ (1,594,345 ) Total other income $ 154,258 $ (1,254,130 ) $ (1,099,872 ) Loss before income taxes $ (491,486 ) $ (1,254,130 ) $ (1,745,616 ) Net loss $ (73,287 ) $ (1,254,130 ) $ (1,327,417 ) Basic net loss per share $ $ (0.07 ) $ (0.07 ) Diluted net loss per share $ (0.02 ) $ (0.06 ) $ (0.08 ) Revised Condensed Consolidated Statement of Operations for the year ended December 31, 2019 Change in fair value of derivative liability $ $ 10,000 [6] $ 10,000 Change in fair value of warrant liability $ $ 194,482 [7] $ 194,482 Interest expense $ (1,206,201 ) $ (1,339,006 ) [11] $ (2,545,207 ) Total other income $ 2,473,579 $ (1,134,523 ) $ 1,339,056 Loss before income taxes $ (1,611,576 ) $ (1,134,523 ) $ (2,746,099 ) Net loss $ (1,193,377 ) $ (1,134,523 ) $ (2,327,900 ) Basic net loss per share $ (0.07 ) $ (0.07 ) $ (0.14 ) Diluted net loss per share $ (0.20 ) $ (0.04 ) $ (0.24 ) [1] The Company is not required to and has not previously reported information on the statement of operations for the three months ended December 31, 2019 [2] Fair value and accretion to par value of the 2019 Lincoln Park Note. [3] Fair value of the 2019 Lincoln Park Warrants. [4] Fair value of the conversion feature of the 2019 Lincoln Park Note. [5] Reversal of beneficial conversion feature recorded for the 2019 Lincoln Park Note [6] Change in fair value of bifurcated conversion feature of 2019 Lincoln Park Note. [7] Change in fair value of 2019 Lincoln Park Warrant liability. [8] Reversal of the amortization of the beneficial conversion feature of the 2019 Lincoln Park Note offset by accretion of the 2019 Lincoln Park Note. [9] Unamortized discount on the beneficial conversion feature of the Pinnacle Note. [10] Contingent beneficial conversion feature on repricing of Pinnacle Note conversion, offset by reversal of beneficial conversion feature of the 2019 Lincoln Park Note. [11] Accretion of the 2019 Lincoln Park Note and $1.2 million of amortization of the beneficial conversion feature of the Pinnacle Note. Update to Significant Accounting Policies Our significant accounting policies are detailed in "Note 3: Summary of Significant Accounting Policies" within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019. Significant changes to our accounting policies as a result of electing the fair value option for certain convertible notes and warrants issued during the three and six months ended June 30, 2020 is discussed below: Fair Value Option (FVO) Election 2020 Convertible Notes The Company accounts for certain convertible notes issued during the six months ended June 30, 2020 under the fair value option election of ASC 825, Financial Instruments (ASC-825) as discussed below. The convertible notes accounted for under the FVO election are each a debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815, Derivatives and Hedging (ASC-815). Notwithstanding, ASC 825-10-15-4 provides for the fair value option (FVO) election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment, as required by ASC 825-10-45-5, is recognized as a component of other comprehensive income (OCI) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed consolidated statement of operations. With respect to the above notes, as provided for by ASC 825-10-50-30(b), the estimated fair value adjustment is presented in a respective single line item within other income (expense) in the accompanying consolidated statement of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk. Recent Accounting Pronouncements Accounting Guidance Adopted In March 2019, the Financial Accounting Standards Board (the FASB) issued new guidance on film production costs Accounting Standards Update (ASU) 2019-02, (Entertainment Films- Other Assets Film Costs (Subtopic 926-20)). The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and may be adopted early. The new guidance aligns the accounting for the production costs of an episodic series with those of a film by removing the content distinction for capitalization. It also addresses presentation, requires new disclosures for produced and licensed content and addresses cash flow classification for license agreements to better reflect the economics of an episodic series. The Company adopted this new guidance without a material impact on its consolidated financial statements. In October 2018, the FASB issued new guidance on consolidation ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and should be applied retrospectively with a cumulative effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. The new guidance provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The Company adopted this new guidance without a material impact on its consolidated financial statements. In August 2018, the FASB issued new guidance on fair value measurement (ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkChanges to the Disclosure Requirements for Fair Value Measurement). The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The guidance modifies the disclosure requirements on fair value by removing some requirements, modifying others, adding changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements, and providing the option to disclose certain other quantitative information with respect to significant unobservable inputs in lieu of a weighted average. The Company adopted this new guidance without a material impact on its consolidated financial statements. Accounting Guidance Not yet Adopted In August 2020, the FASB issued ASU 2020-06DebtDebt with Conversion and Other Options (Subtopic 470-20) and Derivatives and HedgingContracts in Entity's Own Equity (Subtopic 815-40)Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. In June 2016, the FASB issued new guidance on measurement of credit losses (ASU 2016-13, Measurement of Credit Losses on Financial Instruments) with subsequent amendments issued in November 2018 (ASU 2018-19) and April 2019 (ASU 2019-04). This update changes the accounting for credit losses on loans and held-to-maturity debt securities and requires a current expected credit loss (CECL) approach to determine the allowance for credit losses. It is applicable to trade accounts receivable. The guidance is effective for fiscal years beginning after December 15, 2022 with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. Early adoption is permitted. The Company is in the process of evaluating the impact of the adoption of ASU 2016-13 on the Company's consolidated financial statements and disclosures. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2020 | |
Going Concern | |
GOING CONCERN | NOTE 2 GOING CONCERN The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP and contemplate the continuation of the Company as a going concern. The Company had net loss of $2,943,601 and $869,754, respectively, for the three and six months ended June 30, 2020, and had an accumulated deficit of $96,902,603 as of June 30, 2020. As of June 30, 2020, the Company had a working capital deficit of $2,380,135 and therefore does not have adequate capital to fund its obligations as they come due or to maintain or grow its operations. In addition, several of our subsidiaries operate in industries that have been adversely affected by the government mandated work-from-home, stay-at-home and shelter-in-place orders as a result of the novel coronavirus COVID-19. As a result, the Companys revenues have been negatively impacted by a reduction in the services we provide to clients operating in these industries. The Company has taken measure such as a freeze on hiring, salary reductions, staff reductions and cuts in non-essential spending to mitigate the reduction in revenues. The Company is dependent upon funds from the issuance of debt securities, securities convertible into shares of Common Stock, sales of shares of Common Stock and financial support of certain shareholders. The continued spread of COVID-19 and uncertain market conditions may limit the Companys ability to access capital. If the Company is unable to obtain funding from these sources within the next 12 months, it could be forced to curtail its business operations or liquidate. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The condensed consolidated financial statements, of which these notes form a part, do not include any adjustments that might result from the outcome of these uncertainties. On June 5, 2020, the Company entered into a share purchase agreement with certain institutional investors and sold to such investors an aggregate of 7,900,000 shares of Common Stock in a registered direct offering for net proceeds of approximately $7.6 million. The Companys management currently plans to raise any necessary additional funds through additional issuances of its Common Stock, securities convertible into its Common Stock and/or 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. Any issuance of shares of Common Stock or securities convertible into Common Stock would dilute the equity interests of our existing shareholders, perhaps substantially. The Company currently has the rights to several scripts, including one currently in development for which it intends to obtain financing to produce and release following which it expects to earn a producer and overhead fee. There can be no assurances that such production, together with any other productions, will be commenced or released or that fees will be realized in future periods or at all. The Company is currently exploring opportunities to expand the services currently being offered by 42West, The Door, Viewpoint and Shore Fire while reducing expenses of their respective operations through synergies with the Company. There can be no assurance that the Company will be successful in expanding such services or reducing expenses. Between April 19, 2020 and April 23, 2020, the Company and its subsidiaries received five separate PPP Loans for an aggregate amount of $2.8 million under PPP which was established under the CARES Act. The application for the PPP Loans requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operation of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support the ongoing operations in a manner that is not significantly detrimental to the business. The receipt of the funds from the PPP Loans and the forgiveness of the PPP Loans is dependent on the Company having initially qualified for the PPP Loans and qualifying for the forgiveness of such PPP Loans based on funds being used for certain expenditures such as payroll costs and rent, as required by the terms of the PPP Loans. There is no assurance that the Companys obligation under the PPP Loans will be forgiven. If the PPP Loans are not forgiven, the Company will need to repay the PPP Loans over a two-year period, commencing six months after the funding of the PPP Loans, at an interest rate of 1% per annum. |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | NOTE 3 GOODWILL As of June 30, 2020, in connection with its acquisitions of 42West, The Door, Viewpoint and Shore Fire, the Company has a balance of $18,072,825 of goodwill on its condensed consolidated balance sheet which management has assigned to the entertainment publicity and marketing segment. The Company accounts for goodwill in accordance with FASB ASC No. 350, IntangiblesGoodwill 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 quantitative goodwill impairment test. This 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 estimated fair value of the reporting unit is less than its carrying value, a goodwill impairment exists for the reporting unit and an impairment loss is recorded. The Company determined that the adverse effects of COVID-19 on certain of the industries in which it operates could be an indicator of a possible impairment of goodwill. As such, the Company updated its estimates and assumptions, with the information available at the time of the assessment, performed an impairment test on the carrying value of its goodwill and determined that an impairment adjustment was not necessary. As previously discussed, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. The Companys future assessment of the magnitude of the effects of the COVID-19 outbreak on its business could result in impairment of goodwill in future reporting periods. |
MERGERS AND ACQUISITIONS
MERGERS AND ACQUISITIONS | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
MERGERS AND ACQUISITIONS | NOTE 4 MERGERS AND ACQUISITIONS Shore Fire Media, Ltd On December 3, 2019, (the Shore Fire Closing Date), the Company acquired all of the issued and outstanding capital stock of Shore Fire, a New York corporation (the Shore Fire Purchase), pursuant to a share purchase agreement (the Shore Fire Share Purchase Agreement) dated on the Shore Fire Closing Date, between the Company and Shore Fire seller. Shore Fire is an entertainment public relations agency, offering talent publicity in the music, events, books, podcasts, and comedy sectors. The total consideration paid to the Shore Fire seller in respect of the Shore Fire Purchase is $3.1 million as follows: (i) $1,140,000 in cash on the Shore Fire Closing date (adjusted for Shore Fires indebtedness, working capital and cash targets); (ii) $200,000 in shares of Common Stock at a price of $0.64 per share (314,812 shares) issued to the seller on the Shore Fire Closing Date, (iii) an additional $400,000 in shares of common stock paid in two equal installments of $200,000 each on the first and second anniversary of the Shore Fire Closing Date, (iv) an additional $1,000,000 in cash paid in four equal payments of $250,000 each to the seller on the three, six, twelve, and twenty-four month anniversaries of the Shore Fire Closing Date, and (v) $140,000 and $120,000 in cash paid to key employees on the first and second anniversary of the Shore Fire Closing Date. In addition, on March 31, 2020, the Company and the seller agreed on $124,836 as the amount of the working capital adjustment, pursuant to the terms of the Shore Fire Purchase Agreement. The Shore Fire Purchase Agreement contains customary representations, warranties, and covenants of the parties thereto. The Common Stock issued as part of the consideration on the Shore Fire Closing Date has not been registered under the Securities Act of 1933, as amended (the Securities Act). As a condition to the Shore Fire Purchase, the seller entered into an employment agreement with the Company to continue as an employee after the closing of the Shore Fire Purchase. The sellers employment agreement is through December 3, 2022 and the contract defines base compensation and a bonus structure based on Shore Fire achieving certain financial targets. The employment agreement contains provisions for termination and as a result of death or disability and entitles the employee to vacations and to participate in all employee benefit plans offered by the Company. The provisional acquisition-date fair value of the consideration transferred totaled $3,124,836, which consisted of the following: Common Stock issued at closing (314,812 shares) $ 200,000 Cash Consideration paid at closing 1,140,000 Cash Installment to be paid on March 3, 2020 250,000 Cash Installment to be paid on June 3, 2020 250,000 Cash Installment to be paid on December 3, 2020 390,000 Common Stock to be issued on December 3, 2020 200,000 Cash Installment to be paid on December 3, 2021 370,000 Common Stock to be issued on December 3, 2021 200,000 Working capital adjustment paid on April 1, 2020 124,836 $ 3,124,836 The final amount of consideration may potentially change due to other closing adjustments, which have not yet been determined. The fair value of the 314,812 shares of Common Stock issued on the Shore Fire Closing Date was determined based on the closing market price of the Companys Common Stock on the Shore Fire Closing Date of $0.64 per share. The following table summarizes the provisional fair values of the assets acquired and liabilities assumed at the Shore Fire Closing Date. Amounts in the table are provisional estimates that may change, as described below. Cash $ 384,530 Accounts receivable 294,033 Other current assets 33,402 Property, plant & equipment 112,787 Intangibles 1,080,000 Total identifiable assets acquired 1,904,752 Accrued expenses (298,870 ) Accounts payable (38,750 ) Deferred tax liability (358,153 ) Contract liability (143,339 ) Other current liability (16,651 ) Total liabilities assumed (855,763 ) Net identifiable assets acquired 1,048,989 Goodwill 2,075,847 Net assets acquired $ 3,124,836 Of the provisional fair value of the $1,080,000 of acquired identifiable intangible assets, $510,000 was assigned to customer relationships (5 years useful life) and $570,000 was assigned to the trade name (10-year useful life), that were recognized at a provisional fair value on the acquisition date. The customer relationships will be amortized using an accelerated method, and the trade name will be amortized using the straight-line method. The provisional fair value of accounts receivable acquired is $294,033. The provisional fair values of property and equipment and leasehold improvements of $112,787, and other assets of $33,402, are based on Shore Fires carrying values prior to the acquisition, which approximate their provisional fair values. The provisional amount of $2,075,847 of goodwill was assigned to the entertainment publicity and marketing segment. The goodwill recognized is attributable primarily to expectations of continued successful efforts to obtain new customers, buyer specific synergies and the assembled workforce of Shore Fire. The following is a reconciliation of the initially reported fair value to the adjusted fair value of goodwill: Goodwill originally reported at December 3, 2020 $ 1,951,011 Changes to estimated fair values: Working capital adjustment 124,836 Adjusted goodwill $ 2,075,847 The above estimated 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 June 30, 2020, the Company recorded the identifiable net assets acquired of $1,048,989 as shown in the table above in its condensed consolidated balance sheet. The Company did not recognize any adjustments to the identifiable net assets during the six months ended June 30, 2020. Unaudited Pro Forma Consolidated Statements of Operations The following represents the Companys unaudited pro forma consolidated operations for the three and six months ended June 30, 2019 as if Shore Fire had been acquired on January 1, 2019 and its results had been included in the consolidated results of the Company for such period: For the three months ended June 30, For the six months ended June 30, Revenue $ 7,466,465 $ 14,939,501 Net income $ (839,195 ) $ (677,160 ) These amounts have been calculated after applying the Companys accounting policies and adjusting the results of the acquisitions to reflect the amortization that would have been charged, assuming the intangible assets had been recorded on January 1, 2019. The impact of the acquisition of Shore Fire on the Companys actual results for periods following the acquisition may differ significantly from that reflected in this unaudited pro forma information for a number of reasons. As a result, this unaudited pro forma information is not necessarily indicative of what the combined companys financial condition or results of operations would have been had the acquisitions been completed on January 1, 2019, as provided in 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. 42West In connection with the 42West acquisition, on March 30, 2017, the Company entered into put agreements (the Put Agreements) with each of the 42West sellers. Pursuant to the terms and subject to the conditions set forth in the Put Agreements, the Company has granted the 42West sellers the right, but not the obligation, to cause the Company to purchase up to an aggregate of 1,187,087 of their respective shares of Common Stock received as consideration for the Companys acquisition of 42West 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). During the six months ended June 30, 2020, the 42West sellers exercised Put Rights with respect to an aggregate of 177,518 shares of Common Stock. No put rights were exercised during the three months ended June 30, 2020. During the three and six months ended June 30, 2020, the Company made payments of $84,700 and $459,700, respectively, related to exercise of Put Rights, of which $275,000, pertained to Put Rights that were exercised in December 2019. As of June 30, 2020, the Company had a balance of $1,452,500 of Put Rights that were exercised but not yet paid. The Company also entered into Put Agreements with three separate 42West employees with change of control provisions in their employment agreements. The Company agreed to purchase up to 50% of the shares of Common Stock to be received by the employees in satisfaction of the change of control provision in their employment agreements. The employees have the right, but not the obligation, to cause the Company to purchase up to an additional 20,246 shares of Common Stock in respect of the earn out consideration. |
CAPITALIZED PRODUCTION COSTS, A
CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
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 costs of scripts, fees for casting agents and other development costs for projects that are in development but have not been produced. Capitalized production costs are stated on the Companys condensed consolidated balance sheets at the lower of unamortized costs or net realizable value. The Company recorded $274,575 and $203,036 in capitalized production costs associated with these scripts and development costs as of June 30, 2020 and December 31, 2019, respectively. The Company intends to produce these projects, but they were not yet in production as of June 30, 2020 and there can be no assurance that these projects will be produced on the timelines anticipated or at all. The Company has assessed events and changes in circumstances that would indicate whether the Company should assess if the fair value of the productions is less than the unamortized costs capitalized and did not identify indicators of impairment. The Company did not have any revenues from motion pictures or digital productions for the three months ended June 30, 2020 and 2019, respectively and had $0 and $78,990 for the six months ended June 30, 2020 and 2019, respectively. These revenues were attributable to Max Steel, Accounts Receivables The Companys trade accounts receivables related to its entertainment publicity and marketing segment 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 June 30, 2020 and December 31, 2019, the Company had accounts receivable balances of $2,521,885 and $3,581,155, respectively, net of allowance for doubtful accounts of $368,014 and $307,887, respectively, related to its entertainment publicity and marketing segment. The Company did not have any accounts receivable related to its content production segment. Other Current Assets The Company had a balance of $187,504 and $372,872 in other current assets on its condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020 and December 31, 2019, these amounts were primarily composed of the following: Indemnification asset Prepaid expenses Tax Incentives Income tax receivable |
PROPERTY, EQUIPMENT AND LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS | NOTE 6 PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Property, equipment and leasehold improvement consists of: June 30, December 31, Furniture and fixtures $ 790,591 $ 792,611 Computers and equipment 1,734,753 1,728,916 Leasehold improvements 770,629 770,628 3,295,973 3,292,155 Less: accumulated depreciation and amortization (2,437,875 ) (2,255,306 ) Property, equipment and leasehold improvements, net $ 858,098 $ 1,036,849 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 leasehold improvements are amortized over the remaining term of the related leases. The Company recorded depreciation and amortization expense of $96,383 and $186,474 for the three and six months ended June 30, 2020, respectively and $89,306 and $180,428 for the three and six months ended June 30, 2019, respectively. |
INVESTMENT
INVESTMENT | 6 Months Ended |
Jun. 30, 2020 | |
Long-term Investments [Abstract] | |
INVESTMENT | NOTE 7 INVESTMENT At June 30, 2020, investments, at cost, consisted of 344,980 shares of common stock of The Virtual Reality Company (VRC), a privately held company. 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 held by 42West into shares of common stock of VRC. The Companys investment in VRC represents less than a 1% noncontrolling ownership interest in VRC. The Company had a balance of $220,000 on its condensed consolidated balance sheets as of both June 30, 2020 and December 31, 2019, related to this investment. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8 DEBT Production Service Agreement During 2014, Dolphin Films entered into a financing agreement to produce Max Steel Max Steel On February 20, 2020, the Company received notification from the lender of the Production Service Agreement that Max Steel VIE did not owe any debt to the lender. As a result, the Company recorded a gain on extinguishment of debt in the amount of $0 and $3,311,198 during the three and six months ended June 30, 2020. As of June 30, 2020, and December 31, 2019, the Company had outstanding balances of $0 and $3,311,198 including accrued interest in the amount of $0 and 1,698,280, respectively, in the caption debt related to this Production Service Agreement on its condensed consolidated balance sheets. Line of Credit On March 15, 2018, 42West entered into a business loan agreement with BankUnited, N.A. for a revolving line of credit (the Loan Agreement). The Loan Agreement matured on March 15, 2020 and bore interest on the outstanding balance at the banks prime rate plus 0.25% per annum throughout its term. The maximum amount that could have been drawn on the revolving line of credit was $2,250,000 with a sublimit of $750,000 for standby letters of credit. Amounts outstanding under the Loan Agreement were secured by 42Wests current and future inventory, chattel paper, accounts, equipment and general intangibles. On March 28, 2018, the Company drew $1,690,000 under the Loan Agreement to purchase 183,296 shares of Common Stock, pursuant to the Put Agreements. On February 20, 2020, the Company paid down $500,000 of the line of credit as part of an agreement to convert the line of credit into a three-year term loan described below. As of June 30, 2020, there was no balance on the line of credit due to its conversion to a term loan, and as of December 31, 2019, the outstanding balance on the line of credit was $1,700,390. Term Loan On March 31, 2020, 42West and The Door, as co-borrowers, entered into a business loan agreement with Bank United, N.A. to convert the balance of the 42West line of credit of $1,200,390 into a three-year term loan (the Term Loan). The Term Loan bears interest at a rate of 0.75% points over the Lenders Prime Rate and matures on March 15, 2023. As of June 30, 2020, the outstanding balance on the Term Loan was $1,100,357. The Term Loan contains customary affirmative covenants, including covenants regarding maintenance of a maximum debt to total net worth ratio of at least 4.0:1.0 and a minimum fixed charge coverage of 1.06x based on fiscal year-end audit to be calculated as provided in the Term Loan. Further, the Term Loan contains customary negative covenants, including those that, subject to certain exceptions, restrict the ability of 42West and The Door to incur additional indebtedness, grant liens, make loans, investments or certain acquisitions, or enter into certain types of agreements. Upon the occurrence of an event of default, the bank may accelerate the maturity of the loan and declare the unpaid principal balance and accrued but unpaid interest immediately due and payable. In the event of 42West and The Doors insolvency, such outstanding amounts will automatically become due and payable. 42West and The Door may prepay any amounts outstanding under the Term Loan without penalty. The bank tests for compliance with debt covenants on an annual basis based on the financial statements of 42West and The Door as of and for the year ended December 31. Based on current economic factors and uncertainties due to COVID-19, the Company believes it may be out of compliance with certain debt covenants as of and for the year ended December 31, 2020. As such, the Company classified the entire balance of $1,100,357 of the Term Loan in current liabilities on its condensed consolidated balance sheet. Payroll Protection Program Loan Between April 19, 2020 and April 23, 2020, the Company and four of its subsidiaries executed notes and received an aggregate amount of $2,795,700 from five PPP Loans from BankUnited, N.A., under the PPP which was established under the CARES Act and is administered by the U.S. Small Business Administration. Loans obtained through the PPP are eligible to be forgiven as long as the proceeds are used for qualifying purposes and certain other conditions are met. The receipt of these funds, and the forgiveness of the loan is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on its adherence to the forgiveness criteria. In June 2020, Congress passed the Payroll Protection Program Flexibility Act that made several significant changes to PPP loan provisions, including providing greater flexibility for loan forgiveness. The Company is using the proceeds from the PPP Loans to fund payroll costs in accordance with the relevant terms and conditions of the CARES Act. The Company is following the government guidelines and tracking costs to insure 100% forgiveness of the loan. To the extent it is not forgiven, the Company would be required to repay that portion at an interest rate of 1% over a period of two years. As of June 30, 2020, the current and long-terms portion of the loan were $1,041,997 and $1,753,703, respectively. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2020 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 9 NOTES PAYABLE Convertible Notes Fair Value Convertible Notes On January 3, 2020, the Company entered into a securities purchase agreement with Lincoln Park Capital Fund LLC, an Illinois limited liability company (Lincoln Park) and issued a convertible promissory note with a principal amount of $1.3 million (the 2020 Lincoln Park Note) at a purchase price of $1.2 million together with warrants to purchase up to 207,588 shares of our common stock at an exercise price of $0.78 per share. The securities purchase agreement provides for issuance of warrants to purchase up to 207,588 shares of our common stock on each of the second, fourth, and sixth month anniversaries of the securities purchase agreement if the principal balance has not been paid on such dates (the 2020 Lincoln Park Warrants). As such, on each of March 4, 2020, and May 4, 2020, the Company issued warrants to purchase up to 207,588 shares of its common stock. The 2020 Lincoln Park Note may be converted at any time into shares of our common stock (the 2020 Conversion Shares) at an initial conversion price equal to the lower of (A) $1.05 per share and (B) the lower of (i) the lowest intraday sales price of our common stock on the applicable conversion date and (ii) the average of the three lowest closing sales prices of our common stock during the twelve consecutive trading days including the trading day immediately preceding the conversion date but under no circumstances lower than $0.78 per share. If an event of default under the 2020 Lincoln Park Note occurs prior to maturity, the 2020 Lincoln Park Note will be convertible into shares of Common Stock at a 15% discount to the applicable conversion price. Outstanding principal under the 2020 Lincoln Park Note will not accrue interest, except upon an event of default, in which case interest at a default rate of 18% per annum would accrue until such event of default is cured. The 2020 Lincoln Park Note matures on January 3, 2022. The proceeds of the 2020 Lincoln Park Note were used to repay the 2018 Convertible Debt described below. The Company elected the fair value option to account for the 2020 Lincoln Park Note and determined that the 2020 Lincoln Park Warrants met the criteria to be accounted for as a derivative. The fair value of the 2020 Lincoln Park Note on issuance was recorded as $885,559. For the three and six months ended June 30, 2020, the fair value of the note increased by $309,020 and $203,461, respectively, and was recognized as current period other expense in the Companys condensed consolidated statement of operations (as no portion of such fair value adjustment resulted from instrument-specific credit risk). As of June 30, 2020, the balance of the convertible promissory note on the Companys condensed consolidated balance sheet was $1,089,020. The fair value of the 2020 Lincoln Park Warrants was recorded on issuance as a debt discount of $314,441. For the three and six months ended June 30, 2020, the fair value of the warrants increased by $270,000 and $215,559, respectively, and was recognized as current period other expense in the Companys condensed consolidated statement of operations. As of June 30, 2020, the fair value of the warrants on the Companys condensed consolidated balance sheet was $525,559. In connection with the transactions contemplated by the securities purchase agreement, on January 3, 2020, the Company entered into a registration rights agreement with Lincoln Park, pursuant to which the Company agreed to register the 2020 Conversion Shares for resale by Lincoln Park under the Securities Act, if during the six-month period commencing on the date of the Registration Rights Agreement, the Company files a resale registration statement with the Securities and Exchange Commission for any other shareholder of the Company. On March 4, 2020, the Company issued a convertible promissory note to a third-party investor and in exchange received $500,000. The Company also agreed to issue a warrant (Series I Warrant) to purchase up to 100,000 shares of our common stock at a purchase price of $0.78 per share. The convertible promissory note bears interest at a rate of 8% per annum and matures on March 4, 2030. The Company elected the fair value option to account for the convertible promissory note and determined that the Series I Warrant met the criteria to be accounted for as a derivative. As such, the Company recorded the fair value on issuance of the convertible promissory note and Series I Warrant as $460,000 and $40,000, respectively. For the three and six months ended June 30, 2020, the fair value of the convertible promissory note increased by $195,500 and $105,500, respectively, and was recognized as current period other expense in the Companys condensed consolidated statement of operations (as no portion of such fair value adjustment resulted from instrument-specific credit risk). For the three and six months ended June 30, 2020, the fair value of the Series I Warrant increased by $30,000 and $20,000, respectively, and was recognized as current period other expense in the Companys condensed consolidated statement of operations. As of June 30, 2020, the balance of the convertible promissory note and Series I Warrant on the Companys condensed consolidated balance sheet was $565,500 and $60,000, respectively. The balance of the convertible promissory note and any accrued interest may be converted at the noteholders option at any time at a purchase price $0.78 per share of our common stock. On March 25, 2020, the Company issued a convertible promissory note to a third-party investor for a principal amount of $560,000 and received $500,000, net of transaction costs of $10,000 paid to the investor and original issue discount. The Company also issued 50,000 shares of our common stock related to this convertible note payable. The maturity date of the convertible promissory note is March 25, 2021 and the balance of the convertible promissory note and any accrued interest may be converted at the noteholders option at any time at a purchase price $0.78 per share of Common Stock. The Company elected the fair value option to account for the convertible promissory note. The convertible promissory notes fair value on issuance was recorded at $500,000. For the three and six months ending June 30, 2020, the fair value of the note increased by $240,000 and $191,900, respectively, and was recognized as current period other expense in the Companys condensed consolidated statement of operations (as no portion of such fair value adjustment resulted from instrument-specific credit risk). As of June 30, 2020, the balance of the convertible promissory note on the Companys condensed consolidated balance sheet was $740,000. On May 20, 2019, the Company entered into a securities purchase agreement with Lincoln Park pursuant to which the Company agreed to issue and sell to Lincoln Park a senior convertible promissory note with an initial principal amount of $1,100,000 (the 2019 Lincoln Park Note) at a purchase price of $1,000,000 (representing an original issue discount of approximately 9.09%), together with warrants to purchase up to 137,500 shares of Common Stock at an exercise price of $2.00 per share and 137,500 additional warrants on each of the second, fourth and sixth month anniversaries of the securities purchase agreement if any of the balance remains outstanding on such dates (the 2019 Lincoln Park Warrants). As such, on each of July 23, 2019, September 20, 2019, and November 20, 2019, the Company issued warrants to purchase up to 137,500 shares of Common Stock. On January 3, 2020, the exercise price of the 2019 Lincoln Park Warrants was reduced to $0.78 per share. The 2019 Lincoln Park Note is convertible at any time into shares of Common Stock (the Conversion Shares) at an initial conversion price equal to the lower of (A) $5.00 per share and (B) the lower of (i) the lowest intraday sale price of the Common Stock on the applicable conversion date and (ii) the average of the three lowest closing sales prices of the Common Stock during the twelve consecutive trading days ending on and including the trading day immediately preceding the conversion date, subject in the case of this clause (B), to a floor of $1.00 per share. Pursuant to a re-pricing clause in the 2019 Lincoln Park Note, the $5.00 fixed conversion price was reduced to $0.78, the purchase price used in the Companys public offering that closed on October 21, 2019. Outstanding principal under the 2019 Lincoln Park Note will not accrue interest, except upon an event of default, in which case interest at a default rate of 18% per annum would accrue until such event of default is cured. The 2019 Lincoln Park Note matures on May 21, 2021 and can be paid prior to the maturity date without any penalty. The Company accounts for the embedded conversion feature of the 2019 Lincoln Park Note at fair value under ASC-815. Under ASC-815, an embedded feature in a debt instrument that meets the definition of a derivative is fair valued at issuance and remeasured at each reporting period with changes in fair value recognized in earnings. The Company also determined that the 2019 Lincoln Park Warrants met the definition of a derivative and should be classified as a liability recorded at fair value upon issuance and remeasured at each reporting period with changes recorded in earnings. On each of February 3, February 12, February 27, and March 4, 2020, (the Conversion Dates) Lincoln Park converted $250,000 of principal ($1,000,000 total) into shares of Common Stock at a conversion price of $0.78. On June 2, 2020, Lincoln Park converted the remaining $100,000 into shares of Common Stock at a conversion price of $0.78. The Company recorded $5,031 and $59,742 of interest expense to accrete the note to par value for the three and six months ending June 30, 2020. On June 5, 2020, Lincoln Park exercised the 2019 Lincoln Park Warrants through a cashless exercise formula pursuant to the warrant agreement and was issued 377,016 shares of the Common Stock. As of June 30, 2020, the aggregate fair value of the convertible promissory notes described above in Fair Value Convertible Debt was recorded under the caption convertible notes payable at fair value at $740,000 and $1,654,522 in current and noncurrent liabilities, respectively, in the Companys condensed consolidated balance sheet. 2020 Convertible Debt On March 18, 2020, the Company issued two convertible promissory notes to two third-party investors for principal amounts of $120,000 and $75,000. The notes earn interest at 10% per annum and mature on March 18, 2022. The balance of each of the convertible promissory notes and any accrued interest may be converted at the noteholders option at any time at a purchase price $0.78 per share of our common stock. The principal balance of the convertible promissory notes was recorded in noncurrent liabilities under the caption convertible notes payable. The convertible promissory notes did not contain a beneficial conversion feature on issuance as they contain a variable conversion price. 2019 Convertible Debt On each of March 25, 2019, July 9, 2019, September 25, 2019, and October 11, 2019 the Company issued convertible promissory note agreements to third-party investors and received $200,000, $150,000, $250,000, and $500,000, respectively, to be used for working capital. The convertible promissory notes bear interest at a rate of 10% per annum and mature on March 25, 2021, July 9, 2021, September 25, 2021, and October 11, 2021, respectively. The balance of the convertible promissory notes and any accrued interest may be converted into shares of Common Stock at the noteholders option at any time at a purchase price based on the 30-day trailing average closing price of the Common Stock. On January 1, 2020, $200,000 was converted into 346,021 shares of Common Stock, on January 12, 2020, $150,000 was converted into 254,326 shares of Common Stock, on June 4, 2020, $500,000 was converted into 989,368 shares of Common Stock and on June 5, 2020, $250,000 was converted into 494,684 shares of Common Stock. The Company recorded as interest expense a beneficial conversion feature related to the conversion of the 2019 Convertible Debt in the aggregate amount of $406,863 and $708,643 for the three and six months ended June 30, 2020. 2018 Convertible Debt On July 5, 2018, the Company issued an 8% secured convertible promissory note in the principal amount of $1.5 million (the Pinnacle Note) to Pinnacle Family Office Investments, L.P. (Pinnacle) pursuant to a Securities Purchase Agreement, dated the same date, between the Company and Pinnacle. The Company used the proceeds of the Pinnacle Note to finance the Companys acquisition of The Door. The Companys obligations under the Pinnacle Note were secured primarily by a lien on the assets of The Door and Viewpoint. The principal amount of the Pinnacle Note bore interest at the rate of 8% per annum. The Pinnacle Note matured on January 5, 2020. Pinnacle had the option to convert the outstanding principal amount of the convertible promissory note into shares of Common Stock at any time at a price per share equal to $3.25, subject to adjustment for stock dividends, stock splits, dilutive issuances and subsequent rights offerings. The conversion price was adjusted to $0.78, the purchase price used in the Companys public offering that closed on October 21, 2019. On December 4, 2019, Pinnacle converted $297,936 of the principal on the note to 380,603 shares of the Company at a price of $0.78 per share. On the date of the Pinnacle Note, the Companys Common Stock had a market value of $3.65. The Company determined that the Note contained a beneficial conversion feature by calculating the amount of shares using the conversion rate of the Pinnacle Note of $3.25 per share, and then calculating the market value of the shares that would be issued at conversion using the market value of the Companys Common Stock on the date of the Pinnacle Note. The Company recorded a debt discount on the Note of $184,614 that was amortized and recorded as interest expense over the life of the Pinnacle Note. Upon the re-pricing of the conversion feature of the Pinnacle Note on October 21, 2019, the Company recognized an additional beneficial conversion feature of $1,315,386, of which $0 and $69,350 was amortized as interest expense for the three and six months ended June 30, 2020, respectively. The Pinnacle note was paid in full on January 5, 2020. For the three and six months ended June 30, 2020, the Company recorded interest expense of $0 and $70,686 (including the $69,350 amortization of beneficial conversion feature discussed above) and paid interest in the amount of $0 and $29,614, respectively. As of June 30, 2020, the Company did not have a balance related to the Pinnacle Note. As of December 31, 2019, the Company had a balance of $1,202,064 recorded in current liabilities under the caption convertible notes payable. 2017 Convertible Debt In 2017, the Company entered into subscription agreements pursuant to which it issued unsecured convertible promissory notes, each with substantially similar terms, for an aggregate principal amount of $875,000. Each of the convertible promissory notes had an initial maturity date of one year from the date of issuance, with the exception of one note in the amount of $75,000, which had an initial maturity date of two years from the date of issuance, and bears interest at a rate of 10% per annum. During 2018, the respective maturity dates of the promissory notes were extended for a period of one year from the original maturity dates and in 2019 were extended for another one-year period. The principal and any accrued and unpaid interest of the convertible promissory notes are convertible by the respective holders into shares of Common Stock 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 defined in the convertible promissory notes) of Common Stock is made, 95% of the public offering price per share of Common Stock. On June 15, 2020, $250,000 of the 2017 Convertible Debt and $2,905 of accrued interest was converted into 421,509 shares of Common Stock, on June 17, 2020, $75,000 of the 2017 Convertible Debt and $333 of accrued interest was converted into 124,008 shares of Common Stock and on June 30, 2020, $50,000 of the 2017 Convertible Debt was converted into 79,365 shares of Common Stock using a 90-day average trading price. The Company recorded as interest expense a beneficial conversion feature related to the conversion of the 2017 Convertible Debt in the aggregate amount of $375,000 for each of the three and six months ended June 30, 2020. In regard to the 2020, 2019, 2018, and 2017 Convertible Debt discussed above, for the three and six months ended June 30, 2020, the Company paid interest in the aggregate amount of $11,042 and $57,806, respectively, and recorded interest expense in the amount of $913,464 and $1,340,228, respectively in the Companys condensed consolidated statement of operations. The interest expense for the three and six months ended June 30, 2020 included the amortization of beneficial conversion features in the amounts of $856,863 and $1,227,993, respectively related to the 2017, 2018 and 2019 Convertible Debt that were converted during the three and six months ended June 30, 2020. As of June 30, 2020 and December 31, 2019, the Company recorded accrued interest of $67,594 and $40,803, respectively, relating to the 2020, 2019, 2018 and 2017 Convertible Debt. As of June 30, 2020 and December 31, 2019, the Company had a balance of $802,500 and $2,454,564, respectively, in current liabilities under the caption convertible notes payable and a balance of $195,000 and $1,100,000, respectively, in noncurrent liabilities under the caption convertible notes payable in its condensed consolidated balance sheet, related to the 2020, 2019, 2018, and 2017 Convertible Debt. Nonconvertible Notes Payable On July 5, 2012 the Company entered into an unsecured promissory note in the amount of $300,000 bearing 10% interest per annum and payable on demand with KCF Investments LLC (KCF). On December 10, 2018, the Company agreed to exchange this note, including accrued interest of $192,233, for a new unsecured promissory note in the amount of $492,233 that matures on December 10, 2023. This promissory note bears interest of 10% per annum and can be prepaid without a penalty at any time prior to its maturity. The note requires monthly repayments of principal and interest in the amount of $10,459 throughout the life of the note. For the three and six months ended June 30, 2020, the Company repaid $21,778 and $43,021 of the principal amount of the promissory note. On November 30, 2017, the Company entered into an unsecured promissory note in the amount of $200,000 that matures on January 15, 2021. The promissory note bears interest of 10% per annum and can be prepaid without a penalty at any time prior to its maturity. On June 14, 2017, the Company entered into an unsecured promissory note in the amount of $400,000, with a maturity date of June 14, 2021. The promissory note bears interest of 10% per annum and can be prepaid without a penalty after the initial six months. On November 5, 2019, the Company entered into an unsecured promissory note in the amount of $350,000, maturing on November 4, 2021. The promissory note bears interest of 10% per annum and can be prepaid without a penalty after the initial six months. During the three and six months ended June 30, 2020, the Company paid interest on its nonconvertible promissory notes in the aggregate amount of $33,347 and $67,230, respectively. During the three and six months ended June 30, 2019, the Company paid interest on its nonconvertible promissory notes in the aggregate amount of $26,662 and $53,808, respectively. The Company had balances of $8,537 and $8,788 as of June 30, 2020 and December 31, 2019, respectively, for accrued interest recorded in its condensed consolidated balance sheets, relating to these nonconvertible promissory notes. The Company recorded interest expense for the three and six months ended June 30, 2020 of $33,220 and $66,979, respectively, and $26,497 and $53,532 for the three and six months ending June 30, 2019, respectively, relating to these nonconvertible promissory notes. As of June 30, 2020, the Company had a balance of $692,743 in current liabilities and $626,597 in noncurrent liabilities under the caption notes payable related to these nonconvertible promissory notes. As of December 31, 2019, the Company had balances of $288,237 in current liabilities and $1,074,122 in noncurrent liabilities on its condensed consolidated balance sheets under the caption notes payable relating to these nonconvertible promissory notes. |
LOANS FROM RELATED PARTY
LOANS FROM RELATED PARTY | 6 Months Ended |
Jun. 30, 2020 | |
Due to Related Parties [Abstract] | |
LOANS FROM RELATED PARTY | NOTE 10 LOANS FROM RELATED PARTY Dolphin Entertainment, LLC (DE LLC), an entity wholly owned by the Companys CEO, William ODowd, previously advanced funds for working capital to Dolphin Films. During 2016, Dolphin Films entered into a promissory note with DE LLC (the DE LLC Note) in the principal amount of $1,009,624. Under the terms of the DE LLC Note, the CEO may make additional advancements to the Company, as needed, and may be repaid a portion of the loan, which is payable on demand and bears interest at 10% per annum. Included in the balance of the DE LLC Note are certain script costs and other payables totaling $594,315 that were owed to DE LLC. For the three and six months ended June 30, 2020, the Company paid $100,000 of interest on the DE LLC Note and recorded interest expense of $27,621 and $55,242, respectively and did not repay any principal balance of the DE LLC Note. For the three and six months ended June 30, 2019, the Company did not repay any principal balance or interest of the DE LLC Note and recorded interest expense of $27,621 and $54,938, respectively. As of June 30, 2020 and December 31, 2019, the Company had a principal balance of $1,107,873 and accrued interest of $370,834 and $415,592, respectively, relating to the DE LLC Note on its condensed consolidated balance sheets. On August 12, 2019, the Company entered into the Exchange Agreement whereby Leslee Dart, a Director of the Company agreed to take a convertible note instead of cash in exchange for 76,194 Put Rights that she had exercised but had not been paid. The principal amount of the convertible note is $702,500, bears interest at a rate of 10% per annum and matures on August 12, 2020. The balance of the convertible note and any accrued interest may be converted into shares of Common Stock at the noteholders option at any time during the term of the convertible note payable, at a purchase price based on the 30-day trailing average closing price of the Common Stock. For the three and six months ended June 30, 2020, the Company recorded interest expense in the amount of $17,563 and $35,126, respectively and did not repay any principal balance or interest on the note. As of June 30, 2020, $62,264 was recorded as accrued interest and $702,500 was recorded in convertible notes payable as current liabilities, on the condensed consolidated balance sheet. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 11 FAIR VALUE MEASUREMENTS Put Rights In connection with the 42West acquisition on March 30, 2017, the Company entered into the put agreements, pursuant to which it granted Put Rights to the sellers. During the six months ended June 30, 2020, the sellers exercised their Put Rights, for an aggregate amount of 177,518 shares of Common Stock. During the three and six months ended June 30, 2020, the Company paid $84,700 and $459,700, respectively, related to Put Rights that were exercised of which $275,000 were exercised in December 2019. As of June 30, 2020, $1,452,500 was due from the exercise of these Put Rights. In addition, the Company entered into put agreements with three 42West employees with change of control provision in their employment agreements. The Company agreed to purchase up to 50% of the shares of Common Stock to be received by the employees in satisfaction of the change of control provision in their employment agreements. The employees have the right, but not the obligation, to cause the Company to purchase an additional 20,246 shares of Common Stock. The Company records the fair value of the liability in the condensed 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 in the consolidated statements of operations. The carrying amount at fair value of the aggregate liability for the Put Rights recorded on the condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 was $2,663,237 and $3,003,547, respectively. Due to the change in the fair value of the Put Rights for the period in which the Put Rights were outstanding for the three and six months ending June 30, 2020, the Company recorded a gain of $47,070 and $1,517,810, respectively, and $251,350 and $1,778,376, respectively, for the three and six months ended June 30, 2019, in the condensed 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 managements own assumptions about the assumptions that market participants would use in valuing the Put Rights as of June 30, 2020 and December 31, 2019. The Company determined the fair value by using the following key inputs to the Black-Scholes Option Pricing Model: Inputs As of As of Equity volatility estimate 135 .0% 64.0% 70.0 % Discount rate based on US Treasury obligations 0.13% 0.18 % 1.54% 1.59 % For the Put Rights, which are 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, 2019 to June 30, 2020: Ending fair value balance reported in the consolidated balance sheet at December 31, 2019 $ 3,003,547 Put rights exercised in December 2019 paid in January 2020 (275,000 ) Change in fair value (gain) reported in the statements of operations (1,517,810 ) Put rights exercised June 2020 and not yet paid 1,452,500 Ending fair value of put rights reported in the condensed consolidated balance sheet at June 30, 2020 $ 2,663,237 Contingent Consideration In connection with the Companys acquisition of The Door, the Door Members have the potential to earn the contingent consideration, comprising up to 1,538,462 shares of Common Stock, based on a purchase price of $3.25, and up $2,000,000 in cash on achievement of adjusted net income targets based on the operations of The Door over the four-year period beginning January 1, 2018. The Company records the fair value of the liability in the condensed 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 contingent consideration in the condensed consolidated statements of operations. The fair value of the contingent consideration on the date of the acquisition of The Door was $1,620,000. The carrying amount at fair value of the aggregate liability for the contingent consideration recorded on the condensed consolidated balance sheet at June 30, 2020 and December 31, 2019 is $800,000 and $330,000, respectively. Due to the change in the fair value of the contingent consideration for the period in which the contingent consideration was outstanding during the three and six months ended June 30, 2020, the Company recorded a loss on the contingent consideration of $573,000 and $470,000 in the condensed consolidated statement of operations. 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 managements 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 by using the following key inputs to the Monte Carlo Simulation Model: Inputs As of As of Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the contingent consideration) 0.16% - 0.18 % 1.58% - 1.59 % Annual Asset Volatility Estimate 75.0 % 40.0 % For the contingent consideration, which are 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, 2019 to June 30, 2020: Beginning fair value balance reported on the consolidated balance sheet at December 31, 2019 $ 330,000 Change in fair value (loss) reported in the statements of operations 470,000 Ending fair value balance reported in the condensed consolidated balance sheet at June 30, 2020 $ 800,000 Fair Value Option Election Convertible notes payable and freestanding warrants 2020 convertible notes payable The Company issued the 2020 Lincoln Park Note with a principal amount of $1.3 million at a purchase price of $1.2 million on January 3, 2020. This note is accounted for under the ASC 825-10-15-4 FVO election. Under the FVO election the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. As provided for by ASC 825-10-50-30(b), the estimated fair value adjustment is presented as a single line item within other income (expense) in the accompanying consolidated statement of operations under the caption change in fair value of convertible notes and derivative liabilities. For the 2020 Lincoln Park Note, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from January 3, 2020 (date of issuance) to June 30, 2020: Beginning fair value balance on issue date - January 3, 2020 $ 885,559 Change in fair value (loss) reported in the statements of operations 203,461 Ending fair value balance - June 30, 2020 $ 1,089,020 The estimated fair value of the 2020 Lincoln Park Note as of its January 3, 2020 issue date and as of June 30, 2020, was computed using a Monte Carlo simulation, 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 2020 Lincoln Park Note reflects managements own assumptions about the assumptions that market participants would use in valuing the 2020 Lincoln Park Note as of the acquisition date and subsequent reporting periods. The Company determined the fair value by using the following key inputs to the Monte Carlo Simulation Model Fair Value Assumption - 2020 Lincoln Park Note January 3, June 30, Face value principal payable $ 1,300,000 $ 1,300,000 Original conversion price Variable Variable Value of Common Stock $ 0.64 $ 0.87 Expected term (years) 2.00 1.51 Volatility 87.5% 120% Straight debt yield 9.5% 14.0% Risk free rate 1.53% 0.16% The variable conversion price is the lower of (A) $1.05 per share and (B) the lower of (i) the lowest intraday sales price of our common stock on the applicable conversion date and (ii) the average of the three lowest closing sales prices of our common stock during the twelve consecutive trading days including the trading day immediately preceding the conversion date but under no circumstances lower than $0.78 per share. In addition to the 2020 Lincoln Park Note, the Company issued two other convertible notes during the six months ending June 30, 2020 for which it elected FVO. The first was issued for a face value of $500,000 on March 4, 2020, and the second was issued for a face value of $560,000 on March 25, 2020. Under the FVO election the financial instrument is initially measured at its issue-date estimated fair value and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. As provided for by ASC 825-10-50-30(b), the estimated fair value adjustment is presented as a single line item within other income (expense) in the accompanying consolidated statement of operations under the caption change in fair value of convertible notes and derivative liabilities. For the March 4, 2020 note, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from March 4, 2020 (date of issuance) to June 30, 2020: Beginning fair value balance on issue date - March 4, 2020 $ 460,000 Change in fair value (loss) reported in the statements of operations 105,500 Ending fair value balance - June 30, 2020 $ 565,500 The estimated fair value of the note as of its March 4, 2020 issue date and as of June 30, 2020, was computed using a Black-Scholes simulation of the present value of its cash flows using a synthetic credit rating analysis and a required rate of return, using the following assumptions: Fair Value Assumption - 2020 Convertible Note (March 4 note) March 4, June 30, Face value principal payable $ 500,000 $ 500,000 Original conversion price $ 0.78 $ 0.78 Value of Common Stock $ 0.67 $ 0.87 Expected term (years) 10.00 9.68 Volatility 90% 120% Risk free rate 1.02% 0.66% For the March 25, 2020 note, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from March 25, 2020 (date of issuance) to June 30, 2020: Beginning fair value balance on issue date - March 25, 2020 $ 500,000 Change in fair value (loss) reported in the statements of operations 240,000 Ending fair value balance - June 30, 2020 $ 740,000 The estimated fair value of the note as of its March 25, 2020 issue date and as of June 30, 2020, was computed using a Monte-Carlo simulation of the present value of its cash flows using a synthetic credit rating analysis and a required rate of return, using the following assumptions: Fair Value Assumption - 2020 Convertible Note (March 25 note) March 25, June 30, Face value principal payable $ 560,000 $ 560,000 Original conversion price $ 0.40 $ 0.78 Value of Common Stock $ 0.67 $ 0.87 Expected term (years) 1.00 0.73 Volatility 90% 120% Straight debt yield 23.5% 14.0% Risk free rate 0.25% 0.16% Warrants In connection with the 2020 Lincoln Park Note, the Company issued warrants to purchase up to 207,588 shares of its common stock on January 3, 2020, as well as on each of the second, fourth, and six month anniversaries of the 2020 Lincoln Park Note issuance. For the 2020 Lincoln Park Warrants, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from January 3, 2020 (date of issuance) to June 30, 2020: 2020 Lincoln Park Warrants: Fair Value 2020 Lincoln Park Warrants derivative liability - January 3, 2020 $ 314,441 Change in fair value (loss) reported in the statements of operations 211,118 2020 Lincoln Park Warrants derivative liability - June 30, 2020 $ 525,559 The estimated fair value of the 2020 Lincoln Park Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Fair Value Assumption - 2020 Lincoln Park Warrants January 3, June 30, Aggregate Fair Value $ 314,441 $ 530,000 Exercise Price per share $ 0.7828 $ 0.7828 Value of Common Stock $ 0.64 $ 0.87 Expected term (years) 5.50 5.01 Volatility 87.5% 120% Dividend yield 0% 0% Risk free rate 1.62% 0.29% In connection with the March 4, 2020, convertible promissory note (see Note 9) issued, the Company issued Series I Warrant to purchase up to 100,000 shares of Common Stock at a purchase price of $0.78 per share. For the Series I Warrant, which is measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from March 4, 2020 (date of issuance) to June 30, 2020: Series I Warrant: Fair Value 2020 Series I Warrants derivative liability - March 4, 2020 $ 40,000 Change in fair value (loss) reported in the statements of operations 20,000 2020 Series I Warrants derivative liability - June 30, 2020 $ 60,000 The estimated fair value of the Series I Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Fair Value Assumption - Series I Warrants March 4, June 30, Aggregate Fair Value $ 40,000 $ 60,000 Exercise Price per share $ 0.7828 $ 0.7828 Value of Common Stock $ 0.67 $ 0.87 Expected term (years) 5.50 5.18 Volatility 90% 120% Dividend yield 0% 0% Risk free rate 0.80% 0.30% In connection with the $1,200,000 2019 Lincoln Park Note issued on May 20, 2019, the Company issued warrants to purchase up to 550,000 shares of common stock. On June 5, 2020, Lincoln Park exercised the warrants through a cashless exercise formula pursuant to the warrant agreement. The Company issued 377,016 shares of Common Stock related to this cashless exercise. On June 5, 2020, the market value of the Common Stock was $0.98 per share. For the 2019 Lincoln Park Warrants, which are 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, 2019 to June 30, 2020: 2019 Lincoln Park Warrants: Fair Value 2019 Lincoln Park Warrants liability - December 31, 2019 $ 189,590 Change in fair value (loss) reported in the statements of operations 179,886 Market value of shares issued upon cashless exercise of 2019 Lincoln Park Warrants (369,476 ) 2019 Lincoln Park Warrants liability - June 30, 2020 $ The estimated fair value of the 2019 Lincoln Park Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Fair Value Assumption - 2019 Lincoln Park Warrants December 31, 2019 Aggregate Fair Value $ 189,590 Exercise Price per share $ 2.00 Value of Common Stock $ 0.70 Expected term (years) 5.39 Volatility 90% Dividend yield 0% Risk free rate 1.69% Derivative Liability (2019 Lincoln Park Note Embedded Conversion Feature) The Company accounted for the embedded conversion feature of the 2019 Lincoln Park Note as a derivative liability. For the embedded conversion feature of the 2019 Lincoln Park Note, which is 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, 2019 to June 30, 2020: Beginning fair value balance - December 31, 2019 $ 170,000 Change in fair value reported in the statements of operations Reduction in value due to note principal conversion (170,000 ) Ending fair value balance - June 30, 2020 $ |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT LIABILITIES | NOTE 12 CONTRACT LIABILITIES The Company receives advance payments from customers for public relations projects or as deposits for promotional or brand-support video projects, that it records as contract liabilities. Once the work is performed or the projects are delivered to the customer, the contract liability is recorded as revenue. The Company had balances of $370,466 and $309,880 as of June 30, 2020 and December 31, 2019, respectively, in contract liabilities. |
VARIABLE INTEREST ENTITIES
VARIABLE INTEREST ENTITIES | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
VARIABLE INTEREST ENTITIES | NOTE 13 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 entitys 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 SPEs investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPEs 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 VIEs 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 VIEs 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 evaluated the 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 JB Believe, LLC are consolidated in the condensed consolidated balance sheets as of June 30, 2020 and December 31, 2019, and in the condensed consolidated statements of operations and statements of cash flows presented herein for the three and six months ended June 30, 2020 and 2019. The financial statements of Max Steel Productions LLC are consolidated in the condensed consolidated balance sheet as of December 31, 2019 and in condensed consolidated statement of operations and statement of cash flows presented herein for the period between January 1, and February 20, 2020 and the three and six months ended June 30, 2019. These entities were previously under common control and have been accounted for at historical costs for all periods presented. Max Steel Productions LLC JB Believe LLC As of and For the As of For the For the three months As of and For the As of For the For the (in USD) 2020 2020 2019 2019 2019 2020 2020 2019 2019 2019 Assets 7,379,851 190,520 190,347 Liabilities (11,816,966 ) (6,750,088 ) (6,749,914 ) Revenues 3,311,198 78,990 Expenses 26,290 (14,035 ) (29,464 ) (8,223 ) 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 Companys involvement with a VIE cause the Companys 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 on historical cost. A gain or loss may be recognized upon deconsolidation of a VIE depending on the amounts of deconsolidated assets and liabilities compared to the fair value of retained interests and ongoing contractual arrangements. Max Steel VIE was initially formed for the purpose of recording the production costs of the motion picture Max Steel. As of June 30, 2020 and December 31, 2019, there were outstanding balances of $0 and $3,311,198, including accrued interest of $0 and $1,698,280, respectively, related to this debt which are included in the caption debt in the condensed consolidated balance sheets. The accrued interest was reclassified from accrued interest to debt as of December 31, 2019. 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 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 14 STOCKHOLDERS EQUITY A. Preferred Stock The Companys 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 an amendment to the Companys 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 Companys 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. Additionally, on July 6, 2017, the Second Amended and Restated Articles of Incorporation eliminated previous designations of Series A Convertible Preferred Stock and Series B Convertible Preferred Stock, no shares of which are outstanding. 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 on September 14, 2017) 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 the issue. An Eligible Class C Preferred Stock Holder means any of (i) DE LLC for so long as Mr. ODowd continues to beneficially own at least 90% of DE LLC and serves on its board of directors or other governing entity, (ii) any other entity in which Mr. ODowd beneficially owns more than 90%, or a trust for the benefit of others, for which Mr. ODowd serves as trustee and (iii) Mr. ODowd individually. Series C Convertible Preferred Stock will be convertible by the Eligible Class C Preferred Stock Holder only 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 have voting rights only if 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 shares of Common Stock into which the Series C Convertible Preferred Stock may 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 Companys Common Stock. B. Common Stock On January 13, 2020, a holder of a convertible promissory note converted a note with a principal amount of $200,000 into 346,021 shares of Common Stock. On January 13, 2020, two of the sellers of 42West that had exercised Put Rights in December were paid $175,000 for 18,980 shares of Common Stock. On January 23, 2020, the Company issued 252,158 shares of Common Stock to one of the sellers of Viewpoint as payment for the third installment of the consideration for the acquisition of Viewpoint. On February 3, 2020, a holder of a convertible promissory note converted a note with a principal amount of $150,000 into 254,326 shares of Common Stock. On February 6, 2020, Lincoln Park converted $250,000 of the principal amount of the 2019 Lincoln Park Note into 319,366 shares of Common Stock. On February 7, 2020, one of the sellers of 42West that had exercised Put Rights in December was paid $100,000 for 10,846 shares of Common Stock. On February 13, 2020, Lincoln Park converted $250,000 of the principal amount of the 2019 Lincoln Park Note into 319,366 shares of Common Stock. On February 27, 2020, Lincoln Park converted $250,000 of the principal amount of the 2019 Lincoln Park Note into 319,366 shares of Common Stock. On February 28, 2020, one of the sellers of 42West exercised Put for 10,846 shares of Common Stock and was paid $100,000. On March 24, 2020, the Company issued 50,000 shares of Common Stock as partial consideration for a $560,000 convertible note payable and received net proceeds of $500,000. On March 26, 2020, Lincoln Park converted $250,000 of the principal amount of the 2019 Lincoln Park Note into 319,366 shares of Common Stock. On May 15, 2020, one of the sellers of 42West that had exercised Put Rights in December was paid $24,700 for 2,676 shares of Common Stock. On June 2, 2020, Lincoln Park converted the remaining $100,000 of the principal amount of the 2019 Lincoln Park Note into 127,746 shares of Common Stock. On June 4, 2020, the sellers of 42West received an aggregate of 932,866 shares of Common Stock related to the earnout consideration for the 42West acquisition. On June 4, 2020, a holder of a convertible promissory note converted $500,000 of principal and $4,578 of accrued interest into 989,368 shares of Common Stock. On June 5, 2020, Lincoln Park exercised the 2019 Lincoln Park Warrants through a cashless exercise mechanism and was issued 377,016 shares of Common Stock. On June 5, 2020, a holder of a convertible promissory note converted $75,000 of principal and $707 of accrued interest into 132,820 shares of Common Stock. On June 5, 2020, a holder of a convertible promissory note converted $250,000 of principal and $2,289 of accrued interest into 494,684 shares of Common Stock. On June 15, 2020, a holder of a convertible promissory note converted $250,000 of principal and $2,905 of accrued interest into 421,509 shares of Common Stock. On June 17, 2020, two holders of a convertible promissory notes converted $75,000 of principal and $333 of accrued interest into 124,008 shares of Common Stock. On June 9, 2020, the Company sold and issued 7,900,000 shares of Common Stock through a registered direct offering. As of June 30, 2020 and December 31, 2019, the Company had 31,529,538 and 17,892,900 shares of Common Stock issued and outstanding, respectively. |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 15 LOSS PER SHARE The following table sets forth the computation of basic and diluted loss per share: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Numerator Net loss attributable to Dolphin Entertainment shareholders and numerator for basic earnings per share $ (2,943,601 ) $ (796,650 ) $ (869,754 ) $ (674,042 ) Change in fair value of put rights (47,070 ) (251,350 ) (1,517,810 ) (1,778,376 ) Numerator for diluted loss per share $ (2,990,671 ) $ (1,048,000 ) $ (2,387,564 ) $ (2,452,418 ) Denominator Denominator for basic EPS - weighted-average shares 23,596,206 15,969,926 21,818,711 15,957,085 Effect of dilutive securities: Put rights 1,703,130 3,202,161 4,253,064 3,714,039 Denominator for diluted EPS - adjusted weighted-average shares 25,299,336 19,172,087 26,071,775 19,671,124 Basic loss per share $ (0.12 ) $ (0.05 ) $ (0.04 ) $ (0.04 ) Diluted loss per share $ (0.12 ) $ (0.05 ) $ (0.09 ) $ (0.12 ) Basic loss per share is computed by dividing 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 loss per share assumes that any dilutive equity instruments, such as put rights and convertible notes payable were exercised and outstanding Common Stock adjusted accordingly. Certain of the Companys convertible notes payable and the Series C Preferred Stock have clauses that entitle the holder to participate if dividends are declared to the common stockholders as if the instruments had been converted into shares of common stock. As such, the Company uses the two-class method to compute earnings per share and attribute a portion of the Companys net income to these participating securities. For the three and six months ended June 30, 2020 and 2019, the Company had a net loss and as such the two-class method is not presented. In periods when the Put Rights are assumed to have been settled at the beginning of the period in calculating the denominator for diluted earnings (loss) per share, the related change in the fair value of Put Right liability recognized in the consolidated statements of operations for the period, is added back or subtracted from net income during the period. The denominator for calculating diluted loss per share for the three and six months ended June 30, 2020 and 2019 assumes the Put Rights had been settled at the beginning of the period, and therefore, the related income due to the decrease in the fair value of the Put Right liability during the three and six months ended June 30, 2020 and 2019 is subtracted from net loss. For the three and six months ended June 30, 2020 and 2019, convertible promissory notes were not included in diluted loss per share because inclusion was considered to be anti-dilutive . |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | NOTE 16 WARRANTS A summary of warrants outstanding at December 31, 2019 and issued, exercised and expired during the six months ended June 30, 2020 is as follows: Warrants: Shares Weighted Avg. Balance at December 31, 2019 2,277,253 $ 3.47 Issued 515,176 0.78 Exercised (550,000 ) 0.00 Expired (250,000 ) 0.78 Balance at June 30, 2020 1,992,429 $ 3.72 On November 4, 2016, the Company issued warrants to T Squared to purchase up to 250,000 shares of Common Stock at an initial exercise price of $14.00 per share. The warrants contain a down round provision and on October 21, 2019, as a result of the Companys sale of Common Stock through an underwritten public offering, the exercise price of the warrants was reduced to $0.78 per share. The warrants were not exercised and expired on January 31, 2020. In the 2017 public offering, the Company issued 1,215,000 units, each comprising one share of Common Stock, and one warrant exercisable for one share of Common Stock for $4.74 per share. In addition to the units issued and sold in this 2017 public offering, the Company also issued warrants to the underwriters to purchase up to an aggregate of 85,050 shares of Common Stock at a purchase price of $4.74 per share. On January 22, 2018, the underwriters exercised their over-allotment option with respect to 175,750 warrants to purchase Common Stock at a purchase price of $4.74 per share. In connection with the exercise of the over-allotment option, the Company issued to the underwriters warrants to purchase an aggregate of 1,453 shares of Common Stock at a purchase price of $4.74 per share. The Company determined that each of these warrants should be classified as equity and recorded the fair value of the warrants in additional paid in capital. On each of May 21, July 23, September 20, and November 20, 2019 the Company issued 2019 Lincoln Park Warrants to purchase up to 137,500 shares of Common Stock (550,000 total) at a purchase price of $2.00 per share to Lincoln Park related to the 2019 Lincoln Park Note. On January 3, 2020, in relation to the 2020 Lincoln Park Note, the exercise price of the 2019 Lincoln Park Warrants was reduced to $0.78 per share. The 2019 Lincoln Park Warrants became exercisable on the six-month anniversary of issuance and for a period of five years thereafter. Pursuant to the warrant agreements, if a resale registration statement covering the shares of Common Stock underlying the 2019 Lincoln Park Warrants is not effective and available at the time of exercise, the 2019 Lincoln Park Warrants may be exercised by means of a cashless exercise formula. On June 5, 2020, Lincoln Park exercised the 2019 Lincoln Park Warrants by means of a cashless exercise formula and were issued 377,016 shares of Common Stock. The Company determined that the 2019 Lincoln Park Warrants should be classified as freestanding financial instruments and meet the criteria to be accounted for as derivative liabilities at fair value. For the three and six months ended June 30, 2020, the Company recorded $187,960 and $179,886 of change in fair value on its condensed consolidated statement of operations. On each of January 3, March 4, and May 4, 2020, in relation to the 2020 Lincoln Park Note, the Company issued the 2020 Lincoln Park Warrants to purchase up to 207,588 shares of Common Stock (622,764 total) at a purchase price of $0.78 per share to Lincoln Park and issued additional warrants to purchase up to 207,588 shares of Common Stock on July 3, 2020. The 2020 Lincoln Park Warrants become exercisable on the six-month anniversary of issuance and for a period of five years thereafter. If a resale registration statement covering the shares of Common Stock underlying the 2020 Lincoln Park Warrants is not effective and available at the time of exercise, the 2020 Lincoln Park Warrants may be exercised by means of a cashless exercise formula. The Company determined that the 2020 Lincoln Park Warrants should be classified as freestanding financial instruments that meet the criteria to be accounted for as derivative liabilities and recorded a fair value at issuance of $314,441. The Company recorded $215,559 and $270,000 of expense due to change in fair value during the three and six months ended June 30, 2020, and had a balance of $525,559 as of June 30, 2020 recorded in its condensed consolidated balance sheet. On March 4, 2020, in connection with the $500,000 convertible note payable (see Note 9) the Company issued Series I Warrant to purchase up to 100,000 shares of Common Stock at a purchase price of $0.78 per share. The warrants become exercisable on the six-month anniversary and for a period of five years thereafter. If a resale registration statement covering the shares of Common Stock underlying the warrants is not effective and available at the time of exercise, the warrants may be exercised by means of a cashless exercise formula. The Company determined that the Series I Warrant should be classified as a freestanding financial instrument that meets the criteria to be accounted for as a derivative liability and recorded a fair value at issuance of $40,000. The Company recorded $30,000 and $10,000, respectively, of expense due to change in fair value during the three and six months ended June 30, 2020 and had a balance of $60,000 as of June 30, 2020 recorded in its condensed consolidated balance sheet. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17 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. In addition, the CEO was entitled to an annual discretionary bonus as determined by the Companys Board of Directors. As part of his agreement, he received a $1,000,000 signing bonus in 2012 that is recorded in accrued compensation on the condensed 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. Even though the employment agreement expired and has not been renewed, the Company has an obligation under the agreement to continue to accrue interest on the unpaid balance. As of June 30, 2020 and December 31, 2019, the Company accrued $2,625,000 of compensation as accrued compensation and has balances of $1,624,109 and $1,493,219 respectively, in accrued interest in current liabilities on its condensed consolidated balance sheets, related to Mr. ODowds employment. The Company recorded interest expense related to the accrued compensation of $65,445 and $65,445, respectively, for the three months ended June 30, 2020 and 2019, and $130,890 and $130,171 for the six months ended June 30, 2020, and 2019, respectively, on the condensed consolidated statements of operations. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 18 SEGMENT INFORMATION The Company operates in two reportable segments, Entertainment Publicity and Marketing Segment and Content Production Segment. The Entertainment Publicity and Marketing segment is composed of 42West, The Door and Viewpoint and provides clients with diversified services, including public relations, entertainment and hospitality content marketing and strategic marketing consulting. The Content Production segment is composed of Dolphin Entertainment and Dolphin Films and engages 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 segments and assessing operating segment performance is operating income (loss) which is the same as Loss before other income (expenses) on the Companys consolidated statement of operations for the three and six months ended June 30, 2020. Salaries and related expenses include salaries, bonuses, commissions 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 acquisitions of 42West, The Door, Viewpoint, and Shore Fire, the Company assigned $7,530,549 of intangible assets, net of accumulated amortization of $5,130,784 and goodwill of $18,072,825 as of June 30, 2020 to the Entertainment Publicity and Marketing segment. The balances reflected as of June 30, 2019 for Entertainment Publicity and Marketing segment comprise 42West, The Door, and Viewpoint. Three months ended Six months ended Three months ended Six months ended June 30, 2020 June 30, 2019 Revenues: EPD $ 5,194,725 $ 11,828,525 $ 6,273,983 $ 12,523,890 CPD 78,990 Total $ 5,194,725 $ 11,828,525 $ 6,273,983 $ 12,602,880 Segment Operating Income (Loss): EPD $ 875,831 $ 216,757 $ (450,165 ) $ (810,759 ) CPD (1,054,869 ) (1,266,654 ) (751,914 ) (1,216,481 ) Total (179,038 ) (1,049,897 ) (1,202,079 ) (2,027,240 ) Interest expense (1,058,694 ) (1,682,976 ) (317,687 ) (605,657 ) Other income (expense) (1,705,869 ) 1,863,120 723,116 1,958,855 Loss before income taxes $ (2,943,601 ) $ (869,754 ) $ (796,650 ) $ (674,042 ) As of As of Total assets: EPD $ 40,556,344 $ 40,083,491 CPD 9,190,227 2,488,235 Total $ 49,746,571 $ 42,571,726 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 19 LEASES Viewpoint is obligated under an operating lease agreement for office space in Newton, Massachusetts, expiring in March 2021. The lease is secured by a certificate of deposit held by the Company and included in restricted cash in the amounts of $36,735 as of June 30, 2020. The lease provides for increases in rent for real estate taxes and operating expenses and contains a renewal option for an additional five years. The Door occupies space in New York. An entity wholly owned by the former Door Members is obligated under an operating lease agreement for the office space expiring in August 2020 at a rate of $15,300 each month. The lease is secured by a cash security deposit of approximately $29,000. The Company signed a three year renewal of the lease that will commence on August 23, 2020 with substantially the same terms. The Door is obligated under an operating lease agreement for office space in Chicago, Illinois, at a fixed rate of $2,200 per month, which expired in May 2020 and was not renewed. 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 in the amount of $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 in the amount of $50,000 at June 30, 2020. 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. On February 19, 2019, the Company entered into an agreement to lease 3,024 square feet of office space in Coral Gables, Florida. The lease is for a period of 62 months from the commencement date, at a monthly lease rate of $9,954 with annual increases of 3%. The rent payments are abated for the first four months of the lease after the commencement date, which was October 1, 2019. The lease is secured by a cash deposit of $19,908. Shore Fire Media is obligated under an operating lease agreement for office space in Brooklyn, New York, expiring in February 2026. The lease is secured by a cash deposit of $34,490. Shore Fire Media is obligated under an operating lease agreement for office space in Nashville, Tennessee, expiring July 2020. The lease is secured by a cash deposit of $1,575 and was not renewed upon its expiration. The amortizable life of the right-of-use asset is limited by the expected lease term. Although certain leases include options to extend the Company did not include these in the right-of-use asset or lease liability calculations because it is not reasonably certain that the options will be executed. June 30, December 31, Assets Right-of-use asset $ 6,567,094 $ 7,435,903 Liabilities Current Lease liability $ 1,515,458 $ 1,610,022 Noncurrent Lease liability $ 5,659,094 $ 6,386,209 Total lease liability $ 7,174,552 $ 7,996,231 The table below shows the lease income and expenses recorded in the consolidated statement of operations incurred during the three and six months ended June 30, 2020. Lease costs Classification Three months Six months Operating lease costs Selling, general and administrative expenses $ 554,506 $ 1,063,113 Operating lease costs Direct costs 60,861 121,722 Sublease income Selling, general and administrative expenses (2,397 ) (4,794 ) Net lease costs $ 612,970 $ 1,180,041 Maturities of lease liabilities were as follows: 2020 (excluding six months ended June 30, 2020) $ 1,104,564 2021 1,919,733 2022 1,294,106 2023 1,305,358 2024 1,357,335 Thereafter 2,173,036 Total lease payments $ 9,154,132 Less: Imputed interest (1,979,580 ) Present value of lease liabilities $ 7,174,552 The Company used its incremental borrowing rate on January 1, 2019, deemed to be 8%, to calculate the present value of the lease liabilities and right-of-use asset. The weighted average remaining lease term for our operating leases was six years at June 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 20 COMMITMENTS AND CONTINGENCIES Litigation 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 any pending litigation is not expected to have a material effect in the Companys financial position, results of operations and cash flows. The Company is not aware of any pending litigation as of the date of this report. Incentive Compensation Plan On June 29, 2017, the shareholders of the Company approved the Dolphin Digital Media, Inc. 2017 Equity Incentive Plan (the 2017 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 Companys 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 Internal Revenue Code of 1986, as amended (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 Compensation 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 Compensation 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. During the six months ended June 30, 2020, the Company did not issue any Awards under the 2017 Plan. Employee Benefit Plan The Company has a 401(K) profit sharing plan that covers substantially all of its employees. The Company matches 100% of the first 3% contributed by the employee and then 50% up to a maximum of 4% contributed by the employee. The contribution is also limited by annual maximum amount determined by the Internal Revenue Service. The Companys contributions were $61,259 and $167,047 during the three and six months ended June 30, 2020. Employment Contracts As a condition to the Shore Fire Purchase, Marilyn Laverty, the Shore Fire seller, entered into an employment agreement with the Company to continue as an employee after the closing of the Shore Fire Purchase. Ms. Lavertys employment agreement is through December 31, 2022 and may be renewed by Ms. Laverty for two successive one-year terms. The employment agreement defines base compensation and a salary increase and bonus structure based on Shore Fire achieving certain financial targets. Ms. Laverty will serve as Shore Fires President. The employment agreements contain provisions for termination and as a result of death or disability and entitles the employee to vacations and to participate in all employee benefit plans offered by the Company. As a condition to the acquisition of Viewpoint, David Shilale entered into an employment agreement with the Company to continue as an employee after the closing of the Viewpoint purchase. Mr. Shilales employment agreement is for a period of three years from the closing date of the Viewpoint purchase and the contract defines the base compensation and a commission structure based on Viewpoint achieving certain financial targets. The bonus for Mr. Shilale is determined at the sole discretion of the Companys Board of Directors and management. The agreement does not provide for guaranteed increases to the base salary. The employment agreement contains provisions for termination and as a result of death or disability and entitles the employee to vacations and to participate in all employee benefit plans offered by the Company. In connection with the acquisition of The Door, each of the former members of The Door (the Door Members) has entered into a four-year employment agreement with The Door, pursuant to which each Door Member has agreed not to transfer any shares of Common Stock received as consideration for the merger (the Share Consideration) in the first year following the closing date of the merger, no more than 1/3 of such Share Consideration in the second year and no more than an additional 1/3 of such Share Consideration in the third year. During the year ended December 31, 2017, 42West renewed two senior level management employment agreements each with a three-year term. The contracts define each individuals 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 acquisition of 42West each of the three principal sellers entered into employment agreements with the Company and have agreed to continue as employees of the Company for a three-year term. Effective April 1, 2020, the Company renewed Leslee Darts employment agreement for a period of three years and may automatically be renewed for successive one-year terms by mutual agreement of Ms. Dart and the Company. The employment agreement provides for a base salary and contains provisions for termination and as a result of death or disability. During the term of the employment agreement, Ms. Dart is entitled to participate in all employee benefit plans, practices and programs maintained by the Company as well as is entitled to paid vacation in accordance with the Companys policy. The Company has not renewed the employment agreement of the other two principal sellers, although one remains employed by the Company, while the other one has retired. Letter of Credit Pursuant to the lease agreements of the 42West New York and Los Angeles office locations, the Company is required to issue letters of credit to secure the leases. On July 24, 2018, the Company renewed the letter of credit issued by City National Bank for the 42West office space in New York. The letter of credit is for $677,354 and originally expired on August 1, 2018. This letter of credit renews automatically annually unless City National Bank notifies the landlord 60-days prior to the expiration of the banks election not to renew the letter of credit. The Company granted City National Bank a security interest in bank account funds totaling $677,354 pledged as collateral for the letter of credit. On June 29, 2018, the Company issued a letter of credit through Bank United, in the amount of $50,000, reducing the borrowing capacity under the Loan Agreement by that amount. The letters of credit commit the issuer to pay specified amounts to the holder of the letter of credit under certain conditions. If this were to occur, the Company would be required to reimburse the issuer of the letter of credit. The Company was not aware of any material claims relating to its outstanding letters of credit as of June 30, 2020. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21 SUBSEQUENT EVENTS On July 10, 2020, one of the sellers of 42West exercised Put Rights in the amount of 13,592 and was paid $125,300 on July 16, 2020. On July 14, 2020 and July 16, 2020, three of the sellers of 42West were paid an aggregate of $460,000 for Put Rights that had been previously exercised. On July 15, 2020, Lincoln Park converted $360,000 of the principal balance of the 2020 Lincoln Park Note at a purchase price of $.88 per share and was issued 410,959 shares of Common Stock. On August 17, 2020 (the Closing Date), the Company entered into a Membership Interest Purchase Agreement (the Purchase Agreement Seller Be Social The consideration paid by the Company in connection with the acquisition of Be Social is $2,200,000 plus the potential to earn up to an additional $800,000. As a result, the Company (i) paid $1,500,000 cash on the Closing Date; (ii) issued 349,534 of shares of its Common Stock on the Closing Date and (iii) will issue a number of shares of Common Stock with an aggregate value of $350,000 on January 4, 2021. The Company may also pay up to an additional $800,000, 62.5% of which will be paid in cash and 37.5% in shares of Common Stock based on the achievement of specified financial performance targets during the years ended December 31, 2022 and 2023. The Seller has entered into an employment agreement with the Company with a term through December 31, 2023. |
GENERAL (Policies)
GENERAL (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Impact of COVID-19 | Impact of COVID-19 On March 11, 2020, the World Health Organization categorized a novel coronavirus (COVID-19) as a pandemic, and it continues to spread throughout the United States. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place have adversely affected the demand for certain of the services the Company offers resulting in decreased revenues and cash flows. One of our subsidiaries operates in the food and hospitality sector that has been negatively impacted by the orders to either suspend or reduce operations of restaurants and hotels. Another subsidiary represents talent, such as actors, directors and producers. The revenues from these clients has been negatively impacted by the suspension of content production. Conversely, the television and streaming consumption around the globe has increased as well as the demand for consumer products. Revenues from the marketing of these shows and products has somewhat offset the decrease in revenue from the sectors discussed above. The Company expects that the effects of COVID-19 pandemic will continue to negatively impact its results of operations, cash flows and financial position; however, the extent of the impact will vary depending on the duration and severity of the economic and operational impacts of COVID-19. The Company has taken steps such as freezes on hiring, staff reductions, salary reductions and cuts in non-essential spending to mitigate the effects of COVID-19 on the Companys financial results. Between April 19, 2020 and April 23, 2020, the Company and its subsidiaries received five separate unsecured loans for an aggregate amount of $2.8 million (the PPP Loans PPP CARES Act 2020 Registered Direct Offering On June 5, 2020, the Company issued and sold to certain institutional investors in a registered direct offering an aggregate of 7,900,000 shares of its common stock, par value $0.015 (“Common Stock”), at a price of $1.05 per share. The offering of the shares was made pursuant to the Company’s effective shelf registration statement on Form S-3 previously filed with the Securities and Exchange Commission. The Company received proceeds of approximately $7.6 million from the issuance and sale of its Common Stock after deducting related offering fees and expenses. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Dolphin, and all of its wholly owned subsidiaries, comprising Dolphin Films, Inc. (Dolphin Films), Dolphin SB Productions LLC, Dolphin Max Steel Holdings, LLC (Max Steel Holdings), Dolphin JB Believe Financing, LLC, Dolphin JOAT Productions, LLC, 42West, The Door, Viewpoint and Shore Fire. 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). The Company consolidates a VIE in its 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 operations 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 in its condensed consolidated financial statements JB Believe, LLC as a VIE. During the six months ended June 30, 2020, the Company analyzed its status as the primary beneficiary of Max Steel Productions LLC (Max Steel VIE) that has previously been consolidated in the financial statements of the Company and determined that it was no longer the primary beneficiary. As a result, the Company deconsolidated the financial statements of Max Steel VIE on a prospective basis from the Companys condensed consolidated financial statements as of June 30, 2020. See Note 13 for further discussion. The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and the instructions to Form 10-Q under the Securities Exchange Act of 1934, as amended (the Exchange Act), and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Companys management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020. The condensed consolidated balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read together with the audited consolidated financial statements and related notes included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2019. |
Reclassifications | Reclassifications Reclassifications have been made to our condensed consolidated financial statements for the prior period to conform to classifications used in 2020. |
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 the expected revenue and costs for investments in digital and feature film projects, estimates of sales returns and other allowances, provisions for doubtful accounts and impairment assessments for investment in feature film projects, goodwill and intangible assets. Actual results could differ materially from such estimates. Additionally, the full impact of the COVID-19 outbreak is unknown and cannot be reasonably estimated. However, management has made appropriate accounting estimates on certain accounting matters, which include the allowance for doubtful accounts, carrying value of the goodwill and other intangible assets, carrying amount of certain convertible notes payable and embedded derivatives and warrant liabilities, based on the facts and circumstances available as of the reporting date. The Companys future assessment of the magnitude and duration of the COVID-19 outbreak, as well as other factors, could result in material impacts to the Companys financial statements in future reporting periods. |
Revision of Prior Period Financial Statements | Revision of Prior Period Financial Statements During the preparation of the condensed consolidated financial statements for the three months ended March 31, 2020, the Company identified certain immaterial errors related to its accounting of the 2019 Lincoln Park Note, 2019 Lincoln Park Warrants and the Pinnacle Note (each as defined in Note 9 – Notes Payable-Convertible Notes below), which were corrected and reflected in the Company’s first quarter, 2020 Form 10-Q. The Company concluded that the conversion feature of the 2019 Lincoln Park Note and the 2019 Lincoln Park Warrants met the definition of a derivative and should have been recorded at fair value at inception and remeasured at each reporting period with changes in the fair value recognized in earnings. The accretion to par value of the 2019 Lincoln Park Note is recorded as interest expense. The Company had originally accounted for the 2019 Lincoln Park Warrants as equity-linked instruments and had not bifurcated the conversion feature in the 2019 Lincoln Park Note. The Company also reviewed the Pinnacle Note that had a down round provision allowing for the repricing of the conversion price upon the Companys issuance of equity securities at a price lower than the Pinnacle Note conversion price. On October 21, 2019, the Company sold shares of Common Stock in a registered public offering, at a price of $0.7828 when the Pinnacle Note conversion price was $3.00. As a result, the conversion price of the Pinnacle Note was repriced to $0.7828. Due to the repricing, the Company should have recorded a beneficial conversion feature on the date of the repricing and amortized the beneficial conversion feature as interest expense over the remaining life of the Pinnacle Note that matured on January 5, 2020. In accordance with SAB No. 99, “ ” “ ” ’ ’ A summary of the revisions to previously reported financial information is as follows: As Reported Adjustment As Adjusted Revised Consolidated Balance Sheet as of June 30, 2019 Convertible note payable (noncurrent) $ 1,044,232 $ (380,636 ) [2] $ 663,596 Warrant liability (noncurrent) $ $ 302,306 [3] $ 302,306 Derivative liability $ $ 150,000 [4] $ 150,000 Total noncurrent liabilities $ 8,559,526 $ 71,670 $ 8,631,196 Total liabilities $ 31,088,896 $ 71,670 $ 31,160,566 Additional paid in capital $ 103,571,126 $ (166,887 ) [5] $ 103,404,239 Accumulated deficit $ (95,298,433 ) $ 95,217 $ (95,203,216 ) Total stockholders' equity $ 8,489,611 $ (71,670 ) $ 8,417,941 Revised Condensed Consolidated Statement of Operations for the three months ended June 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 81,766 [7] $ 81,766 Interest expense $ (301,138 ) $ (16,549 ) [8] $ (317,687 ) Total other income $ 310,211 $ 95,217 $ 405,429 Loss before income taxes/Net loss $ (891,867 ) $ 95,217 $ (796,650 ) Basic net loss per share $ (0.06 ) $ 0.01 $ (0.05 ) Diluted net loss per share $ (0.06 ) $ 0.01 $ (0.05 ) As Reported Adjustment As Adjusted Revised Condensed Consolidated Statement of Operations for the six months ended June 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 81,766 [7] $ 81,766 Interest expense $ (589,108 ) $ (16,549 ) [8] $ (605,657 ) Total other income $ 1,257,981 $ 95,217 $ 1,353,198 Loss before income taxes/Net loss $ (769,259 ) $ 95,217 $ (674,042 ) Basic net loss per share $ (0.05 ) $ 0.01 $ (0.04 ) Diluted net loss per share $ (0.13 ) $ 0.01 $ (0.12 ) Revised Consolidated Balance Sheet as of September 30, 2019 Convertible note payable (noncurrent) $ 1,477,597 $ (330,989 ) [2] $ 1,146,608 Warrant liability (noncurrent) $ $ 228,269 [3] $ 228,269 Derivative liability $ $ 150,000 [4] $ 150,000 Total noncurrent liabilities $ 8,299,494 $ 47,280 $ 8,346,774 Total liabilities $ 29,890,000 $ 47,280 $ 29,937,280 Additional paid in capital $ 103,146,270 $ (166,887 ) [5] $ 102,979,383 Accumulated deficit $ (95,649,264 ) $ 119,607 $ (95,529,657 ) Total stockholders' equity $ 7,717,630 $ (47,280 ) $ 7,670,350 Revised Condensed Consolidated Statement of Operations for the three months ended September 30, 2019 Change in fair value of derivative liability $ $ $ Change in fair value of warrant liability $ $ 74,037 [7] $ 74,037 Interest expense $ (295,556 ) $ (49,647 ) [8] $ (345,203 ) Total other income $ 1,061,340 $ 24,390 $ 1,085,730 Loss before income taxes/Net loss $ (350,831 ) $ 24,390 $ (326,441 ) Basic net loss per share $ (0.02 ) $ $ (0.02 ) Diluted net loss per share $ (0.05 ) $ $ (0.05 ) Revised Condensed Consolidated Statement of Operations for the nine months ended September 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 155,803 [7] $ 155,803 Interest expense $ (884,665 ) $ (66,196 ) [8] $ (950,861 ) Total other income $ 2,319,321 $ 119,607 $ 2,438,928 Loss before income taxes/Net loss $ (1,120,090 ) $ 119,607 $ (1,000,483 ) Basic net loss per share $ (0.07 ) $ 0.01 $ (0.06 ) Diluted net loss per share $ (0.17 ) $ $ (0.17 ) Revised Consolidated Balance Sheet as of December 31, 2019 Convertible note payable (noncurrent) $ 1,907,575 $ (177,957 ) [2] $ 1,729,618 Convertible note payable (current) $ 2,452,960 $ (69,350 ) [9] $ 2,383,610 Warrant liability (noncurrent) $ $ 189,590 [3] $ 189,590 Derivative liability $ $ 170,000 [4] $ 170,000 Total current liabilities $ 22,490,861 $ (69,350 ) $ 22,421,511 Total noncurrent liabilities $ 10,392,050 $ 181,633 $ 10,573,683 Total liabilities $ 32,882,911 $ 112,283 $ 32,995,194 Additional paid in capital $ 105,443,656 $ 1,022,240 [10] $ 106,465,896 Accumulated deficit $ (96,024,243 ) $ (1,134,523 ) $ (97,158,766 ) Total stockholders' equity $ 9,688,815 $ (112,283 ) $ 9,576,532 As Reported Adjustment As Adjusted Revised Condensed Consolidated Statement of Operations for the three months ended December 31, 2019[1] Change in fair value of derivative liability $ $ (20,000 ) [6] $ (20,000 ) Change in fair value of warrant liability $ $ 38,679 [7] $ 38,679 Interest expense $ (321,536 ) $ (1,272,809 ) [11] $ (1,594,345 ) Total other income $ 154,258 $ (1,254,130 ) $ (1,099,872 ) Loss before income taxes $ (491,486 ) $ (1,254,130 ) $ (1,745,616 ) Net loss $ (73,287 ) $ (1,254,130 ) $ (1,327,417 ) Basic net loss per share $ $ (0.07 ) $ (0.07 ) Diluted net loss per share $ (0.02 ) $ (0.06 ) $ (0.08 ) Revised Condensed Consolidated Statement of Operations for the year ended December 31, 2019 Change in fair value of derivative liability $ $ 10,000 [6] $ 10,000 Change in fair value of warrant liability $ $ 194,482 [7] $ 194,482 Interest expense $ (1,206,201 ) $ (1,339,006 ) [11] $ (2,545,207 ) Total other income $ 2,473,579 $ (1,134,523 ) $ 1,339,056 Loss before income taxes $ (1,611,576 ) $ (1,134,523 ) $ (2,746,099 ) Net loss $ (1,193,377 ) $ (1,134,523 ) $ (2,327,900 ) Basic net loss per share $ (0.07 ) $ (0.07 ) $ (0.14 ) Diluted net loss per share $ (0.20 ) $ (0.04 ) $ (0.24 ) [1] The Company is not required to and has not previously reported information on the statement of operations for the three months ended December 31, 2019 [2] Fair value and accretion to par value of the 2019 Lincoln Park Note. [3] Fair value of the 2019 Lincoln Park Warrants. [4] Fair value of the conversion feature of the 2019 Lincoln Park Note. [5] Reversal of beneficial conversion feature recorded for the 2019 Lincoln Park Note [6] Change in fair value of bifurcated conversion feature of 2019 Lincoln Park Note. [7] Change in fair value of 2019 Lincoln Park Warrant liability. [8] Reversal of the amortization of the beneficial conversion feature of the 2019 Lincoln Park Note offset by accretion of the 2019 Lincoln Park Note. [9] Unamortized discount on the beneficial conversion feature of the Pinnacle Note. [10] Contingent beneficial conversion feature on repricing of Pinnacle Note conversion, offset by reversal of beneficial conversion feature of the 2019 Lincoln Park Note. [11] Accretion of the 2019 Lincoln Park Note and $1.2 million of amortization of the beneficial conversion feature of the Pinnacle Note. |
Update to Significant Accounting Policies | Update to Significant Accounting Policies Our significant accounting policies are detailed in "Note 3: Summary of Significant Accounting Policies" within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019. Significant changes to our accounting policies as a result of electing the fair value option for certain convertible notes and warrants issued during the three and six months ended June 30, 2020 is discussed below: Fair Value Option (FVO) Election 2020 Convertible Notes The Company accounts for certain convertible notes issued during the six months ended June 30, 2020 under the fair value option election of ASC 825, Financial Instruments (ASC-825) as discussed below. The convertible notes accounted for under the FVO election are each a debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815, Derivatives and Hedging (ASC-815). Notwithstanding, ASC 825-10-15-4 provides for the fair value option (FVO) election, to the extent not otherwise prohibited by ASC 825-10-15-5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date. The estimated fair value adjustment, as required by ASC 825-10-45-5, is recognized as a component of other comprehensive income (OCI) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized as other income (expense) in the accompanying condensed consolidated statement of operations. With respect to the above notes, as provided for by ASC 825-10-50-30(b), the estimated fair value adjustment is presented in a respective single line item within other income (expense) in the accompanying consolidated statement of operations, since the change in fair value of the convertible notes payable was not attributable to instrument specific credit risk. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Guidance Adopted In March 2019, the Financial Accounting Standards Board (the FASB) issued new guidance on film production costs Accounting Standards Update (ASU) 2019-02, (Entertainment Films- Other Assets Film Costs (Subtopic 926-20)). The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and may be adopted early. The new guidance aligns the accounting for the production costs of an episodic series with those of a film by removing the content distinction for capitalization. It also addresses presentation, requires new disclosures for produced and licensed content and addresses cash flow classification for license agreements to better reflect the economics of an episodic series. The Company adopted this new guidance without a material impact on its consolidated financial statements. In October 2018, the FASB issued new guidance on consolidation ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years and should be applied retrospectively with a cumulative effect adjustment to retained earnings at the beginning of the earliest period presented. Early adoption is permitted. The new guidance provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. The Company adopted this new guidance without a material impact on its consolidated financial statements. In August 2018, the FASB issued new guidance on fair value measurement (ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure FrameworkChanges to the Disclosure Requirements for Fair Value Measurement). The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted. The guidance modifies the disclosure requirements on fair value by removing some requirements, modifying others, adding changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements, and providing the option to disclose certain other quantitative information with respect to significant unobservable inputs in lieu of a weighted average. The Company adopted this new guidance without a material impact on its consolidated financial statements. Accounting Guidance Not yet Adopted In August 2020, the FASB issued ASU 2020-06DebtDebt with Conversion and Other Options (Subtopic 470-20) and Derivatives and HedgingContracts in Entity's Own Equity (Subtopic 815-40)Accounting For Convertible Instruments and Contracts in an Entity's Own Equity. The guidance simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted net income per share calculation in certain areas. The new guidance is effective for annual and interim periods beginning after December 15, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its consolidated financial statements. In June 2016, the FASB issued new guidance on measurement of credit losses (ASU 2016-13, Measurement of Credit Losses on Financial Instruments) with subsequent amendments issued in November 2018 (ASU 2018-19) and April 2019 (ASU 2019-04). This update changes the accounting for credit losses on loans and held-to-maturity debt securities and requires a current expected credit loss (CECL) approach to determine the allowance for credit losses. It is applicable to trade accounts receivable. The guidance is effective for fiscal years beginning after December 15, 2022 with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. Early adoption is permitted. The Company is in the process of evaluating the impact of the adoption of ASU 2016-13 on the Company's consolidated financial statements and disclosures. |
GENERAL (Tables)
GENERAL (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Revisions to Previously Reported Financial Information | A summary of the revisions to previously reported financial information is as follows: As Reported Adjustment As Adjusted Revised Consolidated Balance Sheet as of June 30, 2019 Convertible note payable (noncurrent) $ 1,044,232 $ (380,636 ) [2] $ 663,596 Warrant liability (noncurrent) $ $ 302,306 [3] $ 302,306 Derivative liability $ $ 150,000 [4] $ 150,000 Total noncurrent liabilities $ 8,559,526 $ 71,670 $ 8,631,196 Total liabilities $ 31,088,896 $ 71,670 $ 31,160,566 Additional paid in capital $ 103,571,126 $ (166,887 ) [5] $ 103,404,239 Accumulated deficit $ (95,298,433 ) $ 95,217 $ (95,203,216 ) Total stockholders' equity $ 8,489,611 $ (71,670 ) $ 8,417,941 Revised Condensed Consolidated Statement of Operations for the three months ended June 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 81,766 [7] $ 81,766 Interest expense $ (301,138 ) $ (16,549 ) [8] $ (317,687 ) Total other income $ 310,211 $ 95,217 $ 405,429 Loss before income taxes/Net loss $ (891,867 ) $ 95,217 $ (796,650 ) Basic net loss per share $ (0.06 ) $ 0.01 $ (0.05 ) Diluted net loss per share $ (0.06 ) $ 0.01 $ (0.05 ) As Reported Adjustment As Adjusted Revised Condensed Consolidated Statement of Operations for the six months ended June 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 81,766 [7] $ 81,766 Interest expense $ (589,108 ) $ (16,549 ) [8] $ (605,657 ) Total other income $ 1,257,981 $ 95,217 $ 1,353,198 Loss before income taxes/Net loss $ (769,259 ) $ 95,217 $ (674,042 ) Basic net loss per share $ (0.05 ) $ 0.01 $ (0.04 ) Diluted net loss per share $ (0.13 ) $ 0.01 $ (0.12 ) Revised Consolidated Balance Sheet as of September 30, 2019 Convertible note payable (noncurrent) $ 1,477,597 $ (330,989 ) [2] $ 1,146,608 Warrant liability (noncurrent) $ $ 228,269 [3] $ 228,269 Derivative liability $ $ 150,000 [4] $ 150,000 Total noncurrent liabilities $ 8,299,494 $ 47,280 $ 8,346,774 Total liabilities $ 29,890,000 $ 47,280 $ 29,937,280 Additional paid in capital $ 103,146,270 $ (166,887 ) [5] $ 102,979,383 Accumulated deficit $ (95,649,264 ) $ 119,607 $ (95,529,657 ) Total stockholders' equity $ 7,717,630 $ (47,280 ) $ 7,670,350 Revised Condensed Consolidated Statement of Operations for the three months ended September 30, 2019 Change in fair value of derivative liability $ $ $ Change in fair value of warrant liability $ $ 74,037 [7] $ 74,037 Interest expense $ (295,556 ) $ (49,647 ) [8] $ (345,203 ) Total other income $ 1,061,340 $ 24,390 $ 1,085,730 Loss before income taxes/Net loss $ (350,831 ) $ 24,390 $ (326,441 ) Basic net loss per share $ (0.02 ) $ $ (0.02 ) Diluted net loss per share $ (0.05 ) $ $ (0.05 ) Revised Condensed Consolidated Statement of Operations for the nine months ended September 30, 2019 Change in fair value of derivative liability $ $ 30,000 [6] $ 30,000 Change in fair value of warrant liability $ $ 155,803 [7] $ 155,803 Interest expense $ (884,665 ) $ (66,196 ) [8] $ (950,861 ) Total other income $ 2,319,321 $ 119,607 $ 2,438,928 Loss before income taxes/Net loss $ (1,120,090 ) $ 119,607 $ (1,000,483 ) Basic net loss per share $ (0.07 ) $ 0.01 $ (0.06 ) Diluted net loss per share $ (0.17 ) $ $ (0.17 ) Revised Consolidated Balance Sheet as of December 31, 2019 Convertible note payable (noncurrent) $ 1,907,575 $ (177,957 ) [2] $ 1,729,618 Convertible note payable (current) $ 2,452,960 $ (69,350 ) [9] $ 2,383,610 Warrant liability (noncurrent) $ $ 189,590 [3] $ 189,590 Derivative liability $ $ 170,000 [4] $ 170,000 Total current liabilities $ 22,490,861 $ (69,350 ) $ 22,421,511 Total noncurrent liabilities $ 10,392,050 $ 181,633 $ 10,573,683 Total liabilities $ 32,882,911 $ 112,283 $ 32,995,194 Additional paid in capital $ 105,443,656 $ 1,022,240 [10] $ 106,465,896 Accumulated deficit $ (96,024,243 ) $ (1,134,523 ) $ (97,158,766 ) Total stockholders' equity $ 9,688,815 $ (112,283 ) $ 9,576,532 As Reported Adjustment As Adjusted Revised Condensed Consolidated Statement of Operations for the three months ended December 31, 2019[1] Change in fair value of derivative liability $ $ (20,000 ) [6] $ (20,000 ) Change in fair value of warrant liability $ $ 38,679 [7] $ 38,679 Interest expense $ (321,536 ) $ (1,272,809 ) [11] $ (1,594,345 ) Total other income $ 154,258 $ (1,254,130 ) $ (1,099,872 ) Loss before income taxes $ (491,486 ) $ (1,254,130 ) $ (1,745,616 ) Net loss $ (73,287 ) $ (1,254,130 ) $ (1,327,417 ) Basic net loss per share $ $ (0.07 ) $ (0.07 ) Diluted net loss per share $ (0.02 ) $ (0.06 ) $ (0.08 ) Revised Condensed Consolidated Statement of Operations for the year ended December 31, 2019 Change in fair value of derivative liability $ $ 10,000 [6] $ 10,000 Change in fair value of warrant liability $ $ 194,482 [7] $ 194,482 Interest expense $ (1,206,201 ) $ (1,339,006 ) [11] $ (2,545,207 ) Total other income $ 2,473,579 $ (1,134,523 ) $ 1,339,056 Loss before income taxes $ (1,611,576 ) $ (1,134,523 ) $ (2,746,099 ) Net loss $ (1,193,377 ) $ (1,134,523 ) $ (2,327,900 ) Basic net loss per share $ (0.07 ) $ (0.07 ) $ (0.14 ) Diluted net loss per share $ (0.20 ) $ (0.04 ) $ (0.24 ) [1] The Company is not required to and has not previously reported information on the statement of operations for the three months ended December 31, 2019 [2] Fair value and accretion to par value of the 2019 Lincoln Park Note. [3] Fair value of the 2019 Lincoln Park Warrants. [4] Fair value of the conversion feature of the 2019 Lincoln Park Note. [5] Reversal of beneficial conversion feature recorded for the 2019 Lincoln Park Note [6] Change in fair value of bifurcated conversion feature of 2019 Lincoln Park Note. [7] Change in fair value of 2019 Lincoln Park Warrant liability. [8] Reversal of the amortization of the beneficial conversion feature of the 2019 Lincoln Park Note offset by accretion of the 2019 Lincoln Park Note. [9] Unamortized discount on the beneficial conversion feature of the Pinnacle Note. [10] Contingent beneficial conversion feature on repricing of Pinnacle Note conversion, offset by reversal of beneficial conversion feature of the 2019 Lincoln Park Note. [11] Accretion of the 2019 Lincoln Park Note and $1.2 million of amortization of the beneficial conversion feature of the Pinnacle Note. |
MERGERS AND ACQUISITIONS (Table
MERGERS AND ACQUISITIONS (Tables) - Shore Fire Seller [Member] | 6 Months Ended |
Jun. 30, 2020 | |
Schedule of Consideration Transferred | The provisional acquisition-date fair value of the consideration transferred totaled $3,124,836, which consisted of the following: Common Stock issued at closing (314,812 shares) $ 200,000 Cash Consideration paid at closing 1,140,000 Cash Installment to be paid on March 3, 2020 250,000 Cash Installment to be paid on June 3, 2020 250,000 Cash Installment to be paid on December 3, 2020 390,000 Common Stock to be issued on December 3, 2020 200,000 Cash Installment to be paid on December 3, 2021 370,000 Common Stock to be issued on December 3, 2021 200,000 Working capital adjustment paid on April 1, 2020 124,836 $ 3,124,836 |
Schedule of Assets Acquired and Liabilities Assumed | The following table summarizes the provisional fair values of the assets acquired and liabilities assumed at the Shore Fire Closing Date. Amounts in the table are provisional estimates that may change, as described below. Cash $ 384,530 Accounts receivable 294,033 Other current assets 33,402 Property, plant & equipment 112,787 Intangibles 1,080,000 Total identifiable assets acquired 1,904,752 Accrued expenses (298,870 ) Accounts payable (38,750 ) Deferred tax liability (358,153 ) Contract liability (143,339 ) Other current liability (16,651 ) Total liabilities assumed (855,763 ) Net identifiable assets acquired 1,048,989 Goodwill 2,075,847 Net assets acquired $ 3,124,836 |
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 December 3, 2020 $ 1,951,011 Changes to estimated fair values: Working capital adjustment 124,836 Adjusted goodwill $ 2,075,847 |
Schedule of Proforma Results of Operations | The following represents the Companys unaudited pro forma consolidated operations for the three and six months ended June 30, 2019 as if Shore Fire had been acquired on January 1, 2019 and its results had been included in the consolidated results of the Company for such period: For the three months ended June 30, For the six months ended June 30, Revenue $ 7,466,465 $ 14,939,501 Net income $ (839,195 ) $ (677,160 ) |
PROPERTY, EQUIPMENT AND LEASE_2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, equipment and leasehold | Property, equipment and leasehold improvement consists of: June 30, December 31, Furniture and fixtures $ 790,591 $ 792,611 Computers and equipment 1,734,753 1,728,916 Leasehold improvements 770,629 770,628 3,295,973 3,292,155 Less: accumulated depreciation and amortization (2,437,875 ) (2,255,306 ) Property, equipment and leasehold improvements, net $ 858,098 $ 1,036,849 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
2020 Convertible Debt Lincoln Park Note [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The Company determined the fair value by using the following key inputs to the Monte Carlo Simulation Model Fair Value Assumption - 2020 Lincoln Park Note January 3, June 30, Face value principal payable $ 1,300,000 $ 1,300,000 Original conversion price Variable Variable Value of Common Stock $ 0.64 $ 0.87 Expected term (years) 2.00 1.51 Volatility 87.5% 120% Straight debt yield 9.5% 14.0% Risk free rate 1.53% 0.16% |
Schedule of Liability Fair Value Categorized Within Level 3 | For the 2020 Lincoln Park Note, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from January 3, 2020 (date of issuance) to June 30, 2020: Beginning fair value balance on issue date - January 3, 2020 $ 885,559 Change in fair value (loss) reported in the statements of operations 203,461 Ending fair value balance - June 30, 2020 $ 1,089,020 |
2020 Convertible Debt Lincoln Park Note [Member] | Convertible Debt One [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The estimated fair value of the note as of its March 4, 2020 issue date and as of June 30, 2020, was computed using a Black-Scholes simulation of the present value of its cash flows using a synthetic credit rating analysis and a required rate of return, using the following assumptions: Fair Value Assumption - 2020 Convertible Note (March 4 note) March 4, June 30, Face value principal payable $ 500,000 $ 500,000 Original conversion price $ 0.78 $ 0.78 Value of Common Stock $ 0.67 $ 0.87 Expected term (years) 10.00 9.68 Volatility 90% 120% Risk free rate 1.02% 0.66% |
Schedule of Liability Fair Value Categorized Within Level 3 | For the March 4, 2020 note, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from March 4, 2020 (date of issuance) to June 30, 2020: Beginning fair value balance on issue date - March 4, 2020 $ 460,000 Change in fair value (loss) reported in the statements of operations 105,500 Ending fair value balance - June 30, 2020 $ 565,500 |
2020 Convertible Debt Lincoln Park Note [Member] | Convertible Debt Two [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The estimated fair value of the note as of its March 25, 2020 issue date and as of June 30, 2020, was computed using a Monte-Carlo simulation of the present value of its cash flows using a synthetic credit rating analysis and a required rate of return, using the following assumptions: Fair Value Assumption - 2020 Convertible Note (March 25 note) March 25, June 30, Face value principal payable $ 560,000 $ 560,000 Original conversion price $ 0.40 $ 0.78 Value of Common Stock $ 0.67 $ 0.87 Expected term (years) 1.00 0.73 Volatility 90% 120% Straight debt yield 23.5% 14.0% Risk free rate 0.25% 0.16% |
Schedule of Liability Fair Value Categorized Within Level 3 | For the March 25, 2020 note, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from March 25, 2020 (date of issuance) to June 30, 2020: Beginning fair value balance on issue date - March 25, 2020 $ 500,000 Change in fair value (loss) reported in the statements of operations 240,000 Ending fair value balance - June 30, 2020 $ 740,000 |
2020 Convertible Debt Lincoln Park Warrants [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The estimated fair value of the 2020 Lincoln Park Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Fair Value Assumption - 2020 Lincoln Park Warrants January 3, June 30, Aggregate Fair Value $ 314,441 $ 530,000 Exercise Price per share $ 0.7828 $ 0.7828 Value of Common Stock $ 0.64 $ 0.87 Expected term (years) 5.50 5.01 Volatility 87.5% 120% Dividend yield 0% 0% Risk free rate 1.62% 0.29% |
Schedule of Liability Fair Value Categorized Within Level 3 | For the 2020 Lincoln Park Warrants, which are measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from January 3, 2020 (date of issuance) to June 30, 2020: 2020 Lincoln Park Warrants: Fair Value 2020 Lincoln Park Warrants derivative liability - January 3, 2020 $ 314,441 Change in fair value (loss) reported in the statements of operations 211,118 2020 Lincoln Park Warrants derivative liability - June 30, 2020 $ 525,559 |
2020 Convertible Debt Lincoln Park Warrants [Member] | Warrant I Series [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The estimated fair value of the Series I Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Fair Value Assumption - Series I Warrants March 4, June 30, Aggregate Fair Value $ 40,000 $ 60,000 Exercise Price per share $ 0.7828 $ 0.7828 Value of Common Stock $ 0.67 $ 0.87 Expected term (years) 5.50 5.18 Volatility 90% 120% Dividend yield 0% 0% Risk free rate 0.80% 0.30% |
Schedule of Liability Fair Value Categorized Within Level 3 | For the Series I Warrant, which is measured at fair value categorized within Level 3 of the fair value hierarchy, the following is a reconciliation of the fair values from March 4, 2020 (date of issuance) to June 30, 2020: Series I Warrant: Fair Value 2020 Series I Warrants derivative liability - March 4, 2020 $ 40,000 Change in fair value (loss) reported in the statements of operations 20,000 2020 Series I Warrants derivative liability - June 30, 2020 $ 60,000 |
2019 Convertible Debt Lincoln Park Warrants [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The estimated fair value of the 2019 Lincoln Park Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Fair Value Assumption - 2019 Lincoln Park Warrants December 31, 2019 Aggregate Fair Value $ 189,590 Exercise Price per share $ 2.00 Value of Common Stock $ 0.70 Expected term (years) 5.39 Volatility 90% Dividend yield 0% Risk free rate 1.69% |
Schedule of Liability Fair Value Categorized Within Level 3 | For the 2019 Lincoln Park Warrants, which are 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, 2019 to June 30, 2020: 2019 Lincoln Park Warrants: Fair Value 2019 Lincoln Park Warrants liability - December 31, 2019 $ 189,590 Change in fair value (loss) reported in the statements of operations 179,886 Market value of shares issued upon cashless exercise of 2019 Lincoln Park Warrants (369,476 ) 2019 Lincoln Park Warrants liability - June 30, 2020 $ |
2019 Convertible Debt Lincoln Park Embedded Conversion Warrants [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Liability Fair Value Categorized Within Level 3 | The Company accounted for the embedded conversion feature of the 2019 Lincoln Park Note as a derivative liability. For the embedded conversion feature of the 2019 Lincoln Park Note, which is 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, 2019 to June 30, 2020: Beginning fair value balance - December 31, 2019 $ 170,000 Change in fair value reported in the statements of operations Reduction in value due to note principal conversion (170,000 ) Ending fair value balance - June 30, 2020 $ |
Put Rights [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The Company determined the fair value by using the following key inputs to the Black-Scholes Option Pricing Model: Inputs As of As of Equity volatility estimate 135 .0% 64.0% 70.0 % Discount rate based on US Treasury obligations 0.13% 0.18 % 1.54% 1.59 % |
Schedule of Liability Fair Value Categorized Within Level 3 | For the Put Rights, which are 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, 2019 to June 30, 2020: Ending fair value balance reported in the consolidated balance sheet at December 31, 2019 $ 3,003,547 Put rights exercised in December 2019 paid in January 2020 (275,000 ) Change in fair value (gain) reported in the statements of operations (1,517,810 ) Put rights exercised June 2020 and not yet paid 1,452,500 Ending fair value of put rights reported in the condensed consolidated balance sheet at June 30, 2020 $ 2,663,237 |
Contingent Consideration [Member] | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |
Schedule of Fair Value Assumptions Used to Value Liabilities | The Company determined the fair value by using the following key inputs to the Monte Carlo Simulation Model: Inputs As of As of Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the contingent consideration) 0.16% - 0.18 % 1.58% - 1.59 % Annual Asset Volatility Estimate 75.0 % 40.0 % |
Schedule of Liability Fair Value Categorized Within Level 3 | For the contingent consideration, which are 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, 2019 to June 30, 2020: Beginning fair value balance reported on the consolidated balance sheet at December 31, 2019 $ 330,000 Change in fair value (loss) reported in the statements of operations 470,000 Ending fair value balance reported in the condensed consolidated balance sheet at June 30, 2020 $ 800,000 |
VARIABLE INTEREST ENTITIES (Tab
VARIABLE INTEREST ENTITIES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |
Summary of Financial Information for Variable Interest Entities | Max Steel Productions LLC JB Believe LLC As of and For the As of For the For the three months As of and For the As of For the For the (in USD) 2020 2020 2019 2019 2019 2020 2020 2019 2019 2019 Assets 7,379,851 190,520 190,347 Liabilities (11,816,966 ) (6,750,088 ) (6,749,914 ) Revenues 3,311,198 78,990 Expenses 26,290 (14,035 ) (29,464 ) (8,223 ) |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Income Per Share | The following table sets forth the computation of basic and diluted loss per share: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Numerator Net loss attributable to Dolphin Entertainment shareholders and numerator for basic earnings per share $ (2,943,601 ) $ (796,650 ) $ (869,754 ) $ (674,042 ) Change in fair value of put rights (47,070 ) (251,350 ) (1,517,810 ) (1,778,376 ) Numerator for diluted loss per share $ (2,990,671 ) $ (1,048,000 ) $ (2,387,564 ) $ (2,452,418 ) Denominator Denominator for basic EPS - weighted-average shares 23,596,206 15,969,926 21,818,711 15,957,085 Effect of dilutive securities: Put rights 1,703,130 3,202,161 4,253,064 3,714,039 Denominator for diluted EPS - adjusted weighted-average shares 25,299,336 19,172,087 26,071,775 19,671,124 Basic loss per share $ (0.12 ) $ (0.05 ) $ (0.04 ) $ (0.04 ) Diluted loss per share $ (0.12 ) $ (0.05 ) $ (0.09 ) $ (0.12 ) |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrant Activity | A summary of warrants outstanding at December 31, 2019 and issued, exercised and expired during the six months ended June 30, 2020 is as follows: Warrants: Shares Weighted Avg. Balance at December 31, 2019 2,277,253 $ 3.47 Issued 515,176 0.78 Exercised (550,000 ) 0.00 Expired (250,000 ) 0.78 Balance at June 30, 2020 1,992,429 $ 3.72 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Assets by Segment | Three months ended Six months ended Three months ended Six months ended June 30, 2020 June 30, 2019 Revenues: EPD $ 5,194,725 $ 11,828,525 $ 6,273,983 $ 12,523,890 CPD 78,990 Total $ 5,194,725 $ 11,828,525 $ 6,273,983 $ 12,602,880 Segment Operating Income (Loss): EPD $ 875,831 $ 216,757 $ (450,165 ) $ (810,759 ) CPD (1,054,869 ) (1,266,654 ) (751,914 ) (1,216,481 ) Total (179,038 ) (1,049,897 ) (1,202,079 ) (2,027,240 ) Interest expense (1,058,694 ) (1,682,976 ) (317,687 ) (605,657 ) Other income (expense) (1,705,869 ) 1,863,120 723,116 1,958,855 Loss before income taxes $ (2,943,601 ) $ (869,754 ) $ (796,650 ) $ (674,042 ) As of As of Total assets: EPD $ 40,556,344 $ 40,083,491 CPD 9,190,227 2,488,235 Total $ 49,746,571 $ 42,571,726 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Right of Use Asset or Lease Liability Calculations | June 30, December 31, Assets Right-of-use asset $ 6,567,094 $ 7,435,903 Liabilities Current Lease liability $ 1,515,458 $ 1,610,022 Noncurrent Lease liability $ 5,659,094 $ 6,386,209 Total lease liability $ 7,174,552 $ 7,996,231 |
Schedule of Lease Income and Expenses | The table below shows the lease income and expenses recorded in the consolidated statement of operations incurred during the three and six months ended June 30, 2020. Lease costs Classification Three months Six months Operating lease costs Selling, general and administrative expenses $ 554,506 $ 1,063,113 Operating lease costs Direct costs 60,861 121,722 Sublease income Selling, general and administrative expenses (2,397 ) (4,794 ) Net lease costs $ 612,970 $ 1,180,041 |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities were as follows: 2020 (excluding six months ended June 30, 2020) $ 1,104,564 2021 1,919,733 2022 1,294,106 2023 1,305,358 2024 1,357,335 Thereafter 2,173,036 Total lease payments $ 9,154,132 Less: Imputed interest (1,979,580 ) Present value of lease liabilities $ 7,174,552 |
GENERAL (Details)
GENERAL (Details) - USD ($) | Jun. 09, 2020 | Jun. 05, 2020 | Apr. 23, 2020 | Apr. 23, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Oct. 21, 2019 |
Common stock, par value | $ 0.015 | $ 0.015 | |||||
Registered direct offering [Member] | |||||||
Number of shares issued and sold | 7,900,000 | 7,900,000 | |||||
Sale of stock price per share | $ 1.05 | ||||||
Net proceeds from sale of equity | $ 7,600,000 | ||||||
Common stock, par value | $ 0.015 | ||||||
PPP Loans [Member] | |||||||
Proceeds from issuance of five separate unsecured debt | $ 2,800,000 | $ 2,795,700 | |||||
Amount of compensation of an individual employee in excess | $ 100,000 | ||||||
Percentage of forgiven amount | 40.00% | ||||||
Pinnacle Convertible Debt [Member] | |||||||
Exercise price | $ 0.7828 | ||||||
Conversion price | $ 0.7828 | $ 3 | |||||
Amortization of the beneficial conversion feature | $ 1,200,000 |
GENERAL (Schedule of Revisions
GENERAL (Schedule of Revisions to Previously Reported Financial Information (Revised Consolidated Balance Sheet) (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | ||||
Convertible note payable (noncurrent) | $ 195,000 | $ 1,100,000 | $ 1,146,608 | $ 663,596 | |||||||
Convertible note payable (current) | 802,500 | 2,383,610 | |||||||||
Warrant liability (noncurrent) | 189,590 | 228,269 | 302,306 | ||||||||
Derivative liability | 170,000 | 150,000 | 150,000 | ||||||||
Total current liabilities | 18,363,819 | 22,421,511 | |||||||||
Total noncurrent liabilities | 11,843,307 | 10,573,683 | 8,346,774 | 8,631,196 | |||||||
Total liabilities | 30,207,126 | 32,995,194 | 29,937,280 | 31,160,566 | |||||||
Additional paid in capital | 115,966,906 | 106,465,896 | 102,979,383 | 103,404,239 | |||||||
Accumulated deficit | (96,902,603) | (97,158,766) | (95,529,657) | (95,203,216) | |||||||
Total stockholders' equity | $ 19,539,445 | $ 12,616,298 | 9,576,532 | 7,670,350 | 8,417,941 | $ 9,905,091 | $ 10,776,527 | ||||
As Reported [Member] | |||||||||||
Convertible note payable (noncurrent) | 1,907,575 | 1,477,597 | 1,044,232 | ||||||||
Convertible note payable (current) | 2,452,960 | ||||||||||
Warrant liability (noncurrent) | |||||||||||
Derivative liability | |||||||||||
Total current liabilities | 22,490,861 | ||||||||||
Total noncurrent liabilities | 10,392,050 | 8,299,494 | 8,559,526 | ||||||||
Total liabilities | 32,882,911 | 29,890,000 | 31,088,896 | ||||||||
Additional paid in capital | 105,443,656 | 103,146,270 | 103,571,126 | ||||||||
Accumulated deficit | (96,024,243) | (95,649,264) | (95,298,433) | ||||||||
Total stockholders' equity | 9,688,815 | 7,717,630 | 8,489,611 | ||||||||
Adjustment [Member] | |||||||||||
Convertible note payable (noncurrent) | [1] | (177,957) | (330,989) | (380,636) | |||||||
Convertible note payable (current) | [2] | (69,350) | |||||||||
Warrant liability (noncurrent) | [3] | 189,590 | 228,269 | 302,306 | |||||||
Derivative liability | [4] | 170,000 | 150,000 | 150,000 | |||||||
Total current liabilities | (69,350) | ||||||||||
Total noncurrent liabilities | 181,633 | 47,280 | 71,670 | ||||||||
Total liabilities | 112,283 | 47,280 | 71,670 | ||||||||
Additional paid in capital | 1,022,240 | [5] | (166,887) | [6] | (166,887) | [6] | |||||
Accumulated deficit | (1,134,523) | 119,607 | 95,217 | ||||||||
Total stockholders' equity | $ (112,283) | $ (47,280) | $ (71,670) | ||||||||
[1] | Fair value and accretion to par value of the 2019 Lincoln Park Note. | ||||||||||
[2] | Unamortized discount on the beneficial conversion feature of the Pinnacle Note. | ||||||||||
[3] | Fair value of the 2019 Lincoln Park Warrants. | ||||||||||
[4] | Fair value of the conversion feature of the 2019 Lincoln Park Note. | ||||||||||
[5] | Contingent beneficial conversion feature on repricing of Pinnacle Note conversion, offset by reversal of beneficial conversion feature of the 2019 Lincoln Park Note. | ||||||||||
[6] | Reversal of beneficial conversion feature recorded for the 2019 Lincoln Park Note |
GENERAL (Schedule of Revision_2
GENERAL (Schedule of Revisions to Previously Reported (Revised Condensed Consolidated Statement of Operations) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | ||||||||
Change in fair value of derivative liability | $ (20,000) | $ 30,000 | $ 30,000 | $ 30,000 | $ 10,000 | ||||||||||||
Change in fair value of warrant liability | $ (483,519) | 38,679 | 74,037 | 81,766 | $ (411,004) | 81,766 | 155,803 | 194,482 | |||||||||
Interest expense | (1,058,694) | (1,594,345) | (345,203) | (317,687) | (1,682,976) | (605,657) | (950,861) | (2,545,207) | |||||||||
Total other income | (2,764,563) | (1,099,872) | 1,085,730 | 405,429 | 180,144 | 1,353,198 | 2,438,928 | 1,339,056 | |||||||||
Loss before income taxes/Net loss | (2,943,601) | (1,745,616) | $ (326,441) | (796,650) | (869,754) | (674,042) | $ (1,000,483) | (2,746,099) | |||||||||
Net loss | $ (2,943,601) | $ 2,073,847 | $ (1,327,417) | $ (796,650) | $ 122,608 | $ (869,754) | $ (674,042) | $ (2,327,900) | |||||||||
Basic net loss per share | $ (0.12) | $ (0.07) | $ (0.02) | $ (0.05) | $ (0.04) | $ (0.04) | $ (0.06) | $ (0.14) | |||||||||
Diluted net loss per share | $ (0.12) | $ (0.08) | $ (0.05) | $ (0.05) | $ (0.09) | $ (0.12) | $ (0.17) | $ (0.24) | |||||||||
As Reported [Member] | |||||||||||||||||
Change in fair value of derivative liability | |||||||||||||||||
Change in fair value of warrant liability | |||||||||||||||||
Interest expense | (321,536) | (295,556) | (301,138) | (589,108) | (884,665) | (1,206,201) | |||||||||||
Total other income | 154,258 | 1,061,340 | 310,211 | 1,257,981 | 2,319,321 | 2,473,579 | |||||||||||
Loss before income taxes/Net loss | (491,486) | $ (350,831) | $ (891,867) | $ (769,259) | $ (1,120,090) | (1,611,576) | |||||||||||
Net loss | $ (73,287) | $ (1,193,377) | |||||||||||||||
Basic net loss per share | $ (0.02) | $ (0.06) | $ (0.05) | $ (0.07) | $ (0.07) | ||||||||||||
Diluted net loss per share | $ (0.02) | $ (0.05) | $ (0.06) | $ (0.13) | $ (0.17) | $ (0.20) | |||||||||||
Adjustment [Member] | |||||||||||||||||
Change in fair value of derivative liability | $ (20,000) | [1] | $ 30,000 | [1] | $ 30,000 | [1] | $ 30,000 | [1] | $ 10,000 | [1] | |||||||
Change in fair value of warrant liability | [2] | 38,679 | 74,037 | 81,766 | 81,766 | 155,803 | 194,482 | ||||||||||
Interest expense | (1,272,809) | [3] | (49,647) | [4] | (16,549) | [4] | (16,549) | [4] | (66,196) | [4] | (1,339,006) | [3] | |||||
Total other income | (1,254,130) | 24,390 | 95,217 | 95,217 | 119,607 | (1,134,523) | |||||||||||
Loss before income taxes/Net loss | (1,254,130) | $ 24,390 | $ 95,217 | $ 95,217 | $ 119,607 | (1,134,523) | |||||||||||
Net loss | $ (1,254,130) | $ (1,134,523) | |||||||||||||||
Basic net loss per share | $ (0.07) | $ 0.01 | $ 0.01 | $ 0.01 | $ (0.07) | ||||||||||||
Diluted net loss per share | $ (0.06) | $ 0.01 | $ 0.01 | $ (0.04) | |||||||||||||
[1] | Change in fair value of bifurcated conversion feature of 2019 Lincoln Park Note. | ||||||||||||||||
[2] | Change in fair value of 2019 Lincoln Park Warrant liability. | ||||||||||||||||
[3] | Accretion of the 2019 Lincoln Park Note and $1.2 million of amortization of the beneficial conversion feature of the Pinnacle Note. | ||||||||||||||||
[4] | Reversal of the amortization of the beneficial conversion feature of the 2019 Lincoln Park Note offset by accretion of the 2019 Lincoln Park Note. |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | Jun. 05, 2020 | Apr. 23, 2020 | Apr. 23, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2019 |
Net loss | $ (2,943,601) | $ 2,073,847 | $ (1,327,417) | $ (796,650) | $ 122,608 | $ (869,754) | $ (674,042) | $ (2,327,900) | ||||
Accumulated deficit | 96,902,603 | $ 97,158,766 | $ 95,203,216 | 96,902,603 | $ 95,203,216 | $ 97,158,766 | $ 95,529,657 | |||||
Working capital deficit | $ 2,380,135 | $ 2,380,135 | ||||||||||
Certain institutional investors [Member] | ||||||||||||
Number of shares issued and sold | 7,900,000 | |||||||||||
Net proceeds from sale of equity | $ 7,600,000 | |||||||||||
PPP Loans [Member] | ||||||||||||
Proceeds from issuance of five separate unsecured debt | $ 2,800,000 | $ 2,795,700 | ||||||||||
Debt term | 2 years | 2 years | ||||||||||
Interest rate | 1.00% | 1.00% |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 18,072,825 | $ 17,947,989 |
MERGERS AND ACQUISITIONS (Shore
MERGERS AND ACQUISITIONS (Shore Fire Media, Ltd) (Details) - Shore Fire Seller [Member] - USD ($) | Dec. 03, 2019 | Mar. 31, 2020 |
Business Acquisition [Line Items] | ||
Membership interests acquired | 100.00% | |
Purchase price | $ 3,100,000 | |
Cash payment | 1,140,000 | |
Cash payment in lieu of shares of Common Stock | $ 200,000 | |
Price per share | $ 0.64 | |
Working capital adjustment | $ 124,836 | |
Shares issued | 314,812 | |
Intangible assets | $ 1,080,000 | |
Accounts receivable | 294,033 | |
Customer relationships [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 510,000 | |
Useful life of Intangible assets | 5 years | |
Trade Names [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 570,000 | |
Useful life of Intangible assets | 10 years | |
First Anniversary [Member] | Key Employees [Member] | ||
Business Acquisition [Line Items] | ||
Cash payment | $ 140,000 | |
Second Anniversary [Member] | Key Employees [Member] | ||
Business Acquisition [Line Items] | ||
Cash payment | 120,000 | |
Additional Cash [Member] | ||
Business Acquisition [Line Items] | ||
Cash payment | 400,000 | |
Additional Cash [Member] | Two equal payments [Member] | ||
Business Acquisition [Line Items] | ||
Cash payment | 200,000 | |
Additional Cash [Member] | ||
Business Acquisition [Line Items] | ||
Cash payment | 1,000,000 | |
Additional Cash [Member] | Four Equal Payments [Member] | ||
Business Acquisition [Line Items] | ||
Cash payment | $ 250,000 |
MERGERS AND ACQUISITIONS (42 We
MERGERS AND ACQUISITIONS (42 West Acquisition) (Details) - 42 West Sellers [Member] - Put Agreements [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2019 | Mar. 30, 2017 | Jun. 30, 2020 | Jun. 30, 2020 | |
Business Acquisition [Line Items] | ||||
Price per share | $ 9.22 | |||
Shares issued in Earn Out Consideration | 20,246 | |||
Number of shares purchased | 1,187,087 | |||
Shares exercised during the period | 177,518 | |||
Shares exercised during the period, value | $ 275,000 | $ 84,700 | $ 459,700 | |
Balance of put right | $ 1,452,500 | $ 1,452,500 | ||
Percentage of shares of common Stock to be received by employees in satisfaction of change of control provision | 50.00% |
MERGERS AND ACQUISITIONS (Sched
MERGERS AND ACQUISITIONS (Schedule of Consideration Transferred) (Details) - USD ($) | Dec. 03, 2019 | Mar. 31, 2019 |
Business Acquisition [Line Items] | ||
Common Stock issued at closing (314,812 shares) | $ 87,169 | |
Shore Fire Seller [Member] | ||
Business Acquisition [Line Items] | ||
Common Stock issued at closing (314,812 shares) | $ 200,000 | |
Cash Consideration paid at closing | 1,140,000 | |
Cash Installment to be paid on March 3, 2020 | 250,000 | |
Cash Installment to be paid on June 3, 2020 | 250,000 | |
Cash Installment to be paid on December 3, 2020 | 390,000 | |
Common Stock to be issued on December 3, 2020 | 200,000 | |
Cash Installment to be paid on December 3, 2021 | 370,000 | |
Common Stock to be issued on December 3, 2021 | 200,000 | |
Working capital adjustment paid on April 1, 2020 | 124,836 | |
Fair value of the consideration transferred totaled | $ 3,124,836 |
MERGERS AND ACQUISITIONS (Sch_2
MERGERS AND ACQUISITIONS (Schedule of Assets Acquired and Liabilities Assumed) (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 03, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 18,072,825 | $ 17,947,989 | |
Shore Fire Seller [Member] | |||
Business Acquisition [Line Items] | |||
Cash | $ 384,530 | ||
Accounts receivable | 294,033 | ||
Other current assets | 33,402 | ||
Property, plant & equipment | 112,787 | ||
Intangibles | 1,080,000 | ||
Total identifiable assets acquired | 1,904,752 | ||
Accrued expenses | (298,870) | ||
Accounts payable | (38,750) | ||
Deferred tax liability | (358,153) | ||
Contract liability | (143,339) | ||
Other current liability | (16,651) | ||
Total liabilities assumed | (855,763) | ||
Net identifiable assets acquired | 1,048,989 | ||
Goodwill | $ 2,075,847 | 2,075,847 | |
Net assets acquired | $ 3,124,836 |
MERGERS AND ACQUISITIONS (Sch_3
MERGERS AND ACQUISITIONS (Schedule of Initially Reported Fair Value to Adjusted Fair Value of Goodwill) (Details) | 7 Months Ended |
Jun. 30, 2020USD ($) | |
Changes to estimated fair values: | |
Adjusted goodwill at Ending | $ 18,072,825 |
Shore Fire Seller [Member] | |
Business Acquisition [Line Items] | |
Goodwill originally reported at beginning | 2,075,847 |
Changes to estimated fair values: | |
Working capital adjustment | 124,836 |
Adjusted goodwill at Ending | $ 2,075,847 |
MERGERS AND ACQUISITIONS (Sch_4
MERGERS AND ACQUISITIONS (Schedule of Proforma Results of Operations) (Details) - Shore Fire Seller [Member] - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Business Acquisition [Line Items] | ||
Revenue | $ 7,466,465 | $ 14,939,501 |
Net income | $ (839,195) | $ (677,160) |
CAPITALIZED PRODUCTION COSTS,_2
CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS (Capitalized Production Costs) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Production and distribution revenues | $ 78,990 | ||||
Capitalized production costs | 274,575 | 274,575 | $ 203,036 | ||
Purchased Scripts [Member] | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Capitalized production costs | $ 274,575 | $ 274,575 | $ 203,036 |
CAPITALIZED PRODUCTION COSTS,_3
CAPITALIZED PRODUCTION COSTS, ACCOUNTS RECEIVABLES AND OTHER CURRENT ASSETS (Accounts Receivable and Other Assets) (Details) - USD ($) | Jun. 04, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable, net of allowance for doubtful accounts | $ 2,521,885 | $ 3,581,155 | |
Other current assets | 187,504 | 372,872 | |
Indemnification assets | 0 | 300,000 | |
Tax incentives | 5,228 | 5,228 | |
Income tax receivable | 19,610 | 19,610 | |
42 West [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Amount of Earn-out consideration | $ 300,000 | ||
Shares issued during period | 932,866 | ||
Publicity Segment [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Allowance for doubtful accounts | $ 368,014 | $ 307,887 |
PROPERTY, EQUIPMENT AND LEASE_3
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Furniture and fixtures | $ 790,591 | $ 790,591 | $ 792,611 | ||
Computers and equipment | 1,734,753 | 1,734,753 | 1,728,916 | ||
Leasehold improvements | 770,629 | 770,629 | 770,628 | ||
Property plant and equipment gross | 3,295,973 | 3,295,973 | 3,292,155 | ||
Less: accumulated depreciation and amortization | (2,437,875) | (2,437,875) | (2,255,306) | ||
Property, equipment and leasehold improvements, net | 858,098 | 858,098 | $ 1,036,849 | ||
Depreciation and amortization expense | $ 96,383 | $ 89,306 | $ 186,474 | $ 180,428 | |
Furniture and fixtures | Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 5 years | ||||
Furniture and fixtures | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 7 years | ||||
Computer and equipment [Member] | Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 3 years | ||||
Computer and equipment [Member] | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 5 years |
INVESTMENT (Details)
INVESTMENT (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Long-term Investments [Abstract] | ||
Number of cost method investment shares owned | 344,980 | |
Investments | $ 220,000 | $ 220,000 |
DEBT (Production Service Agreem
DEBT (Production Service Agreement) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 20, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2014 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||||
Gain on extinguishment of debt | $ 3,259,866 | $ (21,287) | |||||
Production Service Agreement [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument face amount | 0 | 0 | $ 10,419,009 | $ 3,311,198 | |||
Producer fee owed to lender | $ 892,619 | ||||||
Debt instrument basis spread on variable rate | 8.50% | ||||||
Gain on extinguishment of debt | $ 3,311,198 | 0 | 3,311,198 | ||||
Interest payable | $ 0 | $ 0 | $ 1,698,280 |
DEBT (Line of Credit) (Details)
DEBT (Line of Credit) (Details) - USD ($) | Mar. 15, 2018 | Feb. 20, 2020 | Mar. 28, 2018 | Jun. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | |||||
Line of credit | $ 1,700,390 | ||||
42 West [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit basis spread on variable rate | 0.25% | ||||
Line of credit | $ 2,250,000 | ||||
Line credit maturity date | Mar. 15, 2020 | ||||
Line of credit outstanding | $ 0 | $ 1,700,390 | |||
42 West [Member] | Standby Letters of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit | $ 750,000 | ||||
42 West [Member] | Put Agreements [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Proceeds from line of credit | $ 1,690,000 | ||||
Line of credit paid | $ 500,000 | ||||
Number of shares purchased | 183,296 |
DEBT (Term Loan) (Details)
DEBT (Term Loan) (Details) - USD ($) | Apr. 23, 2020 | Apr. 23, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Line Items] | ||||
Term loan | $ 1,100,357 | |||
Term Loan [Member] | 42 West [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument face amount | $ 1,200,390 | |||
Debt term | 3 years | |||
Interest rate | 0.75% | |||
Maturity date | Mar. 15, 2023 | |||
Term loan | $ 1,100,357 | |||
Term Loan in current liabilities | 1,100,357 | |||
PPP Loans [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt term | 2 years | 2 years | ||
Interest rate | 1.00% | 1.00% | ||
Borrowings aggregate amount | $ 2,800,000 | $ 2,795,700 | ||
Short-term debt | 1,041,997 | |||
Long term debt | $ 1,753,703 |
NOTES PAYABLE (Convertible Note
NOTES PAYABLE (Convertible Notes) (Details) - USD ($) | Jun. 05, 2020 | Jun. 04, 2020 | Jun. 02, 2020 | Mar. 04, 2020 | Feb. 13, 2020 | Feb. 12, 2020 | Feb. 06, 2020 | Feb. 03, 2020 | Jan. 13, 2020 | Jan. 12, 2020 | Jan. 03, 2020 | Jan. 02, 2020 | Dec. 05, 2019 | Oct. 11, 2019 | Jul. 09, 2019 | Jul. 05, 2018 | Jun. 20, 2020 | Jun. 17, 2020 | Jun. 15, 2020 | Mar. 26, 2020 | Mar. 25, 2020 | Mar. 18, 2020 | Feb. 27, 2020 | Oct. 21, 2019 | Sep. 25, 2019 | May 20, 2019 | Mar. 25, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | May 20, 2020 | May 04, 2020 | Sep. 20, 2019 | Jul. 23, 2019 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 2,650,000 | $ 75,000 | ||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | 3,259,866 | (21,287) | ||||||||||||||||||||||||||||||||||||||
Interest expense | 1,058,694 | $ 1,594,345 | $ 345,203 | 317,687 | 1,682,976 | 605,657 | $ 950,861 | $ 2,545,207 | ||||||||||||||||||||||||||||||||
Interest Paid | 208,742 | 151,100 | ||||||||||||||||||||||||||||||||||||||
Interest payable | 2,071,073 | 1,986,679 | 2,071,073 | 1,986,679 | ||||||||||||||||||||||||||||||||||||
Debt carrying amount current portion | 0 | 3,311,198 | 0 | 3,311,198 | ||||||||||||||||||||||||||||||||||||
Fair value of warrants | 483,519 | (38,679) | $ (74,037) | $ (81,766) | 411,004 | $ (81,766) | $ (155,803) | (194,482) | ||||||||||||||||||||||||||||||||
Third-party investor [Member] | Warrant I Series [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||||||||||||||||||||||||||||
Debt conversion converted, shares issued | 1,000,000 | |||||||||||||||||||||||||||||||||||||||
Exercise price | $ 0.78 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | Mar. 4, 2030 | |||||||||||||||||||||||||||||||||||||||
Fair value of debt | $ 40,000 | 60,000 | 60,000 | |||||||||||||||||||||||||||||||||||||
Increase (decrease) in fair value of debt | 30,000 | 20,000 | ||||||||||||||||||||||||||||||||||||||
2020 Convertible Debt Lincoln Park Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 1,300,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument purchase price | $ 1,200,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 1.05 | |||||||||||||||||||||||||||||||||||||||
Fair value of debt | 885,559 | |||||||||||||||||||||||||||||||||||||||
Increase (decrease) in fair value of debt | $ 309,020 | $ 203,461 | ||||||||||||||||||||||||||||||||||||||
2020 Convertible Debt Lincoln Park Note [Member] | Third-party investor one [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 120,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 0.78 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | Mar. 18, 2022 | |||||||||||||||||||||||||||||||||||||||
2020 Convertible Debt Lincoln Park Note [Member] | Third-party investor Two [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 75,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 0.78 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | Mar. 18, 2022 | |||||||||||||||||||||||||||||||||||||||
2020 Convertible Debt Lincoln Park Warrants [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument purchase price | $ 207,588 | |||||||||||||||||||||||||||||||||||||||
Exercise price | $ 0.7828 | $ 0.78 | $ 0.78 | |||||||||||||||||||||||||||||||||||||
Fair value of debt | 314,441 | $ 525,559 | $ 525,559 | |||||||||||||||||||||||||||||||||||||
Increase (decrease) in fair value of debt | 270,000 | 215,559 | ||||||||||||||||||||||||||||||||||||||
Convertible note Payable [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Shares issued | 50,000 | |||||||||||||||||||||||||||||||||||||||
2019 Convertible Debt Lincoln Park Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument purchase price | $ 1,200,000 | |||||||||||||||||||||||||||||||||||||||
Convertible promissory note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 75,000 | $ 500,000 | $ 100,000 | $ 250,000 | $ 250,000 | $ 150,000 | $ 200,000 | $ 75,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||||||||||||||||||||||||||||
Debt conversion converted, shares issued | 132,820 | 989,368 | 127,746 | 319,366 | 319,366 | 254,326 | 346,021 | 124,008 | 421,509 | 319,366 | 319,366 | |||||||||||||||||||||||||||||
Convertible promissory note [Member] | Third-party investor [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | 500,000 | |||||||||||||||||||||||||||||||||||||||
Fair value of debt | $ 460,000 | 565,000 | 565,000 | |||||||||||||||||||||||||||||||||||||
Increase (decrease) in fair value of debt | 195,500 | 105,500 | ||||||||||||||||||||||||||||||||||||||
Convertible promissory note [Member] | Third-party investor one [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 500,000 | |||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 560,000 | |||||||||||||||||||||||||||||||||||||||
Exercise price | $ 0.78 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | Mar. 25, 2021 | |||||||||||||||||||||||||||||||||||||||
Fair value of debt | $ 500,000 | 740,000 | 740,000 | |||||||||||||||||||||||||||||||||||||
Increase (decrease) in fair value of debt | 240,000 | 191,900 | ||||||||||||||||||||||||||||||||||||||
Debt instrument transaction costs | $ 10,000 | |||||||||||||||||||||||||||||||||||||||
Convertible promissory note [Member] | 2020 Convertible Debt Lincoln Park Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 1,300,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument purchase price | $ 1,200,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate default | 18.00% | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 1.05 | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price percentage of common stock | 15.00% | |||||||||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 207,588 | 207,588 | ||||||||||||||||||||||||||||||||||||||
Exercise price | $ 0.78 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | Jan. 3, 2022 | |||||||||||||||||||||||||||||||||||||||
Shares exercised during the period | 207,588 | |||||||||||||||||||||||||||||||||||||||
Fair value of debt | $ 1,089,020 | $ 1,089,020 | ||||||||||||||||||||||||||||||||||||||
Convertible promissory note [Member] | 2019 Convertible Debt Lincoln Park Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 1,100,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument purchase price | $ 1,000,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 9.09% | |||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate default | 18.00% | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 0.78 | $ 5 | ||||||||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 137,500 | |||||||||||||||||||||||||||||||||||||||
Exercise price | $ 2 | $ 0.78 | $ 0.78 | |||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2020 Convertible Debt Lincoln Park Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 100,000 | $ 250,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 0.78 | $ 0.78 | $ 0.78 | $ 0.78 | $ 0.78 | |||||||||||||||||||||||||||||||||||
Interest expense | $ 5,031 | $ 59,742 | ||||||||||||||||||||||||||||||||||||||
Debt carrying amount current portion | 740,000 | 740,000 | ||||||||||||||||||||||||||||||||||||||
Debt carrying amount noncurrent | $ 1,654,522 | 1,654,522 | ||||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2019 Convertible Debt Lincoln Park Note [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt conversion converted, shares issued | 377,016 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | May 21, 2021 | |||||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2019 Convertible Debt Lincoln Park Note [Member] | Minimum [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 1 | |||||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2019 Convertible Debt Lincoln Park Note [Member] | Lincoln Park Warrants [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Warrants to purchase common stock | 137,500 | 137,500 | ||||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2019 Convertible Debt [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 500,000 | $ 150,000 | $ 250,000 | $ 200,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 250,000 | $ 500,000 | $ 150,000 | $ 200,000 | ||||||||||||||||||||||||||||||||||||
Debt conversion converted, shares issued | 494,684 | 989,368 | 254,326 | 346,021 | ||||||||||||||||||||||||||||||||||||
Beneficial conversion feature | $ 406,863 | 708,643 | ||||||||||||||||||||||||||||||||||||||
Debt maturity date | Oct. 11, 2021 | Jul. 9, 2021 | Sep. 25, 2021 | Mar. 25, 2021 | ||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2018 Pinnacle Convertible Debt [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 1,500,000 | |||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 8.00% | |||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 297,936 | |||||||||||||||||||||||||||||||||||||||
Debt conversion converted, shares issued | 380,603 | |||||||||||||||||||||||||||||||||||||||
Debt instrument conversion price | $ 0.78 | $ 3.25 | $ 0.78 | |||||||||||||||||||||||||||||||||||||
Market price of common stock | $ 3.65 | |||||||||||||||||||||||||||||||||||||||
Beneficial conversion feature | $ 1,315,386 | 0 | 69,350 | |||||||||||||||||||||||||||||||||||||
Interest Expense amortization of beneficial conversion feature | 69,350 | |||||||||||||||||||||||||||||||||||||||
Interest expense | $ 184,614 | 0 | 70,686 | |||||||||||||||||||||||||||||||||||||
Interest Paid | 0 | 29,614 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 1,202,064 | |||||||||||||||||||||||||||||||||||||||
Debt maturity date | Jan. 5, 2020 | |||||||||||||||||||||||||||||||||||||||
Convertible Debt [Member] | 2017 Convertible Debt [Member] | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||
Debt instrument amount | $ 250,000 | $ 875,000 | ||||||||||||||||||||||||||||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||||||||||||||||||||||||||||
Debt conversion converted amount | $ 50,000 | $ 75,000 | ||||||||||||||||||||||||||||||||||||||
Debt conversion converted, shares issued | 79,365 | 124,008 | 421,509 | |||||||||||||||||||||||||||||||||||||
Beneficial conversion feature | 375,000 | 375,000 | ||||||||||||||||||||||||||||||||||||||
Interest Expense amortization of beneficial conversion feature | 856,863 | 1,227,993 | ||||||||||||||||||||||||||||||||||||||
Interest expense | 13,464 | 1,340,228 | ||||||||||||||||||||||||||||||||||||||
Interest Paid | 11,042 | 57,806 | ||||||||||||||||||||||||||||||||||||||
Interest payable | $ 333 | $ 2,905 | 67,594 | 40,803 | 67,594 | 40,803 | ||||||||||||||||||||||||||||||||||
Debt carrying amount current portion | 802,500 | 2,454,564 | 802,500 | 2,454,564 | ||||||||||||||||||||||||||||||||||||
Debt carrying amount noncurrent | $ 195,000 | $ 1,100,000 | $ 195,000 | $ 1,100,000 | $ 75,000 |
NOTES PAYABLE (Nonconvertible N
NOTES PAYABLE (Nonconvertible Notes Payable) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 10, 2018 | |
Debt Instrument [Line Items] | |||||||||
Interest expense | $ 1,058,694 | $ 1,594,345 | $ 345,203 | $ 317,687 | $ 1,682,976 | $ 605,657 | $ 950,861 | $ 2,545,207 | |
Interest Paid | 208,742 | 151,100 | |||||||
Interest payable | 2,071,073 | 1,986,679 | 2,071,073 | 1,986,679 | |||||
Debt carrying amount current portion | 0 | 3,311,198 | 0 | 3,311,198 | |||||
Repayment of debt | 99,367 | ||||||||
Notes Payable [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest expense | 33,220 | 26,497 | 66,979 | 53,532 | |||||
Interest payable | 8,537 | 8,788 | 8,537 | 8,788 | |||||
Debt carrying amount current portion | 692,743 | 288,237 | 692,743 | 288,237 | |||||
Debt carrying amount noncurrent | 626,597 | $ 1,074,122 | $ 626,597 | $ 1,074,122 | |||||
Notes Payable [Member] | Notes Payable issued July 5, 2012 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument issuance date | Jul. 5, 2012 | ||||||||
Debt instrument amount | $ 300,000 | $ 300,000 | $ 492,233 | ||||||
Debt instrument rate | 10.00% | 10.00% | |||||||
Debt instrument maturity date | Dec. 10, 2023 | ||||||||
Interest payable | $ 192,233 | $ 192,233 | |||||||
Monthly payments | 10,459 | ||||||||
Repayment of debt | 21,778 | $ 43,021 | |||||||
Notes Payable [Member] | Notes Payable issued November 30, 2017 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument issuance date | Nov. 30, 2017 | ||||||||
Debt instrument amount | $ 200,000 | $ 200,000 | |||||||
Debt instrument rate | 10.00% | 10.00% | |||||||
Debt instrument maturity date | Jan. 15, 2021 | ||||||||
Notes Payable [Member] | Notes Payable issued June 14, 2017 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument amount | $ 400,000 | $ 400,000 | |||||||
Debt instrument rate | 10.00% | 10.00% | |||||||
Debt instrument maturity date | Jun. 14, 2021 | ||||||||
Notes Payable [Member] | Notes Payable issued November 5, 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument amount | $ 350,000 | $ 350,000 | |||||||
Debt instrument rate | 10.00% | 10.00% | |||||||
Debt instrument maturity date | Nov. 4, 2021 | ||||||||
Nonconvertible Promissory Notes [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest Paid | $ 33,347 | $ 26,662 | $ 67,230 | $ 53,808 |
LOANS FROM RELATED PARTY (Detai
LOANS FROM RELATED PARTY (Details) - USD ($) | Oct. 11, 2019 | Aug. 12, 2019 | Jul. 09, 2019 | Sep. 25, 2019 | Mar. 25, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||||||||||||||
Interest Paid | $ 208,742 | $ 151,100 | ||||||||||||
Interest expense | $ 1,058,694 | $ 1,594,345 | $ 345,203 | $ 317,687 | 1,682,976 | 605,657 | $ 950,861 | $ 2,545,207 | ||||||
Loan from related party | 1,107,873 | 1,107,873 | 1,107,873 | 1,107,873 | ||||||||||
Accrued interest | 2,071,073 | 1,986,679 | 2,071,073 | 1,986,679 | ||||||||||
Promissory Note [Member] | DE New Promissory Note [Member] | CEO [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debt instrument amount | $ 1,009,624 | |||||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||
Certain script costs and other payables added to note principal amount | $ 594,315 | |||||||||||||
Interest Paid | 100,000 | 100,000 | ||||||||||||
Interest expense | 27,621 | $ 27,621 | 55,242 | $ 54,938 | ||||||||||
Loan from related party | 1,107,873 | 1,107,873 | 1,107,873 | 1,107,873 | ||||||||||
Accrued interest | 370,834 | $ 415,592 | 370,834 | $ 415,592 | ||||||||||
Convertible Debt [Member] | 2019 Convertible Debt [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debt instrument amount | $ 500,000 | $ 150,000 | $ 250,000 | $ 200,000 | ||||||||||
Debt instrument interest rate | 10.00% | 10.00% | 10.00% | 10.00% | ||||||||||
Debt maturity date | Oct. 11, 2021 | Jul. 9, 2021 | Sep. 25, 2021 | Mar. 25, 2021 | ||||||||||
Convertible Debt [Member] | 2019 Convertible Debt [Member] | Leslee Dart [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Debt instrument amount | $ 702,500 | 702,500 | 702,500 | |||||||||||
Debt instrument interest rate | 10.00% | |||||||||||||
Interest expense | 17,563 | 35,126 | ||||||||||||
Accrued interest | $ 62,264 | $ 62,264 | ||||||||||||
Debt maturity date | Aug. 12, 2020 | |||||||||||||
Convertible Debt [Member] | 2019 Convertible Debt [Member] | Put Rights [Member] | Leslee Dart [Member] | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Shares exercised during the period | 76,194 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) | Jun. 05, 2020 | Mar. 28, 2018 | Mar. 30, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | May 20, 2020 | Mar. 25, 2020 | Mar. 04, 2020 | Jan. 03, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Change in fair value of put rights | $ (47,070) | $ (251,350) | $ (1,517,810) | $ (1,778,376) | ||||||||
2020 Convertible Debt Lincoln Park Note [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Debt instrument amount | $ 1,300,000 | |||||||||||
Debt instrument purchase price | $ 1,200,000 | |||||||||||
Debt instrument conversion price | $ 1.05 | |||||||||||
2020 Convertible Debt Lincoln Park Note [Member] | Convertible Debt One [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Debt instrument amount | $ 500,000 | |||||||||||
2020 Convertible Debt Lincoln Park Note [Member] | Convertible Debt Two [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Debt instrument amount | $ 560,000 | |||||||||||
2019 Convertible Debt Lincoln Park Note [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Price per share | $ 0.98 | |||||||||||
Debt instrument purchase price | $ 1,200,000 | |||||||||||
Issuance of shares related to cashless exercise of warrants | 377,016 | |||||||||||
2019 Convertible Debt Lincoln Park Note [Member] | Warrant [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Debt instrument purchase price | $ 550,000 | |||||||||||
2020 Convertible Debt Lincoln Park Warrants [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Debt instrument purchase price | $ 207,588 | |||||||||||
2020 Convertible Debt Lincoln Park Warrants [Member] | Warrant I Series [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Debt instrument purchase price | $ 100,000 | |||||||||||
Put Rights [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Change in fair value of warrant liability | 47,070 | $ 251,350 | 1,517,810 | $ 1,778,376 | ||||||||
Change in fair value of put rights | 2,663,237 | $ 3,003,547 | ||||||||||
Contingent Consideration [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Contingent consideration | 800,000 | $ 800,000 | 330,000 | |||||||||
42 West [Member] | Put Agreements [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Number of shares purchased | 183,296 | |||||||||||
42 West [Member] | Put Rights [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Number of shares purchased | 177,518 | |||||||||||
Number of shares purchased, value | $ 84,700 | $ 459,700 | $ 275,000 | |||||||||
Owes amount for put rights exercised | $ 452,500 | |||||||||||
42 West Sellers [Member] | Put Agreements [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Number of shares purchased | 1,187,087 | |||||||||||
Price per share | $ 9.22 | |||||||||||
Shares issued in Earn Out Consideration | 20,246 | |||||||||||
Door Marketing Group LLC [Member] | Contingent Consideration [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Price per share | $ 3.25 | $ 3.25 | ||||||||||
Shares issued in Earn Out Consideration | 1,538,462 | |||||||||||
Shares issued in Earn Out Consideration, value | $ 2,000,000 | |||||||||||
Contingent consideration | $ 1,620,000 | 1,620,000 | ||||||||||
The Door [Member] | Contingent Consideration [Member] | ||||||||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||||||||
Change in fair value of warrant liability | $ 573,000 | $ 470,000 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of Fair Value Assumptions Used to Value Liabilities, Put Rights) (Details) - Put Rights [Member] | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity volatility estimate | 135.00% | |
Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity volatility estimate | 64.00% | |
Discount rate based on US Treasury obligations | 0.13% | 1.54% |
Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity volatility estimate | 70.00% | |
Discount rate based on US Treasury obligations | 0.18% | 1.59% |
FAIR VALUE MEASUREMENTS (Sche_2
FAIR VALUE MEASUREMENTS (Schedule of Liability Fair Value Categorized Within Level 3) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Beginning fair value balance reported on the consolidated balance sheet | $ 170,000 | |||
Ending fair value balance reported on the consolidated balance sheet | $ 150,000 | $ 150,000 | ||
Put Rights [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Beginning fair value balance reported on the consolidated balance sheet | 3,003,547 | |||
Put rights exercised in December 2019 paid in January 2020 | (275,000) | |||
Change in fair value (gain) reported in the statements of operations | (47,070) | $ (251,350) | (1,517,810) | $ (1,778,376) |
Put rights exercised June 2020 and not yet paid | 1,452,500 | 1,452,500 | ||
Ending fair value of put rights reported in the condensed consolidated balance sheet at June 30, 2020 | $ 2,663,237 | $ 2,663,237 |
FAIR VALUE MEASUREMENTS (Sche_3
FAIR VALUE MEASUREMENTS (Schedule of Fair Value Assumptions Used to Value Liabilities, Contingent Consideration) (Details) - Contingent Consideration [Member] - The Door [Member] | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Annual Asset Volatility Estimate | 75.00% | 40.00% |
Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration) | 0.16% | 1.58% |
Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration) | 0.18% | 1.59% |
FAIR VALUE MEASUREMENTS (Sche_4
FAIR VALUE MEASUREMENTS (Schedule of Liability Fair Value Categorized Within Level 3, Contingent Consideration) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Beginning fair value balance reported on the consolidated balance sheet | $ 170,000 | ||
Ending fair value balance reported on the consolidated balance sheet | $ 150,000 | ||
Contingent Consideration [Member] | The Door [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Beginning fair value balance reported on the consolidated balance sheet | 330,000 | ||
Change in fair value (loss) reported in the statements of operations | 573,000 | 470,000 | |
Ending fair value balance reported on the consolidated balance sheet | $ 800,000 | $ 800,000 |
FAIR VALUE MEASUREMENTS (Sche_5
FAIR VALUE MEASUREMENTS (Schedule of Liability Fair Value Categorized Within Level 3 (Convertible notes payable)) (Details) - 2020 Convertible Debt Lincoln Park Note [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2020 | Mar. 25, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Beginning fair value balance on issue date | $ 885,559 | |||
Change in fair value (loss) reported in the statements of operations | 203,461 | |||
Ending fair value balance | $ 1,089,020 | $ 1,089,020 | ||
Convertible Debt One [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Beginning fair value balance on issue date | $ 460,000 | $ 565,500 | ||
Change in fair value (loss) reported in the statements of operations | 105,500 | |||
Ending fair value balance | $ 565,500 | |||
Convertible Debt Two [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Beginning fair value balance on issue date | $ 500,000 | |||
Change in fair value (loss) reported in the statements of operations | 240,000 | |||
Ending fair value balance | $ 740,000 |
FAIR VALUE MEASUREMENTS (Sche_6
FAIR VALUE MEASUREMENTS (Schedule of Fair Value Assumptions, (Convertible notes payable) (Details) - USD ($) | Mar. 04, 2020 | Jan. 03, 2020 | Mar. 25, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Aggregate Fair Value | $ 170,000 | $ 150,000 | $ 150,000 | ||||
2020 Convertible Debt Lincoln Park Note [Member] | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Face value principal payable | $ 1,300,000 | $ 1,300,000 | |||||
Original conversion price | Variable | Variable | |||||
Value of Common Stock | $ 0.64 | $ 0.87 | |||||
Expected term (years) | 2 years | 1 year 6 months 3 days | |||||
Volatility | 87.50% | 120.00% | |||||
Straight debt yield | 9.50% | 14.00% | |||||
Risk free rate | 1.53% | 0.16% | |||||
2020 Convertible Debt Lincoln Park Note [Member] | Convertible Debt One [Member] | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Face value principal payable | $ 500,000 | $ 500,000 | |||||
Original conversion price | $ 0.78 | $ 0.78 | |||||
Value of Common Stock | $ 0.67 | $ 0.87 | |||||
Expected term (years) | 10 years | 9 years 8 months 5 days | |||||
Volatility | 90.00% | 120.00% | |||||
Risk free rate | 1.02% | 0.66% | |||||
2020 Convertible Debt Lincoln Park Note [Member] | Convertible Debt Two [Member] | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Face value principal payable | $ 560,000 | $ 560,000 | |||||
Original conversion price | $ 0.40 | $ 0.78 | |||||
Value of Common Stock | $ 0.67 | $ 0.87 | |||||
Expected term (years) | 1 year | 8 months 23 days | |||||
Volatility | 90.00% | 120.00% | |||||
Straight debt yield | 23.50% | 14.00% | |||||
Risk free rate | 0.25% | 0.16% | |||||
2020 Convertible Debt Lincoln Park Warrants [Member] | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Aggregate Fair Value | $ 314,441 | $ 530,000 | |||||
Exercise Price per share | $ 0.7828 | $ 0.78 | |||||
Value of Common Stock | $ 0.64 | $ 0.87 | |||||
Expected term (years) | 5 years 6 months | 5 years 4 days | |||||
Volatility | 87.50% | 120.00% | |||||
Dividend yield | 0.00% | 0.00% | |||||
Risk free rate | 1.62% | 0.29% | |||||
2020 Convertible Debt Lincoln Park Warrants [Member] | Warrant I Series [Member] | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Aggregate Fair Value | $ 40,000 | $ 60,000 | |||||
Exercise Price per share | $ 0.7828 | $ 60,000 | |||||
Value of Common Stock | $ 0.67 | $ 0.87 | |||||
Expected term (years) | 5 years 6 months | 5 years 2 months 5 days | |||||
Volatility | 90.00% | 120.00% | |||||
Dividend yield | 0.00% | 0.00% | |||||
Risk free rate | 0.80% | 0.30% | |||||
2019 Convertible Debt Lincoln Park Warrants [Member] | |||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||||
Aggregate Fair Value | $ 189,590 | ||||||
Exercise Price per share | $ 2 | ||||||
Value of Common Stock | $ 0.70 | ||||||
Expected term (years) | 5 years 4 months 20 days | ||||||
Volatility | 90.00% | ||||||
Dividend yield | 0.00% | ||||||
Risk free rate | 1.69% |
CONTRACT LIABILITIES (Details)
CONTRACT LIABILITIES (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 370,466 | $ 309,880 |
VARIABLE INTEREST ENTITIES (Nar
VARIABLE INTEREST ENTITIES (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Feb. 20, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2014 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||||||
Gain on extinguishment of debt | $ 3,259,866 | $ (21,287) | |||||
Loss on deconsolidation of Max Steel VIE | (1,484,591) | ||||||
Debt | 0 | 0 | $ 3,311,198 | ||||
Accrued interest | 2,071,073 | $ 2,071,073 | 1,986,679 | ||||
JB Believe, LLC [Member] | |||||||
Variable Interest Entity [Line Items] | |||||||
Membership interest | 25.00% | ||||||
Due from related party | 6,491,834 | $ 6,491,834 | |||||
Production Service Agreement [Member] | |||||||
Variable Interest Entity [Line Items] | |||||||
Gain on extinguishment of debt | $ 3,311,198 | 0 | 3,311,198 | ||||
Loss on deconsolidation of Max Steel VIE | 0 | 1,484,591 | |||||
Debt instrument face amount | $ 0 | 0 | $ 10,419,009 | $ 3,311,198 | |||
Producer fee owed to lender | $ 892,619 | ||||||
Motion Picture [Member] | JB Believe, LLC [Member] | |||||||
Variable Interest Entity [Line Items] | |||||||
Repayments of investments | 3,200,000 | ||||||
Amount paid to release film | $ 5,000,000 |
VARIABLE INTEREST ENTITIES (Sum
VARIABLE INTEREST ENTITIES (Summary of Financial Information for Variable Interest Entities) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Max Steel Productions, LLC [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Assets | $ 7,379,851 | ||||
Liabilities | (11,816,966) | ||||
Revenues | 3,311,198 | 78,990 | |||
Expenses | (14,035) | 26,290 | |||
JB Believe, LLC [Member] | |||||
Variable Interest Entity [Line Items] | |||||
Assets | 190,520 | 190,520 | 190,347 | ||
Liabilities | (6,750,088) | (6,750,088) | $ (6,749,914) | ||
Revenues | |||||
Expenses | $ (8,223) | $ (29,464) |
STOCKHOLDERS' EQUITY (Preferred
STOCKHOLDERS' EQUITY (Preferred Stock) (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 30, 2020 | May 09, 2017 | Feb. 23, 2016 | |
Class of Stock [Line Items] | |||
Preferred stock, authorized shares | 10,000,000 | ||
Preferred stock, description | 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% of DE LLC and serves on its 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. | ||
EBITDA, amount | $ 3 | ||
Series C Convertible Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, authorized shares | 50,000 | 1,000,000 | |
Preferred stock, par value | $ 0.001 | $ 0.001 | |
Preferred stock liquidation value | $ 0.001 |
STOCKHOLDERS' EQUITY (Common St
STOCKHOLDERS' EQUITY (Common Stock) (Narrative) (Details) - USD ($) | Jun. 09, 2020 | Jun. 05, 2020 | Jun. 04, 2020 | Jun. 02, 2020 | May 15, 2020 | Feb. 13, 2020 | Feb. 07, 2020 | Feb. 06, 2020 | Feb. 03, 2020 | Jan. 23, 2020 | Jan. 13, 2020 | Jun. 17, 2020 | Jun. 15, 2020 | Mar. 26, 2020 | Mar. 24, 2020 | Feb. 28, 2020 | Feb. 27, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||||||||||||||||||||
Shares issued in conversion of debt, value | $ 2,650,000 | $ 75,000 | ||||||||||||||||||
Common stock, issued | 50,000 | 31,608,903 | 17,892,900 | |||||||||||||||||
Common stock, Outstanding | 31,608,903 | 17,892,900 | ||||||||||||||||||
Convertible Notes Payable | $ 560,000 | |||||||||||||||||||
Proceeds from convertible debt | $ 500,000 | $ 2,395,000 | $ 1,110,457 | |||||||||||||||||
Registered direct offering [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Number of shares issued and sold | 7,900,000 | 7,900,000 | ||||||||||||||||||
Lincoln Park Warrants [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Common stock received | 377,016 | |||||||||||||||||||
42 West [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares issued during period | 932,866 | |||||||||||||||||||
42 West [Member] | Put Rights [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares exercised during the period | 2,676 | 10,846 | 18,980 | 10,846 | ||||||||||||||||
Shares exercised during the period, value | $ 24,700 | $ 100,000 | $ 175,000 | $ 100,000 | ||||||||||||||||
Viewpoint [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares issued during period | 252,158 | |||||||||||||||||||
Convertible promissory note [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares issued in conversion of debt | 132,820 | 989,368 | 127,746 | 319,366 | 319,366 | 254,326 | 346,021 | 124,008 | 421,509 | 319,366 | 319,366 | |||||||||
Shares issued in conversion of debt, value | $ 75,000 | $ 500,000 | $ 100,000 | $ 250,000 | $ 250,000 | $ 150,000 | $ 200,000 | $ 75,000 | $ 250,000 | $ 250,000 | $ 250,000 | |||||||||
Interest payable | $ 707 | $ 4,578 | $ 333 | $ 2,905 | ||||||||||||||||
Convertible promissory note one [Member] | ||||||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||||||
Shares issued in conversion of debt | 494,684 | |||||||||||||||||||
Shares issued in conversion of debt, value | $ 250,000 | |||||||||||||||||||
Interest payable | $ 2,289 |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | |
Numerator | ||||||||
Net loss attributable to Dolphin Entertainment shareholders and numerator for basic earnings per share | $ (2,943,601) | $ (796,650) | $ (869,754) | $ (674,042) | ||||
Change in fair value of put rights | (47,070) | (251,350) | (1,517,810) | (1,778,376) | ||||
Numerator for diluted loss per share | $ (2,990,671) | $ (1,048,000) | $ (2,387,564) | $ (2,452,418) | ||||
Denominator | ||||||||
Denominator for basic EPS - weighted-average shares | 23,596,206 | 15,969,926 | 21,818,711 | 15,957,085 | ||||
Effect of dilutive securities: | ||||||||
Put rights | 1,703,130 | 3,202,161 | 4,253,064 | 3,714,039 | ||||
Denominator for diluted EPS - adjusted weighted-average shares | 25,299,336 | 19,172,087 | 26,071,775 | 19,671,124 | ||||
Basic loss per share | $ (0.12) | $ (0.07) | $ (0.02) | $ (0.05) | $ (0.04) | $ (0.04) | $ (0.06) | $ (0.14) |
Diluted loss per share | $ (0.12) | $ (0.08) | $ (0.05) | $ (0.05) | $ (0.09) | $ (0.12) | $ (0.17) | $ (0.24) |
WARRANTS (Narrative) (Details)
WARRANTS (Narrative) (Details) - USD ($) | Nov. 04, 2016 | Jan. 22, 2018 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2017 | May 04, 2020 | Mar. 24, 2020 | Mar. 04, 2020 | Jan. 05, 2020 | Jan. 03, 2020 | Nov. 20, 2019 | Sep. 20, 2019 | Jul. 23, 2019 | May 21, 2019 |
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Change in fair value of warrants | $ 483,519 | $ (38,679) | $ (74,037) | $ (81,766) | $ 411,004 | $ (81,766) | $ (155,803) | $ (194,482) | ||||||||||||
Convertible note payable | $ 560,000 | |||||||||||||||||||
Underwriter [Member] | Common Stock | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Warrants issued | 1,453 | |||||||||||||||||||
Number of shares issued and sold | 175,750 | |||||||||||||||||||
T Squared [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Warrants issued | 250,000 | |||||||||||||||||||
Exercise price | $ 14 | |||||||||||||||||||
T Squared [Member] | Minimum [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Exercise price | $ 0.78 | |||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Warrants issued | 1,215,000 | |||||||||||||||||||
Exercise price | $ 4.74 | |||||||||||||||||||
Warrant [Member] | Underwriter [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Exercise price | $ 4.74 | $ 4.74 | ||||||||||||||||||
Number of shares issued and sold | 85,050 | |||||||||||||||||||
Sale of stock price per share | $ 4.74 | |||||||||||||||||||
Lincoln Park Warrants [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Exercise price | $ 0.78 | $ 0.78 | $ 2 | $ 2 | $ 2 | $ 2 | ||||||||||||||
Warrants to purchase common stock | 622,764 | 377,016 | 207,588 | 550,000 | 550,000 | 550,000 | 137,500 | |||||||||||||
Change in fair value of warrants | 187,960 | 179,886 | ||||||||||||||||||
Derivative liabilities | 525,559 | 525,559 | $ 314,441 | |||||||||||||||||
Change in fair value (gain) of derivative liability | 215,559 | 270,000 | ||||||||||||||||||
Additional Lincoln Park Warrants [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Warrants to purchase common stock | 207,588 | |||||||||||||||||||
Series I Warrants [Member] | ||||||||||||||||||||
Class of Warrant or Right [Line Items] | ||||||||||||||||||||
Exercise price | $ 0.78 | |||||||||||||||||||
Warrants to purchase common stock | 100,000 | |||||||||||||||||||
Derivative liabilities | 60,000 | 60,000 | $ 40,000 | |||||||||||||||||
Change in fair value (gain) of derivative liability | $ 30,000 | $ 10,000 | ||||||||||||||||||
Convertible note payable | $ 500,000 |
WARRANTS (Schedule of Warrant A
WARRANTS (Schedule of Warrant Activity) (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Shares | |
Balance at December 31, 2019 | shares | 2,277,253 |
Issued | shares | 515,176 |
Exercised | shares | (550,000) |
Expired | shares | (250,000) |
Balance at June 30, 2020 | shares | 1,992,429 |
Weighted Avg. Exercise Price | |
Balance at December 31, 2019 | $ / shares | $ 3.47 |
Issued | $ / shares | 0.78 |
Exercised | $ / shares | 0 |
Expired | $ / shares | 0.78 |
Balance at June 30, 2020 | $ / shares | $ 3.72 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - CEO [Member] - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2014 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | |||||||
Annual compensation owed to related party per signed agreement | $ 250,000 | ||||||
Signing bonus owed to related party per signed agreement | $ 1,000,000 | ||||||
Accrued compensation | $ 2,625,000 | $ 2,625,000 | $ 2,625,000 | ||||
Accrued interest | 1,624,109 | 1,624,109 | $ 1,493,219 | ||||
Interest expense | $ 65,445 | $ 65,445 | $ 130,890 | $ 130,171 | |||
Interest rate | 10.00% |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||||||
Revenues | $ 5,194,725 | $ 6,273,983 | $ 11,828,525 | $ 12,602,880 | ||||
Total Operating Loss | (179,038) | (1,202,079) | (1,049,898) | (2,027,240) | ||||
Interest expense | (1,058,694) | $ (1,594,345) | $ (345,203) | (317,687) | (1,682,976) | (605,657) | $ (950,861) | $ (2,545,207) |
Other income, net | (1,705,869) | 723,116 | 1,863,120 | 1,958,855 | ||||
Income before income taxes | (2,943,601) | (1,745,616) | $ (326,441) | (796,650) | (869,754) | (674,042) | $ (1,000,483) | (2,746,099) |
Total assets | 49,746,571 | 42,571,726 | 49,746,571 | 42,571,726 | ||||
Accumulated amortization on intangible assets | 5,130,784 | 4,299,794 | 5,130,784 | 4,299,794 | ||||
42 West [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Intangible assets acquired | 7,530,549 | |||||||
Accumulated amortization on intangible assets | 5,130,784 | 5,130,784 | ||||||
Entertainment publicity and marketing segment [Member] | 42 West [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Goodwill acquired | 18,072,825 | |||||||
EPD [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 5,194,725 | 6,273,983 | 11,828,525 | 12,523,890 | ||||
Total Operating Loss | 875,831 | (450,165) | 216,757 | (810,759) | ||||
Total assets | 40,556,344 | 40,083,491 | 40,556,344 | 40,083,491 | ||||
CPD [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 78,990 | |||||||
Total Operating Loss | (1,054,869) | $ (751,914) | (1,266,654) | $ (1,216,481) | ||||
Total assets | $ 9,190,227 | $ 2,488,235 | $ 9,190,227 | $ 2,488,235 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Feb. 19, 2019 | Jun. 30, 2020 | Dec. 31, 2018 | |
Operating Leased Assets [Line Items] | |||
Weighted average remaining lease term | 6 years | ||
Incremental borrowings rate | 8.00% | ||
Newton, Massachusetts Office Space [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Mar. 31, 2021 | ||
Operating lease term | 5 years | ||
Operating lease security deposit | $ 36,735 | ||
New York Office Space [Member] | Door [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Aug. 31, 2020 | ||
Operating lease security deposit | $ 29,000 | ||
Operating lease payment | $ 15,300 | ||
New York Office Space [Member] | 42 West [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Dec. 31, 2026 | ||
Operating lease term | 5 years | ||
Value of Standby Letter or Credit used to secure operating lease | $ 677,354 | ||
Chicago Office Space [Member] | Door [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | May 31, 2020 | ||
Monthly rent payment owed under operating lease agreement | $ 2,200 | ||
California Office Space [Member] | 42 West [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Dec. 31, 2021 | ||
Operating lease term | 5 years | ||
Value of Standby Letter or Credit used to secure operating lease | $ 50,000 | ||
Operating lease security deposit | $ 44,788 | ||
Coral Gables, Florida Office Space [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease term | 62 months | ||
Operating lease security deposit | $ 19,908 | ||
Percentage of annual increase in lease amount | 3.00% | ||
Monthly rent payment owed under operating lease agreement | $ 9,954 | ||
Brooklyn, New York Office Space [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Feb. 28, 2026 | ||
Operating lease security deposit | $ 34,490 | ||
Nashville, Tennessee Office Space [Member] | |||
Operating Leased Assets [Line Items] | |||
Operating lease expiration date | Jul. 31, 2020 | ||
Operating lease security deposit | $ 1,575 |
LEASES (Schedule of Right of Us
LEASES (Schedule of Right of Use Asset or Lease Liability Calculations) (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Right of use asset | $ 6,567,094 | $ 7,435,903 |
Current | ||
Lease liability | 1,515,458 | 1,610,022 |
Noncurrent | ||
Lease liability | 5,659,094 | 6,386,209 |
Total lease liability | $ 7,174,552 | $ 7,996,231 |
LEASES (Schedule of Lease Incom
LEASES (Schedule of Lease Income and Expenses) (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Net lease costs | $ 612,970 | $ 1,180,041 |
Selling, general and administrative expenses [Member] | ||
Operating lease costs | 554,506 | 1,063,113 |
Sublease income | (2,397) | (4,794) |
Direct costs [Member] | ||
Operating lease costs | $ 60,861 | $ 121,722 |
LEASES (Schedule of Maturities
LEASES (Schedule of Maturities of Lease Liabilities) (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (excluding six months ended June 30, 2020) | $ 1,104,564 | |
2021 | 1,919,733 | |
2022 | 1,294,106 | |
2023 | 1,305,358 | |
2024 | 1,357,335 | |
Thereafter | 2,173,036 | |
Total lease payments | 9,154,132 | |
Less: Imputed interest | (1,979,580) | |
Present value of lease liabilities | $ 7,174,552 | $ 7,996,231 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 29, 2017 | Jun. 29, 2018 | Dec. 31, 2017 | |
Other Commitments [Line Items] | |||||
Common shares authorized under 2017 Plan | 1,000,000 | ||||
2017 Plan description | 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 Internal Revenue Code of 1986, as amended (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 Compensation 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 Compensation 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. | ||||
401(K) profit sharing plan contributions | $ 61,259 | $ 167,047 | |||
Contribution description | The Company matches 100% of the first 3% contributed by the employee and then 50% up to a maximum of 4% contributed by the employee. | ||||
Amount accrued of plan audit | $ 300,000 | ||||
42 West [Member] | Bank United [Member] | |||||
Other Commitments [Line Items] | |||||
Letter of credit | $ 50,000 | ||||
New York Office Space [Member] | 42 West [Member] | |||||
Other Commitments [Line Items] | |||||
Value of Standby Letter or Credit used to secure operating lease | 677,354 | $ 677,354 | |||
New York Office Space [Member] | 42 West [Member] | City National Bank [Member] | |||||
Other Commitments [Line Items] | |||||
Value of Standby Letter or Credit used to secure operating lease | $ 677,354 | $ 677,354 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Aug. 17, 2020 | Jul. 16, 2020 | Jul. 15, 2020 | Jul. 10, 2020 | Jul. 08, 2020 | May 15, 2020 | Feb. 07, 2020 | Jan. 13, 2020 | Feb. 28, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||||||||||
Interest Paid | $ 208,742 | $ 151,100 | |||||||||||
42 West [Member] | Put Rights [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Shares exercised during the period | 2,676 | 10,846 | 18,980 | 10,846 | |||||||||
Number of shares purchased, value | $ 84,700 | $ 459,700 | $ 275,000 | ||||||||||
Subsequent Event [Member] | 2020 Lincoln Park Note [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt instrument principal balance | $ 360,000 | ||||||||||||
Debt instrument purchase price per share | $ 0.88 | ||||||||||||
Shares issued in conversion of debt | 410,959 | ||||||||||||
Subsequent Event [Member] | 42 West [Member] | Put Rights [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Shares exercised during the period | 13,592 | ||||||||||||
Sale of common stock and warrants (unit) in Offering | $ 125,300 | ||||||||||||
Number of shares purchased, value | $ 460,000 | ||||||||||||
Subsequent Event [Member] | Be Social [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Total consideration for business acquisition | $ 2,200,000 | ||||||||||||
Potential additional consideration for acquisition representing 62.5% of which will be paid in cash and 37.5% in shares of Common Stock based on the achievement of specified financial performance targets during the years ended December 31, 2022 and 2023 | 800,000 | ||||||||||||
Cash consideration paid for acquisition | $ 1,500,000 | ||||||||||||
Equity consideration issued for acquisition | 349,534 | ||||||||||||
Subsequent Event [Member] | Be Social [Member] | Forecast [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Future equity consideration to be issued on January 4, 2021 for acquisition | $ 350,000 | ||||||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Interest Paid | $ 150,000 |