Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 09, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38331 | |
Entity Registrant Name | DOLPHIN ENTERTAINMENT, INC. | |
Entity Central Index Key | 0001282224 | |
Entity Tax Identification Number | 86-0787790 | |
Entity Incorporation, State or Country Code | FL | |
Entity Address, Address Line One | 150 Alhambra Circle | |
Entity Address, Address Line Two | Suite 1200 | |
Entity Address, City or Town | Coral Gables | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33134 | |
City Area Code | (305) | |
Local Phone Number | 774-0407 | |
Title of 12(b) Security | Common Stock, $0.015 par value per share | |
Trading Symbol | DLPN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 10,214,052 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current | ||
Cash and cash equivalents | $ 4,452,562 | $ 7,688,743 |
Restricted cash | 1,140,483 | 541,883 |
Accounts receivable: | ||
Trade, net of allowance of $627,553 and $471,535, respectively | 4,757,499 | 4,513,179 |
Other receivables | 2,061,845 | 3,583,357 |
Notes receivable | 4,323,153 | 1,510,137 |
Other current assets | 890,645 | 450,060 |
Total current assets | 17,626,187 | 18,287,359 |
Capitalized production costs, net | 1,598,412 | 137,235 |
Employee receivable | 572,085 | 366,085 |
Right-of-use asset | 7,894,850 | 6,129,411 |
Goodwill | 20,021,357 | 20,021,357 |
Intangible assets, net | 5,116,568 | 6,142,067 |
Property, equipment and leasehold improvements, net | 315,004 | 473,662 |
Other long-term assets | 2,581,005 | 1,234,275 |
Total Assets | 55,725,468 | 52,791,451 |
LIABILITIES | ||
Accounts payable | 1,572,855 | 942,085 |
Notes payable, current portion | 516,036 | 307,685 |
Contingent consideration | 500,000 | 600,000 |
Accrued interest – related party | 1,650,635 | 1,621,437 |
Accrued compensation – related party | 2,625,000 | 2,625,000 |
Lease liability, current portion | 2,033,780 | 1,600,107 |
Deferred revenue | 911,970 | 406,373 |
Other current liabilities | 5,692,600 | 6,850,584 |
Total current liabilities | 15,502,876 | 14,953,271 |
Notes payable | 380,859 | 868,959 |
Convertible notes payable | 2,400,000 | 2,900,000 |
Convertible note payable at fair value | 420,613 | 998,135 |
Loan from related party | 1,107,873 | 1,107,873 |
Contingent consideration | 205,000 | 3,684,221 |
Lease liability | 6,581,512 | 5,132,895 |
Deferred tax liability | 97,879 | 76,207 |
Warrant liability | 30,000 | 135,000 |
Other noncurrent liabilities | 18,915 | |
Total Liabilities | 26,745,527 | 29,856,561 |
STOCKHOLDERS’ EQUITY | ||
Preferred Stock, Series C, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding at September 30, 2022 and December 31, 2021 | 1,000 | 1,000 |
Common stock, $0.015 par value, 200,000,000 shares authorized, 9,999,052 and 8,020,381 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 149,986 | 120,306 |
Additional paid-in capital | 134,755,491 | 127,247,928 |
Accumulated deficit | (105,926,536) | (104,434,344) |
Total Stockholders’ Equity | 28,979,941 | 22,934,890 |
Total Liabilities and Stockholders’ Equity | $ 55,725,468 | $ 52,791,451 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Allowance for doubtful debts | $ 627,553 | $ 471,535 |
Common stock, par value | $ 0.015 | $ 0.015 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 9,999,052 | 8,020,381 |
Common stock, Outstanding | 9,999,052 | 8,020,381 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized shares | 50,000 | 50,000 |
Preferred stock, issued | 50,000 | 50,000 |
Preferred stock, Outstanding | 50,000 | 50,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 9,899,013 | $ 9,399,432 | $ 29,366,748 | $ 25,219,793 |
Expenses: | ||||
Direct costs | 837,429 | 991,708 | 2,941,044 | 2,578,295 |
Payroll and benefits | 7,030,814 | 5,875,755 | 20,947,531 | 16,770,091 |
Selling, general and administrative | 1,663,288 | 1,519,812 | 4,644,264 | 4,234,309 |
Acquisition costs | 315,800 | 315,800 | 22,907 | |
Depreciation and amortization | 415,836 | 475,207 | 1,248,621 | 1,436,189 |
Change in fair value of contingent consideration | (5,000) | 1,110,000 | (1,439,778) | 1,310,000 |
Legal and professional | 774,613 | 498,661 | 2,317,800 | 1,301,267 |
Total expenses | 11,032,780 | 10,471,143 | 30,975,282 | 27,653,058 |
Loss from operations | (1,133,767) | (1,071,711) | (1,608,534) | (2,433,265) |
Other (expenses) income: | ||||
Gain on extinguishment of debt, net | 1,733,400 | 2,689,010 | ||
Loss on disposal of fixed assets | (48,461) | |||
Change in fair value of convertible note | 45,642 | (223,923) | 577,522 | (826,398) |
Change in fair value of warrants | 10,000 | (55,000) | 105,000 | (2,552,877) |
Change in fair value of put rights | (71,106) | |||
Interest expense | (126,147) | (241,115) | (400,884) | (576,146) |
Total other (expenses) income, net | (70,505) | 1,213,362 | 281,638 | (1,385,978) |
(Loss) income before income taxes and equity in losses of unconsolidated affiliates | (1,204,272) | 141,651 | (1,326,896) | (3,819,243) |
Income tax (expense) benefit | (7,224) | (21,672) | 38,851 | |
Net (loss) income before equity in losses of unconsolidated affiliates | (1,211,496) | 141,651 | (1,348,568) | (3,780,392) |
Equity in losses of unconsolidated affiliates | (100,223) | (143,623) | ||
Net (loss) income | $ (1,311,719) | $ 141,651 | $ (1,492,191) | $ (3,780,392) |
(Loss) earnings per share: | ||||
Basic | $ (0.14) | $ 0.02 | $ (0.16) | $ (0.50) |
Diluted | $ (0.14) | $ 0.02 | $ (0.23) | $ (0.50) |
Weighted average number of shares outstanding: | ||||
Basic | 9,664,681 | 7,740,085 | 9,307,830 | 7,551,974 |
Diluted | 9,793,715 | 7,740,085 | 9,437,807 | 7,551,974 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,492,191) | $ (3,780,392) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 1,248,621 | 1,436,189 |
Share-based compensation | 166,582 | |
Equity in losses of unconsolidated affiliates | 143,623 | |
Commitment shares issued to Lincoln Park Capital LLC | 232,118 | |
Bonus payment issued in shares | 50,000 | 17,858 |
Gain on extinguishment of debt | (2,689,010) | |
Loss on disposal of fixed assets | 48,461 | |
Impairment of right-of-use asset | 98,857 | |
Impairment of capitalized production costs | 87,323 | 115,881 |
Bad debt expense | 276,579 | 232,100 |
Change in fair value of put rights | 71,106 | |
Change in fair value of contingent consideration | (1,439,778) | 1,310,000 |
Change in fair value of warrants | (105,000) | 2,552,877 |
Change in fair value of convertible note | (577,522) | 826,398 |
Change in deferred tax | 21,672 | (38,851) |
Changes in operating assets and liabilities: | ||
Accounts receivable, trade and other | 209,600 | (1,278,000) |
Other current assets | 145,492 | (206,762) |
Capitalized production costs | (1,548,500) | (95,829) |
Other long-term assets and employee receivable | (196,353) | (9,744) |
Deferred revenue | (494,403) | 2,354,336 |
Accounts payable | 630,770 | (484,741) |
Accrued interest – related party | 29,198 | 29,194 |
Other current liabilities | (1,157,985) | 117,134 |
Lease liability | 17,994 | (8,245) |
Other noncurrent liabilities | 18,915 | |
Net cash (used in) provided by operating activities | (3,634,388) | 519,960 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (64,464) | |
Acquisition of B/HI Communications, Inc., net of cash acquired | (525,856) | |
Issuance of notes receivable | (3,108,080) | |
Net cash used in investing activities | (3,172,544) | (525,856) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from equity line of credit agreement | 5,049,100 | |
Cash settlement of contingent consideration for B/HI | (600,000) | |
Proceeds from convertible notes payable | 5,950,000 | |
Repayment of term loan | (300,097) | |
Repayment of notes payable | (279,749) | (71,463) |
Exercise of put rights | (1,015,135) | |
Net cash provided by financing activities | 4,169,351 | 4,563,305 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (2,637,581) | 4,557,409 |
Cash and cash equivalents and restricted cash, beginning of period | 8,230,626 | 8,637,376 |
Cash and cash equivalents and restricted cash, end of period | 5,593,045 | 13,194,785 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: | ||
Interest paid | 554,897 | 495,722 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of commitment shares to Lincoln Park Capital LLC | 232,118 | |
Receipt of Crafthouse equity in connection with marketing agreement | 1,000,000 | |
Settlement of contingent consideration for B/HI and The Door in shares of common stock | 1,539,444 | |
Principal balance of convertible notes converted into shares of common stock | 500,000 | 3,745,000 |
Issuance of shares of common stock related to the acquisitions | 350,000 | |
Put rights exchanged for shares of common stock | 600,000 | |
Interest on notes paid in stock | 8,611 | |
Employee bonus paid in stock | 50,000 | 17,858 |
Cash and cash equivalents | 4,452,562 | 12,652,902 |
Restricted cash | 1,140,483 | 541,883 |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 5,593,045 | $ 13,194,785 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (Unaudited) - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 1,000 | $ 99,281 | $ 117,540,557 | $ (97,972,041) | $ 19,668,797 |
Beginning Balance, Shares at Dec. 31, 2020 | 50,000 | 6,618,785 | |||
Net income | (5,271,985) | (5,271,985) | |||
Issuance of shares related to conversion of note payable | $ 9,948 | 2,543,664 | 2,553,612 | ||
Issuance of shares related to conversion of note payable, shares | 663,155 | ||||
Issuance of shares related to cashless exercise of warrants | $ 2,190 | 2,795,687 | 2,797,877 | ||
Issuance of shares related to cashless exercise of warrants, shares | 146,027 | ||||
Issuance of shares issued to seller of Be Social | $ 1,549 | 348,451 | 350,000 | ||
Issuance of shares issued to seller of Be Social, shares | 103,245 | ||||
Consideration for acquisition of B/HI Communications, Inc | 31,158 | 31,158 | |||
Issuance of shares related to exchange of Put Rights for stock | $ 1,163 | $ 356,199 | $ 357,362 | ||
Issuance of shares related to exchange of Put Rights for stock, shares | 77,519 | ||||
Shares retired from exercise of puts | (51) | 51 | |||
Shares retired from exercise of puts, Shares | (3,254) | ||||
Ending balance, value at Mar. 31, 2021 | $ 1,000 | $ 114,080 | $ 123,615,767 | $ (103,244,026) | $ 20,486,821 |
Ending Balance, Shares at Mar. 31, 2021 | 50,000 | 7,605,477 | |||
Net income | 1,349,942 | 1,349,942 | |||
Issuance of shares related to acquisition of The Door | $ 154 | (154) | |||
Issuance of shares related to acquisition of The Door, shares | 10,238 | ||||
Issuance of shares related to exchange of Put Rights for stock | $ 568 | $ 348,759 | $ 349,327 | ||
Issuance of shares related to exchange of Put Rights for stock, shares | 37,847 | ||||
Shares retired from exercise of puts | (227) | (13,203) | (13,430) | ||
Shares retired from exercise of puts, Shares | (15,093) | ||||
Ending balance, value at Jun. 30, 2021 | $ 1,000 | $ 114,575 | $ 123,951,169 | $ (101,894,084) | $ 22,172,660 |
Ending Balance, Shares at Jun. 30, 2021 | 50,000 | 7,638,469 | |||
Net income | 141,651 | 141,651 | |||
Issuance of shares for employee bonus | $ 29 | $ 17,829 | $ 17,858 | ||
Issuance of shares for employee bonus, shares | 1,935 | ||||
Shares retired from exercise of puts | 1,924 | 1,198,076 | 1,200,000 | ||
Shares retired from exercise of puts, Shares | 128,280 | ||||
Ending balance, value at Sep. 30, 2021 | $ 1,000 | $ 116,528 | $ 125,167,074 | $ (101,752,433) | $ 23,532,169 |
Ending Balance, Shares at Sep. 30, 2021 | 50,000 | 7,768,684 | |||
Beginning balance, value at Dec. 31, 2021 | $ 1,000 | $ 120,306 | 127,247,928 | (104,434,344) | 22,934,890 |
Beginning Balance, Shares at Dec. 31, 2021 | 50,000 | 8,020,381 | |||
Net income | (792,481) | (792,481) | |||
Issuance of shares to Lincoln Park Capital LLC | $ 9,330 | 2,506,020 | 2,515,350 | ||
Issuance of shares to Lincoln Park Capital LLC, shares | 622,019 | ||||
Issuance of common stock on vesting of restricted stock units, net of shares withheld for taxes | $ 130 | (130) | |||
Issuance of common stock on vesting of restricted stock units, net of shares withheld for taxes, shares | 8,645 | ||||
Share-based compensation | 59,305 | 59,305 | |||
Ending balance, value at Mar. 31, 2022 | $ 1,000 | $ 129,766 | 129,813,123 | (105,226,825) | 24,717,064 |
Ending Balance, Shares at Mar. 31, 2022 | 50,000 | 8,651,045 | |||
Net income | 612,008 | 612,008 | |||
Issuance of shares to Lincoln Park Capital LLC | $ 6,750 | 1,845,540 | 1,852,290 | ||
Issuance of shares to Lincoln Park Capital LLC, shares | 450,000 | ||||
Issuance of common stock on vesting of restricted stock units, net of shares withheld for taxes | $ 120 | (120) | |||
Issuance of common stock on vesting of restricted stock units, net of shares withheld for taxes, shares | 7,982 | ||||
Issuance of shares to sellers of The Door Marketing Group LLC for earnout consideration | $ 4,193 | 1,019,004 | 1,023,197 | ||
Issuance of shares to sellers of The Door Marketing Group LLC for earnout consideration, shares | 279,562 | ||||
Issuance of shares to seller of B/HI Communication Inc for earnout consideration | $ 2,451 | 513,796 | 516,247 | ||
Issuance of shares to seller of B/HI Communication Inc for earnout consideration, shares | 163,369 | ||||
Share-based compensation | 54,757 | 54,757 | |||
Ending balance, value at Jun. 30, 2022 | $ 1,000 | $ 143,280 | 133,246,100 | (104,614,817) | 28,775,563 |
Ending Balance, Shares at Jun. 30, 2022 | 50,000 | 9,551,958 | |||
Net income | (1,311,719) | (1,311,719) | |||
Issuance of shares related to conversion of note payable | $ 1,884 | 498,116 | 500,000 | ||
Issuance of shares related to conversion of note payable, shares | 125,604 | ||||
Issuance of shares to Lincoln Park Capital LLC | $ 4,534 | 909,043 | 913,577 | ||
Issuance of shares to Lincoln Park Capital LLC, shares | 302,313 | ||||
Issuance of common stock on vesting of restricted stock units, net of shares withheld for taxes | $ 115 | (115) | |||
Issuance of common stock on vesting of restricted stock units, net of shares withheld for taxes, shares | 7,656 | ||||
Issuance of shares related to employment agreement | $ 173 | 49,827 | 50,000 | ||
Issuance of shares related to employment agreement, shares | 11,521 | ||||
Share-based compensation | 52,520 | 52,520 | |||
Ending balance, value at Sep. 30, 2022 | $ 1,000 | $ 149,986 | $ 134,755,491 | $ (105,926,536) | $ 28,979,941 |
Ending Balance, Shares at Sep. 30, 2022 | 50,000 | 9,999,052 |
GENERAL
GENERAL | 9 Months Ended |
Sep. 30, 2022 | |
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”), Viewpoint Computer Animation Incorporated (“Viewpoint”), Be Social Public Relations, LLC (“Be Social”) and B/HI Communications, Inc. (“B/HI”), the Company provides expert strategic marketing and publicity services throughout the United States of America (“U.S.”) to virtually all of the major film studios and many of the leading streaming services, as well as to independent and digital content providers, and A-list celebrity talent, including actors, directors, producers, celebrity chefs, social media influencers and recording artists. The Company also provides strategic marketing publicity services and creative brand strategies for a wide variety of consumer brands, including prime hotel and restaurant groups, throughout the U.S. Dolphin’s content production business is a long established, leading independent producer, committed to distributing premium, best-in-class film and digital entertainment. Dolphin produces original feature films and digital programming primarily aimed at family and young adult markets. Impact of COVID-19 The continued spread of new COVID-19 variants did not have a significant impact on our business during the quarter ended September 30, 2022. The future course of the pandemic could have adverse effects in the U.S and global economies and thus negatively impact our business and financial results. 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, Dolphin JB Believe Financing, LLC, Dolphin JOAT Productions, LLC, 42West, The Door, Viewpoint, Shore Fire, Be Social and B/HI. The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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 Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2022, and its results of operations and cash flows for the three and nine months ended September 30, 2022 and 2021. All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021 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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. 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 as of 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 estimates in the fair value of acquisitions, estimates in assumptions used to calculate the fair value of certain liabilities, realizability of notes receivable and impairment assessments for investment in capitalized production costs, goodwill and long-lived assets. Management bases its estimates on historical experience and on other various assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from such estimates under different assumptions and conditions. Due to COVID-19 and the uncertainty of the extent of the impacts related thereto, certain estimates and assumptions may require increased judgment. As events continue to evolve and additional information becomes available, these estimates may change in future periods. It is difficult to predict what the ongoing impact of the pandemic will be on future periods. Update to Significant Accounting Policies The Company’s significant accounting policies are detailed in "Note 2: Summary of Significant Accounting Policies" within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. As a result of entering into a collaborative arrangement in June 2022, the Company updated its revenue recognition accounting policy to include the information as detailed below. There were no other significant changes to the Company’s accounting policies during the three and nine months ended September 30, 2022. Revenue Recognition The Company analyzes our collaboration agreements to assess whether such arrangements, or transactions between arrangement participants, involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities or are more akin to a vendor-customer relationship. In making this evaluation, the Company considers whether the activities of the collaboration are considered to be distinct and deemed to be within the scope of the collaboration guidance and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of the revenue with contracts with customer guidance. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements that are in the scope of the collaboration guidance, we may analogize to the revenue from contracts with customers’ guidance for some aspects of these arrangements. Revenue from transactions with collaboration participants is presented apart from revenue with contracts with customers in our condensed consolidated statements of operations. To date, there has been no revenue generated from collaboration arrangements. Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In June 2016, the FASB issued new guidance on measurement of credit losses (ASU 2016-13, “ Measurement of Credit Losses on Financial Instruments Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on the Company’s condensed consolidated statements of operations or condensed consolidated statements of cash flows. |
REVENUE
REVENUE | 9 Months Ended |
Sep. 30, 2022 | |
Revenue | |
REVENUE | NOTE 2 – REVENUE Disaggregation of Revenue The Company’s principal geographic markets are within the U.S. The following is a description of the principal activities, by reportable segment, from which we generate revenue. For more detailed information about reportable segments, see Note 15. Entertainment Publicity and Marketing The Entertainment Publicity and Marketing (“EPM”) segment generates revenue from diversified marketing services, including public relations, entertainment and hospitality content marketing, strategic marketing consulting and content production of marketing materials. Within the EPM segment, we typically identify one performance obligation, the delivery of professional publicity services, in which we typically act as the principal. Fees are generally recognized on a straight-line or monthly basis, as the services are consumed by our clients, which approximates the proportional performance on such contracts. We also enter into management agreements with a roster of social media influencers and are paid a percentage of the revenue earned by the social media influencer. Due to the short-term nature of these contracts, in which we typically act as the agent, the performance obligation is typically completed and revenue is recognized net at a point in time, typically the date of publication. Content Production The Content Production (“CPD”) segment generates revenue from the production of original motion pictures and other digital content production. In the CPD segment, we typically identify performance obligations depending on the type of service, for which we generally act as the principal. Revenue from motion pictures is recognized upon transfer of control of the licensing rights of the motion picture or web series to the customer. For minimum guarantee licensing arrangements, the amount related to each performance obligation is recognized when the content is delivered, and the window for exploitation right in that territory has begun, which is the point in time at which the customer is able to begin to use and benefit from the content. For sales or usage-based royalty income, revenue is recognized starting at the exhibition date and is based on the Company’s participation in the box office receipts of the theatrical exhibitor and the performance of the motion picture. The revenues recorded by the EPM and CPD segments is detailed below: Schedule of Revenue by Segment For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Entertainment publicity and marketing $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 Content production — — — — Total Revenues $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 The opening and closing balances of our contract asset and liability balances from contracts with customers as of September 30, 2022 and December 31, 2021 were as follows: Schedule of contract asset and liability Contract Contract Balance as of December 31, 2021 $ 62,500 $406,373 Balance as of September 30, 2022 — 911,970 Change $ (62,500 ) $505,597 Contract assets are comprised of services provided for which consideration has not been received and for which payments are not unconditional. The change in the contract asset balance relates to the transfer to accounts receivable when the right to payment becomes unconditional. Contract assets are presented within other current assets in the condensed consolidated balance sheets. Contract liabilities are recorded when the Company receives advance payments from customers for public relations projects or as deposits for promotional or brand-support video projects. Once the work is performed or the projects are delivered to the customer, the contract liabilities are deemed earned and recorded as revenue. Advance payments received are generally for short duration and are recognized once the performance obligation of the contract is met. Contract liabilities are presented within deferred revenue in the condensed consolidated balance sheets. The change in the contract liability balance relates to the advanced consideration received from customers under the terms of our contracts, primarily related to fees, which are generally recognized shortly after billing. Revenues for the three and nine months ended September 30, 2022 and 2021 include the following: Schedule of Revenues Three Months Ended Nine Months Ended 2022 2021 2022 2021 Amounts included in the beginning of year contract liability balance $ — $ 10,000 $ 329,937 $ 347,221 Remaining performance obligations As of September 30, 2022, we had approximately $ 911,970 849,469 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | NOTE 3 — GOODWILL AND INTANGIBLE ASSETS Goodwill As of September 30, 2022, the Company has a balance of $ 20,021,357 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, (3) significant decline in market capitalization or (4) an adverse action or assessment by a regulator. There were no triggering events noted during the three and nine month period ended September 30, 2022, that would require the Company to reassess goodwill for impairment outside of its regular annual impairment test. Intangible Assets Finite-lived intangible assets consisted of the following as of September 30, 2022 and December 31, 2021: Schedule of Intangible Assets September 30, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization: Customer relationships $ 8,290,000 $ 5,531,265 $ 2,758,735 $ 8,290,000 $ 4,880,016 $ 3,409,984 Trademarks and trade names 4,490,000 2,157,167 2,332,833 4,490,000 1,797,917 2,692,083 Non-compete agreements 690,000 665,000 25,000 690,000 650,000 40,000 $ 13,470,000 $ 8,353,432 $ 5,116,568 $ 13,470,000 $ 7,327,933 $ 6,142,067 Amortization expense associated with the Company’s intangible assets was $ 341,833 394,998 1,025,499 1,184,994 Amortization expense related to intangible assets for the remainder of 2022 and thereafter is as follows: Schedule of amortization expense related to intangible assets for the next five years 2022 $ 341,833 2023 1,227,824 2024 991,715 2025 961,373 2026 934,001 Thereafter 659,822 Total $ 5,116,568 |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | NOTE 4 — ACQUISITIONS B/HI Communications, Inc. Effective January 1, 2021, the Company acquired all of the issued and outstanding shares of B/HI, a California corporation (the “B/HI Purchase”) pursuant to a share purchase agreement (the “B/HI Share Purchase Agreement”) between the Company and Dean G. Bender and Janice L. Bender, as co-trustees of the Bender Family Trust dated May 6, 2013 (collectively, the “B/HI Sellers). B/HI is an entertainment public relations agency that specializes in corporate and product communications programs for interactive gaming, e-sports, entertainment content and consumer product organizations. The total consideration paid to the B/HI Seller in respect to the B/HI Purchase is $ 0.8 1.1 0.6 163,369 22,907 1,082,856 2,509,697 |
NOTES RECEIVABLE
NOTES RECEIVABLE | 9 Months Ended |
Sep. 30, 2022 | |
Credit Loss [Abstract] | |
NOTES RECEIVABLE | NOTE 5 — NOTES RECEIVABLE The notes receivable held by the Company are unsecured convertible note receivables from JDDC Elemental LLC (“Midnight Theatre”) (the “Notes Receivable”). The Notes Receivable are recorded at their principal face amount plus accrued interest. Due to their short-term maturity and conversion terms, these have been recorded at the face value of the note and an allowance for credit losses has not been established. Midnight Theatre As of September 30, 2022, the Midnight Theatre notes amount to $ 4,323,153 215,073 869,280 3,108,080 Crafthouse Cocktails On November 30, 2021, Crafthouse Cocktails issued a $ 500,000 no no |
EQUITY METHOD INVESTMENTS
EQUITY METHOD INVESTMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY METHOD INVESTMENTS | NOTE 6 — EQUITY METHOD INVESTMENTS Equity method investments are included within other long-term assets in the condensed consolidated balance sheets. As of September 30, 2022, the investment in Midnight Theatre and Crafthouse Cocktails amounted to $ 939,214 1,417,163 Midnight Theatre Hidden Leaf, the restaurant at Midnight Theatre, commenced operations in early July 2022. During both the three and nine months ended September 30, 2022, the Company recorded a loss of $ 60,786 Crafthouse Cocktails During the nine months ended September 30, 2022, the Crafthouse Note discussed in Note 5 was converted and Dolphin was issued common memberships interests of Crafthouse Cocktails. During the nine months ended September 30, 2022, the Company received an additional $ 1,000,000 39,437 82,837 |
OTHER CURRENT LIABILITIES
OTHER CURRENT LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
OTHER CURRENT LIABILITIES | NOTE 7 — OTHER CURRENT LIABILITIES Other current liabilities consisted of the following: Schedule of Other liabilities September 30, December 31, 2022 2021 Accrued funding under Max Steel production agreement $ 620,000 $ 620,000 Accrued audit, legal and other professional fees 698,304 429,299 Accrued commissions 496,276 457,269 Accrued bonuses 220,000 360,817 Due to seller of Be Social — 304,169 Talent liability 2,343,906 2,908,357 Accumulated customer deposits 801,247 1,206,864 Other 512,867 563,809 Other current liabilities $ 5,692,600 $ 6,850,584 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 8 — DEBT Total debt of the Company was as follows as of September 30, 2022 and December 31, 2021: Schedule of debt Debt Type September 30, December 31, Convertible notes payable $ 2,400,000 $ 2,900,000 Convertible note payable - fair value option 420,613 998,135 Non-convertible promissory notes 896,895 1,176,644 Loans from related party (see Note 9) 1,107,873 1,107,873 Total debt $ 4,825,381 $ 6,182,652 Less current portion of debt (516,036 ) (307,685 ) Noncurrent portion of debt $ 4,309,345 $ 5,874,967 Schedule of Future Annual Contractual Principal Payment Commitments of Debt Debt Type Maturity Date 2022 2023 2024 2025 2026 Thereafter Convertible notes payable Ranging from August to September 2024 $ — $ — $ 2,400,000 $ — $ — $ — Convertible note payable - fair value option March 2030 — — — — — 500,000 Nonconvertible promissory notes Ranging between June 2023 and December 2023 (1) 27,935 868,960 — — — — Loans from related party July 2024 — — 1,107,873 — — — $ 27,935 $ 868,960 $ 3,507,873 $ — $ — $ 500,000 (1) Pursuant to the terms of one of the nonconvertible promissory notes, the Company makes monthly payments of principal and interest. This note matures on December 2023; however, the amounts in the 2022 column represent principal payments to be made during the remainder of 2022. Convertible Notes Payable As of September 30, 2022, the Company has two outstanding convertible promissory notes in the aggregate principal amount of $ 2,400,000 10 2.50 The Company recorded interest expense related to convertible notes payable of $ 80,278 88,000 215,278 130,482 199,445 109,176 As of September 30, 2022 and December 31, 2021, the principal balance of the convertible promissory notes of $ 2,400,000 2,900,000 During the three and nine months ended 500,000 125,604 3.98 5,278 Subsequent to September 30, 2022, on October 4, 2022, October 18, 2022 and November 3, 2022, the Company issued three convertible promissory notes in the aggregate amount of $ 1,300,000 10 2.50 2.00 Convertible Note Payable at Fair Value The Company had one convertible promissory note outstanding with aggregate principal amount of $ 500,000 The Company had a balance of $ 420,613 998,135 The Company recorded a gain in fair value of $ 45,642 223,923 577,522 826,398 The Company recorded interest expense related to the convertible note payable at fair value of $ 9,863 29,589 29,589 Nonconvertible Promissory Notes As of September 30, 2022, the Company has outstanding unsecured nonconvertible promissory notes in the aggregate amount of $ 896,895 10 December 2023 0.3 As of September 30, 2022 and December 31, 2021, the Company had a balance of $ 516,036 307,685 380,859 868,959 The Company recorded interest expense related to these nonconvertible promissory notes of $ 22,719 30,317 70,996 92,765 73,127 93,186 |
LOANS FROM RELATED PARTY
LOANS FROM RELATED PARTY | 9 Months Ended |
Sep. 30, 2022 | |
Loans From Related Party | |
LOANS FROM RELATED PARTY | NOTE 9 — LOANS FROM RELATED PARTY The Company issued Dolphin Entertainment, LLC (“DE LLC”), an entity wholly owned by the Company’s Chief Executive Officer, William O’Dowd (the “CEO”), a promissory note (the “DE LLC Note”) which matures on July 31, 2024. As of both September 30, 2022 and December 31, 2021, the Company had a principal balance of $ 1,107,873 138,712 55,849 The Company recorded interest expense of $ 27,924 82,863 81,621 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 10 — FAIR VALUE MEASUREMENTS The Company’s non-financial assets measured at fair value on a nonrecurring basis include goodwill and intangible assets. The determination of our intangible fair values includes several assumptions and inputs (Level 3) that are subject to various risks and uncertainties. Management believes it has made reasonable estimates and judgments concerning these risks and uncertainties. All other financial assets and liabilities are carried at amortized cost. The Company’s cash balances are representative of their fair values, as these balances are comprised of deposits available on demand. The carrying amounts of accounts receivable, notes receivable, prepaid and other current assets, accounts payable and other non-current liabilities are representative of their fair values because of the short turnover of these instruments. Financial Disclosures about Fair Value of Financial Instruments The tables below set forth information related to the Company’s consolidated financial instruments: Schedule of consolidated financial instruments Level in September 30, 2022 December 31, 2021 Fair Value Carrying Fair Carrying Fair Hierarchy Amount Value Amount Value Assets: Cash and cash equivalents 1 $ 4,452,562 $ 4,452,562 $ 7,688,743 $ 7,688,743 Restricted cash 1 1,140,483 1,140,483 541,883 541,883 Liabilities: Convertible notes payable 3 $ 2,400,000 $ 2,168,000 $ 2,900,000 $ 2,900,000 Convertible note payable at fair value 3 420,613 420,613 998,135 998,135 Warrant liability 3 30,000 30,000 135,000 135,000 Contingent consideration 3 705,000 705,000 4,284,221 4,284,221 Convertible notes payable As of September 30, 2022, the Company has two outstanding convertible notes payable with aggregate principal amount of $2,400,000. See Note 8 for further information on the terms of these convertible notes. Schedule of convertible notes payable September 30, 2022 December 31, 2021 Level Carrying Amount Fair Value Carrying Amount Fair Value 10% convertible notes due in August 2024 3 $ 2,000,000 $ 1,811,000 $ 2,000,000 $ 1,998,000 10% convertible notes due in September 2024 3 400,000 357,000 900,000 902,000 $ 2,400,000 $ 2,168,000 $ 2,900,000 $ 2,900,000 The estimated fair value of the convertible notes was computed using a Monte Carlo Simulation, using the following assumptions: Schedule of estimated fair value Fair Value Assumption – Convertible Debt September 30, 2022 December 31, 2021 Stock Price $ 2.65 $ 8.52 Minimum Conversion Price $ 2.50 $ 2.50 Annual Asset Volatility Estimate 80 % 100 % Risk Free Discount Rate (based on U.S. government treasury obligation with a term similar to that of the convertible note) 4.02 4.05 % 0.61 0.64 % Fair Value Option (“FVO”) Election – Convertible note payable and freestanding warrants Convertible note payable, at fair value As of September 30, 2022, the Company has one outstanding convertible note payable with a face value of $ 500,000 The March 4th Note is measured at fair value and categorized within Level 3 of the fair value hierarchy. The following is a reconciliation of the fair values from December 31, 2021 to September 30, 2022: Schedule of fair value categorized within Level 3 March 4th Note Beginning fair value balance reported on the condensed consolidated balance sheet at December 31, 2021 $ 998,135 (Gain) on change of fair value reported in the condensed consolidated statements of operations (577,522 ) Ending fair value balance reported on the condensed consolidated balance sheet at September 30, 2022 $ 420,613 The estimated fair value of the March 4th Note as of September 30, 2022 and December 31, 2021, 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: Schedule of estimated fair value September 30, 2022 December 31, 2021 Face value principal payable $ 500,000 $ 500,000 Original conversion price $ 3.91 $ 3.91 Value of Common Stock $ 2.65 $ 8.52 Expected term (years) 7.43 8.18 Volatility 100 % 100 % Risk free rate 3.95 % 1.47 % Warrants In connection with the March 4th Note, the Company issued the Series I Warrants. The Series I Warrants are measured at fair value and categorized within Level 3 of the fair value hierarchy. The following is a reconciliation of the fair values from December 31, 2021 to September 30, 2022: Schedule of fair value categorized within Level 3 Fair Value: Series I Beginning fair value balance reported on the condensed consolidated balance sheet at December 31, 2021 $ 135,000 (Gain) on change of fair value reported in the condensed consolidated statements of operations (105,000 ) Ending fair value balance reported on the condensed consolidated balance sheet at September 30, 2022 $ 30,000 The estimated fair value of the Series “I” Warrants was computed using a Black-Scholes valuation model, using the following assumptions: Schedule of estimated fair value Fair Value Assumption - Series “I” Warrants September 30, 2022 December 31, 2021 Exercise Price per share $ 3.91 $ 3.91 Value of Common Stock $ 2.65 $ 8.52 Expected term (years) 2.92 3.67 Volatility 100 % 100 % Dividend yield 0 % 0 % Risk free rate 4.25 % 1.07 % Contingent consideration The Company records the fair value of the contingent consideration 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 “Change in fair value of contingent consideration” in the condensed consolidated statements of operations. As discussed in Note 4, during the year ended December 31, 2021, the B/HI seller met the conditions for payment of contingent consideration. As a result, the contingent consideration has been recorded as the actual amount of the payout to the B/HI seller, $ 1.1 600,000 163,369 For the contingent consideration related to Be Social, the Company utilized a Monte Carlo Simulation model, which incorporates significant inputs that are not observable in the market, and thus represents a Level 3 measurement as defined in ASC 820. The unobservable inputs utilized for measuring the fair value of the contingent consideration reflect management’s own assumptions about the assumptions that market participants would use in valuing the contingent consideration as of the acquisition date. The Company determined the fair value by using the following key inputs to the Monte Carlo Simulation Model: Schedule of contingent consideration Be Social Inputs As of September 30, 2022 As of Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the contingent consideration) 3.33 % 0.73 % Annual Asset Volatility Estimate 60.00 % 85.00 % For the contingent consideration, 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, 2021 to September 30, 2022: Schedule of reconciliation of the fair values The Door (1) Be Social (2) B/HI (3) Beginning fair value balance reported on the condensed consolidated balance sheet at December 31, 2021 $ 2,381,869 $ 710,000 $ 1,192,352 (Gain) on change of fair value reported in the condensed consolidated statements of operations (1,358,672 ) (5,000 ) (76,106 ) Settlement of contingent consideration (1,023,197 ) — (1,116,246 ) Ending fair value balance reported in the condensed consolidated balance sheet at September 30, 2022 $ — $ 705,000 $ — (1) During the year ended December 31, 2021, The Door achieved the conditions for the earnout consideration, which were settled on June 7, 2022 by payment of 279,562 shares of common stock. For the three and nine months ended September 30, 2021, the Company recorded gains of $280,000 and $100,000, respectively, in fair value of contingent consideration related to The Door in the condensed consolidated statements of operations. (2) For the three and nine months ended September 30, 2021, the Company recorded losses of $250,000 and $270,000, respectively, in fair value of contingent consideration related to Be Social in the condensed consolidated statements of operations. (3) For both the three and nine months ended September 30, 2021, the Company recorded a loss of $1,140,000 in fair value of contingent consideration related to B/HI in the condensed consolidated statements of operations. During the year ended December 31, 2021, B/HI achieved the conditions for the earnout consideration, which were settled on June 14 and June 29, 2022, as described above. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 11 — STOCKHOLDERS’ EQUITY 2021 Lincoln Park Transaction On December 29, 2021, the Company entered into a purchase agreement (the “LP 2021 Purchase Agreement”) and a registration rights agreement (the “LP 2021 Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $ 25,000,000 The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 50,000 shares of common stock on any business day (a “Regular Purchase”), provided that on such day the last closing sale price per-share of our common stock is not less than $1.00 as reported by the Nasdaq Capital Market. The amount of a Regular Purchase may be increased under certain circumstances up to 75,000 shares if the closing price is not below $10.00, and up to 100,000 shares if the closing price is not below $12.50, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. Pursuant to the terms of the LP 2021 Purchase Agreement, at the time the Company signed the LP 2021 Purchase Agreement and the LP 2021 Registration Rights Agreement, the Company issued 51,827 37,019 During the nine months ended September 30, 2022, excluding the additional commitment shares disclosed above, the Company sold 1,035,000 3.47 5.15 4,367,640 2022 Lincoln Park Transaction On August 10, 2022, the Company entered into a new purchase agreement (the “LP 2022 Purchase Agreement”) and a registration rights agreement (the “LP 2022 Registration Rights Agreement”) with Lincoln Park, pursuant to which the Company could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $ 25,000,000 The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 50,000 shares of common stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 75,000 shares if the closing price is not below $7.50 and up to 100,000 shares if the closing price is not below $10.00, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. In the event we purchase the full amount allowed for a Regular Purchase on any given business day, we may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price of shares of common stock related to the future funding will be based on the then prevailing market prices of such shares at the time of sales as described in the LP 2022 Purchase Agreement. Pursuant to the terms of the LP 2022 Purchase Agreement, at the time the Company signed the LP 2022 Purchase Agreement and the LP 2022 Registration Rights Agreement, the Company issued 57,313 During both the three and nine months ended September 30, 2022, excluding the additional commitment shares disclosed above, the Company sold 245,000 2.42 3.72 681,460 215,000 2.31 2.65 547,375 The Company evaluated the contract that includes the right to require Lincoln Park to purchase shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. The Company has analyzed the terms of the freestanding put right and has concluded that it has no value as of September 30, 2022. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 12 — SHARE-BASED COMPENSATION On June 29, 2017, the shareholders of the Company approved the Dolphin Digital Media, Inc. 2017 Equity Incentive Plan (the “2017 Plan”). There are 2,000,000 The RSUs granted under the 2017 Plan to the Company’s employees vest in four equal installments on the following dates: March 15, 2022, June 15, 2022, September 15, 2022 and December 15, 2022. The Company recognized compensation expense for RSUs of $ 52,520 166,582 no 51,965 0.21 The following table sets forth the activity for the RSUs: Schedule of RSUs Number of Weighted Average Outstanding (nonvested), December 31, 2021 — $ — Granted 36,336 6.86 Forfeited (4,404 ) 6.86 Vested (24,357 ) 6.86 Outstanding (nonvested), September 30, 2022 7,575 $ 6.86 Shares issued related to an employment agreement Pursuant to the employment agreement between the Company and Mr. Anthony Francisco, on July 27, 2022, the Company issued to Mr. Francisco 11,521 4.34 25,000 100,000 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
(Loss) earnings per share: | |
EARNINGS (LOSS) PER SHARE | NOTE 13 — EARNINGS (LOSS) PER SHARE The following table sets forth the computation of basic and diluted (loss) earnings per share: Schedule of Basic and Diluted Income (Loss) Per Share Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Numerator Net (loss) income $ (1,311,719 ) $ 141,651 $ (1,492,191 ) $ (3,780,392 ) Net income attributable to participating securities — 5,833 — — Net (loss) income attributable to Dolphin Entertainment common stock shareholders and numerator for basic (loss) earnings per share (1,311,719 ) 135,818 (1,492,191 ) (3,780,392 ) Change in fair value of convertible notes payable (45,642 ) — (577,522 ) — Change in fair value of warrants (10,000 ) — (105,000 ) — Interest expense 9,863 — 29,589 — Numerator for diluted (loss) earnings per share $ (1,357,498 ) $ 135,818 $ (2,145,124 ) $ (3,780,392 ) Denominator Denominator for basic EPS - weighted-average shares 9,664,681 7,740,085 9,307,830 7,551,974 Effect of dilutive securities: Warrants 1,157 — 2,100 — Convertible notes payable 127,877 — 127,877 — Denominator for diluted EPS - adjusted weighted-average shares 9,793,715 7,740,085 9,437,807 7,551,974 Basic (loss) earnings per share $ (0.14 ) $ 0.02 $ (0.16 ) $ (0.50 ) Diluted (loss) earnings per share $ (0.14 ) $ 0.02 $ (0.23 ) $ (0.50 ) Basic (loss) earnings per share is computed by dividing income or loss attributable to the shareholders of common stock (the numerator) by the weighted-average number of shares of common stock outstanding (the denominator) for the period. Diluted (loss) earnings per share assume that any dilutive equity instruments, such as convertible notes payable and warrants were exercised and outstanding common stock adjusted accordingly, if their effect is dilutive. One of the Company’s convertible notes payable, the warrants 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 Company’s net income to these participating securities. These securities do not contractually participate in losses. For the three months ended September 30, 2021, the Company attributed $ 5,833 For the three and nine months ended September 30, 2022, the convertible promissory note carried at fair value and the outstanding warrants were included in the calculation of fully diluted loss per share. The other convertible notes carried at their principal loan amount, convertible into an aggregate of 578,313 663,801 326,702 273,594 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 — RELATED PARTY TRANSACTIONS As part of the employment agreement with its CEO, the Company provided a $ 1,000,000 1,625,000 10 As of September 30, 2022 and December 31, 2021, the Company had accrued $ 2,625,000 1,511,929 1,565,588 66,164 196,336 250,000 The Company entered into the DE LLC Note with an entity wholly owned by our CEO. See Note 9 for further discussion. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | NOTE 15 — SEGMENT INFORMATION The Company operates in two reportable segments, Entertainment Publicity and Marketing Segment (“EPM”) and Content Production Segment (“CPD”). · The Entertainment Publicity and Marketing segment is composed of 42West, The Door, Viewpoint, Shore Fire, Be Social, and B/HI. This segment primarily provides clients with diversified marketing services, including public relations, entertainment and hospitality content marketing, strategic marketing consulting and content production of marketing materials. · The Content Production segment is composed of Dolphin Entertainment and Dolphin Films. This segment engages in the production and distribution of digital content and feature films. The activities of our Content Production segment also include all corporate overhead activities. The profitability measure employed by our chief operating decision maker, our President and Chief Executive Officer, for allocating resources to operating segments and assessing operating segment performance is operating income (loss). Salaries and related expenses include salaries, bonuses, commissions and other incentive related expenses. General and administrative expenses include rental expense and depreciation of property, equipment and leasehold improvements for properties occupied by corporate office employees, as well as legal and professional expenses which 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. All segments follow the same accounting policies as those described in the Annual Report on Form 10-K for the year ended December 31, 2021. In connection with the acquisitions of 42West, The Door, Viewpoint, Shore Fire, Be Social, and B/HI, the Company assigned $ 5,116,568 8,353,432 20,021,357 Schedule of Revenue and Assets by Segment Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Revenues: EPM $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 CPD — — — — Total $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 Segment Operating Income (Loss): EPM $ 604,837 $ 507,658 $ 3,336,688 $ 488,077 CPD (1,738,604 ) (1,579,369 ) (4,945,222 ) (2,921,342 ) Total operating (loss) income (1,133,767 ) (1,071,711 ) (1,608,534 ) (2,433,265 ) Interest expense (126,147 ) (241,115 ) (400,884 ) (576,146 ) Other income (expenses), net 55,642 1,454,477 682,522 (809,832 ) (Loss) income before income taxes and equity in losses of unconsolidated affiliates $ (1,204,272 ) $ 141,651 $ (1,326,896 ) $ (3,819,243 ) As of As of Total assets: EPM $ 48,366,935 $ 48,691,939 CPD 7,358,533 4,099,512 Total $ 55,725,468 $ 52,791,451 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
LEASES | NOTE 16 — LEASES The Company and its subsidiaries are party to various office leases with terms expiring at different dates through December 2027. The amortizable life of the right-of-use (“ROU”) asset is limited by the expected lease term. Although certain leases include options to extend, the Company did not include these in the ROU asset or lease liability calculations because it is not reasonably certain that the options will be executed. On July 18, 2022, the Company entered into an agreement to sublet 17,554 rentable square feet in Los Angeles, California at a base rent of $3.61 per rentable square foot. The term of the sublease commenced on July 27, 2022 and expires on November 29, 2027 and allows for annual increases of 3% per annum throughout the term of the lease. The table below shows the lease income and expenses recorded in the condensed consolidated statements of operations incurred during the three and nine months ended September 30, 2022 and 2021. Schedule of Lease Income and Expenses Three Months Ended Nine Months Ended September 30, Lease costs Classification 2022 2021 2022 2021 Operating lease costs Selling, general and administrative expenses $ 709,542 $ 620,121 $ 1,876,153 $ 2,029,524 Operating lease costs Direct costs — — — 60,861 Sublease income Selling, general and administrative expenses (106,247 ) — (228,230 ) — Net lease costs $ 603,295 $ 620,121 $ 1,647,923 $ 2,090,385 During the nine months ended September 30, 2022, the Company recorded an impairment of its ROU asset amounting to $ 98,857 Lease Payments For the nine months ended September 30, 2022 and 2021, the Company made payments in cash related to its operating leases in the amounts of $ 1,567,453 2,067,546 Future maturities lease payments for operating leases for the remainder of 2022 and thereafter, were as follows: Schedule of Future Minimum Payments Under Operating Lease Agreements 2022 $ 695,949 2023 2,659,521 2024 2,550,664 2025 1,979,589 2026 1,782,057 Thereafter 719,797 Total lease payments $ 10,387,577 Less: Imputed interest (1,772,284 ) Present value of lease liabilities $ 8,615,293 As of September 30, 2022, the Company’s weighted average remaining lease term on its operating leases is 3.60 8.63 |
COLLABORATIVE ARRANGEMENT
COLLABORATIVE ARRANGEMENT | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
COLLABORATIVE ARRANGEMENT | NOTE 17 — COLLABORATIVE ARRANGEMENT IMAX Co-Production Agreement On June 24, 2022, the Company entered into an agreement with IMAX Corporation (“IMAX”) to co-produce and co-finance a documentary motion picture on the flight demonstration squadron of the United States Navy, called The Blue Angels (“Blue Angels Agreement”). IMAX and Dolphin have each agreed to fund 50% of the production budget. During the three and nine months ended September 30, 2022, the Company paid $ 1,000,000 1,500,000 We have evaluated the Blue Angels Agreement and have determined that it is a collaborative arrangement under FASB ASC Topic 808 “Collaborative Arrangements”. We will reevaluate whether an arrangement qualifies or continues to qualify as a collaborative arrangement whenever there is a change in either the roles of the participants or the participants’ exposure to significant risks and rewards, dependent upon the ultimate commercial success of documentary motion picture. As production of the documentary motion picture is still in the early stages, no income or expense has been recorded in connection with the Blue Angels Agreement during the three and nine months ended September 30, 2022. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 18 — COMMITMENTS AND CONTINGENCIES Litigation The Company may be subject to legal proceedings, claims, and liabilities that arise in the ordinary course of business. The Company is not aware of any pending litigation as of the date of this report and, therefore, 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 Company’s financial position, results of operations and cash flows. IMAX Co-Production Agreement As discussed in Note 17, on June 24, 2022, the Company entered into the Blue Angels Agreement with IMAX. Under the terms of this agreement, the Company has funded $ 1,500,000 500,000 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19 — SUBSEQUENT EVENTS 7,777 Creature Chronicles: Exiled Aliens 13,175 435,000 On November 14, 2022, (the “Closing Date”), the Company, through its wholly owned subsidiary, MidCo LLC, (“MidCo”), acquired all of the issued and outstanding membership interest of Socialyte, LLC, a Delaware limited liability company, (“Socialyte”), pursuant to a membership purchase agreement between the Company and NSL Ventures, LLC (“Seller”). Socialyte is a New York and Los Angeles based creative agency specializing in social media influencer marketing campaigns for brands. The consideration paid by the Company in connection with the acquisition of Socialyte is $13,000,000 plus the potential to earn up to an additional $5,000,000 upon meeting certain financial targets in 2022. On the Closing Date, the Company paid the Seller $5,000,000 cash, issued the Seller 1,346,257 shares of its Common Stock and issued the Seller a $3,000,000 unsecured promissory note, which is to be repaid in two equal installments on June 30, 2023 and September 30, 2023. In addition, the Company issued the Seller 685,234 shares of its Common Stock in satisfaction of the Closing Date working capital adjustment. 3,000,000 |
GENERAL (Policies)
GENERAL (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Impact of COVID-19 | Impact of COVID-19 The continued spread of new COVID-19 variants did not have a significant impact on our business during the quarter ended September 30, 2022. The future course of the pandemic could have adverse effects in the U.S and global economies and thus negatively impact our business and financial results. |
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, Dolphin JB Believe Financing, LLC, Dolphin JOAT Productions, LLC, 42West, The Door, Viewpoint, Shore Fire, Be Social and B/HI. The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“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 Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2022, and its results of operations and cash flows for the three and nine months ended September 30, 2022 and 2021. All significant inter-company balances and transactions have been eliminated from the condensed consolidated financial statements. Operating results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022. The condensed consolidated balance sheet as of December 31, 2021 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 Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. |
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 as of 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 estimates in the fair value of acquisitions, estimates in assumptions used to calculate the fair value of certain liabilities, realizability of notes receivable and impairment assessments for investment in capitalized production costs, goodwill and long-lived assets. Management bases its estimates on historical experience and on other various assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from such estimates under different assumptions and conditions. Due to COVID-19 and the uncertainty of the extent of the impacts related thereto, certain estimates and assumptions may require increased judgment. As events continue to evolve and additional information becomes available, these estimates may change in future periods. It is difficult to predict what the ongoing impact of the pandemic will be on future periods. |
Update to Significant Accounting Policies | Update to Significant Accounting Policies The Company’s significant accounting policies are detailed in "Note 2: Summary of Significant Accounting Policies" within Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021. As a result of entering into a collaborative arrangement in June 2022, the Company updated its revenue recognition accounting policy to include the information as detailed below. There were no other significant changes to the Company’s accounting policies during the three and nine months ended September 30, 2022. |
Revenue Recognition | Revenue Recognition The Company analyzes our collaboration agreements to assess whether such arrangements, or transactions between arrangement participants, involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities or are more akin to a vendor-customer relationship. In making this evaluation, the Company considers whether the activities of the collaboration are considered to be distinct and deemed to be within the scope of the collaboration guidance and those that are more reflective of a vendor-customer relationship and, therefore, within the scope of the revenue with contracts with customer guidance. This assessment is performed throughout the life of the arrangement based on changes in the responsibilities of all parties in the arrangement. For collaboration arrangements that are in the scope of the collaboration guidance, we may analogize to the revenue from contracts with customers’ guidance for some aspects of these arrangements. Revenue from transactions with collaboration participants is presented apart from revenue with contracts with customers in our condensed consolidated statements of operations. To date, there has been no revenue generated from collaboration arrangements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In June 2016, the FASB issued new guidance on measurement of credit losses (ASU 2016-13, “ Measurement of Credit Losses on Financial Instruments |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform with current year presentation. These reclassifications had no impact on the Company’s condensed consolidated statements of operations or condensed consolidated statements of cash flows. |
REVENUE (Tables)
REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue | |
Schedule of Revenue by Segment | Schedule of Revenue by Segment For the Three Months Ended September 30, For the Nine Months Ended September 30, 2022 2021 2022 2021 Entertainment publicity and marketing $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 Content production — — — — Total Revenues $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 |
Schedule of contract asset and liability | Schedule of contract asset and liability Contract Contract Balance as of December 31, 2021 $ 62,500 $406,373 Balance as of September 30, 2022 — 911,970 Change $ (62,500 ) $505,597 |
Schedule of Revenues | Schedule of Revenues Three Months Ended Nine Months Ended 2022 2021 2022 2021 Amounts included in the beginning of year contract liability balance $ — $ 10,000 $ 329,937 $ 347,221 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Schedule of Intangible Assets September 30, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Intangible assets subject to amortization: Customer relationships $ 8,290,000 $ 5,531,265 $ 2,758,735 $ 8,290,000 $ 4,880,016 $ 3,409,984 Trademarks and trade names 4,490,000 2,157,167 2,332,833 4,490,000 1,797,917 2,692,083 Non-compete agreements 690,000 665,000 25,000 690,000 650,000 40,000 $ 13,470,000 $ 8,353,432 $ 5,116,568 $ 13,470,000 $ 7,327,933 $ 6,142,067 |
Schedule of amortization expense related to intangible assets for the next five years | Schedule of amortization expense related to intangible assets for the next five years 2022 $ 341,833 2023 1,227,824 2024 991,715 2025 961,373 2026 934,001 Thereafter 659,822 Total $ 5,116,568 |
OTHER CURRENT LIABILITIES (Tabl
OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Other liabilities | Schedule of Other liabilities September 30, December 31, 2022 2021 Accrued funding under Max Steel production agreement $ 620,000 $ 620,000 Accrued audit, legal and other professional fees 698,304 429,299 Accrued commissions 496,276 457,269 Accrued bonuses 220,000 360,817 Due to seller of Be Social — 304,169 Talent liability 2,343,906 2,908,357 Accumulated customer deposits 801,247 1,206,864 Other 512,867 563,809 Other current liabilities $ 5,692,600 $ 6,850,584 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Schedule of debt Debt Type September 30, December 31, Convertible notes payable $ 2,400,000 $ 2,900,000 Convertible note payable - fair value option 420,613 998,135 Non-convertible promissory notes 896,895 1,176,644 Loans from related party (see Note 9) 1,107,873 1,107,873 Total debt $ 4,825,381 $ 6,182,652 Less current portion of debt (516,036 ) (307,685 ) Noncurrent portion of debt $ 4,309,345 $ 5,874,967 |
Schedule of Future Annual Contractual Principal Payment Commitments of Debt | Schedule of Future Annual Contractual Principal Payment Commitments of Debt Debt Type Maturity Date 2022 2023 2024 2025 2026 Thereafter Convertible notes payable Ranging from August to September 2024 $ — $ — $ 2,400,000 $ — $ — $ — Convertible note payable - fair value option March 2030 — — — — — 500,000 Nonconvertible promissory notes Ranging between June 2023 and December 2023 (1) 27,935 868,960 — — — — Loans from related party July 2024 — — 1,107,873 — — — $ 27,935 $ 868,960 $ 3,507,873 $ — $ — $ 500,000 (1) Pursuant to the terms of one of the nonconvertible promissory notes, the Company makes monthly payments of principal and interest. This note matures on December 2023; however, the amounts in the 2022 column represent principal payments to be made during the remainder of 2022. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of consolidated financial instruments | Schedule of consolidated financial instruments Level in September 30, 2022 December 31, 2021 Fair Value Carrying Fair Carrying Fair Hierarchy Amount Value Amount Value Assets: Cash and cash equivalents 1 $ 4,452,562 $ 4,452,562 $ 7,688,743 $ 7,688,743 Restricted cash 1 1,140,483 1,140,483 541,883 541,883 Liabilities: Convertible notes payable 3 $ 2,400,000 $ 2,168,000 $ 2,900,000 $ 2,900,000 Convertible note payable at fair value 3 420,613 420,613 998,135 998,135 Warrant liability 3 30,000 30,000 135,000 135,000 Contingent consideration 3 705,000 705,000 4,284,221 4,284,221 |
Schedule of convertible notes payable | Schedule of convertible notes payable September 30, 2022 December 31, 2021 Level Carrying Amount Fair Value Carrying Amount Fair Value 10% convertible notes due in August 2024 3 $ 2,000,000 $ 1,811,000 $ 2,000,000 $ 1,998,000 10% convertible notes due in September 2024 3 400,000 357,000 900,000 902,000 $ 2,400,000 $ 2,168,000 $ 2,900,000 $ 2,900,000 |
Schedule of fair value categorized within Level 3 | Schedule of fair value categorized within Level 3 March 4th Note Beginning fair value balance reported on the condensed consolidated balance sheet at December 31, 2021 $ 998,135 (Gain) on change of fair value reported in the condensed consolidated statements of operations (577,522 ) Ending fair value balance reported on the condensed consolidated balance sheet at September 30, 2022 $ 420,613 |
Schedule of contingent consideration | Schedule of contingent consideration Be Social Inputs As of September 30, 2022 As of Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the contingent consideration) 3.33 % 0.73 % Annual Asset Volatility Estimate 60.00 % 85.00 % |
Schedule of reconciliation of the fair values | Schedule of reconciliation of the fair values The Door (1) Be Social (2) B/HI (3) Beginning fair value balance reported on the condensed consolidated balance sheet at December 31, 2021 $ 2,381,869 $ 710,000 $ 1,192,352 (Gain) on change of fair value reported in the condensed consolidated statements of operations (1,358,672 ) (5,000 ) (76,106 ) Settlement of contingent consideration (1,023,197 ) — (1,116,246 ) Ending fair value balance reported in the condensed consolidated balance sheet at September 30, 2022 $ — $ 705,000 $ — (1) During the year ended December 31, 2021, The Door achieved the conditions for the earnout consideration, which were settled on June 7, 2022 by payment of 279,562 shares of common stock. For the three and nine months ended September 30, 2021, the Company recorded gains of $280,000 and $100,000, respectively, in fair value of contingent consideration related to The Door in the condensed consolidated statements of operations. (2) For the three and nine months ended September 30, 2021, the Company recorded losses of $250,000 and $270,000, respectively, in fair value of contingent consideration related to Be Social in the condensed consolidated statements of operations. (3) For both the three and nine months ended September 30, 2021, the Company recorded a loss of $1,140,000 in fair value of contingent consideration related to B/HI in the condensed consolidated statements of operations. During the year ended December 31, 2021, B/HI achieved the conditions for the earnout consideration, which were settled on June 14 and June 29, 2022, as described above. |
Monte Carlo Simulation [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of estimated fair value | Schedule of estimated fair value Fair Value Assumption – Convertible Debt September 30, 2022 December 31, 2021 Stock Price $ 2.65 $ 8.52 Minimum Conversion Price $ 2.50 $ 2.50 Annual Asset Volatility Estimate 80 % 100 % Risk Free Discount Rate (based on U.S. government treasury obligation with a term similar to that of the convertible note) 4.02 4.05 % 0.61 0.64 % |
Convertible Debt [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of estimated fair value | Schedule of estimated fair value September 30, 2022 December 31, 2021 Face value principal payable $ 500,000 $ 500,000 Original conversion price $ 3.91 $ 3.91 Value of Common Stock $ 2.65 $ 8.52 Expected term (years) 7.43 8.18 Volatility 100 % 100 % Risk free rate 3.95 % 1.47 % |
Series I Warrant [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of estimated fair value | Schedule of estimated fair value Fair Value Assumption - Series “I” Warrants September 30, 2022 December 31, 2021 Exercise Price per share $ 3.91 $ 3.91 Value of Common Stock $ 2.65 $ 8.52 Expected term (years) 2.92 3.67 Volatility 100 % 100 % Dividend yield 0 % 0 % Risk free rate 4.25 % 1.07 % |
Schedule of fair value categorized within Level 3 | Schedule of fair value categorized within Level 3 Fair Value: Series I Beginning fair value balance reported on the condensed consolidated balance sheet at December 31, 2021 $ 135,000 (Gain) on change of fair value reported in the condensed consolidated statements of operations (105,000 ) Ending fair value balance reported on the condensed consolidated balance sheet at September 30, 2022 $ 30,000 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of RSUs | Schedule of RSUs Number of Weighted Average Outstanding (nonvested), December 31, 2021 — $ — Granted 36,336 6.86 Forfeited (4,404 ) 6.86 Vested (24,357 ) 6.86 Outstanding (nonvested), September 30, 2022 7,575 $ 6.86 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
(Loss) earnings per share: | |
Schedule of Basic and Diluted Income (Loss) Per Share | Schedule of Basic and Diluted Income (Loss) Per Share Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Numerator Net (loss) income $ (1,311,719 ) $ 141,651 $ (1,492,191 ) $ (3,780,392 ) Net income attributable to participating securities — 5,833 — — Net (loss) income attributable to Dolphin Entertainment common stock shareholders and numerator for basic (loss) earnings per share (1,311,719 ) 135,818 (1,492,191 ) (3,780,392 ) Change in fair value of convertible notes payable (45,642 ) — (577,522 ) — Change in fair value of warrants (10,000 ) — (105,000 ) — Interest expense 9,863 — 29,589 — Numerator for diluted (loss) earnings per share $ (1,357,498 ) $ 135,818 $ (2,145,124 ) $ (3,780,392 ) Denominator Denominator for basic EPS - weighted-average shares 9,664,681 7,740,085 9,307,830 7,551,974 Effect of dilutive securities: Warrants 1,157 — 2,100 — Convertible notes payable 127,877 — 127,877 — Denominator for diluted EPS - adjusted weighted-average shares 9,793,715 7,740,085 9,437,807 7,551,974 Basic (loss) earnings per share $ (0.14 ) $ 0.02 $ (0.16 ) $ (0.50 ) Diluted (loss) earnings per share $ (0.14 ) $ 0.02 $ (0.23 ) $ (0.50 ) |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue and Assets by Segment | Schedule of Revenue and Assets by Segment Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Revenues: EPM $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 CPD — — — — Total $ 9,899,013 $ 9,399,432 $ 29,366,748 $ 25,219,793 Segment Operating Income (Loss): EPM $ 604,837 $ 507,658 $ 3,336,688 $ 488,077 CPD (1,738,604 ) (1,579,369 ) (4,945,222 ) (2,921,342 ) Total operating (loss) income (1,133,767 ) (1,071,711 ) (1,608,534 ) (2,433,265 ) Interest expense (126,147 ) (241,115 ) (400,884 ) (576,146 ) Other income (expenses), net 55,642 1,454,477 682,522 (809,832 ) (Loss) income before income taxes and equity in losses of unconsolidated affiliates $ (1,204,272 ) $ 141,651 $ (1,326,896 ) $ (3,819,243 ) As of As of Total assets: EPM $ 48,366,935 $ 48,691,939 CPD 7,358,533 4,099,512 Total $ 55,725,468 $ 52,791,451 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of Lease Income and Expenses | Schedule of Lease Income and Expenses Three Months Ended Nine Months Ended September 30, Lease costs Classification 2022 2021 2022 2021 Operating lease costs Selling, general and administrative expenses $ 709,542 $ 620,121 $ 1,876,153 $ 2,029,524 Operating lease costs Direct costs — — — 60,861 Sublease income Selling, general and administrative expenses (106,247 ) — (228,230 ) — Net lease costs $ 603,295 $ 620,121 $ 1,647,923 $ 2,090,385 |
Schedule of Future Minimum Payments Under Operating Lease Agreements | Schedule of Future Minimum Payments Under Operating Lease Agreements 2022 $ 695,949 2023 2,659,521 2024 2,550,664 2025 1,979,589 2026 1,782,057 Thereafter 719,797 Total lease payments $ 10,387,577 Less: Imputed interest (1,772,284 ) Present value of lease liabilities $ 8,615,293 |
REVENUE (Schedule of revenue by
REVENUE (Schedule of revenue by segment) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | $ 9,899,013 | $ 9,399,432 | $ 29,366,748 | $ 25,219,793 |
EPM [Member] | ||||
Revenue | 9,899,013 | 9,399,432 | 29,366,748 | 25,219,793 |
C P D [Member] | ||||
Revenue |
REVENUE (Schedule of contract a
REVENUE (Schedule of contract asset and liability) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue | ||
Contract asset | $ 62,500 | |
Contract liability | 911,970 | $ 406,373 |
Change in contract asset | (62,500) | |
Changes in contracts liability | $ 505,597 |
REVENUE (Schedule of revenues)
REVENUE (Schedule of revenues) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Amounts included in the beginning of year contract liability balance | $ 10,000 | $ 329,937 | $ 347,221 |
REVENUE (Details Narrative)
REVENUE (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Revenue | |
Performance obligations | $ 911,970 |
Performance obligation recognized | $ 849,469 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Schedule of Intangible Assets) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 13,470,000 | $ 13,470,000 |
Accumulated Amortization | 8,353,432 | 7,327,933 |
Net Carrying Amount | 5,116,568 | 6,142,067 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,290,000 | 8,290,000 |
Accumulated Amortization | 5,531,265 | 4,880,016 |
Net Carrying Amount | 2,758,735 | 3,409,984 |
Trademarks and Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 4,490,000 | 4,490,000 |
Accumulated Amortization | 2,157,167 | 1,797,917 |
Net Carrying Amount | 2,332,833 | 2,692,083 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 690,000 | 690,000 |
Accumulated Amortization | 665,000 | 650,000 |
Net Carrying Amount | $ 25,000 | $ 40,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Schedule of amortization expense related to intangible assets) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 341,833 | |
2023 | 1,227,824 | |
2024 | 991,715 | |
2025 | 961,373 | |
2026 | 934,001 | |
Thereafter | 659,822 | |
Total | $ 5,116,568 | $ 6,142,067 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of goodwill | $ 20,021,357 | |||
Amortization expense | $ 341,833 | $ 394,998 | $ 1,025,499 | $ 1,184,994 |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Jun. 14, 2022 | Jan. 02, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||||||
Revenues | $ 9,899,013 | $ 9,399,432 | $ 29,366,748 | $ 25,219,793 | ||
B H I Share Purchase Agreement [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Purchase amount | $ 800,000 | |||||
Additional earned | $ 1,100,000 | |||||
Cash | $ 600,000 | $ 600,000 | ||||
B H I Share Purchase Agreement [Member] | Common Stock [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Number of shares issued | 163,369 | |||||
B H I [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Purchase amount | 22,907 | 22,907 | ||||
Number of shares issued | 163,369 | |||||
Revenues | $ 1,082,856 | $ 2,509,697 |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Notes receivable | $ 4,323,153 | $ 4,323,153 | $ 1,510,137 | |
Interest receivable | 215,073 | 215,073 | ||
Notes receivable | 0 | 0 | ||
Crafthouse Cocktails [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Notes receivable issued | 0 | 0 | ||
Seven Unsecured Convertible Promissory Notes [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Unsecured convertible promissory notes | 3,108,080 | 3,108,080 | ||
Midnight Theatre [Member] | Four Unsecured Convertible Promissory Notes [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Unsecured convertible promissory notes | $ 869,280 | $ 869,280 | ||
Crafthouse Cocktails [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Unsecured convertible promissory notes | $ 500,000 |
EQUITY METHOD INVESTMENTS (Deta
EQUITY METHOD INVESTMENTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Loss on equity method investment | $ (100,223) | $ (143,623) | ||
Investment in JDDC Elemental LLC | 1,000,000 | |||
Midnight Theatre [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Investment | 939,214 | 939,214 | ||
Loss on equity method investment | 60,786 | 60,786 | ||
Crafthouse Cocktails [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Investment | 1,417,163 | 1,417,163 | ||
Loss on equity method investment | $ 39,437 | $ 82,837 |
OTHER CURRENT LIABILITIES (Sche
OTHER CURRENT LIABILITIES (Schedule of Other liabilities) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued funding under Max Steel production agreement | $ 620,000 | $ 620,000 |
Accrued audit, legal and other professional fees | 698,304 | 429,299 |
Accrued commissions | 496,276 | 457,269 |
Accrued bonuses | 220,000 | 360,817 |
Due to seller of Be Social | 304,169 | |
Talent liability | 2,343,906 | 2,908,357 |
Accumulated customer deposits | 801,247 | 1,206,864 |
Other | 512,867 | 563,809 |
Other current liabilities | $ 5,692,600 | $ 6,850,584 |
DEBT (Schedule of debt) (Detail
DEBT (Schedule of debt) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Convertible notes payable | $ 2,400,000 | $ 2,900,000 |
Convertible note payable - fair value option | 420,613 | 998,135 |
Non-convertible promissory notes | 896,895 | 1,176,644 |
Loans from related party (see Note 9) | 1,107,873 | 1,107,873 |
Total debt | 4,825,381 | 6,182,652 |
Less current portion of debt | (516,036) | (307,685) |
Noncurrent portion of debt | $ 4,309,345 | $ 5,874,967 |
DEBT (Schedule of Future Annual
DEBT (Schedule of Future Annual Contractual Principal Payment Commitments of Debt) (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Debt Instrument [Line Items] | ||
2022 | $ 27,935 | |
2023 | 868,960 | |
2024 | 3,507,873 | |
2025 | ||
2026 | ||
Thereafter | $ 500,000 | |
Convertible Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | Ranging from August to September 2024 | |
2022 | ||
2023 | ||
2024 | 2,400,000 | |
2025 | ||
2026 | ||
Thereafter | ||
Convertible Notes Payable Fair Value Option [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | March 2030 | |
2022 | ||
2023 | ||
2024 | ||
2025 | ||
2026 | ||
Thereafter | $ 500,000 | |
Nonconvertible Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | Ranging between June 2023 and December 2023(1) | [1] |
2022 | $ 27,935 | [1] |
2023 | 868,960 | [1] |
2024 | [1] | |
2025 | [1] | |
2026 | [1] | |
Thereafter | [1] | |
Loan From Related Party [Member] | ||
Debt Instrument [Line Items] | ||
Maturity Date | July 2024 | |
2022 | ||
2023 | ||
2024 | 1,107,873 | |
2025 | ||
2026 | ||
Thereafter | ||
[1]Pursuant to the terms of one of the nonconvertible promissory notes, the Company makes monthly payments of principal and interest. This note matures on December 2023; however, the amounts in the 2022 column represent principal payments to be made during the remainder of 2022. |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Nov. 03, 2022 | Oct. 04, 2022 | Aug. 08, 2022 | Oct. 18, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||||||||
Debt instrument amount | $ 2,400,000 | $ 2,400,000 | |||||||
Interest rate | 10% | ||||||||
Share price | $ 2.50 | $ 2.50 | |||||||
Interest expense | $ 80,278 | $ 88,000 | $ 215,278 | $ 130,482 | |||||
Iinterest payments | 199,445 | 109,176 | |||||||
Accrued interest | 1,650,635 | 1,650,635 | $ 1,621,437 | ||||||
Change in fair value of convertible notes and derivative liabilities | 45,642 | 223,923 | 577,522 | 826,398 | |||||
Interest expense | 126,147 | 241,115 | 400,884 | 576,146 | |||||
Debt carrying amount current portion | 4,825,381 | 4,825,381 | 6,182,652 | ||||||
Notes payable, current portion | 516,036 | 516,036 | 307,685 | ||||||
Current liabilities | 15,502,876 | 15,502,876 | 14,953,271 | ||||||
Interest expense | 22,719 | 30,317 | 70,996 | 92,765 | |||||
Interest paid | 73,127 | 93,186 | |||||||
Convertible Debt [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt instrument amount | 500,000 | 500,000 | |||||||
Noncurrent liabilities | 420,613 | 420,613 | 998,135 | ||||||
Convertible Notes Payable [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Interest expense | 9,863 | $ 9,863 | 29,589 | 29,589 | |||||
Convertible Promissory Notes [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Iinterest payments | 29,589 | 29,589 | |||||||
Notes Payable to Banks [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt instrument amount | $ 896,895 | $ 896,895 | |||||||
Debt instrument rate | 10% | 10% | |||||||
Debt instrument maturity date | December 2023 | ||||||||
Nonconvertible Promissory Notes [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt carrying amount current portion | $ 300,000 | $ 300,000 | |||||||
Current liabilities | $ 380,859 | 380,859 | $ 868,959 | ||||||
Convertible Promissory Notes [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt conversion, Principal | $ 2,400,000 | $ 2,900,000 | |||||||
One Convertible Notes Payable [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt conversion, Principal | $ 500,000 | ||||||||
Number of shares converted | 125,604 | ||||||||
Conversion price | $ 3.98 | ||||||||
Accrued interest | $ 5,278 | ||||||||
Three Convertible Notes [Member] | Subsequent Event [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt conversion, Principal | $ 1,300,000 | $ 1,300,000 | $ 1,300,000 | ||||||
Convertible Notes [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt instrument rate | 10% | 10% | |||||||
Two Convertible Notes [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Conversion price | $ 2.50 | $ 2.50 | |||||||
One Convertible Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Conversion price | $ 2 |
LOANS FROM RELATED PARTY (Detai
LOANS FROM RELATED PARTY (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||
Debt instrument amount | $ 2,400,000 | $ 2,400,000 | |||
Accrued interest | 1,650,635 | 1,650,635 | $ 1,621,437 | ||
Interest expenses related party | 27,924 | $ 27,924 | 82,863 | $ 82,863 | |
Interest payments | 199,445 | 109,176 | |||
Related Party [Member] | |||||
Debt Instrument [Line Items] | |||||
Interest payments | $ 81,621 | ||||
Notes Payable, Other Payables [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument amount | 1,107,873 | 1,107,873 | |||
Accrued interest | $ 138,712 | $ 138,712 | $ 55,849 |
FAIR VALUE MEASUREMENTS (Schedu
FAIR VALUE MEASUREMENTS (Schedule of consolidated financial instruments) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Contingent Consideration [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Carrying amount | $ 705,000 | $ 4,284,221 |
Fair value | 705,000 | 4,284,221 |
Convertible Notes Payable [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Carrying amount | 2,400,000 | 2,900,000 |
Fair value | 2,168,000 | 2,900,000 |
Convertible Notes Payable At Fair Value [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Carrying amount | 420,613 | 998,135 |
Fair value | 420,613 | 998,135 |
Warrantliability [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Carrying amount | 30,000 | 135,000 |
Fair value | 30,000 | 135,000 |
Cash and Cash Equivalents [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Carrying amount | 4,452,562 | 7,688,743 |
Fair value | 4,452,562 | 7,688,743 |
Restricted Cash [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Carrying amount | 1,140,483 | 541,883 |
Fair value | $ 1,140,483 | $ 541,883 |
FAIR VALUE MEASUREMENTS (Sche_2
FAIR VALUE MEASUREMENTS (Schedule of convertible notes payable) (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Net Carrying Amount | $ 2,400,000 | $ 2,900,000 |
Fair Value Amount | 2,168,000 | 2,900,000 |
August 2024 [Member] | ||
Short-Term Debt [Line Items] | ||
Net Carrying Amount | 2,000,000 | 2,000,000 |
Fair Value Amount | 1,811,000 | 1,998,000 |
September 2024 [Member] | ||
Short-Term Debt [Line Items] | ||
Net Carrying Amount | 400,000 | 900,000 |
Fair Value Amount | $ 357,000 | $ 902,000 |
FAIR VALUE MEASUREMENTS (Sche_3
FAIR VALUE MEASUREMENTS (Schedule of Fair Value Assumptions Used to Value Liabilities, Put Rights) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Series I Warrants [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Exercise Price per share | $ 3.91 | $ 3.91 |
Value of Common Stock | $ 2.65 | $ 8.52 |
Expected term (years) | 2 years 11 months 1 day | 3 years 8 months 1 day |
Volatility | 100% | 100% |
Dividend yield | 0% | 0% |
Risk free rate | 4.25% | 1.07% |
Convertible Debt [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Original conversion price | $ 3.91 | $ 3.91 |
Volatility | 100% | 100% |
Risk free rate | 3.95% | 1.47% |
Face value principal payable | $ 500,000 | $ 500,000 |
Value of common stock | $ 2.65 | $ 8.52 |
Expected term (years) | 7 years 5 months 4 days | 8 years 2 months 4 days |
Monte Carlo Simulation [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Stock Price | $ 2.65 | $ 8.52 |
Original conversion price | $ 2.50 | $ 2.50 |
Volatility | 80% | 100% |
Monte Carlo Simulation [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk free rate | 4.02% | 0.61% |
Monte Carlo Simulation [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk free rate | 4.05% | 0.64% |
FAIR VALUE MEASUREMENTS (Sche_4
FAIR VALUE MEASUREMENTS (Schedule of fair value categorized within Level 3) (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning fair value balance reported on the consolidated balance sheet | $ 998,135 | |
Gain in fair value reported in the condensed consolidated statements of operations | (577,522) | |
Ending fair value balance reported on the consolidated balance sheet | 420,613 | |
Contingent Consideration [Member] | The Door [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning fair value balance reported on the consolidated balance sheet | 2,381,869 | [1] |
Ending fair value balance reported on the consolidated balance sheet | [1] | |
(Gain) Loss in fair value reported in the condensed consolidated statements of operations | (1,358,672) | [1] |
Settlement of contingent consideration | (1,023,197) | [1] |
Contingent Consideration [Member] | Be Social [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning fair value balance reported on the consolidated balance sheet | 710,000 | [2] |
Ending fair value balance reported on the consolidated balance sheet | 705,000 | [2] |
(Gain) Loss in fair value reported in the condensed consolidated statements of operations | (5,000) | [2] |
Settlement of contingent consideration | [2] | |
Contingent Consideration [Member] | B H I [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning fair value balance reported on the consolidated balance sheet | 1,192,352 | [3] |
Ending fair value balance reported on the consolidated balance sheet | [3] | |
(Gain) Loss in fair value reported in the condensed consolidated statements of operations | (76,106) | [3] |
Settlement of contingent consideration | (1,116,246) | [3] |
Series I Warrants [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Beginning fair value balance reported on the consolidated balance sheet | 135,000 | |
Gain in fair value reported in the condensed consolidated statements of operations | (105,000) | |
Ending fair value balance reported on the consolidated balance sheet | $ 30,000 | |
[1]During the year ended December 31, 2021, The Door achieved the conditions for the earnout consideration, which were settled on June 7, 2022 by payment of 279,562 shares of common stock. For the three and nine months ended September 30, 2021, the Company recorded gains of $280,000 and $100,000, respectively, in fair value of contingent consideration related to The Door in the condensed consolidated statements of operations.[2]For the three and nine months ended September 30, 2021, the Company recorded losses of $250,000 and $270,000, respectively, in fair value of contingent consideration related to Be Social in the condensed consolidated statements of operations.[3]For both the three and nine months ended September 30, 2021, the Company recorded a loss of $1,140,000 in fair value of contingent consideration related to B/HI in the condensed consolidated statements of operations. During the year ended December 31, 2021, B/HI achieved the conditions for the earnout consideration, which were settled on June 14 and June 29, 2022, as described above. |
FAIR VALUE MEASUREMENTS (Sche_5
FAIR VALUE MEASUREMENTS (Schedule of reconciliation of the fair values) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Risk Free Discount Rate (based on US government treasury obligation with a term similar to that of the Contingent Consideration) | 3.33% | 0.73% |
Annual Asset Volatility Estimate | 60% | 85% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | Jun. 14, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Debt instrument amount | $ 2,400,000 | ||
Fair value payout | $ 1,100,000 | ||
Cash | $ 600,000 | ||
B H I [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Shares issued during period | 163,369 | ||
B H I [Member] | Contingent Consideration [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Debt instrument amount | $ 500,000 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||||
Aug. 10, 2022 | Mar. 07, 2022 | Dec. 29, 2021 | Nov. 14, 2022 | Dec. 29, 2021 | Sep. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Proceeds from issuance of common stock | $ 681,460 | |||||
Subsequent Event [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Number of shares issued and sold | 215,000 | |||||
Proceeds from issuance of common stock | $ 547,375 | |||||
Lincoln Park Transaction [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued during period | 57,313 | |||||
Number of shares issued and sold | 245,000 | |||||
Minimum [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued price per share | $ 2.42 | |||||
Minimum [Member] | Subsequent Event [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued price per share | $ 2.31 | |||||
Maximum [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued price per share | $ 3.72 | |||||
Maximum [Member] | Subsequent Event [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued price per share | $ 2.65 | |||||
L P Purchase Agreement 2021 [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares available to purchase per agreement, value | $ 25,000,000 | |||||
Regular Purchase, description | The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 50,000 shares of common stock on any business day (a “Regular Purchase”), provided that on such day the last closing sale price per-share of our common stock is not less than $1.00 as reported by the Nasdaq Capital Market. The amount of a Regular Purchase may be increased under certain circumstances up to 75,000 shares if the closing price is not below $10.00, and up to 100,000 shares if the closing price is not below $12.50, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. | |||||
Shares issued during period | 37,019 | 51,827 | ||||
Number of shares issued and sold | 1,035,000 | |||||
Proceeds from issuance of common stock | $ 4,367,640 | |||||
L P Purchase Agreement 2021 [Member] | Minimum [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued price per share | $ 3.47 | |||||
L P Purchase Agreement 2021 [Member] | Maximum [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares issued price per share | $ 5.15 | |||||
L P Purchase Agreement 2022 [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Shares available to purchase per agreement, value | $ 25,000,000 | |||||
Regular Purchase, description | The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 50,000 shares of common stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 75,000 shares if the closing price is not below $7.50 and up to 100,000 shares if the closing price is not below $10.00, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. In the event we purchase the full amount allowed for a Regular Purchase on any given business day, we may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price of shares of common stock related to the future funding will be based on the then prevailing market prices of such shares at the time of sales as described in the LP 2022 Purchase Agreement. |
SHARE BASED COMPENSATION (Detai
SHARE BASED COMPENSATION (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Number of shares, beginning balance | shares | |
Weighted Average Grant Date fair Value, beginning balance | $ / shares | |
Number of shares, Granted | shares | 36,336 |
Weighted Average Grant Date fair Value, Garnted | $ / shares | $ 6.86 |
Number of shares, Forfeited | shares | (4,404) |
Weighted Average Grant Date fair Value, Forfeited | $ / shares | $ 6.86 |
Number of shares, Vested | shares | (24,357) |
Weighted Average Grant Date fair Value, Vested | $ / shares | $ 6.86 |
Number of shares, ending balance | shares | 7,575 |
Weighted Average Grant Date fair Value, ending balance | $ / shares | $ 6.86 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jul. 27, 2022 | Jun. 29, 2017 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Share-based compensation | $ 166,582 | |||||
Share price | $ 2.50 | $ 2.50 | ||||
Mr Francisco [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Employee share awards amount | $ 25,000 | |||||
Number of shares issued | 11,521 | |||||
Share price | $ 4.34 | |||||
Mr Francisco [Member] | Employment Agreement [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Employee share awards amount | $ 100,000 | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Employee share awards amount | $ 52,520 | $ 166,582 | ||||
Share-based compensation | $ 0 | $ 0 | ||||
Unrecognized compensation expense | $ 51,965 | $ 51,965 | ||||
Weighted-average period | 2 months 15 days | |||||
2017 Equity Incentive Plan [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Granted shares | 2,000,000 |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator | ||||
Net (loss) income | $ (1,311,719) | $ 141,651 | $ (1,492,191) | $ (3,780,392) |
Net income attributable to participating securities | 5,833 | |||
Net (loss) income attributable to Dolphin Entertainment common stock shareholders and numerator for basic (loss) earnings per share | (1,311,719) | 135,818 | (1,492,191) | (3,780,392) |
Change in fair value of convertible notes payable | (45,642) | (577,522) | ||
Change in fair value of warrants | (10,000) | (105,000) | ||
Interest expense | 9,863 | 29,589 | ||
Numerator for diluted (loss) earnings per share | $ (1,357,498) | $ 135,818 | $ (2,145,124) | $ (3,780,392) |
Denominator | ||||
Denominator for basic EPS - weighted-average shares | 9,664,681 | 7,740,085 | 9,307,830 | 7,551,974 |
Effect of dilutive securities: | ||||
Warrants | 1,157 | 2,100 | ||
Convertible notes payable | $ 127,877 | $ 127,877 | ||
Denominator for diluted EPS - adjusted weighted-average shares | 9,793,715 | 7,740,085 | 9,437,807 | 7,551,974 |
Basic (loss) earnings per share | $ (0.14) | $ 0.02 | $ (0.16) | $ (0.50) |
Diluted (loss) earnings per share | $ (0.14) | $ 0.02 | $ (0.23) | $ (0.50) |
EARNINGS (LOSS) PER SHARE (De_2
EARNINGS (LOSS) PER SHARE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
(Loss) earnings per share: | ||||
Net (loss) income attributable to participating securities | $ 5,833 | |||
Antidilutive shares | 578,313 | 326,702 | 663,801 | 273,594 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2012 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 15, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||||
Interest Expense, Related Party | $ 66,164 | $ 66,164 | $ 196,336 | $ 196,336 | |||
Interest paid owed on accrued compensation | $ 250,000 | ||||||
Chief Executive Officer [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Signing bonus owed to related party per signed agreement | $ 1,000,000 | ||||||
Base salary | $ 1,625,000 | ||||||
Interest rate | 10% | ||||||
Accrued Salaries | 2,625,000 | 2,625,000 | $ 2,625,000 | ||||
Interest Payable | $ 1,511,929 | $ 1,511,929 | $ 1,565,588 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | |||||
Revenue | $ 9,899,013 | $ 9,399,432 | $ 29,366,748 | $ 25,219,793 | |
Total operating loss | (1,133,767) | (1,071,711) | (1,608,534) | (2,433,265) | |
Interest expense | (126,147) | (241,115) | (400,884) | (576,146) | |
Other income (loss), net | 55,642 | 1,454,477 | 682,522 | (809,832) | |
Loss before income taxes and equity in losses of unconsolidated affiliates | (1,204,272) | 141,651 | (1,326,896) | (3,819,243) | |
Total assets | 55,725,468 | 55,725,468 | $ 52,791,451 | ||
EPM [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Revenue | 9,899,013 | 9,399,432 | 29,366,748 | 25,219,793 | |
Total operating loss | 604,837 | 507,658 | 3,336,688 | 488,077 | |
Total assets | 48,366,935 | 48,366,935 | 48,691,939 | ||
C P D [Member] | |||||
Revenue from External Customer [Line Items] | |||||
Revenue | |||||
Total operating loss | (1,738,604) | $ (1,579,369) | (4,945,222) | $ (2,921,342) | |
Total assets | $ 7,358,533 | $ 7,358,533 | $ 4,099,512 |
SEGMENT INFORMATION (Details Na
SEGMENT INFORMATION (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||
Finite-Lived Intangible Assets, Accumulated Amortization | $ 8,353,432 | $ 7,327,933 |
42 West, The Door and Viewpoint, Shore Media [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Finite-lived Intangible Assets Acquired | 5,116,568 | |
Finite-Lived Intangible Assets, Accumulated Amortization | 8,353,432 | |
Goodwill, Acquired During Period | $ 20,021,357 |
LEASES (Schedule of Lease Incom
LEASES (Schedule of Lease Income and Expenses) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net lease costs | $ 603,295 | $ 620,121 | $ 1,647,923 | $ 2,090,385 |
Selling, General and Administrative Expenses [Member] | ||||
Operating lease costs | 709,542 | 620,121 | 1,876,153 | 2,029,524 |
Sublease income | (106,247) | (228,230) | ||
Direct costs [Member] | ||||
Operating lease costs | $ 60,861 |
LEASES (Schedule of Maturities
LEASES (Schedule of Maturities of Lease Liabilities) (Details) | Sep. 30, 2022 USD ($) |
Leases | |
2022 | $ 695,949 |
2023 | 2,659,521 |
2024 | 2,550,664 |
2025 | 1,979,589 |
2026 | 1,782,057 |
Thereafter | 719,797 |
Total lease payments | 10,387,577 |
Less: Imputed interest | (1,772,284) |
Present value of lease liabilities | $ 8,615,293 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Impairment of ROU asset | $ 98,857 | |
Operating lease payment | $ 1,567,453 | $ 2,067,546 |
Operating lease term | 3 years 7 months 6 days | |
weighted average discount rate | 8.63% |
COLLABORATIVE ARRANGEMENT (Deta
COLLABORATIVE ARRANGEMENT (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Jun. 24, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Payment for debt | $ 1,500,000 | $ 1,000,000 | $ 1,500,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended |
Jun. 24, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | |
Product Liability Contingency [Line Items] | |||
Payment for debt | $ 1,500,000 | $ 1,000,000 | $ 1,500,000 |
Production Budget [Member] | |||
Product Liability Contingency [Line Items] | |||
Payment for debt | $ 500,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) | Nov. 14, 2022 | Oct. 02, 2022 |
Subsequent Event [Line Items] | ||
Acquisition description | The consideration paid by the Company in connection with the acquisition of Socialyte is $13,000,000 plus the potential to earn up to an additional $5,000,000 upon meeting certain financial targets in 2022. On the Closing Date, the Company paid the Seller $5,000,000 cash, issued the Seller 1,346,257 shares of its Common Stock and issued the Seller a $3,000,000 unsecured promissory note, which is to be repaid in two equal installments on June 30, 2023 and September 30, 2023. In addition, the Company issued the Seller 685,234 shares of its Common Stock in satisfaction of the Closing Date working capital adjustment. | |
Secured loan | $ 3,000,000 | |
Creature Chronicles [Member] | ||
Subsequent Event [Line Items] | ||
Number of non fungible tokens ("NFT'S") issued for sale | 7,777 | |
Solana ("SOL") crypto value | 13,175 | |
SOL equivalent cash value | $ 435,000 |