Dolphin Entertainment (DLPN) 10-Q 21 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 21, 2016
Document And Entity Information
Entity Registrant Name	Dolphin Digital Media Inc
Entity Central Index Key	1,282,224
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		14,132,415
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2016	Dec. 31, 2015	[1]
ASSETS
Cash and cash equivalents	$ 982,360	$ 2,392,685
Restricted cash	1,250,000	0
Prepaid expenses	2,752	72,518
Related party receivable	521,219	453,529
Receivable and other current assets	3,969,758	2,827,131
Total Current Assets	6,726,089	5,745,863
Captialized production costs	14,318,814	15,170,768
Property and equipment	39,417	55,413
Deposits	1,597,070	397,069
Total Assets	22,681,390	21,369,113
LIABILITIES
Accounts payable	746,831	2,070,545
Other current liabilities	3,524,723	2,984,320
Accrued Compensation	2,187,500	2,065,000
Debt	29,497,415	37,331,008
Loans from related party	2,010,806	2,917,523
Deferred revenue	1,343,632	1,418,368
Notes payable	300,000	300,000
Total Current Liabilities	39,610,907	49,086,764
Non Current
Convertible note	0	3,164,000
Loan from related party	0	1,982,267
Total Non Current Liabilities	0	5,146,267
Total Liabilities	39,610,907	54,233,031
STOCKHOLDERS' DEFICIT
Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015 and 10,674,215 issued and outstanding at September 30, 2016	160,113	1,228,385
Additional paid in capital	65,023,567	25,214,317
Accumulated deficit	(85,415,193)	(62,615,428)
Total Dolphin Digital Media, Inc. Deficit	(19,900,513)	(35,841,726)
Non-controlling interest	2,970,996	2,977,808
Total Stockholders' Deficit	(16,929,517)	(32,863,918)
Total Liabilities and Stockholders' Deficit	22,681,390	21,369,113
Series A Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized	0	0
Series B Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized	330,000	330,000
Series C Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized	$ 1,000	$ 1,000
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Stockholders' Equity
Preferred stock, authorized shares	10,000,000	10,000,000
Common stock, par value	$ 0.015	$ 0.015
Common stock, authorized	400,000,000	400,000,000
Common stock, issued	10,674,215	4,094,618
Common stock, Outstanding	10,674,215	4,094,618
Series A Preferred Stock
Stockholders' Equity
Preferred stock, par value	$ .001	$ 0.001
Preferred stock, issued shares	0	1,042,753
Preferred stock, outstanding shares	0	1,042,753
Series B Preferred Stock
Stockholders' Equity
Preferred stock, par value	$ .10	$ .10
Preferred stock, authorized shares	4,000,000	4,000,000
Preferred stock, issued shares	3,300,000	0
Preferred stock, outstanding shares	3,300,000	0
Series C Preferred Stock
Stockholders' Equity
Preferred stock, par value	$ .001	$ 0.001
Preferred stock, authorized shares	1,000,000	1,000,000
Preferred stock, issued shares	1,000,000	0
Preferred stock, outstanding shares	1,000,000	0

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015		Sep. 30, 2016	Sep. 30, 2015	[1]
Revenues:
Production and distribution	$ 1,140,000	$ 2,393,367	[1]	$ 1,144,157	$ 2,413,996
Membership	6,225	45,000		27,253	61,011
Total revenue	1,146,225	2,438,367		1,171,410	2,475,007
Expenses:
Direct costs	1,375,734	1,559,870	[1]	1,378,173	1,835,257
Distribution and marketing	9,237,873	0	[1]	9,237,873	0
Selling, general and administrative	370,984	263,371	[1]	1,019,641	1,121,868
Legal and professional	689,523	785,418	[1]	1,576,963	2,051,052
Payroll	350,264	375,109	[1]	1,101,465	1,028,836
Loss before other expenses	(10,878,153)	(545,401)	[1]	(13,142,705)	(3,562,006)
Other Income/(Expense)
Other income	0	0	[1]	9,660	0
Amortization of loan fees	(47,369)	0	[1]	(47,369)	0
Loss on extinguishment of debt	0	0	[1]	(5,843,811)	0
Interest expense	(613,651)	(903,317)	[1]	(3,768,727)	(2,296,197)
Net loss	(11,539,173)	(1,448,718)	[1]	(22,792,952)	(5,858,203)
Net Income attributable to non- controlling interest	1,556	11,250	[1]	6,813	15,253
Net Loss attributable to Dolphin Digital Media, Inc.	(11,540,729)	(1,459,968)	[1]	(22,799,765)	(5,873,456)
Net loss	$ (11,539,173)	$ (1,448,718)	[1]	$ (22,792,952)	$ (5,858,203)
Basic and Diluted Loss per Share	$ (1.08)	$ (0.35)	[1]	$ (3.56)	$ (1.43)
Weighted average number of shares used in share calculation	10,674,215	4,094,618	[1]	7,603,251	4,094,618
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	[1]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (22,792,952)	$ (5,858,203)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	15,996	18,965
Amortization of capitalized production costs	1,108,668	1,364,312
Loss on extinguishment of debt	5,843,811	0
Changes in operating assets and liabilities:
Receivables and other current assets	(1,142,727)	(2,754,593)
Prepaid expenses	69,766	2,181,311
Change in related party receivable	(67,690)	0
Capitalized production costs	(256,714)	(2,526,083)
Deposits	(1,200,000)	0
Deferred revenue	(74,736)	0
Accrued compensation	122,500	187,500
Accounts payable	(1,323,714)	(493,999)
Other Current Liabilities	4,121,106	1,799,012
Net Cash Used in Operating Activities	(15,576,686)	(6,081,778)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment	0	(2,550)
Net Cash Used in Investing Activities	0	(2,550)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan and Security agreement	10,569,744	2,550,131
Repayment of Loan and Security agreement	(410,000)	0
Sale on common stock	6,225,000	0
Restricted cash	(1,250,000)	0
Advances from related party	320,000	4,970,018
Repayment to related party	(1,288,383)	(1,022,500)
Net Cash Provided by Financing Activities	14,166,361	6,497,649
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,410,325)	413,321
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	2,392,685	393,075
CASH AND CASH EQUIVALENTS, END OF PERIOD	982,360	806,396
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	749,249	1,355,093
SUPPLEMENTAL DISCLOSURES OF NON CASH FLOW INFORMATION:
Refinance of related party debt to third party debt	0	3,803,337
Conversion of related party debt and interest to shares of common stock	3,073,410	0
Conversion of convertible debt	3,164,000	0
Commitment fee and interest reserve	1,531,871	0
Conversion of loan and security agreements, including interest, into shares of common stock	$ 20,434,858	$ 0
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Deficit - 9 months ended Sep. 30, 2016 - USD ($)		Preferred Stock	Common Stock	Additional Paid-In Capital	Noncontrolling Interest	Accumulated Deficit	Total
Beginning Balance, Shares at Dec. 31, 2015	[1]	1,043,000	4,094,618
Beginning Balance, Amount at Dec. 31, 2015	[1]	$ 1,043	$ 61,419	$ 26,711,240	$ 2,977,808	$ (62,615,428)	$ (32,863,918)
Net loss						(22,792,952)	(22,792,952)
Income attributable to the noncontrolling interest					6,813	(6,813)	0
Return of capital to noncontrolling member					(13,625)		(13,625)
Issuance of common stock during the period, Shares			6,579,493
Issuance of common stock during the period, Amount			$ 924,952	31,972,215			32,897,167
Extinguishment of debt				5,843,811			5,843,811
Preferred Stock deemed dividend related to exchange of Series A for Series B Preferred Stock				(5,227,247)			(5,227,247)
Issuance of Series B Preferred, Shares		3,300,000
Issuance of Series B Preferred, Amount		$ 330,000		5,940,247			6,270,247
Issuance of Series C Preferred, Shares		1,000,000
Issuance of Series C Preferred, Amount		$ 1,000		(1,000)			0
Retirement of Series A Preferred, Shares		(1,043,000)
Retirement of Series A Preferred, Amount		$ (4,043)		(1,041,957)			(1,043,000)
Effect of reverse stock split on cumulative amount of par value, Shares			104
Effect of reverse stock split on cumulative amount of par value, Amount			$ (826,258)	826,258			0
Ending Balance, Shares at Sep. 30, 2016		4,300,000	10,674,215
Ending Balance, Amount at Sep. 30, 2016		$ 331,000	$ 160,113	$ 65,023,567	$ 2,970,996	$ (85,415,193)	$ (16,929,517)
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

1. GENERAL

1. GENERAL	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
1. GENERAL	Nature of Operations Dolphin Digital Media, Inc. (the “Company,” “Dolphin,” “we,” “us” or “our”) is a producer of original high-quality digital programming for online consumption and is committed to delivering premium, best-in-class entertainment and securing premiere distribution partners to maximize audience reach and commercial advertising potential. Dolphin is also developing online kids clubs. On March 7, 2016, the Company completed its merger with Dolphin Films, Inc., an entity under common control. Dolphin Films, Inc. (“Dolphin Films”) is a motion picture studio focused on storytelling on a global scale for young, always-connected audiences. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Dolphin, and all of its majority-owned and controlled subsidiaries, including Dolphin Films, Inc., Hiding Digital Productions, LLC, Dolphin Kids Clubs, LLC, Cybergeddon Productions, LLC, Dolphin SB Productions LLC, Max Steel Productions, LLC, Dolphin Max Steel Holdings LLC, Dolphin JB Believe Financing, LLC and Dolphin JOAT Productions, LLC Effective March 7, 2016, the Company acquired “Dolphin Films” from Dolphin Entertainment, Inc. (“Dolphin Entertainment”), a company wholly owned by William O’Dowd, CEO, President, Chairman of the Board and majority shareholder of Dolphin. The acquisition from Dolphin Entertainment was a transfer between entities under common control. As such, the Company recorded the assets, liabilities and deficit of Dolphin Films on its consolidated balance sheets at Dolphin Entertainment’s historical basis instead of fair value. Transfers of businesses between entities under common control require prior periods to be retrospectively adjusted to furnish comparative information. Accordingly, the accompanying financial statements and related notes of the Company have been retrospectively adjusted to include the historical balances of Dolphin Entertainment prior to the effective date of the acquisition. See Note 3 for additional information regarding Dolphin Films acquisition. On May 9, 2016, the Company filed an amendment to its Articles of Incorporation with the Secretary of State of the State of Florida to effectuate a 20-to-1 reverse stock split. The reverse stock split was approved by the Board of Directors and a majority of the Company’s shareholders and became effective May 10, 2016. The number of common shares in the accompanying unaudited condensed consolidated financial statements and all related footnotes has been adjusted to retrospectively reflect the reverse stock split. The Company enters into relationships or investments with other entities, and in certain instances, the entity in which the Company has a relationship or investment may qualify as a variable interest entity (“VIE”). A VIE is consolidated in the financial statements if the Company is deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. The Company has included Max Steel Productions, LLC formed on July 8, 2013 in the State of Florida and JB Believe, LLC formed on December 4, 2012 in the State of Florida in its combined financial statements as VIE’s. The unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to quarterly report on Form 10-Q under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, 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, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements. Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2016. The balance sheet at December 31, 2015 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 consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates made by management in the preparation of the financial statements relate to ultimate revenue and costs for investment in digital and feature film projects; estimates of sales returns and other allowances and provisions for doubtful accounts and impairment assessments for investment in digital and feature film projects. Actual results could differ from such estimates. Restricted Cash Restricted cash represents amounts held as collateral required under the Company’s loan and security agreement. Proceeds from this loan were used for the distribution and marketing costs of the Company’s feature film. See Note 5 for further discussion. As of September 30, 2016, the Company maintained $1,250,000 in a separate bank account restricted for this purpose. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update on lease accounting. This update requires lessees to put most leases on their balance sheets. The new standard also requires new disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Accounting Standards Update (the “ASU”) will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial statements. In August 2016, the FASB issued an accounting standards update to addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial statements. In October 2016, the FASB issued an accounting standards update of consolidation of entities held by related parties under common control. The update amends the consolidation guidance on how variable interest entities should treat indirect interest in the entity held through related parties. The ASU will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial statements.

2. GOING CONCERN

2. GOING CONCERN	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
2. GOING CONCERN	The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the U.S. which contemplate the continuation of the Company as a going concern. The Company has incurred a net loss for the nine months ended September 30, 2016 of $22,792,952. As of September 30, 2016, the Company recorded an accumulated deficit of $85,415,193. Further, the Company has a working capital deficit of $32,884,818 and therefore does not have adequate capital to fund its obligations as they come due or to maintain or develop its operations. The Company is dependent upon funds from private investors and support of certain stockholders. If the Company is unable to obtain funding from these sources within the next 12 months, it could be forced to liquidate. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. In this regard, management is planning to raise any necessary additional funds through loans and additional issuance of its common stock. There is no assurance that the Company will be successful in raising additional capital. The Company currently has the rights to several scripts that it intends to obtain financing to produce and release during 2017. It expects to earn a producer and overhead fee for each of these productions. There can be no assurances that such productions will be released or fees will be realized in future periods. The Company is currently working on producing a variety of digital projects which it intends to fund through private investors on a project basis and expects to derive additional revenues from these productions in 2017. There can be no assurances that such income will be realized in future periods.

3. ACQUISITION OF DOLPHIN FILMS

3. ACQUISITION OF DOLPHIN FILMS, INC.	9 Months Ended
	Sep. 30, 2016
Acquisition Of Dolphin Films Inc.
3. ACQUISITION OF DOLPHIN FILMS, INC.	On March 7, 2016, the Company, DDM Merger Sub, Inc., a Florida corporation and a direct wholly-owned subsidiary of the Company (“Merger Subsidiary”), Dolphin Entertainment and Dolphin Films completed their previously announced merger contemplated by the Agreement and Plan of Merger, dated October 14, 2015 (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Merger Subsidiary merged with and into Dolphin Films (the “Merger”) with Dolphin Films surviving the Merger. As a result of the Merger, the Company acquired Dolphin Films. At the effective time of the Merger, each share of Dolphin Films’ common stock, par value $1.00 per share, issued and outstanding, was converted into the right to receive the consideration for the Merger (the “Merger Consideration”). The Company issued 2,300,000 shares of Series B Convertible Preferred Stock, par value $0.10 per share, and 1,000,000 shares of Series C Convertible Preferred Stock, par value $0.001 per share to Dolphin Entertainment as the Merger Consideration. William O’Dowd is the President, Chairman and Chief Executive Officer of the Company and, as of March 4, 2016, was the beneficial owner of 52.5% of the outstanding shares of common stock of the Company, par value $0.015 per share (the “Common Stock”). In addition, Mr. O’Dowd is the founder, president and sole shareholder of Dolphin Entertainment, which is the sole shareholder of Dolphin Films. The Merger Consideration was determined as a result of negotiations between Dolphin Entertainment and a special committee of independent directors of the Board of Directors of the Company (the “Special Committee”), with the assistance of separate financial and legal advisors selected and retained by the Special Committee. The Special Committee unanimously determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, were fair to and in the best interests of the shareholders of the Company other than Mr. O’Dowd, and that it was advisable for the Company to enter into the Merger Agreement. The Merger was consummated following the approval and adoption of the Merger Agreement by the Company’s shareholders. The Company retrospectively adjusted the historical financial results for all periods to include Dolphin Films as required for transactions between entities under common control. The following table presents the Company’s previously reported Consolidated Balance Sheet, retrospectively adjusted for the acquisition of Dolphin Films: As of December 31, 2015 (unaudited) Dolphin Digital Media, Inc.* Dolphin Films, Inc. Acquisition Adjustments Consolidated Balance Sheets currently reported ASSETS Current Cash and cash equivalents $ 2,259,504 $ 133,181 - $ 2,392,685 Related party receivable - 453,529 - 453,529 Prepaid Expenses 10,018 62,500 - 72,518 Receivables and other current assets 560,112 2,267,019 - 2,827,131 Total Current Assets 2,829,634 2,916,229 - 5,745,863 - Capitalized production costs 2,439 15,168,329 - 15,170,768 Property and equipment 55,413 - - 55,413 Deposits 41,291 355,778 - 397,069 Total Assets $ 2,928,777 $ 18,440,336 - $ 21,369,113 LIABILITIES Current Accounts payable $ 479,799 $ 1,590,746 - $ 2,070,545 Other current liabilities 2,669,456 314,864 - 2,984,320 Accrued compensation 2,065,000 - - 2,065,000 Debt 2,545,000 - - 2,545,000 Loan from related party - 2,917,523 - 2,917,523 Deferred revenue - 1,418,368 - 1,418,368 Notes payable 300,000 - - 300,000 Total Current Liabilities 8,059,255 6,241,501 - 14,300,756 Non Current Convertible note payable 3,164,000 - - 3,164,000 Loan from related party 1,982,267 - - 1,982,267 Debt 2,600,000 32,186,008 - 34,786,008 Total Noncurrent Liabilities 7,746,267 32,186,008 - 39.932,275 - Total Liabilities 15,805,522 38,427,509 - 54,233,031 STOCKHOLDERS' DEFICIT Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015. 1,228,385 100 (100 ) 1,228,385 Preferred stock Series A $0.001 par value, 10,000,000 shares authorized, 1,042,753 shares issued and outstanding, liquidation preference of $1,042,753 at December 31, 2015. 1,043 - (1,043 ) - Preferred stock, Series B. $0.10 par value, 4,000,000 shares authorized, 3,300,000 shares issued and outstanding at December 31, 2015. - - 330,000 330,000 Preferred stock, Series C. $0.001 par value, 1,000,000 shares authorized, 1,000,000 shares issued and outstanding at December 31, 2015. - - 1,000 1,000 Additional paid in capital 25,544,174 - (329,857 ) 25,214,317 Accumulated deficit (42,628,155 ) (19,987,273 ) - (62,615,428 ) Total Dolphin Digital Media, Inc. Deficit $ (15,854,553 ) $ (19,987,173 ) - $ (35,841,726 ) Non-controlling interest 2,977,808 - - 2,977,808 Total Stockholders' Deficit $ (12,876,745 ) $ (19,987,173 ) - $ (32,863,918 ) Total Liabilities and Stockholders' Deficit $ 2,928,777 $ 18,440,336 - $ 21,369,113 * Previously reported on Form 10-K filed with the SEC March 31, 2016 The following table presents the Company’s previously reported Condensed Consolidated Statement of Operations, retrospectively adjusted for the acquisition of Dolphin Films: for the nine months ended September 30, 2015 (unaudited) Dolphin Digital Media, Inc.* Dolphin Films, Inc. Acquisition Reclassification Consolidated Statement of Operations (currently reported) Revenues: Production $ 2,380,412 $ 33,584 - $ 2,413,996 Membership 61,011 - - 61,011 Total Revenue: 2,441,423 33,584 - $ 2,475,007 Expenses: Direct costs 1,334,311 500,946 - 1,835,257 Selling, general and administrative 1,869,195 130,741 (878,068 ) 1,121,868 Legal and professional - 1,172,984 878,068 2,051,052 Payroll 1,028,836 - - 1,028,836 Loss before other income (expense) (1,790,919 ) (1,771,087 ) - (3,562,006 ) Other Income (Expense): Other Income - - - - Interest expense (657,237 ) (1,638,960 ) - (2,296,197 ) Net Loss (2,448,156 ) (3,410,047 ) - (5,858,203 ) Net income attributable to noncontrolling interest $ 15,253 $ - - $ 15,253 Net loss attributable to Dolphin Films, Inc. - (3,410,047 ) - (3,410,047 ) Net loss attributable to Dolphin Digital Media, Inc. (2,463,409 ) - - (2,463,409 ) Net loss $ (2,448,156 ) $ (3,410,047 ) - $ (5,858,203 ) *As reported on Form 10Q filed with the SEC on November 20, 2015 The following table presents Company’s previously reported Condensed Consolidated Statement of Cash Flows, retrospectively adjusted for the acquisition of Dolphin Films: For the nine months ended September 30, 2015 (unaudited) Dolphin Digital Media, Inc.* Dolphin Films, Inc. Acquisition Adjustments Consolidated Statement of Cash Flows (as currently reported) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,448,156 ) $ (3,410,047 ) - $ (5,858,203 ) Adjustments to reconcile net loss to net cash used in operating activities: - Depreciation 16,415 2,550 - 18,965 Amortization of capitalized production costs 1,334,311 30,001 - 1,364,312 Changes in operating assets and liabilities: - Receivables and other current assets (900,428 ) (1,854,165 ) - (2,754,593 ) Prepaid expenses 2,339 2,178,972 - 2,181,311 Capitalized production costs (1,599,558 ) (926,525 ) - (2,526,083 ) Accrued compensation 187,500 - - 187,500 Accounts payable 16,388 (510,387 ) - (493,999 ) Other Current Liabilities 1,148,327 650,685 - 1,799,012 Net Cash Used in Operating Activities (2,242,862) (3,838,916 ) - (6,081,778 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of furniture and equipment - (2,550 ) - (2,550 ) Net Cash Used In Investing Activities - (2,550 ) (2,550 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Loan and Security agreement 1,400,000 1,150,131 - 2,550,131 Repayment of Loan and Security agreement (250,000 ) 250,000 - - Advances from related party 2,550,000 2,420,018 - 4,970,018 Repayment to related party (1,022,500 ) - - (1,022,500 ) Net Cash Provided by Financing Activities 2,677,500 3,820,149 6,497,649 NET INCREASE IN CASH AND CASH EQUIVALENTS 434,638 (21,317 ) - 413,321 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 198,470 194,605 - 393,075 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 633,108 $ 173,288 - $ 806,396 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Interest paid $ 227,298 $ 627,865 - $ 775,511 * as previously reported on Form 10-Q filed with the SEC on November 20, 2015

4. CAPITALIZED PRODUCTION COSTS

4. CAPITALIZED PRODUCTION COSTS, RECEIVABLES AND OTHER CURRENT ASSETS	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
4. CAPITALIZED PRODUCTION COSTS, RECEIVABLES AND OTHER CURRENT ASSETS	Capitalized production costs include the unamortized costs of completed web series and feature films which have been produced by the Company and costs of scripts for projects that have not been developed or produced. These costs include direct production costs and production overhead and are amortized using the individual-film-forecast method, whereby these costs are amortized and participations and residuals costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the web series or feature film. In April 2016, the Company began production of a new digital project showcasing favorite restaurants of NFL players throughout the country. The Company entered into a co-production agreement with an unrelated party and is responsible for financing 50% of the project’s budget. Per the terms of the agreement, the Company is entitled to 50% of the profits of the project, net of any distribution fees. For the three and nine months ended September 30, 2016, the Company did not earn any revenues from web series and for each of the three and nine months ended September 30, 2015, the Company earned revenues of $2,380,412. The Company had capitalized production costs of $241,714 from web series as of September 30, 2016 and $2,439 (impaired during the nine months ended September 30, 2016), net of accumulated amortization, tax incentives and impairment charges, as of December 31, 2015, recorded on its consolidated condensed balance sheets. The Company completed production of a motion picture during the year ended December 31, 2014 with post production being completed during the second quarter of 2015. The Company released the film domestically October 14, 2016. For the three and nine months ended September 30, 2016, the Company earned revenues from its motion picture business of $1,140,000 and $1,144,157, respectively. This revenue was attributable to the delivery of this motion picture to various international distributors pursuant to existing licensing agreements. During the three and nine months ended September 30, 2015, it earned $13,071 and $33,584 from a film released in December 2013. The Company amortized capitalized production costs (included as direct costs) in the combined statements of operations using the individual film forecast computation method in the amount of $1,106,229 for each of the three and nine months ended September 30, 2016. $9,488 and $30,001, respectively were amortized for the three and nine months ended September 30, 2015. As of September 30, 2016 and December 31, 2015, the Company had $13,787,100 and $14,896,389, respectively of capitalized production costs related to these motion pictures. In addition, the Company has purchased scripts, including one from a related party, for other motion picture productions and has recorded $290,000 and $275,000 in capitalized production costs as of September 30, 2016 and December 31, 2015, respectively, associated with these scripts. The Company intends to produce these projects but they were not yet in production as of September 30, 2016. As of September 30, 2016 and December 31, 2015, respectively, the Company has total capitalized production costs of $14,318,814 and $15,170,768, net of accumulated amortization, tax incentives and impairment charges, recorded on its condensed consolidated balance sheets. On October 14, 2016, the Company released its motion picture “ Max Steel Receivable and Other Current Assets The Company recorded $3,969,758 and $2,827,131 in receivables and other current assets on its consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively. These amounts were primarily comprised of receivables from advertising revenue sharing from its production, receivable from international license agreements, subscription receivable and receivables of tax incentives. For the period ended September 30, 2016, the Company completed delivery of film assets as required by certain international license agreements for its feature film and recorded a receivable of $891,459 related to these contracts. Tax incentives earned with respect to expenditures on qualifying film productions are included as an offset to capitalized production costs when the qualifying expenditures have been incurred provided that there is reasonable assurance that the credits will be realized.

5. DEBT

5. DEBT	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
5. DEBT	Kids Club Agreements During February 2011, the Company entered into two agreements with individual parties (each a “Kids Club Agreement”) for the development of a child fan club for the promotion of a local university and its collegiate athletic program (the “Group Kids Club”). Under each Kids Club Agreement, each party paid the Company $50,000 in return for the participation of future revenue generated by the Group Kids Club. Pursuant to the terms of each of the Kids Club Agreements, the amount invested by the individual investor was to be repaid by the Group Kids Club, with a specified percentage of the Group Kids Club’s net receipts, until the total investment was recouped. Each individual party was to recoup its investment with a percentage of net revenue based upon a fraction, the numerator of which was the amount invested ($50,000), and the denominator of which was $500,000 (the “Investment Ratio”). Thereafter, each individual party would share in a percentage of the net revenue of the Group Kids Club, in an amount equal to one half of the Investment Ratio. As of June 30, 2016, the Company had made aggregate payments of $45,000 under one of the two Kids Clubs Agreements. On July 1, 2016, the Company agreed to terminate such Kids Club Agreement for (i) $10,000, plus (ii) the balance of the original investment ($5,000). The Company paid such individual party $15,000 on July 18, 2016 in full settlement of its obligations under such Kids Club Agreement, and the Kids Club Agreement for such party was terminated. As of September 30, 2016 there is only one Kids Club Agreement outstanding. On October 3, 2016, the Company entered into a debt exchange agreement and agreed to issue 12,000 shares of the Company’s common stock at an exchange price of $5.00 per share to terminate the remaining Kids Club Agreement for (i) $10,000 plus (ii) the original investment of $50,000. For the three and nine months ended September 30, 2016 and 2015, there were no significant revenues generated or costs incurred related to the Group Kids Club. Equity Finance Agreements During the years ended December 31, 2012 and 2011, the Company entered into Equity Finance Agreements (the “Equity Finance Agreements”) for the future production of web series and the option to participate in the production of future web series. The investors contributed a total equity investment of $1,000,000 and had the ability to share in the future revenues of the relevant web series, on a prorate basis, until the total equity investment was recouped and then would have shared at a lower percentage of the additional revenues. The Equity Finance Agreements stated that prior to December 31, 2012, the Company could utilize all, or any portion, of the total equity investment to fund any chosen production. Per the Equity Finance Agreements, the Company was entitled to a producer’s fee, not to exceed $250,000, for each web series that it produced before calculating the share of revenues owed to the investors. The Company invested these funds in eleven projects. On January 1, 2013, the production “cycle” ceased and the investors were entitled to share in the future revenues of any productions for which the funds invested were used. Based on the gross producer’s revenues for the productions to date and the amount of investor funds used to date, the Company was not required to pay the investors any amount in excess of the existing liability already recorded as of September 30, 2016 and December 31, 2015. Two of the productions were completed as of September 30, 2016 and there was no producer gross revenue as defined in the Equity Finance Agreements for each of the three and nine months ended September 30, 2016 and 2015. The cost of the other nine projects was impaired and no future projects are planned with funds from the Equity Finance Agreements. On June 23, 2016, the Company entered into a settlement agreement (the “Settlement”) with one of the investors that had originally contributed $105,000. Pursuant to the terms of the Settlement, the Company made a payment of $200,000 to the investor on June 24, 2016 resulting in a loss on settlement of debt of $95,000. As of September 30, 2016, the total equity investment remaining under the Equity Finance Agreements was $895,000. On October 3, 2016 and October 13, 2016, the Company entered into debt exchange agreements with several investors to issue 66,200 shares of the Company’s common stock at an exchange price of $5.00 per share to terminate three Equity Finance Agreements for a cumulative original investment amount of $331,000. Loan and Security Agreements First Group Film Funding During the years ended December 31, 2013 and 2014, the Company entered into various loan and security agreements with individual noteholders (the “First Loan and Security Noteholders”) for an aggregate principal amount of notes of $11,945,219 to finance future motion picture projects (the “First Loan and Security Agreements”). During the year ended December 31, 2015, one of the First Loan and Security Noteholders increased its funding under its respective First Loan and Security Agreement for an additional $500,000 investment and the Company used the proceeds to repay $405,219 to another First Loan and Security Noteholder. Pursuant to the terms of the First Loan and Security Agreements, the Company issued notes that accrued interest at rates ranging from 11.25% to 12% per annum, payable monthly through June 30, 2015. During 2015, the Company exercised its option under the First Loan and Security Agreements, to extend the maturity date of these notes until December 31, 2016. In consideration for the Company’s exercise of the option to extend the maturity date, the Company was required to pay a higher interest rate, increasing 1.25% to a range between 12.50% and 13.25%. The First Loan and Security Noteholders, as a group, will receive the Company’s entire share of the proceeds from these projects, on a prorata basis, until the principal investment is repaid. Thereafter, the First Loan and Security Noteholders, as a group, would have the right to participate in 15% of the Company’s future profits from these projects (defined as the Company’s gross revenues of such projects less the aggregate amount of principal and interest paid for the financing of such projects) on a prorata basis based on each First Loan and Security Noteholder's loan commitment as a percentage of the total loan commitments received to fund specific motion picture productions. On May 31, 2016 and June 30, 2016, the Company entered into various debt exchange agreements on substantially similar terms with certain of the First Loan and Security Noteholders to convert an aggregate of $11,340,000 of principal and $1,811,490 of accrued interest into shares of Common Stock. Pursuant to the terms of such debt exchange agreements, the Company agreed to convert the debt at $5.00 per share and issued 2,630,298 shares of Common Stock. On May 31, 2016 the market price of a share of Common Stock was $6.99 and on June 30, 2016 it was $6.08. As a result, the Company recorded a loss on the extinguishment of debt on its consolidated statement of operations of $3,328,366 for the nine months ended September 30, 2016. During the three and nine months ended September 30, 2016, the Company expensed $38,741 and $1,358,585, respectively and $261,784 and $739,645 for the three and nine months ended September 30, 2015, respectively, in interest related to the First Loan and Security Agreements. As of September 30, 2016 and December 31, 2015, the Company had $4,970,990 and $9,334,303 of debt related to the First Loan and Security Agreements and $179,808 and $602,661, respectively of accrued interest recorded in other current liabilities on its combined balance sheets. Web Series Funding During the years ended December 31, 2014 and 2015, the Company entered into various loan and security agreements with individual noteholders (the “Web Series Noteholders”) for an aggregate principal amount of notes of $4,090,000 which the Company used to finance production of its 2015 web series (the “Web Series Loan and Security Agreements”). Under the Web Series Loan and Security Agreements, the Company issued promissory notes that accrued interest at rates ranging from 10% to 12% per annum payable monthly through August 31, 2015, with the exception of one note that accrued interest through February 29, 2016. During 2015, the Company exercised its option under the Web Series Loan and Security Agreements to extend the maturity date of these notes until August 31, 2016. In consideration for the Company’s exercise of the option to extend the maturity date, the Company was required to pay a higher interest rate, increasing 1.25% to a range between 11.25% and 13.25%. Pursuant to the terms of the Web Series Loan and Security Agreements, the First Loan and Security Noteholders, as a group, would have the right to participate in 15% of the Company’s future profits generated by the series (defined as the Company’s gross revenues of such series less the aggregate amount of principal and interest paid for the financing of such series) on a prorata basis based on each Web Series Noteholder's loan commitment as a percentage of the total loan commitments received to fund the series. On March 29, 2016 and June 30, 2016, the Company entered into eleven individual debt exchange agreements (the “Web Series Debt Exchange Agreements”) on substantially similar terms with the Web Series Noteholders. Pursuant to the terms of the Web Series Debt Exchange Agreements, the Company and each Web Series Noteholder agreed to convert an aggregate of $2,650,000 of principal and $289,017 of accrued interest under the Web Series Loan and Security Agreements into an aggregate of 587,804 shares of Common Stock at $5.00 per share as payment in full of each of the notes issued under the Web Series Loan and Security Agreements. Mr. Nicholas Stanham, director of the Company, was one of the Web Series Noteholders that converted his note into shares of Common Stock. For 576,676 of the shares issued in exchange for the notes, the market price per share of Common Stock at the time of conversion was $6.00 per share. For the remaining 11,128 shares, the market price per share at the time of conversion was $6.08. As a result, the Company recorded a loss on the extinguishment of debt on its consolidated statement of operations of $588,694, for the nine months ended September 30, 2016, related to this transaction. During the three and nine months ended September 30, 2016, the Company expensed $39,091 and $323,670 respectively, and $108,549 and $275,978 for the three and nine months ended September 30, 2015, respectively, in interest related to the Web Series Loan and Security Agreements. As of September 30, 2016 and December 31, 2015, respectively, the Company had $1,440,000 and $4,090,000, respectively of principal and $210,604 and $173,211, respectively, as accrued interest recorded on its consolidated balance sheets. Second Group Film Funding During the year ended December 31, 2015, the Company entered into various loan and security agreements with individual noteholders (the “Second Loan and Security Noteholders”) for an aggregate principal amount of notes of $9,274,327 to fund a new group of film projects (the “Second Loan and Security Agreements”). Of this amount, notes with an aggregate principal value of $8,774,327 were issued in exchange for debt that had originally been incurred by Dolphin Entertainment, Inc., primarily related to the production and distribution of the motion picture, “Believe”. The remaining $500,000 was issued as a note in exchange for cash. Pursuant to the Second Loan and Security Agreements, the Company issued notes that accrue interest at rates ranging from 11.25% to 12% per annum, payable monthly through December 31, 2016. The Company has the option to extend the maturity date of these notes until July 31, 2018. If the Company chooses to exercise its option to extend the maturity date, the Company would be required to pay a higher interest rate, increasing 1.25% to a range between 11.25% and 13.25%. The Second Loan and Security Noteholders, as a group, will receive the Company’s entire share of the proceeds from these projects, on a prorata basis, until the principal investment is repaid. Thereafter, the Second Loan and Security Noteholders, as a group, would have the right to participate in 15% of the Company’s future profits from such projects (defined as the Company’s gross revenues of such projects less the aggregate amount of principal and interest paid for the financing of such projects) on a prorate basis based on each Second Loan and Security Noteholder’s loan commitment as a percentage of the total loan commitments received to fund specific motion picture productions. On May 31, 2016 and June 30, 2016, the Company entered into various debt exchange agreements on substantially similar terms with certain of the Second Loan and Security Noteholders to convert an aggregate of $4,003,337 of principal and $341,013 of accrued interest into shares of the Common Stock. Pursuant to such debt exchange agreements, the Company agreed to convert the debt at $5.00 per share and issued 868,870 shares of Common Stock. On May 31, 2016, the market price of a share of the Common Stock was $6.99 and on June 30, 2016, it was $6.08. As a result, the Company recorded a loss on the extinguishment of debt on its consolidated statement of operations of $1,312,059 for the nine months ended September 30, 2016. On June 22, 2016, the Company repaid one of the Second Loan and Security Noteholders its principal investment of $300,000. During the three and nine months ended September 30, 2016, the Company expensed $140,958 and $921,366, respectively and $167,991 and $371,939 for the three and nine months ended September 30, 2015, respectively, in interest related to the Second Loan and Security Agreements. As of September 30, 2016 and December 31, 2015, the Company had $4,970,990 and $9,334,303 of debt related to the Second Loan and Security Agreements and $609,797 and $228,040, respectively of accrued interest recorded in other current liabilities on its combined balance sheets. The Company accounts for the above agreements in accordance with ASC 470-10-25-2, which requires that cash received from an investor in exchange for the future payment of a specified percentage or amount of future revenue shall be classified as debt. The Company does not purport the arrangements to be a sale and the Company has significant continuing involvement in the generation of cash flows due to the noteholders. Production Service Agreement During the year ended December 31, 2014, Dolphin Films entered into a financing agreement for the production of one of its motion pictures (the “Production Service Agreement”). The agreement was structured as a Production Service Agreement for a total amount of $10,419,009 with the lender taking an $892,619 producer fee. The Production Service Agreement contained repayment milestones to be made during the year ended December 31, 2015, that if not met, accrued interest at a default rate of 8.5% per annum above the published base rate of HSBC Private Bank (UK) Limited until the maturity on January 31, 2016 or the release of the movie. Due to a delay in the release of the motion picture, the Company did not make the repayments as prescribed in the Production Service Agreement. As a result, the Company recorded accrued interest of $1,047,366 and $381,566, respectively, as of September 30, 2016 and December 31, 2015. The loan was partially secured by international distribution agreements made prior to the commencement of principal photography and tax incentives. As a condition to the Production Service Agreement, the Company acquired a completion guarantee from a bond company for the production of the motion picture. The funds for the loan were held by the bond company and disbursed as needed to complete the production in accordance with the approved production budget. The Company recorded debt as funds were transferred from the bond company for the production. Loan and Security Agreement – (Prints and Advertising Loan) On August 12, 2016, Dolphin Max Steel Holding, LLC, a Florida limited liability company (“Max Steel Holding”) and wholly owned subsidiary of Dolphin Films, entered into a loan and security agreement (the “P&A Loan”) providing for $14,500,000 on a non-revolving credit facility that matures on August 25, 2017. The proceeds of the credit facility were used to pay a portion of the print and advertising expenses of the domestic distribution of the Company’s feature film, “ Max Steel

6. CONVERTIBLE DEBT

6. CONVERTIBLE DEBT	9 Months Ended
	Sep. 30, 2016
Convertible Debt
6. CONVERTIBLE DEBT	On December 7, 2015, the Company entered into a subscription agreement with an investor to sell up to $7,000,000 in convertible promissory notes of the Company. The promissory note, bears interest on the unpaid balance at a rate of 10% per annum, becomes due and payable on December 7, 2016 and may be prepaid, without penalty, at any time. Pursuant to the subscription agreement, the Company issued a convertible note to the investor in the amount of $3,164,000. At any time prior to the maturity date, the investor has the right, at its option, to convert some or all of the convertible note into Common Stock. The convertible note has a conversion price of $5.00 per share. The outstanding principal amount and all accrued interest are mandatorily and automatically converted into Common Stock, at the conversion price, upon the average market price per share of Common Stock being greater than or equal to the conversion price for twenty trading days. The Company completed this offering in reliance on Section 4(a)(2) or Rule 504, 505 or 506 of the Securities Act of 1933, as amended (the "Securities Act"). On February 5, 2016, a triggering event occurred pursuant to the convertible note agreement. As such 632,800 shares of Common Stock were issued in satisfaction of the convertible note payable. As of September 30, 2016 and December 31, 2015, the Company recorded $0 and $3,164,000 as convertible note and accrued $0 and $21,671 of interest in other current liabilities in its consolidated balance sheets. The Company expensed $31,207 of interest, incurred prior to its conversion, during the nine months ended September 30, 2016.

7. NOTES PAYABLE

7. NOTES PAYABLE	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
7. NOTES PAYABLE	Balance December 31, 2015 $ 300,000 Additions - Payments - Balance September 30, 2016 $ 300,000 On July 5, 2012, the Company signed an unsecured promissory note in the amount of $300,000 bearing 10% interest per annum and payable on demand. No payments were made on the note during the nine months ended September 30, 2016. The Company has recorded accrued interest of $127,233 and $104,712 as of September 30, 2016 and December 31, 2015, respectively related to this note. The Company expensed $7,562 and $22,521, respectively for the three and nine months ended September 30, 2016 and $7,562 and $22,438, respectively for the three and nine months ended September 30, 2015 for interest related to this note.

8. LOANS FROM RELATED PARTY

8. LOANS FROM RELATED PARTY	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
8. LOANS FROM RELATED PARTY	The Company issued an unsecured revolving promissory note (the “DE Note”) to Dolphin Entertainment, an entity wholly owned by the Company's CEO that, at September 30, 2016 and December 31, 2015, had outstanding balances of $0 and $1,982,267, respectively. The DE Note accrued interest at a rate of 10% per annum. Dolphin Entertainment had the right at any time to demand that all outstanding principal and accrued interest be repaid with a ten day notice to the Company. During the three and nine months ended September 30, 2015, respectively, Dolphin Entertainment loaned the Company $701,500 and $2,550,000, respectively, and was repaid $400,000 and $1,022,500 in principal, respectively. On March 4, 2016, the Company entered into a subscription agreement with Dolphin Entertainment pursuant to which the Company converted $3,073,410 aggregate amount of principal and interest outstanding under the note into 614,682 shares of Common Stock. The shares of Common Stock were converted at a price of $5.00 per share. On the date of the conversion the market price per share of the Common Stock was $6.00. As a result, the Company recorded $614,682 of loss on extinguishment of debt, on the condensed consolidated statement of operations for the nine months ended September 30, 2016. During the three and nine months ended September 30, 2016, $0 and $32,008 was expensed in interest. The Company recorded accrued interest of $5,788 and $1,126,057 in other current liabilities on its condensed consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively. In addition, Dolphin Entertainment has previously advanced funds for working capital to Dolphin Films. During the year ended December 31, 2015, Dolphin Films agreed to enter into Second Loan and Security Agreements with certain of Dolphin Entertainments debtholders, pursuant to which the debtholders exchanged their Dolphin Entertainment notes for notes issued by Dolphin Films totaling $8,774,327. See note 5 for more details. The amount of debt assumed by Dolphin Films was applied against amounts owed to Dolphin Entertainment by Dolphin Films. As a result, Dolphin Films owes Dolphin Entertainment a net amount of $2,010,806 and $2,917,523, respectively, as of September 30, 2016 and December 31, 2015 that was recorded on the condensed consolidated balance sheets. The net advance bears interest of 10% per annum. Dolphin Films recorded interest expense of $63,899 and $127,978, respectively for the nine months ended September 30, 2016 and 2015. During the nine months ended September 30, 2016, Dolphin Entertainment made advances totaling $320,000 and was repaid $1,608,754.

9. LICENSING AGREEMENT - RELATE

9. LICENSING AGREEMENT - RELATED PARTY	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
9. LICENSING AGREEMENT - RELATED PARTY	In 2008, the Company entered into a ten year licensing agreement with Dolphin Entertainment. Under the license agreement, the Company is authorized to use Dolphin Entertainment’s brand properties in connection with the creation, promotion and operation of subscription based Internet social networking websites for children and young adults. The license requires the Company to pay royalties to Dolphin Entertainment at the rate of fifteen percent of net sales from performance of the licensed activities. During the three and nine months ended September 30, 2016 and 2015, the Company did not use the brand properties of Dolphin Entertainment and, as such, no royalty expense was recorded related to the licensing agreement.

10. DEFERRED REVENUE

10. DEFERRED REVENUE	9 Months Ended
	Sep. 30, 2016
Deferred Revenue [Abstract]
10. DEFERRED REVENUE	During the year ended December 31, 2014, the Company entered into agreements with various entities for the international distribution rights of a motion picture that was in production. As required by the distribution agreements, the Company received $1,418,368 of deposits for these rights that was recorded as deferred revenue on its consolidated balance sheet. During the three months ended September 30, 2016, the Company delivered the motion picture to several entities, and recorded $74,736 of revenue from production from these deposits. As of September 30, 2016 and December 31, 2015, the Company recorded $1,343,632 and $1,418,368 as deferred revenue on its consolidated balance sheets. The amounts will remain in deferred revenue until the motion picture is delivered to the remaining international buyers and all other stipulations in the agreements are met.

11. VARIABLE INTEREST ENTITIES

11. VARIABLE INTEREST ENTITIES	9 Months Ended
	Sep. 30, 2016
Variable Interest Entities
11. VARIABLE INTEREST ENTITIES	VIEs are entities that, by design, either (1) lack sufficient equity to permit the entity to finance its activities without additional subordinated financial support from other parties, or (2) have equity investors that do not have the ability to make significant decisions relating to the entity’s operations through voting rights, or do not have the obligation to absorb the expected losses or the right to receive the residual returns of the entity. The most common type of VIE is a special-purpose entity (“SPE”). SPEs are commonly used in securitization transactions in order to isolate certain assets, and distribute the cash flows from those assets to investors. The legal documents that govern the transaction specify how the cash earned on the assets must be allocated to the SPE’s investors and other parties that have rights to those cash flows. SPEs are generally structured to insulate investors from claims on the SPE’s, assets by creditors of other entities, including the creditors of the seller of the assets. The primary beneficiary of a VIE is required to consolidate the assets and liabilities of the VIE. The primary beneficiary is the party that has both (1) the power to direct the activities of an entity that most significantly impact the VIE’s economic performance; and (2) through its interests in the VIE, the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. To assess whether the Company has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, the Company considers all the facts and circumstances, including its role in establishing the VIE and its ongoing rights and responsibilities. To assess whether the Company has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE, the Company considers all of its economic interests, including debt and equity investments, servicing fees, and derivative or other arrangements deemed to be variable interests in the VIE. This assessment requires that the Company apply judgment in determining whether these interests, in the aggregate, are considered potentially significant to the VIE. The Company performs ongoing reassessments of (1) whether entities previously evaluated under the majority voting-interest framework have become VIEs, based on certain triggering events, and therefore would be subject to the VIE consolidation framework, and (2) whether changes in the facts and circumstances regarding the Company’s involvement with a VIE cause the Company’s consolidation conclusion to change. The consolidation status of the VIEs with which the Company is involved may change as a result of such reassessments. Changes in consolidation status are applied prospectively with assets and liabilities of a newly consolidated VIE initially recorded at fair value unless the VIE is an entity which was previously under common control, which in that case is consolidated based historical cost. A gain or loss may be recognized upon deconsolidation of a VIE depending on the carrying amounts of deconsolidated assets and liabilities compared to the fair value of retained interests and ongoing contractual arrangements. The Company evaluated certain entities of which it did not have a majority voting interest and determined that it had (1) the power to direct the activities of the entities that most significantly impact their economic performance and (2) had the obligation to absorb losses or the right to receive benefits from these entities. As such the financial statements of Max Steel Productions, LLC and JB Believe, LLC are consolidated in the balance sheets as of September 30, 2016 and December 31, 2015, and in the statements of operations and statements of cash flows presented herein for the nine months ended September 30, 2016 and 2015. These entities were previously under common control and have been accounted for at historical costs for all periods presented. Following is summary financial information for the VIE’s: Max Steel Productions LLC JB Believe LLC (in USD) As of and for the nine ended September 30, 2016 As of and for the three months ended September 30, 2016 As of December 31, 2015 For the nine months ended September 30, 2015 For the nine months ended September 30, 2015 As of As of and for the nine ended September 30, 2016 As of and for the three months ended September 30, 2016 As of December 31, 2015 For the nine months ended September 30, 2015 For the nine months ended September 30, 2015 Assets 19,274,629 19,274,629 18,295,633 n/a n/a 125,970 125,970 143,549 n/a n/a Liabilities (21,588,325 ) (21,588,325 ) (19,113,335 ) n/a n/a (7,026,387 ) (7,026,387 ) (6,655,335 ) n/a n/a Revenues 1,140,000 1,140,000 n/a - - 3,786 - n/a 33,584 13,071 Expenses (2,253,056 ) (1,711,325 ) n/a (124,374 ) (478,284 ) (392,416 ) (131,825 ) n/a (249,446 ) (152,406 )

12. STOCKHOLDERS' DEFICIT

12. STOCKHOLDERS' DEFICIT	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
12. STOCKHOLDERS' DEFICIT	A. Preferred Stock The Company’s Articles of Incorporation authorize the issuance of 10,000,000 shares of preferred stock. The Board of Directors has the power to designate the rights and preferences of the preferred stock and issue the preferred stock in one or more series. On October 14, 2015, the Company amended its Articles of Incorporation to designate 4,000,000 preferred shares, as “Series B Convertible Preferred Stock” with a $0.10 par value. Each share of Series B Convertible Preferred Stock is convertible, at the holders request, into nineteen shares of Common Stock. Holders of Series B Convertible Preferred Stock do not have any voting rights. On October 16, 2015, the Company and T Squared Partners LP ("T Squared") entered into a Preferred Stock Exchange Agreement whereby 1,042,753 shares of Series A Convertible Preferred Stock were to be exchanged for 1,000,000 shares of Series B Convertible Preferred Stock upon satisfaction of certain conditions. On March 7, 2016, all conditions were satisfied and, pursuant to the Preferred Stock Exchange Agreement, the Company issued to T Squared Partners LP 1,000,000 shares of Series B Convertible Preferred Stock. The Company retired the 1,042,753 shares of Series A Convertible Preferred Stock it received in the exchange. As of September 30, 2016, no shares of Series B Convertible Preferred Stock had been converted into shares of Common Stock. The Company recorded a preferred stock dividend in additional paid in capital of $4,284,494 related to this exchange. On February 23, 2016, the Company amended its Articles of Incorporation to designate 1,000,000 preferred shares as “Series C Convertible Preferred Stock” with a $0.001 par value. The certificate of designation of the Series C Convertible Preferred Stock (the “Certificate of Designation”) provides that each share of Series C Convertible Preferred Stock will be exercisable into one share of Common Stock. Until the fifth anniversary of the date of the issuance, the Series C Convertible Preferred Stock will have certain anti-dilution protections as provided in the Certificate of Designation. Specifically, the number of shares of Common Stock into which the Series C Convertible Preferred Stock will be converted (the “Conversion Number”) will be adjusted for each future issuance of Common Stock (but not upon issuance of Common Stock equivalents) (i) upon the conversion or exercise of any instrument currently or hereafter issued (but not upon the conversion of the Series C Convertible Preferred Stock), (ii) upon the exchange of debt for shares of Common Stock, or (iii) in a private placement, such that the total number of shares of Common Stock held by an “Eligible Series C Preferred Holder” (based on the number of shares of Common Stock held as of the date of issuance) will be preserved at the same percentage of shares of common stock outstanding currently held by such persons, which currently is approximately 53% of the shares of the Company’s Common Stock outstanding. An Eligible Class C Preferred Stock Holder means any of (i) Dolphin Entertainment for so long as Mr. O’Dowd continues to beneficially own at least 90% of Dolphin Entertainment and serves on the board of directors or other governing body of Dolphin Entertainment, (ii) any other entity in which Mr. O’Dowd beneficially owns more than 90%, or a trust for the benefit of others but for which Mr. O’Dowd serves as trustee and (iii) Mr. O’Dowd individually. The shares of Series C Convertible Preferred Stock will automatically convert into the number of shares of Common Stock equal to the Conversion Number in effect at that time (“Conversion Shares”) upon the occurrence of any of the following events: (i) upon transfer of the Series C Convertible Preferred Stock to any holder other than an Eligible Class C Preferred Stock Holder, (ii) if the aggregate number of shares of Common Stock plus Conversion Shares (issuable upon conversion of each share of Series B Convertible Preferred Stock and the Series C Convertible Preferred Stock) held by the Eligible Class C Preferred Stock Holders in the aggregate constitutes 10% or less of the sum of (x) the outstanding shares of Common Stock plus (y) all Conversion Shares held by the Eligible Class C Preferred Stock Holders and (iii) at such time as the holder of Series C Convertible Preferred Stock ceases to be an Eligible Class C Preferred Stock Holder. Series C Convertible Preferred Stock will only be convertible by the holder upon the Company satisfying certain “optional conversion thresholds” as provided in the Certificate of Designation. The Certificate of Designation also provides for a liquidation value of $0.001 per share. The holders of Series C Convertible Preferred Stock and Common Stock will vote together as a single class on all matters upon which the Common Stock is entitled to vote, except as otherwise required by law. The holders of Series C Convertible Preferred Stock will be entitled to three votes for each share of Common Stock into which such holders’ shares of Series C Convertible Preferred Stock could then be converted. The Certificate of Designation also provides for dividend rights of the Series C Convertible Preferred Stock on parity with the Company’s Common Stock. On March 7, 2016, as the Merger Consideration, Dolphin Entertainment was issued 2,300,000 shares of Series B Convertible Preferred Stock and 1,000,000 shares of Series C Convertible Preferred Stock. As of September 30, 2016, the Company has 3,300,000 shares of Series B Convertible Preferred Stock and 1,000,000 shares of Series C Convertible Preferred Stock issued and outstanding which have no determinable market value. As of December 31, 2015, the Company had 1,042,753 shares of Series A Convertible Preferred Stock issued and outstanding which had no determinable market value. B. Common Stock The Company’s Articles of Incorporation previously authorized the issuance of 200,000,000 shares of Common Stock. 10,000,000 shares have been designated for an Employee Incentive Plan. As of September 30, 2016 and December 31, 2015, no awards have been issued in connection with this plan. On February 23, 2016, the Company filed Articles of Amendment to the Amended Articles of Incorporation with the Secretary of State of the State of Florida to increase the number of authorized shares of its Common Stock from 200,000,000 to 400,000,000. On February 5, 2016, the Company issued 632,800 shares of Common Stock (on a post-split basis), at a post-split price of $5.00 per share, in connection with the conversion of the debt per the terms of the convertible debt agreement entered into on December 7, 2015. See Note 6 for further discussion. On March 4, 2016, the Company issued 614,682 shares of Common Stock (on a post-split basis) in connection with a subscription agreement entered into with Dolphin Entertainment for debt and interest on its revolving promissory note. The debt was converted at a post-split price of $5.00 per share. See Note 8 for further discussion. On March 29, 2016, the Company entered into ten debt exchange agreements to convert $2,883,377 of aggregate principal and accrued interest under certain loan and security agreements into 576,676 shares of Common Stock (on a post-split basis) at a post-split conversion price of $5.00 per share. See Note 5 for further discussion. On April 1, 2016, the Company entered into subscription agreements under substantially identical terms with certain private investors (the “Quarterly Investors”), pursuant to which the Company issued and sold to the Quarterly Investors in a private placement (the “Quarterly Placement”) an aggregate of 1,075,000 shares (the “Initial Subscribed Shares”) of the Company’s Common Stock (on a post-split basis), at a post-split purchase price of $5.00 per Share (the “Quarterly Purchase Price”). The Quarterly Placement initially provided $5,375,000 of aggregate gross proceeds to the Company. Under the terms of the Agreements, each Quarterly Investor has the option to purchase additional shares of Common Stock at the Quarterly Purchase Price, not to exceed the number of such Quarterly Investor’s Initial Subscribed Shares, during each of the second, third and fourth quarters of 2016 (each, a “Quarterly Subscription”). To exercise a Quarterly Subscription, an Investor must deliver notice to the Company of such election during the first ten business days of the applicable quarter, specifying the number of additional shares of Common Stock such Quarterly Investor elects to purchase. If a Quarterly Investor timely delivers such notice to the Company, then the closing of the sale of the applicable number of additional shares of Common Stock must occur on the last business day of the applicable quarter. On June 28, 2016, the Company received $500,000 and issued 100,000 shares of Common Stock related to these agreements. On October 13, 2016, the Company received $600,000 and issued 120,000 shares of Common Stock related to these agreements. On May 9, 2016, the Company filed Articles of Amendment to its Amended Articles of Incorporation to effectuate a 1 to 20 reverse stock split, as previously approved by the Company’s Board of Directors and a majority of its shareholders. The reverse stock split became effective on May 10, 2016. On May 31, 2016, the Company entered into debt exchange agreements under substantially identical terms with certain investors, pursuant to which the Company issued and sold to such investors in a private placement an aggregate of 946,509 shares of Common Stock, in exchange for the cancellation of $4,732,540 of aggregate principal and accrued interest under certain notes held by such investors, at an exchange rate of $5.00 per share. See Note 5 for further discussion. On June 22, 2016, the Company entered into a subscription agreement with an investor, pursuant to which the Company issued and sold to such investor 50,000 shares of Common Stock at a price of $5.00 per Share. This transaction provided $250,000 in proceeds for the Company. On June 30, 2016, the Company entered into a subscription agreement with an investor, pursuant to which the Company issued and sold to such investor 20,000 shares of Common Stock at a price of $5.00 per Share. This transaction provided $100,000 in proceeds for the Company. On June 30, 2016, the Company, entered into debt exchange agreements under substantially identical terms with certain investors pursuant to which the Company issued and sold to such investors in a private placement an aggregate of 2,552,659 shares of Common Stock, in exchange for the cancellation of $12,763,299 of aggregate principal and accrued interest under certain notes held by such investors, at an exchange rate of $5.00 per share. On June 30, 2016, the Company entered into a substantially identical debt exchange agreement as those entered into on March 29, 2016. Pursuant to the terms of the debt exchange agreement, the Company converted an aggregate of $55,640 principal and interest into 11,128 shares of the Company's common stock at a conversion price of $5.00 per share. See Note 5 for further discussion. As of September 30, 2016 and December 31, 2015, the Company had 10,674,215 and 4,094,618 shares of Common Stock issued and outstanding, respectively. C. Noncontrolling Interest On May 21, 2012, the Company entered into an agreement with a note holder to form Dolphin Kids Clubs, LLC ("Dolphin Kids Clubs"). Under the terms of the agreement, Dolphin converted an aggregate amount of $1,500,000 in notes payable and received an additional $1,500,000 during the year ended December 31, 2012 for a 25% membership interest in the newly formed entity. The Company holds the remaining 75% and thus controlling interest in Dolphin Kids Clubs. The purpose of Dolphin Kids Clubs is to create and operate online kids clubs for selected charitable, educational and civic organizations. The agreement encompasses kids clubs created between January 1, 2012 and December 31, 2016. It is a “gross revenue agreement” and the Company will be responsible for paying all associated operating expenses. Revenues from Dolphin Kids Clubs attributable to the noncontrolling interest were $1,556 and $6,813, respectively for the three and nine months ended September 30, 2016 and $11,250 and $15,253 for the three and nine months ended September 30, 2015, respectively. Per the terms of the operating agreement, the revenues of the kids clubs are distributed equally to the members until the noncontrolling member has received $3,000,000 in revenues. Based on the revenues earned from the kids clubs for the nine months ended September 30, 2016, the Company recorded in other current liabilities $13,626 attributable to the noncontrolling member. In accordance with ASC 810-20, Dolphin Kids Clubs is consolidated in the Company’s financial statements. Amounts attributable to the noncontrolling interest will follow the provisions in the contractual arrangement. Noncontrolling interest is presented as a separate component of shareholders’ equity. As of September 30, 2016 and December 31, 2015, the Company recorded a noncontrolling interest of $2,970,996 and $2,977,808 respectively on its consolidated balance sheets for the 25% interest in Dolphin Kids Clubs.

13. LOSS PER SHARE

13. LOSS PER SHARE	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
13. LOSS PER SHARE	Net loss per share is computed by dividing income available to holders of Common Stock (the numerator) by the weighted-average number of Common Stock outstanding (the denominator) for the period. Diluted earnings per share assumes that any dilutive convertible securities outstanding were converted, with related preferred stock dilution requirements and outstanding Common Stock adjusted accordingly. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive. The Company included the preferred stock dividend of $4,284,494 in the calculation of loss per share for the nine months ended September 30, 2016, as the loss for holders of Common Stock would be increased by that amount. Due to the net losses reported dilutive common equivalent shares were excluded from the computation of diluted loss per share, as inclusion would be anti-dilutive for the periods presented.

14. WARRANTS

14. WARRANTS	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
14. WARRANTS	A summary of warrants issued, exercised and expired during the nine months ended September 30, 2016 is as follows: Weighted Avg. Exercise Warrants: Shares Price Balance at December 31, 2015 21,000,000 $ 0.17 Issued — — Exercised — — Expired — — Balance at September 30, 2016 21,000,000 $ 0.17 On March 10, 2010, T Squared Investments, LLC was issued Warrant “E” for 7,000,000 shares of Dolphin Digital Media, Inc. at an exercise price of $0.25 per share with an expiration date of December 31, 2012. T Squared Investments LLC can continually pay the Company an amount of money to reduce the exercise price of Warrant “E” until such time as the exercise price of Warrant “E” is effectively $0.0001 per share. Each time a payment by T Squared Investments LLC is made to Dolphin, a side letter will be executed by both parties that states the new effective exercise price of Warrant “E” at that time. At such time when T Squared Investments LLC has paid down Warrant “E” to an exercise price of $0.0001 per share or less, T Squared Investments LLC shall have the right to exercise Warrant “E” via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act of 1933 (the “Securities Act”). During the years ended December 31, 2010 and 2011, T Squared Investments LLC paid down a total of $1,625,000 and the current exercise price is $0.0179. During the year ended December 31, 2012, T Squared Investments, LLC agreed to amend a provision in the Preferred Stock Purchase agreement dated May 2011 that required the Company to obtain consent from T Squared Investments, LLC before issuing any common stock below the existing conversion price as defined in the agreement. As a result, the Company has extended the expiration date of Warrant “E” (described above) to September 13, 2015 and on September 13, 2012, the Company issued 7,000,000 warrants to T Squared Investments, LLC (“Warrant “F”) with an exercise price of $0.25 per share. Under the terms of Warrant “F”, T Squared Investments, LLC has the option to continually pay the Company an amount of money to reduce the exercise price of Warrant “F” until such time as the exercise price of Warrant “F” is effectively $0.0001 per share. At such time, T Squared Investments, LLC will have the right to exercise Warrant “F” via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. The Company agreed to extend the warrants until December 31, 2018 with substantially the same terms as herein discussed. T Squared Investments, LLC did not make any payments during the nine months ended September 30, 2016 to reduce the exercise price of the warrants. On September 13, 2012, the Company sold 7,000,000 warrants with an exercise price of $0.25 per share and an expiration date of September 13, 2015 for $35,000. Under the terms of these warrants, the holder has the option to continually pay the Company an amount of money to reduce the exercise price of the warrants until such time as the exercise price is effectively $0.0001 per share. At such time, the holder will have the right to exercise the warrants via a cashless provision and hold for six months to remove the legend under Rule 144 of the Securities Act. The Company recorded the $35,000 as additional paid in capital. The Company agreed to extend the warrants for a period of three years until September 13, 2018 with substantially the same terms as herein discussed. The holder of the warrants did not make any payments during the nine months ended September 30, 2016 to reduce the exercise price of the warrants. None of the warrants were included in computing diluted earnings per share because the effect was anti-dilutive.

15. RELATED PARTY TRANSACTIONS

15. RELATED PARTY TRANSACTIONS	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
15. RELATED PARTY TRANSACTIONS	On September 7, 2012, the Company entered into an employment agreement with its CEO. The employment agreement was effective January 1, 2012 and continued for an initial term of three years, renewable at the option of the CEO for another two years. Pursuant to the terms of the agreement, the CEO informed the Company on December 31, 2014, that he would renew his employment agreement for a period of two years commencing January 1, 2015. The agreement states that the CEO will receive annual compensation of $250,000 plus bonus. In addition, the CEO is entitled to an annual discretionary bonus as determined by the Company’s Board of Directors. The CEO is eligible to participate in all of the Company’s benefit plans offered to its employees. As part of his agreement, he received a $1,000,000 signing bonus in 2012 that is recorded in accrued compensation on the condensed consolidated balance sheets. Any unpaid and accrued compensation due to the CEO under this agreement will accrue interest on the principal amount at a rate of 10% per annum from the date of this agreement until it is paid. The agreement includes provisions for disability, termination for cause and without cause by the Company, voluntary termination by executive and a non-compete clause. The Company accrued $2,187,500 and $2,000,000 of compensation as accrued compensation and $679,549 and $523,144 of interest in other current liabilities on its consolidated balance sheets as of September 30, 2016 and December 31, 2015, respectively, in relation to this agreement. For the three and nine months ended September 30, 2016, in connection with this agreement the Company expensed as interest $54,081 and $156,404, respectively and $47,780 and $137,152, respectively for the three and nine months ended September 30, 2015. The Company has 14,000,000 warrants outstanding with TSquared Partners, LLC, a related party which owns 16% of the fully diluted Common Stock. The warrants have an exercise price of $5.00 and expire December 31, 2018. TSquared Partners, LLC paid down a total of $1,625,000 to reduce the exercise price on the warrants and as a result 7,000,000 warrants have an exercise price of $0.36. Note 13 details the terms of these warrants. During 2015, the Company agreed to pay a related party, Dolphin Entertainment $250,000 for a script that it had developed for a web series that the Company produced during the year ended December 31, 2015. As of September 30, 2016 and December 31, 2015, the Company recorded an accrual of $250,000 in other current liabilities on its consolidated balance sheets. As discussed in Note 3, on October 14, 2015, the Company and Merger Subsidiary, a wholly owned subsidiary of the Company, entered into a merger agreement with Dolphin Films and Dolphin Entertainment, both entities owned by a related party. Pursuant to the Merger Agreement, Merger Subsidiary agreed to merge with and into Dolphin Films with Dolphin Films surviving the Merger. As a result of the Merger, the Company acquired Dolphin Films. As consideration for the Merger, the Company issued 2,300,000 shares of Series B Convertible Preferred Stock, par value $0.10 per share, and 1,000,000 shares of Series C Convertible Preferred Stock, par value $0.001 per share to Dolphin Entertainment. In connection with the Merger, on October 16, 2015, the Company and T Squared entered into a Preferred Stock Exchange Agreement pursuant to which the Company agreed to issue 1,000,000 shares of Series B Convertible Preferred Stock to T Squared in exchange for 1,042,753 shares of Series A Convertible Preferred Stock, previously issued to T Squared. See Note 12 for further discussion. The Company entered into a verbal agreement with Dolphin Entertainment for producer services related to certain of its projects. The agreement was for an annual amount of $500,000. The Company terminated the agreement effective June 30, 2015. The Company recorded $250,000 during the nine months ended September 30, 2015 in its condensed consolidated statement of operations. The Company has a related party receivable of $521, 219 and $453,529 as of September 30, 2016 and December 31, 2015, respectively with Dolphin Entertainment for debt that the Company acquired on behalf of the related party.

16. COMMITMENTS AND CONTINGENCI

16. COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
16. COMMITMENTS AND CONTINGENCIES	Litigation On or about January 25, 2010, an action was filed by Tom David against Winterman Group Limited, Dolphin Digital Media (Canada) Ltd., Malcolm Stockdale and Sara Stockdale in the Superior Court of Justice in Ontario (Canada) alleging breach of a commercial lease and breach of a personal guaranty. On or about March 18, 2010, Winterman Group Limited, Malcolm Stockdale and Sara Stockdale filed a Statement of Defense and Crossclaim. In the Statement of Defense, Winterman Group Limited, Malcolm Stockdale and Sara Stockdale denied any liability under the lease and guaranty. In the Crossclaim filed against Dolphin Digital Media (Canada) Ltd., Winterman Group Limited, Malcolm Stockdale and Sara Stockdale seek contribution or indemnity against Dolphin Digital Media (Canada) Ltd. alleging that Dolphin Digital Media (Canada) agreed to relieve Winterman Group Limited, Malcolm Stockdale and Sara Stockdale from any and all liability with respect to the lease or the guaranty. On or about March 19, 2010, Winterman Group Limited, Malcolm Stockdale and Sara Stockdale filed a Third Party Claim against the Company seeking contribution or indemnity against the Company, formerly known as Logica Holdings, Inc., alleging that the Company agreed to relieve Winterman Group Limited, Malcolm Stockdale and Sara Stockdale from any and all liability with respect to the lease or the guaranty. The Third Party Claim was served on the Company on April 6, 2010. On or about April 1, 2010, Dolphin Digital Media (Canada) filed a Statement of Defense and Crossclaim. In the Statement of Defense, Dolphin Digital Media (Canada) denied any liability under the lease and in the Crossclaim against Winterman Group Limited, Malcolm Stockdale and Sara Stockdale, Dolphin Digital Media (Canada) seeks contribution or indemnity against Winterman Group Limited, Malcolm Stockdale and Sara Stockdale alleging that the leased premises were used by Winterman Group Limited, Malcolm Stockdale and Sara Stockdale for their own use. On or about April 1, 2010, Dolphin Digital Media (Canada) also filed a Statement of Defense to the Crossclaim denying any liability to indemnify Winterman Group Limited, Malcolm Stockdale and Sara Stockdale. The ultimate results of these proceedings against the Company cannot be predicted with certainty. On or about March 12, 2012, the Court served a Status Notice on all the parties indicating that since more than (2) years had passed since a defense in the action had been filed, the case had not been set for trial and the case had not been terminated, the case would be dismissed for delay unless action was taken within ninety (90) days of the date of service of the notice. The Company has not filed for a motion to dismiss and no further action has been taken in the case. The ultimate results of these proceedings against the Company could result in a loss ranging from 0 to $325,000. On March 23, 2012, Dolphin Digital Media (Canada) Ltd filed for bankruptcy in Canada. The bankruptcy will not protect the Company from the Third Party Claim filed against it. However, the Company has not accrued for this loss because it believes that the claims against it are without substance and it is not probable that they will result in loss. As of September 30, 2016, the Company has not received any other notifications related to this action. Tax Filings For the year ended December 31, 2011, the Company accrued $120,000 for estimated penalties associated with not filing certain information returns. The penalties per return are $10,000 per entity per year. The Company received notification from the Internal Revenue Service concerning information returns for the year ended December 31, 2009. The Company responded with a letter stating reasonable cause for the noncompliance and requested that penalties be abated. During 2012, the Company received a notice stating that the reasonable cause had been denied. The Company decided to pay the penalties and not appeal the decision for the 2009 Internal Revenue Service notification. There is no associated interest expense as the tax filings are for information purposes only and would not result in further income taxes to be paid by the Company. The Company made payments in the amount of $40,000 during the year ended December 31, 2012 related to these penalties. At each of September 30, 2016 and December 31, 2015, the Company had a remainder of $40,000 in accruals related to these late filing penalties and is presented as a component of other current liabilities. Kids Club In February 2012, the Company entered into a five-year agreement with US Youth Soccer Association, Inc. to create, design and host the US Youth Soccer Clubhouse website. During 2012, the Company hired a third party to begin building the US Youth Soccer Clubhouse website at a cost of $125,000. The first two installments of $25,000 each were paid during 2012 and remaining payments were made monthly over a two-year period once the website was delivered. The Company expensed the payments since it cannot reasonably estimate future cash flows or revenues from the website development. In January 2013, the Company entered into an agreement with a worldwide philanthropic organization to create an online kids club to promote the organizations philanthropic philosophy and encourage literacy programs. Effective July 1, 2015, the two parties agreed to amend and restate the agreement. The agreement is for a period of three years from the effective date and will automatically renew for successive terms of three years unless terminated by either party with written notice at least 180 day prior to the expiration of the initial or any subsequent term. The Company is responsible for the creation and marketing of the website, developing and managing the sponsorship package, and hiring of certain employees to administer the program. Each school sponsorship package is $10,000 with the Company earning $1,250. The remaining funds are used for program materials and the costs of other partners. On July 1, 2016, the Company and United Way Worldwide mutually agreed to terminate the agreement. The Company intends to continue promoting the online kids club with the remaining partners and it does not anticipate any material change in the operations of the online kids club. The Company recorded revenues of $6,225 and $27,253 during the three and nine months ended September 30, 2016 and $45,000 and $61,011 respectively, during the three and nine months ended September 30, 2015, related to these agreements. Incentive Compensation Plan During the year ended December 31, 2012, the Company’s Board of Directors approved an Incentive Compensation Plan. The plan was enacted as a way of attracting and retaining exceptional employees and consultants by enabling them to share in the long term growth and financial success of the Company. The plan will be administered by the Board of Directors or a committee designated by the board. As part of an increase in authorized shares approved by the Board of Directors in 2012, 10,000,000 shares of Common Stock were designated for this plan. No awards have been issued and, as such, the Company has not recorded any liability or equity related to this plan as of September 30, 2016 and December 31, 2015. Talent, Director and Producer Participations Per agreements with talent, directors and producer’s on certain projects, the Company will be responsible for bonus and back end payments upon release of a motion picture and achieving certain box office performance as determined by the individual agreements. The Company cannot estimate the amounts that will be due as these are based on future box office performance. As of September 30, 2016 and December 31, 2015, the Company had not recorded any liability related to these participations.

17. SUBSEQUENT EVENTS

17. SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
Subsequent Events [Abstract]
17. SUBSEQUENT EVENTS	On October 3, 2016, the Company entered into a debt exchange agreement and agreed to issue 12,000 shares of the Company’s common stock at an exchange price of $5.00 per share to terminate the remaining Kids Club Agreement for (i) $10,000 plus (ii) the original investment of $50,000. On October 3, 2016, the market price of the Company’s common stock was $6.75 per share. As a result, the Company will record a loss on extinguishment of debt of $21,000 in the fourth quarter of 2016. On October 13, 2016, the Company received notice from a Quarterly Investor and $600,000 to exercise the option of purchasing shares of the Company’s common stock at $5.00 per share. The Company issued 120,000 shares of common stock related to this exercise. On October 3, 2016, October 13, 2016 and October 27, 2016, the Company entered into three substantially identical debt exchange agreements to issue 66,200 shares of the Company’s common stock at an exchange price of $5.00 per share to terminate three Equity Finance Agreements for a cumulative original investment amount of $331,000. The market price of the Company's common stock was $6.75 per share on October 3, 2016, $6.50 per share on October 13, 2016 and $6.25 per share on October 27, 2016. As a result, the Company will record a loss on extinguishmant of debt of $112,025 in the fourth quarter of 2016. On October 13, 2016, the Company entered into six substantially identical subscription agreements, pursuant to which the Company issued 25,000 shares of common stock at $5.00 per share and received $125,000. On October 13, 2016, the Company received $200,000 from the distributor of the motion picture "Max Steel" related to certain deposits held for distribution costs. These were recorded as Deposits on the Company's condensed consolidated balance sheets as of September 30, 2016. On October 14, 2016, the Company released its motion picture “Max Steel” (the “Film”) in the US. The Film did not perform as well as expected and the Company is assessing whether the fair value of the film is less than the unamortized capitalized costs. The Company used the guidance of ASU 2012-07 and did not identify impairment indicators as of the balance sheet date of September 30, 2016. Indicators of impairment were not apparent until the weekend of the Film’s release and as such any impairment will be made during the fourth quarter of 2016. On November 4, 2016, the Company and T Squared entered into a Warrant Purchase Agreement pursuant to which the Company agreed to issue (i) 1,500,000 Series G Warrants with an exercise price of $5.00 per share of the Company’s common stock, par value $0.015 (“Common Stock”), and an expiration date of January 31, 2018 (the “Series G Warrants”), (ii) 500,000 Series H Warrants with an exercise price of $6.00 per share of Common Stock and an expiration date of January 31, 2019 (the “Series H Warrants”), and (iii) 500,000 Series I Warrants with an exercise price of $7.00 per share of Common Stock and an expiration date of January 31, 2020 (the “Series I Warrants” and together with the Series G Warrants and the Series H Warrants, the “New Warrants”). As consideration for the New Warrants, T Squared agreed to make a $50,000 cash payment to the Company to reduce the aggregate exercise price of the 7,000,000 Series E Warrants that were issued to it on March 10, 2010 and amended on September 10, 2015 to extend their expiration date until December 31, 2018. On November 15, 2016, the Company entered into a subscription agreement with an investor, pursuant to which the Company issued and sold to such investor 100,000 shares of common stock at a price of $5.00 per Share. This transaction provided $500,000 in proceeds for the Company. On November 15, 2016, Dolphin Entertainment converted 2,300,000 Series B Preferred Stock (the “Series B”) into 2,185,000 shares of the Company’s common stock. On November 16, 2016, T Squared Partners LP, converted 1,000,000 of Series B into 950,000 shares of the Company’s common stock. Dolphin Entertainment and T Squared were the only shareholders of Series B and have converted all of their holdings into shares of the Company’s common stock. Subsequent to these two transactions, there are no shares of Series B issued and outstanding.

1. GENERAL (Policies)

1. GENERAL (Policies)	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Nature of Operations	Dolphin Digital Media, Inc. (the “Company,” “Dolphin,” “we,” “us” or “our”) is a producer of original high-quality digital programming for online consumption and is committed to delivering premium, best-in-class entertainment and securing premiere distribution partners to maximize audience reach and commercial advertising potential. Dolphin is also developing online kids clubs. On March 7, 2016, the Company completed its merger with Dolphin Films, Inc., an entity under common control. Dolphin Films, Inc. (“Dolphin Films”) is a motion picture studio focused on storytelling on a global scale for young, always-connected audiences.
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements include the accounts of Dolphin, and all of its majority-owned and controlled subsidiaries, including Dolphin Films, Inc., Hiding Digital Productions, LLC, Dolphin Kids Clubs, LLC, Cybergeddon Productions, LLC, Dolphin SB Productions LLC, Max Steel Productions, LLC, Dolphin Max Steel Holdings LLC, Dolphin JB Believe Financing, LLC and Dolphin JOAT Productions, LLC Effective March 7, 2016, the Company acquired “Dolphin Films” from Dolphin Entertainment, Inc. (“Dolphin Entertainment”), a company wholly owned by William O’Dowd, CEO, President, Chairman of the Board and majority shareholder of Dolphin. The acquisition from Dolphin Entertainment was a transfer between entities under common control. As such, the Company recorded the assets, liabilities and deficit of Dolphin Films on its consolidated balance sheets at Dolphin Entertainment’s historical basis instead of fair value. Transfers of businesses between entities under common control require prior periods to be retrospectively adjusted to furnish comparative information. Accordingly, the accompanying financial statements and related notes of the Company have been retrospectively adjusted to include the historical balances of Dolphin Entertainment prior to the effective date of the acquisition. See Note 3 for additional information regarding Dolphin Films acquisition. On May 9, 2016, the Company filed an amendment to its Articles of Incorporation with the Secretary of State of the State of Florida to effectuate a 20-to-1 reverse stock split. The reverse stock split was approved by the Board of Directors and a majority of the Company’s shareholders and became effective May 10, 2016. The number of common shares in the accompanying unaudited condensed consolidated financial statements and all related footnotes has been adjusted to retrospectively reflect the reverse stock split. The Company enters into relationships or investments with other entities, and in certain instances, the entity in which the Company has a relationship or investment may qualify as a variable interest entity (“VIE”). A VIE is consolidated in the financial statements if the Company is deemed to be the primary beneficiary of the VIE. The primary beneficiary is the party that has the power to direct activities that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to benefits from the VIE that could potentially be significant to the VIE. The Company has included Max Steel Productions, LLC formed on July 8, 2013 in the State of Florida and JB Believe, LLC formed on December 4, 2012 in the State of Florida in its combined financial statements as VIE’s. The unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to quarterly report on Form 10-Q under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, 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, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements. Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2016. The balance sheet at December 31, 2015 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 consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
Use of Estimates	The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The most significant estimates made by management in the preparation of the financial statements relate to ultimate revenue and costs for investment in digital and feature film projects; estimates of sales returns and other allowances and provisions for doubtful accounts and impairment assessments for investment in digital and feature film projects. Actual results could differ from such estimates.
Restricted Cash	Restricted cash represents amounts held as collateral required under the Company’s loan and security agreement. Proceeds from this loan were used for the distribution and marketing costs of the Company’s feature film. See Note 5 for further discussion. As of September 30, 2016, the Company maintained $1,250,000 in a separate bank account restricted for this purpose.
Recent Acounting Pronouncements	In February 2016, the Financial Accounting Standards Board (the “FASB”) issued an accounting standards update on lease accounting. This update requires lessees to put most leases on their balance sheets. The new standard also requires new disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Accounting Standards Update (the “ASU”) will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial statements. In August 2016, the FASB issued an accounting standards update to addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial statements. In October 2016, the FASB issued an accounting standards update of consolidation of entities held by related parties under common control. The update amends the consolidation guidance on how variable interest entities should treat indirect interest in the entity held through related parties. The ASU will be effective on a retrospective or modified retrospective basis for annual reporting periods beginning after December 15, 2016, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on our consolidated financial statements.

3. ACQUISITION OF DOLPHIN FIL25

3. ACQUISITION OF DOLPHIN FILMS, INC. (Tables)	9 Months Ended
	Sep. 30, 2016
Acquisition Of Dolphin Films Inc. Tables
Consolidated Balance Sheet, retrospectively adjusted for the acquisition of Dolphin Films	The Company retrospectively adjusted the historical financial results for all periods to include Dolphin Films as required for transactions between entities under common control. The following table presents the Company’s previously reported Consolidated Balance Sheet, retrospectively adjusted for the acquisition of Dolphin Films: As of December 31, 2015 (unaudited) Dolphin Digital Media, Inc.* Dolphin Films, Inc. Acquisition Adjustments Consolidated Balance Sheets currently reported ASSETS Current Cash and cash equivalents $ 2,259,504 $ 133,181 - $ 2,392,685 Related party receivable - 453,529 - 453,529 Prepaid Expenses 10,018 62,500 - 72,518 Receivables and other current assets 560,112 2,267,019 - 2,827,131 Total Current Assets 2,829,634 2,916,229 - 5,745,863 - Capitalized production costs 2,439 15,168,329 - 15,170,768 Property and equipment 55,413 - - 55,413 Deposits 41,291 355,778 - 397,069 Total Assets $ 2,928,777 $ 18,440,336 - $ 21,369,113 LIABILITIES Current Accounts payable $ 479,799 $ 1,590,746 - $ 2,070,545 Other current liabilities 2,669,456 314,864 - 2,984,320 Accrued compensation 2,065,000 - - 2,065,000 Debt 2,545,000 - - 2,545,000 Loan from related party - 2,917,523 - 2,917,523 Deferred revenue - 1,418,368 - 1,418,368 Notes payable 300,000 - - 300,000 Total Current Liabilities 8,059,255 6,241,501 - 14,300,756 Non Current Convertible note payable 3,164,000 - - 3,164,000 Loan from related party 1,982,267 - - 1,982,267 Debt 2,600,000 32,186,008 - 34,786,008 Total Noncurrent Liabilities 7,746,267 32,186,008 - 39.932,275 - Total Liabilities 15,805,522 38,427,509 - 54,233,031 STOCKHOLDERS' DEFICIT Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015. 1,228,385 100 (100 ) 1,228,385 Preferred stock Series A $0.001 par value, 10,000,000 shares authorized, 1,042,753 shares issued and outstanding, liquidation preference of $1,042,753 at December 31, 2015. 1,043 - (1,043 ) - Preferred stock, Series B. $0.10 par value, 4,000,000 shares authorized, 3,300,000 shares issued and outstanding at December 31, 2015. - - 330,000 330,000 Preferred stock, Series C. $0.001 par value, 1,000,000 shares authorized, 1,000,000 shares issued and outstanding at December 31, 2015. - - 1,000 1,000 Additional paid in capital 25,544,174 - (329,857 ) 25,214,317 Accumulated deficit (42,628,155 ) (19,987,273 ) - (62,615,428 ) Total Dolphin Digital Media, Inc. Deficit $ (15,854,553 ) $ (19,987,173 ) - $ (35,841,726 ) Non-controlling interest 2,977,808 - - 2,977,808 Total Stockholders' Deficit $ (12,876,745 ) $ (19,987,173 ) - $ (32,863,918 ) Total Liabilities and Stockholders' Deficit $ 2,928,777 $ 18,440,336 - $ 21,369,113 * Previously reported on Form 10-K filed with the SEC March 31, 2016
Condensed Consolidated Statement of Operations, retrospectively adjusted for the acquisition of Dolphin Films	The following table presents the Company’s previously reported Condensed Consolidated Statement of Operations, retrospectively adjusted for the acquisition of Dolphin Films: for the nine months ended September 30, 2015 (unaudited) Dolphin Digital Media, Inc.* Dolphin Films, Inc. Acquisition Reclassification Consolidated Statement of Operations (currently reported) Revenues: Production $ 2,380,412 $ 33,584 - $ 2,413,996 Membership 61,011 - - 61,011 Total Revenue: 2,441,423 33,584 - $ 2,475,007 Expenses: Direct costs 1,334,311 500,946 - 1,835,257 Selling, general and administrative 1,869,195 130,741 (878,068 ) 1,121,868 Legal and professional - 1,172,984 878,068 2,051,052 Payroll 1,028,836 - - 1,028,836 Loss before other income (expense) (1,790,919 ) (1,771,087 ) - (3,562,006 ) Other Income (Expense): Other Income - - - - Interest expense (657,237 ) (1,638,960 ) - (2,296,197 ) Net Loss (2,448,156 ) (3,410,047 ) - (5,858,203 ) Net income attributable to noncontrolling interest $ 15,253 $ - - $ 15,253 Net loss attributable to Dolphin Films, Inc. - (3,410,047 ) - (3,410,047 ) Net loss attributable to Dolphin Digital Media, Inc. (2,463,409 ) - - (2,463,409 ) Net loss $ (2,448,156 ) $ (3,410,047 ) - $ (5,858,203 ) *As reported on Form 10Q filed with the SEC on November 20, 2015
Condensed Consolidated Statement of Cash Flows, retrospectively adjusted for the acquisition of Dolphin Films	The following table presents Company’s previously reported Condensed Consolidated Statement of Cash Flows, retrospectively adjusted for the acquisition of Dolphin Films: For the nine months ended September 30, 2015 (unaudited) Dolphin Digital Media, Inc.* Dolphin Films, Inc. Acquisition Adjustments Consolidated Statement of Cash Flows (as currently reported) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,448,156 ) $ (3,410,047 ) - $ (5,858,203 ) Adjustments to reconcile net loss to net cash used in operating activities: - Depreciation 16,415 2,550 - 18,965 Amortization of capitalized production costs 1,334,311 30,001 - 1,364,312 Changes in operating assets and liabilities: - Receivables and other current assets (900,428 ) (1,854,165 ) - (2,754,593 ) Prepaid expenses 2,339 2,178,972 - 2,181,311 Capitalized production costs (1,599,558 ) (926,525 ) - (2,526,083 ) Accrued compensation 187,500 - - 187,500 Accounts payable 16,388 (510,387 ) - (493,999 ) Other Current Liabilities 1,148,327 650,685 - 1,799,012 Net Cash Used in Operating Activities (2,242,862) (3,838,916 ) - (6,081,778 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of furniture and equipment - (2,550 ) - (2,550 ) Net Cash Used In Investing Activities - (2,550 ) (2,550 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from Loan and Security agreement 1,400,000 1,150,131 - 2,550,131 Repayment of Loan and Security agreement (250,000 ) 250,000 - - Advances from related party 2,550,000 2,420,018 - 4,970,018 Repayment to related party (1,022,500 ) - - (1,022,500 ) Net Cash Provided by Financing Activities 2,677,500 3,820,149 6,497,649 NET INCREASE IN CASH AND CASH EQUIVALENTS 434,638 (21,317 ) - 413,321 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 198,470 194,605 - 393,075 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 633,108 $ 173,288 - $ 806,396 SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: Interest paid $ 227,298 $ 627,865 - $ 775,511 * as previously reported on Form 10-Q filed with the SEC on November 20, 2015

7. NOTES PAYABLE (Tables)

7. NOTES PAYABLE (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Payable Tables
Notes Payable	Balance December 31, 2015 $ 300,000 Additions - Payments - Balance September 30, 2016 $ 300,000

11. VARIABLE INTEREST ENTITIES

11. VARIABLE INTEREST ENTITIES (Tables)	9 Months Ended
	Sep. 30, 2016
Variable Interest Entities Tables
Summary financial information for the VIE's	Following is summary financial information for the VIE’s: Max Steel Productions LLC JB Believe LLC (in USD) As of and for the nine ended September 30, 2016 As of and for the three months ended September 30, 2016 As of December 31, 2015 For the nine months ended September 30, 2015 For the nine months ended September 30, 2015 As of As of and for the nine ended September 30, 2016 As of and for the three months ended September 30, 2016 As of December 31, 2015 For the nine months ended September 30, 2015 For the nine months ended September 30, 2015 Assets 19,274,629 19,274,629 18,295,633 n/a n/a 125,970 125,970 143,549 n/a n/a Liabilities (21,588,325 ) (21,588,325 ) (19,113,335 ) n/a n/a (7,026,387 ) (7,026,387 ) (6,655,335 ) n/a n/a Revenues 1,140,000 1,140,000 n/a - - 3,786 - n/a 33,584 13,071 Expenses (2,253,056 ) (1,711,325 ) n/a (124,374 ) (478,284 ) (392,416 ) (131,825 ) n/a (249,446 ) (152,406 )

14. WARRANTS (Tables)

14. WARRANTS (Tables)	9 Months Ended
	Sep. 30, 2016
Warrants Tables
Warrants	A summary of warrants issued, exercised and expired during the nine months ended September 30, 2016 is as follows: Weighted Avg. Exercise Warrants: Shares Price Balance at December 31, 2015 21,000,000 $ 0.17 Issued — — Exercised — — Expired — — Balance at September 30, 2016 21,000,000 $ 0.17

2. GOING CONCERN (Details Narra

2. GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	[1]	Sep. 30, 2016	Sep. 30, 2015	[1]	Dec. 31, 2015	[1]
Going Concern Narrative Details
Net loss	$ (11,539,173)	$ (1,448,718)		$ (22,792,952)	$ (5,858,203)
Accumulated deficit	(85,415,193)			(85,415,193)			$ (62,615,428)
Working Capital Deficit	$ (32,884,818)			$ (32,884,818)
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

3. ACQUISITION OF DOLPHIN FIL30

3. ACQUISITION OF DOLPHIN FILMS, INC. (Details) - USD ($)		Sep. 30, 2016	Dec. 31, 2015
ASSETS
Cash and cash equivalents		$ 982,360	$ 2,392,685	[1]
Restricted cash		1,250,000	0	[1]
Related party receivable		521,219	453,529	[1]
Prepaid expenses		2,752	72,518	[1]
Receivable and other current assets		3,969,758	2,827,131	[1]
Total Current Assets		6,726,089	5,745,863	[1]
Captialized production costs		14,318,814	15,170,768	[1]
Property and equipment		39,417	55,413	[1]
Deposits		1,597,070	397,069	[1]
Total Assets		22,681,390	21,369,113	[1]
LIABILITIES
Accounts payable		746,831	2,070,545	[1]
Other current liabilities		3,524,723	2,984,320	[1]
Accrued Compensation		2,187,500	2,065,000	[1]
Debt		29,497,415	37,331,008	[1]
Loans from related party		2,010,806	2,917,523	[1]
Deferred revenue		1,343,632	1,418,368	[1]
Notes payable		300,000	300,000	[1]
Total Current Liabilities		39,610,907	49,086,764	[1]
Non Current
Convertible note		0	3,164,000	[1]
Loan from related party		0	1,982,267	[1]
Total Non Current Liabilities		0	5,146,267	[1]
Total Liabilities		39,610,907	54,233,031	[1]
STOCKHOLDERS' DEFICIT
Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015		160,113	1,228,385	[1]
Additional paid in capital		65,023,567	25,214,317	[1]
Accumulated deficit		(85,415,193)	(62,615,428)	[1]
Total Dolphin Digital Media, Inc. Deficit		(19,900,513)	(35,841,726)	[1]
Non-controlling interest		2,970,996	2,977,808	[1]
Total Stockholders' Deficit		(16,929,517)	(32,863,918)	[1]
Total Liabilities and Stockholders' Deficit		22,681,390	21,369,113	[1]
Series B Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized		330,000	330,000	[1]
Series C Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized		$ 1,000	1,000	[1]
Dolphin Digital Media, Inc
ASSETS
Cash and cash equivalents	[2]		2,259,504
Related party receivable	[2]		0
Prepaid expenses	[2]		10,018
Receivable and other current assets	[2]		560,112
Total Current Assets	[2]		2,829,634
Captialized production costs	[2]		2,439
Property and equipment	[2]		55,413
Deposits	[2]		41,291
Total Assets	[2]		2,928,777
LIABILITIES
Accounts payable	[2]		479,799
Other current liabilities	[2]		2,669,456
Accrued Compensation	[2]		2,065,000
Debt	[2]		2,545,000
Loans from related party	[2]		0
Deferred revenue	[2]		0
Notes payable	[2]		300,000
Total Current Liabilities	[2]		8,059,255
Non Current
Convertible note	[2]		3,164,000
Loan from related party	[2]		1,982,267
Debt	[2]		2,600,000
Total Non Current Liabilities	[2]		7,746,267
Total Liabilities	[2]		15,805,522
STOCKHOLDERS' DEFICIT
Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015	[2]		1,228,385
Additional paid in capital	[2]		25,544,174
Accumulated deficit	[2]		(42,628,155)
Total Dolphin Digital Media, Inc. Deficit	[2]		(15,854,553)
Non-controlling interest	[2]		2,977,808
Total Stockholders' Deficit	[2]		(12,876,745)
Total Liabilities and Stockholders' Deficit	[2]		2,928,777
Dolphin Digital Media, Inc | Series B Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized	[2]		1,043
Dolphin Digital Media, Inc | Series C Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized	[2]		0
Dolphin Films, Inc. (unaudited)
ASSETS
Cash and cash equivalents			133,181
Related party receivable			453,529
Prepaid expenses			62,500
Receivable and other current assets			2,267,019
Total Current Assets			2,916,229
Captialized production costs			15,168,329
Property and equipment			0
Deposits			355,778
Total Assets			18,440,336
LIABILITIES
Accounts payable			1,590,746
Other current liabilities			314,864
Accrued Compensation			0
Debt			32,186,008
Loans from related party			2,917,523
Deferred revenue			1,418,368
Notes payable			0
Total Current Liabilities			6,241,501
Non Current
Convertible note			0
Loan from related party			0
Debt			0
Total Non Current Liabilities			0
Total Liabilities			38,427,509
STOCKHOLDERS' DEFICIT
Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015			100
Additional paid in capital			0
Accumulated deficit			(19,987,273)
Total Dolphin Digital Media, Inc. Deficit			(19,987,173)
Non-controlling interest			0
Total Stockholders' Deficit			(19,987,173)
Total Liabilities and Stockholders' Deficit			18,440,336
Dolphin Films, Inc. (unaudited) | Series B Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized			0
Dolphin Films, Inc. (unaudited) | Series C Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized			0
Acquisition Adjustments
ASSETS
Cash and cash equivalents			0
Related party receivable			0
Prepaid expenses			0
Receivable and other current assets			0
Total Current Assets			0
Captialized production costs			0
Property and equipment			0
Deposits			0
Total Assets			0
LIABILITIES
Accounts payable			0
Other current liabilities			0
Accrued Compensation			0
Debt			0
Loans from related party			0
Deferred revenue			0
Notes payable			0
Total Current Liabilities			0
Non Current
Convertible note			0
Loan from related party			0
Debt			0
Total Non Current Liabilities			0
Total Liabilities			0
STOCKHOLDERS' DEFICIT
Common stock, $0.015 par value, 400,000,000 shares authorized, 4,094,618 issued and outstanding at December 31, 2015			(100)
Additional paid in capital			(329,857)
Accumulated deficit			0
Total Dolphin Digital Media, Inc. Deficit			0
Non-controlling interest			0
Total Stockholders' Deficit			0
Total Liabilities and Stockholders' Deficit			0
Acquisition Adjustments | Series B Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized			(1,043)
Acquisition Adjustments | Series C Preferred Stock
STOCKHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized			$ 1,000
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3
[2]	Previously reported on Form 10-K filed with the SEC November 20, 2016

3. ACQUISITION OF DOLPHIN FIL31

3. ACQUISITION OF DOLPHIN FILMS, INC. (Details 1) - USD ($)		3 Months Ended			9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015		Sep. 30, 2016	Sep. 30, 2015
Revenues:
Production		$ 1,140,000	$ 2,393,367	[1]	$ 1,144,157	$ 2,413,996	[1]
Membership		6,225	45,000		27,253	61,011	[1]
Total revenue		1,146,225	2,438,367		1,171,410	2,475,007	[1]
Expenses:
Direct costs		1,375,734	1,559,870	[1]	1,378,173	1,835,257	[1]
Selling, general and administrative		370,984	263,371	[1]	1,019,641	1,121,868	[1]
Legal and professional		689,523	785,418	[1]	1,576,963	2,051,052	[1]
Payroll		350,264	375,109	[1]	1,101,465	1,028,836	[1]
Loss before other income (expense)		(10,878,153)	(545,401)	[1]	(13,142,705)	(3,562,006)	[1]
Other Income/(Expense)
Other income		0	0	[1]	9,660	0	[1]
Interest expense		(613,651)	(903,317)	[1]	(3,768,727)	(2,296,197)	[1]
Net loss		(11,539,173)	(1,448,718)	[1]	(22,792,952)	(5,858,203)	[1]
Net Income attributable to non- controlling interest		1,556	11,250	[1]	6,813	15,253	[1]
Net loss attributable to Dolphin Films, Inc.						(3,410,047)
Net Loss attributable to Dolphin Digital Media, Inc.						(2,463,409)
Net loss		$ (11,539,173)	$ (1,448,718)	[1]	$ (22,792,952)	(5,858,203)	[1]
Dolphin Digital Media, Inc
Revenues:
Production	[2]					2,380,412
Membership	[2]					61,011
Total revenue	[2]					2,441,423
Expenses:
Direct costs	[2]					1,334,311
Selling, general and administrative	[2]					1,869,195
Legal and professional	[2]					0
Payroll	[2]					1,028,836
Loss before other income (expense)	[2]					(1,790,919)
Other Income/(Expense)
Other income	[2]					0
Interest expense	[2]					(657,237)
Net loss	[2]					(2,448,156)
Net Income attributable to non- controlling interest	[2]					15,253
Net loss attributable to Dolphin Films, Inc.	[2]					0
Net Loss attributable to Dolphin Digital Media, Inc.	[2]					(2,463,409)
Net loss	[2]					(2,448,156)
Dolphin Films, Inc. (unaudited)
Revenues:
Production						33,584
Membership						0
Total revenue						33,584
Expenses:
Direct costs						500,946
Selling, general and administrative						130,741
Legal and professional						1,172,984
Payroll						0
Loss before other income (expense)						(1,771,087)
Other Income/(Expense)
Other income						0
Interest expense						(1,638,960)
Net loss						(3,410,047)
Net Income attributable to non- controlling interest						0
Net loss attributable to Dolphin Films, Inc.						(3,410,047)
Net Loss attributable to Dolphin Digital Media, Inc.						0
Net loss						(3,410,047)
Acquisition Adjustments
Revenues:
Production						0
Membership						0
Total revenue						0
Expenses:
Direct costs						0
Selling, general and administrative						(878,068)
Legal and professional						878,068
Payroll						0
Loss before other income (expense)						0
Other Income/(Expense)
Other income						0
Interest expense						0
Net loss						0
Net Income attributable to non- controlling interest						0
Net loss attributable to Dolphin Films, Inc.						0
Net Loss attributable to Dolphin Digital Media, Inc.						0
Net loss						$ 0
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3
[2]	As reported on Form 10Q filed with the SEC on March 31, 2015

3. ACQUISITION OF DOLPHIN FIL32

3. ACQUISITION OF DOLPHIN FILMS, INC. (Details 2) - USD ($)		3 Months Ended			9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015		Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$ (11,539,173)	$ (1,448,718)	[1]	$ (22,792,952)	$ (5,858,203)	[1]
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation					15,996	18,965	[1]
Amortization of capitalized production costs					1,108,668	1,364,312	[1]
Changes in operating assets and liabilities:
Receivables and other current assets					(1,142,727)	(2,754,593)	[1]
Prepaid expenses					69,766	2,181,311	[1]
Capitalized production costs					(256,714)	(2,526,083)	[1]
Accrued compensation					122,500	187,500	[1]
Accounts payable					(1,323,714)	(493,999)	[1]
Other Current Liabilities					4,121,106	1,799,012	[1]
Net Cash Used in Operating Activities					(15,576,686)	(6,081,778)	[1]
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment					0	(2,550)	[1]
Net Cash Used in Investing Activities					0	(2,550)	[1]
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan and Security agreement					10,569,744	2,550,131	[1]
Repayment of Loan and Security agreement					(410,000)	0	[1]
Advances from related party					320,000	4,970,018	[1]
Repayment to related party					(1,288,383)	(1,022,500)	[1]
Net Cash Provided by Financing Activities					14,166,361	6,497,649	[1]
NET INCREASE IN CASH AND CASH EQUIVALENTS					(1,410,325)	413,321	[1]
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD					2,392,685	393,075	[1]
CASH AND CASH EQUIVALENTS, END OF PERIOD		$ 982,360	806,396	[1]	982,360	806,396	[1]
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid					$ 749,249	1,355,093	[1]
Dolphin Digital Media, Inc
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	[2]					(2,448,156)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	[2]					16,415
Amortization of capitalized production costs	[2]					1,334,311
Changes in operating assets and liabilities:
Receivables and other current assets	[2]					(900,428)
Prepaid expenses	[2]					2,339
Capitalized production costs	[2]					(1,599,558)
Accrued compensation	[2]					187,500
Accounts payable	[2]					16,388
Other Current Liabilities	[2]					1,148,327
Net Cash Used in Operating Activities	[2]					(2,242,862)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment	[2]					0
Net Cash Used in Investing Activities	[2]					0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan and Security agreement	[2]					1,400,000
Repayment of Loan and Security agreement	[2]					(250,000)
Advances from related party	[2]					2,550,000
Repayment to related party	[2]					(1,022,500)
Net Cash Provided by Financing Activities	[2]					2,677,500
NET INCREASE IN CASH AND CASH EQUIVALENTS	[2]					434,638
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	[2]					198,470
CASH AND CASH EQUIVALENTS, END OF PERIOD	[2]		633,108			633,108
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid	[2]					227,298
Dolphin Films, Inc. (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss						(3,410,047)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation						2,550
Amortization of capitalized production costs						30,001
Changes in operating assets and liabilities:
Receivables and other current assets						(1,854,165)
Prepaid expenses						2,178,972
Capitalized production costs						(926,525)
Accrued compensation						0
Accounts payable						(510,387)
Other Current Liabilities						650,685
Net Cash Used in Operating Activities						(3,838,916)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment						(2,550)
Net Cash Used in Investing Activities						(2,550)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan and Security agreement						1,150,131
Repayment of Loan and Security agreement						250,000
Advances from related party						2,420,018
Repayment to related party						0
Net Cash Provided by Financing Activities						3,820,149
NET INCREASE IN CASH AND CASH EQUIVALENTS						(21,317)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD						194,605
CASH AND CASH EQUIVALENTS, END OF PERIOD			173,288			173,288
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid						627,865
Acquisition Adjustments
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss						0
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation						0
Amortization of capitalized production costs						0
Changes in operating assets and liabilities:
Receivables and other current assets						0
Prepaid expenses						0
Capitalized production costs						0
Accrued compensation						0
Accounts payable						0
Other Current Liabilities						0
Net Cash Used in Operating Activities						0
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment						0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Loan and Security agreement						0
Repayment of Loan and Security agreement						0
Advances from related party						0
Repayment to related party						0
NET INCREASE IN CASH AND CASH EQUIVALENTS						0
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD						0
CASH AND CASH EQUIVALENTS, END OF PERIOD			$ 0			0
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid						$ 0
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3
[2]	As reported on Form 10Q filed with the SEC on March 31, 2015

4. CAPITALIZED PRODUCTION COS33

4. CAPITALIZED PRODUCTION COSTS, RECEIVABLES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
5. CAPITALIZED PRODUCTION COSTS , OTHER CURRENT ASSETS
Capitalized production costs	$ 14,318,814	$ 15,170,768	[1]
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

7. NOTES PAYABLE (Details)

7. NOTES PAYABLE (Details)	9 Months Ended
	Sep. 30, 2016USD ($)
Notes Payable Details
Balance beginning of year	$ 300,000	[1]
Additions	0
Payments	0
Balance end of year	$ 300,000
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

8. LOANS FROM RELATED PARTY (De

8. LOANS FROM RELATED PARTY (Details Narrative) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Loans From Related Party Narrative Details
Accrued Interest	$ 5,788	$ 1,126,057

11. VARIABLE INTEREST ENTITIE36

11. VARIABLE INTEREST ENTITIES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015		Dec. 31, 2015
Assets	$ 22,681,390		$ 22,681,390			$ 21,369,113	[1]
Liabilities	39,610,907		39,610,907			54,233,031	[1]
Revenues	1,146,225	$ 2,438,367	1,171,410	$ 2,475,007	[1]
Max Steel Productions, LLC
Assets	19,274,629		19,274,629			18,295,633
Liabilities	(21,588,325)		(21,588,325)			(19,113,335)
Revenues	1,140,000	0	1,140,000	0
Expenses	(1,711,325)	(124,374)	(2,253,056)	(478,284)
JB Believe, LLC
Assets	125,970		125,970			143,549
Liabilities	(7,026,387)		(7,026,387)			$ (6,655,335)
Revenues	0	3,786	13,071	33,584
Expenses	$ (131,825)	$ (392,416)	$ (152,406)	$ (249,446)
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3

14. WARRANTS (Details)

14. WARRANTS (Details)	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Warrants Details
Number of Warrants, Beginning | shares	21,000,000
Number of Warrants, Issued | shares	0
Number of Warrants, Exercised | shares	0
Number of Warrants, Expired | shares	0
Number of Warrants, Ending | shares	21,000,000
Weighted Average Exercise Price, Beginning | $ / shares	$ .17
Weighted Average Exercise Price, Issued | $ / shares	0
Weighted Average Exercise Price, Exercised | $ / shares	0
Weighted Average Exercise Price, Expired | $ / shares	0
Weighted Average Exercise Price, Ending | $ / shares	$ .17

15. RELATED PARTY TRANSACTIONS

15. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Narrative Details
Officer compensation expense accrued			$ 2,187,500		$ 2,000,000
Interest accrued in other current liabilities	$ 679,549		679,549		523,144
Interest expense	54,081	$ 47,780	156,404	$ 137,152
Related party receivable	$ 521,219		$ 521,219		$ 453,529	[1]
[1]	Financial information has been retrospectively adjusted for the acquisition of Dolphin Films, Inc. See Notes 1 and 3