Dolphin Entertainment, Inc.
For the period ended Dec 31, 2024. Filed Mar 27, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 27, 2025
DLPN$0.93+3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001079973-24-000452
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-27.
0001079973-25-000490
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 153 previous paragraphs and 152 current paragraphs.
55 unchanged; 64 reworded; 31 added; 31 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 41 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
Elle Communications Acquisition
Current report
On July 15, 2024, we acquired all of the issued and outstanding membership interests of Elle, a California limited liability company, pursuant to a membership interest purchase agreement between us and the seller, Danielle Finck. Elle is a public relations agency specializing in social and environmental impact for a client roster of mission-centered brands, nonprofits and philanthropic foundations, social enterprises, sustainability and ethically made products and activists. Elle is headquartered in Los Angeles, California.
Current report
The consideration paid by us in connection with the acquisition of Elle is approximately $4.7 million. On July 15, 2024, we paid the sellers $1.9 million cash and issued the seller 961,000 shares of our common stock. At various dates during the months between July and December 2024, we paid the Elle’s seller approximately $0.6 million related to cash and working capital adjustments and will pay approximately $0.5 million on March 31, 2025 for the contingent consideration pursuant to the membership interest purchase agreement. As part of the membership interest purchase agreement, we entered into employment agreements with Danielle Finck and Silvie Snow Thomas, a key employee, each for a period of four years.
Current report
In February, 2025, Dolphin Films partnered with Aircraft Productions of Toronto, Canada to produce a re-boot of the popular 1986 MGM hockey movie “Youngblood.” The film is expected to be completed and ready for delivery in the second half of 2025.
Current report
The increase for the year ended December 31, 2024 is primarily driven by increases across substantially all subsidiaries and inclusion of $4.5 million of Special Projects, Always Alpha and Elle revenues that were not present for the full year in 2023, offset by the decrease in revenues of Viewpoint. We decided to cease the operations of Viewpoint during the year ended December 31, 2024.
Current report
Revenues from content production increased by approximately $3.4 million during the year ended December 31, 2024, compared to the same period in the prior year, in connection with revenue generated from The Blue Angels documentary film, which was released in theatres on May 17, 2024.
Current report
Direct costs increased $2.3 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase in direct costs for the year ended December 31, 2024 is directly attributable to (i) $1.8 million of capitalized production costs being amortized for the production of The Blue Angels and (ii) the increase in subsidiaries’ revenues as compared with the same period in the prior year.
Current report
Selling, general and administrative expenses decreased by approximately $0.6 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The decrease is primarily related to a decrease in office rent expense from the expiration of one of the New York office leases in August 2023, a cost savings of approximately $0.1 million and a reduction of bad debt expense of approximately $0.4 million due to improvements in our collection of accounts receivable.
Current report
Legal and professional fees had an insignificant decrease of approximately $38 thousand, or 1.5% for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Current report
Other Expenses
Current report
Income Tax Expense
Current report
Total debt amounted to $22.4 million as of December 31, 2024 compared to $19.3 million as of December 31, 2023, an increase of $3.1 million. The increase related primarily to $2.1 million increase in related party nonconvertible promissory notes and $2.0 million of the second term loan that was entered into during the year ended December 31, 2024, offset by the repayments of the first term loan.
Current report
During the year ended December 31, 2024, we sold 475,000 shares of common stock at prices ranging between $2.14 and $3.06 pursuant to the LP 2022 Purchase Agreement and received proceeds of $1.2 million.
Current report
In January and February of 2025, we entered into four convertible notes payable with an aggregate principal balance of $775,000. The convertible notes payable bear interest at a rate of 10% per annum with maturity dates ranging between the second and fifth anniversary of their respective issuance dates. The conversion price of one $100,000 convertible note payable is the 90-day trailing average trading price of our common stock prior to the date of conversion, with a floor price of $1.01. The conversion price of the second $100,000 convertible note payable is the 30-day trailing average trading price of our common stock prior to the date of conversion, with a floor price of $1.01. The conversion price of the third $100,000 convertible note payable is $1.02 per share and the conversion price of the fourth $325,000 convertible note payable is $1.11 per share.
Current report
We recorded a gain in fair value of $35,000 and a loss of $11,444 for the year ended December 31, 2024 and 2023, respectively, on its consolidated statements of operations related to this convertible note payable at fair value.
Current report
As of both December 31, 2024 and December 31, 2023, we had a balance of $0.8 million and $0.5 million, respectively, recorded as current liabilities and $3.1 million and $3.4 million, respectively, in noncurrent liabilities on its consolidated balance sheets related to these unsecured nonconvertible promissory notes.
Current report
We recorded interest expense related to these nonconvertible promissory notes of $388,000 and $338,843 for the year ended December 31, 2024 and 2023, respectively. We made interest payments of $388,000 and $308,044 during the year ended December 31, 2024 and 2023, respectively, related to the nonconvertible promissory notes.
Current report
Unsecured Nonconvertible Promissory Notes – Socialyte
Current report
We recorded interest expense related to this Socialyte Promissory Note of $120,000 and $135,000 for the years ended December 31, 2024 and 2023, respectively. No interest payments were made during the year ended December 31, 2024 and 2023, related to the Socialyte Promissory Note.
Current report
Nonconvertible Promissory Notes from Related Parties
Current report
We issued Dolphin Entertainment, LLC (“DE LLC”), an entity wholly owned by our Chief Executive Officer, William O’Dowd (the “CEO”), a nonconvertible promissory note with a principal balance of $1,107,873 which matures on December 31, 2026. On April 29, 2024 and June 10, 2024, we issued two nonconvertible promissory notes to DE LLC in the amounts of $1,000,000 and $135,000, respectively, which mature on April 29, 2029 and June 10, 2029, respectively, (collectively, “the DE LLC Notes”). The DE LLC Notes each bear interest at a rate of 10% per annum.
Current report
As of December 31, 2024 and 2023, we had an aggregate principal balance of $2,242,873 and $1,107,873, respectively, and accrued interest amounted to $263,767 and $277,423, respectively, related to the DE LLC Notes. For both the year ended December 31, 2024 and 2023, we did not repay any principal balance on the DE LLC Notes. During the year ended December 31, 2024, we made cash interest payments in the amount of $200,000 related to the DE LLC Notes.
Current report
On January 16, 2024, May 28, 2024 and December 30, 2024, we issued three nonconvertible promissory notes to Mr. Donald Scott Mock, the brother of Mr. O’Dowd, in the amount of $900,000, $75,000 and $8,112, respectively, and received proceeds of $983,112 (the “Mock Notes”). The Mock Notes bear interest at a rate of 10% per annum and mature on January 16, 2029, May 28, 2029 and December 30, 2029, respectively. As of December 31, 2024, we had a principal balance of $983,112, and accrued interest of $90,417. We did not make cash payments during the year ended December 31, 2024 related to these loans from related party.
Current report
We recorded interest expense of $276,761 and $110,787 for the year ended December 31, 2024 and 2023, respectively, related to the DE LLC Notes and Mock Notes. No interest payments were made during the year ended December 31, 2024 and 2023, related to the Mock Notes.
Current report
BankUnited Loan Agreements – Refinancing Transaction
Current report
On December 6, 2024, we entered into a second Bank United Loan Agreement (“Second BKU Loan Agreement”) for $2.0 million to finance the acquisition of Elle Communications, LLC. The Second BKU Loan Agreement carries a 1.0% origination fee and matures in December 2027. Similar to the First BKU Term Loan, the Second BKU Loan Agreement has a declining prepayment penalty equal to 3% in year one, 2% in year two and 1% in year three of the outstanding balance. (The First BKU Term Loan, Second BKU Term Loan, BKU Line of Credit and BKU Commercial Card are collectively referred to as the “Bank United Credit Facility”).
Current report
Interest on the BKU Line of Credit is variable based on the Lender’s Prime Rate. During the year ended December 31, 2024 and 2023, we recorded interest expense and made payments of $31,722 and $12,311, respectively, related to the BKU Line of Credit.
Current report
As of December 31, 2024, we had a balance of $1,686,018 classified as current liabilities and $4,782,271 classified as noncurrent liabilities, net of $96,759 of debt issuance costs, in our consolidated balance sheet related to the First BKU Term Loan and the Second BKU Term Loan. As of December 31, 2023, we had a balance of $980,651 classified as current liabilities and $4,501,963 classified as noncurrent liabilities, net of $79,907 of debt issuance costs, in our consolidated balance sheet related to the First BKU Term Loan. As of December 31, 2024 and 2023, we had a balance of $400,000 of principal outstanding under the BKU Line of Credit.
Current report
Amortization of debt origination costs under the BKU Credit Facility is included as a component of interest expense in the consolidated statements of operations and amounted to approximately $16,823 and $4,206 for the year ended December 31, 2024 and 2023, respectively.
Current report
On February 22, 2024, we received $777,905 from IMAX, as a first installment in connection with the Amazon Agreement and on July 9, 2024, we received the second installment from IMAX in the amount of $2,556,452. During the year ended December 31, 2024, we recorded revenue of $3,421,141 related to the Amazon Agreement.
Current report
During the third quarter of 2024, our stock price declined and this, in combination with recurring net losses, resulted in our market capitalization to be less than our book value. In addition, we adjusted downward the revenue projections of certain subsidiaries. We considered these to be triggering events, and therefore performed a quantitative analysis of the fair value of goodwill as of August 31, 2024. As a result of this quantitative analysis, during the third quarter of 2024, we recorded an impairment of goodwill amounting to $6.5 million, which is included in the consolidated statement of operations for the year ended December 31, 2024. During the year ended December 31, 2024, we decided to close the Viewpoint subsidiary, and therefore we impaired goodwill for $0.2 million, which is the balance of goodwill attributable to Viewpoint immediately prior to the decision to shut down. This impairment is included in the consolidated statement of operations for the year ended December 31, 2024.
Removed paragraphs (31)
Previous report
Special Projects Acquisition
Previous report
On October 2, 2023, (the “Special Projects Closing Date”), the Company acquired all of the issued and outstanding membership interests of Special Projects Media LLC, a New York limited liability company (“Special Projects”), pursuant to a membership interest purchase agreement (the “Special Projects Purchase Agreement”) between the Company and Andrea Oliveri, Nicole Vecchiarelli, Foxglove Corp and Alexandra Alonso (“Sellers”). Special Projects is a celebrity and influencer talent booking and events agency that elevates media, fashion, and lifestyle brands. Special Projects has headquarters in New York and Los Angeles.
Previous report
The consideration paid by the Company in connection with the acquisition of Special Projects is approximately $10.0 million, which is subject to adjustments based on a customary post-closing cash consideration adjustment. On the Special Projects Closing Date, the Company paid the Sellers $5.0 million cash and issued the Sellers 2.5 million shares of the Company’s common stock. The Company partially financed the cash portion of the consideration with the Refinancing Transaction described in Note 11 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. As part of the Special Projects Purchase Agreement, the Company entered into employment agreements with Andrea Oliveri and Nicole Vecchiarelli, each for a period of four years.
Previous report
For the years ended December 31, 2023 and 2022, the content production segment derived $55,518 and $18,078 of revenues from the domestic distribution ofBelieve, a feature film released in December 2013. For the year ended December 31, 2022, the majority of the content production segment revenue was derived from the sale of our NFT collection, which did not reoccur in 2023. We expect to generate income in our content production segment in the summer of 2024 with the release of the Blue Angels documentary film.
Previous report
Direct costs are mainly attributable to the EPM segment and decreased by approximately $2.6 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The decrease in direct costs is mainly driven by $0.9 million in direct costs related to NFT production and marketing costs for the year ended December 31, 2022, that were not present in the same period in 2023, as well as a $1.5 million decrease in direct costs primarily attributable to a decrease in Viewpoint’s revenue as compared to the year ended December 31, 2022.
Previous report
Selling, general and administrative expenses increased by approximately $1.9 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
Previous report
The increase is primarily related to:
Previous report
These increases were partially offset by:
Previous report
During the fourth quarter of 2022, we bypassed the optional qualitative assessment and performed a quantitative assessment of goodwill. Based on the quantitative assessment, we determined that fair value of the reporting units was above the carrying value with the exception of one of the reporting units in the entertainment publicity and marketing segment. For the goodwill value assigned to that reporting unit, we concluded the fair value of that reporting unit’s goodwill was below its carrying amount. As a result, an impairment charge of $0.9 million was recorded during the year ended December 31, 2022.
Previous report
Legal and professional fees decreased by approximately $0.4 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, due to legal, consulting and audit fees incurred during the first quarter of 2022 related to our restatement of the unaudited condensed consolidated financial statements as of, and for the three and nine month period ended September 30, 2021 included in our Form 10-Q for that period, and our revisions of the unaudited condensed consolidated financial statements as of and for the three month period ended March 31, 2021 and as of and for the three and six month period ended June 30, 2021, included in our Forms 10-Q for March 31, 2021 and June 30, 2021, respectively, all of which was disclosed in our consolidated financial statements included in our Form 10-K filed on May 26, 2022.
Previous report
Other Income and (Expenses)
Previous report
As part of the Company’s ongoing monitoring of its equity method investments, during the fourth quarter of the year ended December 31, 2023, the Company determined their investment in Midnight Theatre was impaired and therefore recorded an impairment for the entire balance of its investment as of December 31, 2023. This determination was made resulting from a review of Midnight Theatre’s operating results and projections and the Company concluded the resulting decline in the carrying value of this investment was determined to be other than temporary in nature. The impairment amounted to $0.7 million and is recorded within equity in losses of unconsolidated affiliates in the condensed consolidated statements of operations.
Previous report
Prior to the impairment recognition, the Company recorded losses in connection with its equity method investment in Midnight Theatre amounting to $0.2 million during the year ended December 31, 2023. During the year ended December 31, 2022, the Company recorded a loss of $0.1 million in connection with its equity method investment in Midnight Theatre.
Previous report
As part of the Company’s ongoing monitoring of its equity method investments, during the year ended December 31, 2023, the Company determined their investment in Crafthouse Cocktails was deemed to be impaired and therefore recorded an impairment for the entire balance of its investment as of September 30, 2023. As a result, no equity gain or loss was recorded during the three months ended September 30, 2023 or thereafter. This determination was made after Crafthouse Cocktails was unable to secure their latest round of funding. The Company concluded the resulting decline in the carrying value of this investment was not temporary in nature. The impairment amounted to $1.2 million and is recorded within equity in losses of unconsolidated affiliates in the condensed consolidated statements of operations.
Previous report
During the year ended December 31, 2023 and prior to the impairment, we recorded losses of $88.0 thousand from our equity investment in Crafthouse Cocktails, compared to losses of $0.1 million for the year ended December 31, 2022, respectively.
Previous report
Income Tax Benefit
Previous report
Total debt amounted to $19.3 million as of December 31, 2023 compared to $13.7 million as of December 31, 2022, an increase of $5.6 million or 40.9%. The increase related primarily to $5.5 million of term loan in connection with the refinancing transactions described below.
Previous report
2021 Lincoln Park Transaction
Previous report
On December 29, 2021, we entered into a purchase agreement (the “LP 2021 Purchase Agreement”) and a registration rights agreement (the “LP 2021 Registration Rights Agreement”) with Lincoln Park. Pursuant to the terms of the LP 2021 Purchase Agreement, Lincoln Park has agreed to purchase from us up to $25,000,000 of our common stock (subject to certain limitations) from time to time during the term of the LP 2021 Purchase Agreement.
Previous report
The LP 2021 Purchase Agreement was terminated effective August 12, 2022 in connection with the LP 2022 Purchase Agreement and the Company did not sell any shares pursuant to this agreement subsequent to that date. During the year ended December 31, 2022, the Company sold 1,035,000 shares of common stock at prices ranging between $3.47 and $5.15 and received proceeds of $4.4 million.
Previous report
During the year ended December 31, 2023, the Company issued two unsecured nonconvertible promissory notes in the aggregate amount of $2.6 million and received proceeds of the same amount.
Previous report
Nonconvertible Promissory Notes – Socialyte
Previous report
Credit and Security Agreement
Previous report
In connection with the purchase of Socialyte discussed in Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, Socialyte, and Social MidCo, (“MidCo”), a company wholly owned by Dolphin, entered into a Credit and Security Agreement with BankProv (“Credit Agreement”), which included a $3,000,000 secured term note (“BankProv Term Loan”) and $500,000 of a secured revolving line of credit (“Revolver”).
Previous report
Term Loan
Previous report
The Bank Prov Term Loan had a term of five years, with a maturity date of November 14, 2027. The Company was required to repay the Bank Prov Term Loan through 60 consecutive monthly payments of principal, based upon a straight-line amortization period of 84 months, based on the principal amount outstanding, plus interest at an annual rate of 7.37%, commencing on December 14, 2022, and continuing on the corresponding day of each month thereafter until it was paid in full. Any remaining unpaid principal balance, including accrued and unpaid interest and fees, if any, was to be due and payable in full on November 14, 2027, its maturity date.
Previous report
The Bank Prov Term Loan was repaid on September 29, 2023 as part of the Refinancing Transaction discussed below; therefore, as of December 31, 2023, there were no amounts outstanding under the Bank Prov Term Loan.
Previous report
Revolver
Previous report
During the year ended December 31, 2023, the Company had drawn on $400,000 from the Revolver, which was repaid on September 29, 2023 as part of the Refinancing Transaction discussed below. Therefore, as of December 31, 2023, there were no amounts outstanding under the Revolver. When drawn, the outstanding principal balance of the Revolver accrued interest from the date of the draw of the greater of (i) 5.50% per annum, or (ii) the Prime Rate (as defined in the Revolver) plus 0.75% per annum.
Previous report
Refinancing Transaction
Previous report
During the fourth quarter of 2022, we bypassed the optional qualitative assessment and performed a quantitative assessment that determined that the fair value was greater than the carrying value with the exception of one of its reporting units in the entertainment publicity and marketing segment. For the goodwill value assigned to that reporting unit, we concluded the fair value of that reporting unit’s goodwill was below its carrying amount. As a result, an impairment charge of $0.9 million was recorded during the year ended December 31, 2022.
Reworded paragraphs (64)
Previous wording
Through our subsidiaries 42West, Shore Fire and The Door, we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the entertainment and hospitality industries. 42West (Film and Television, Gaming), Shore Fire (Music), and The Door (Culinary, Hospitality, Lifestyle) are each recognized global PR and marketing leaders for the industries they serve. Viewpoint adds full-service creative branding and production capabilities to our marketing group. The Digital Dept. provides influencer marketing capabilities through divisions dedicated to influencer talent management, brand campaign strategy and execution, and influencer event ideation and production. Special Projects is the entertainment industry’s leading celebrity booking firm, specializing in uniting brands and events with celebrities and influencers across the entertainment, media, fashion, consumer product and tech industries. Dolphin’s legacy content production business, founded by our Emmy-nominated Chief Executive Officer, Bill O’Dowd, has produced multiple feature films and award-winning digital series, primarily aimed at family and young adult markets.
Current wording
Through our subsidiaries, 42West LLC (“42West”), The Door Marketing Group LLC (“The Door”), Shore Fire Media, Ltd (“Shore Fire”), The Digital Dept, LLC (“The Digital Dept.”) formerly known as Socialyte LLC (“Socialyte”) and Be Social Relations LLC (“Be Social”) that merged effective January 1, 2024, Special Projects Media, LLC (“Special Projects”), Always Alpha Sports Management, LLC (“Always Alpha”) and Elle Communications, LLC (“Elle”) we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the motion picture, television, music, gaming, culinary, hospitality, lifestyle and charitable industries. 42West (Film and Television, Gaming), Shore Fire (Music), The Door (Culinary, Hospitality, Lifestyle) and Elle (Impact, Philanthropy, Non-Profit) are each recognized global public relations and marketing leaders for the industries they serve. As a group, they were recognized as the #1 PR firm in the country in the prestigious Observer rankings earlier this year. The Digital Dept. (formerly, Socialyte and Be Social) provides influencer marketing capabilities through divisions dedicated to influencer talent management, brand campaign strategy and execution, and influencer event ideation and production. Always Alpha is a talent management firm primarily focused on representing female athletes, broadcasters and coaches. Special Projects is the entertainment industry’s leading celebrity booking firm, specializing in uniting brands and events with celebrities and influencers across the entertainment, media, fashion, consumer product and tech industries. Dolphin’s legacy content production business, Dolphin Films, founded by our Emmy-nominated Chief Executive Officer, Bill O’Dowd, has produced multiple feature films and award-winning digital series, primarily aimed at family and young adult markets.
Previous wording
We have established an acquisition strategy based on identifying and acquiring companies that complement our existing entertainment publicity and marketing services and content production businesses. We believe that complementary businesses, such as public relations companies in new and distinct entertainment verticals, can create synergistic opportunities and bolster profits and cash flow. We have identified potential acquisition targets and are in various stages of discussion with such targets. We completed the Special Projects acquisition during 2023 (discussed below), and intend to complete at least one acquisition during 2024, but there is no assurance that we will be successful in doing so, whether in 2024 or at all.
Current wording
We have established an acquisition strategy based on identifying and acquiring companies that complement our existing entertainment publicity and marketing services and content production businesses. We believe that complementary businesses can create synergistic opportunities and bolster profits and cash flow. While we may acquire additional companies in the future, we are not in active negotiations with any such companies, and there is no assurance that we will be successful in acquiring any additional companies, whether in 2025 or at all.
Previous wording
We have also established an investment strategy, “Ventures” or “Dolphin 2.0,” based upon identifying opportunities to develop internally owned assets, or acquire ownership stakes in others’ assets, in the categories of entertainment content, live events and consumer products. We believe these categories represent the types of assets wherein our expertise and relationships in entertainment marketing most influences the likelihood of success. We are in various stages of internal development and outside conversations on a wide range of opportunities within these Ventures. We intend to enter into additional investments during 2024, but there is no assurance that we will be successful in doing so, whether in 2024 or at all.
Current wording
We have also established an investment strategy, “Ventures” or “Dolphin 2.0,” based upon identifying opportunities to develop internally owned assets, or acquire ownership stakes in others’ assets, in the categories of entertainment content, live events and consumer products. We believe these categories represent the types of assets wherein our expertise and relationships in entertainment marketing most influences the likelihood of success. We are in various stages of internal development and outside conversations on a wide range of opportunities within these Ventures. We intend to enter into Venture investments during 2025, but there is no assurance that we will be successful in doing so, whether in 2025 or at all.
Previous wording
For more information on the Special Projects Acquisition, refer to Note 4 to our consolidated financial statements.
Current wording
For more information on the acquisition of Elle, refer to Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Previous wording
In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of our business are revenues, direct costs, payroll and benefits, selling, general and administrative expenses, legal and professional expenses, other income/expense and net income. Other income/expense consists mainly of interest expense, non-cash changes in fair value of liabilities, costs directly relating to our acquisitions, and gains or losses on extinguishment of debt and disposal of fixed assets.
Current wording
In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of our business are revenues, direct costs, payroll and benefits, selling, general and administrative expenses, legal and professional expenses, other income/expense and net income. Other income/expense consists mainly of interest expense, interest income and non-cash changes in fair value of liabilities,
Previous wording
We operate in two reportable segments: our entertainment publicity and marketing segment and our content production segment. The entertainment publicity and marketing segment is composed of 42West, The Door, Shore Fire, Viewpoint, The Digital Dept. and Special Projects, and provides clients with diversified services, including public relations, entertainment content marketing, strategic communications, influencer marketing, celebrity booking and live event production, creative branding, and the production of promotional video content. The content production segment is composed of Dolphin Films, Inc. (“Dolphin Films”) and Dolphin Digital Studios, which produce and distribute feature films and digital content.
Current wording
We operate in two reportable segments: our entertainment publicity and marketing segment and our content production segment. The entertainment publicity and marketing segment is composed of 42West, The Door, Shore Fire, The Digital Dept., Special Projects, Elle and Always Alpha, and provides clients with diversified services, including public relations, entertainment content marketing, strategic communications, influencer marketing, celebrity booking and live event production. The content production segment is composed of Dolphin Films and Dolphin Digital Studios, which produce and distribute feature films and digital content.
Previous wording
Our revenue is directly impacted by the retention and spending levels of existing clients and by our ability to win new clients. We believe that we have a stable client base, and we have continued to grow organically through referrals and by actively soliciting new business. We earn revenues primarily from the following sources: (i) celebrity talent services; (ii) content marketing services under multiyear master service agreements in exchange for fixed project-based fees; (iii) individual engagements for entertainment content marketing services for durations of generally between three and six months; (iv) strategic communications services; (v) engagements for marketing of special events such as food and wine festivals; (vi) engagement for marketing of brands; (vii) arranging strategic marketing agreements between brands and social media influencers or celebrities, (viii) curating and booking celebrities for live events; and (ix) content production of marketing materials on a project contract basis. For these revenue streams, we collect fees through either fixed fee monthly retainer agreements, fees based on a percentage of contracts or project-based fees.
Current wording
Our revenue is directly impacted by the retention and spending levels of existing clients and by our ability to win new clients. We believe that we have a stable client base, and we have continued to grow organically through referrals and by actively soliciting new business. We earn revenues primarily from the following sources: (i) celebrity talent services; (ii) content marketing services under multiyear master service agreements in exchange for fixed project-based fees; (iii) individual engagements for entertainment content marketing services for durations of generally between three and six months; (iv) strategic communications services; (v) engagements for marketing of special events such as food and wine festivals; (vi) engagement for marketing of brands; (vii) arranging strategic marketing agreements between brands and social media influencers or celebrities and (viii) curating and booking celebrities for live events. For these revenue streams, we collect fees through either fixed fee monthly retainer agreements, fees based on a percentage of contracts or project-based fees.
Previous wording
In June 2022, we entered into an agreement with IMAX Corporation (“IMAX”) to co-produce and co-finance a documentary motion picture on the flight demonstration squadron of the United States Navy called the Blue Angels. IMAX and Dolphin each agreed to fund 50% of the production budget which was estimated at approximately $4 million. On November 7, 2023, we agreed to pay and paid an additional $250,000, which represented 50% of the estimated additional production costs to complete the documentary. As of December 31, 2023, we had paid $2,250,000 in connection with this agreement. On April 25, 2023, IMAX entered into an acquisition agreement with Amazon Content Services LLC, (the “Amazon Agreement”) for the distribution rights of The Blue Angels. We estimate that we will derive approximately $3.75 million from this agreement. On February 22, 2024, the Company received $777,905 from IMAX, as a first installment in connection with the Amazon Agreement.
Current wording
In June 2022, we entered into an agreement with IMAX Corporation (“IMAX”) to co-produce and co-finance a documentary motion picture on the flight demonstration squadron of the United States Navy called the Blue Angels. IMAX and Dolphin each agreed to fund 50% of the production budget which was estimated at approximately $4 million. On November 7, 2023, we agreed to pay and paid an additional $250,000, which represented 50% of the estimated additional production costs to complete the documentary. We paid $2,250,000 related to productions costs of The Blue Angels in connection with this agreement. On April 25, 2023, IMAX entered into an acquisition agreement with Amazon Content Services LLC, (the “Amazon Agreement”) for the distribution rights of The Blue Angels. We estimate that we will derive approximately $3.75 million from this agreement. On February 22, 2024, we received $777,905 from IMAX, as a first installment in connection with the Amazon Agreement and on July 9, 2024, we received the second installment from IMAX in the amount of $2,556,452. The Blue Angels documentary motion picture was released in theatres on May 17, 2024 and began streaming on Amazon Prime Video on May 23, 2024.
Previous wording
For the years ended December 31, 2023 and 2022, we derived substantially all of our revenues from our entertainment publicity and marketing segment. The entertainment publicity and marketing segment includes revenues from Special Projects from the Special Projects Closing Date through December 31, 2023.
Current wording
For the years ended December 31, 2024 and 2023, we derived substantially all of our revenues from our entertainment publicity and marketing segment. The entertainment publicity and marketing segment includes revenues from Elle from July 1, 2024 through December 31, 2024.
Previous wording
For the years ended December 31, 2023 and 2022, our content production segment derived revenues from the domestic distribution ofBelieve, a feature film that was released in 2013. In addition, during the year ended December 31, 2022, the content production segment recognized revenue from the minting and sale of an NFT collection titled Creature Chronicles: Exiled Aliens. We expect to generate income from our content production segment during 2024 with the release of “The Blue Angels” documentary motion picture, discussed in the “Project Development and Related Services” above.
Current wording
During the year ended December 31, 2024, we generated revenue in our content production segment related to The Blue Angels documentary motion picture. For the year ended December 31, 2023, our content production segment derived revenues from the domestic distribution of Believe, a feature film that was released in 2013.
Previous wording
Revenues from entertainment publicity and marketing increased by approximately $3.0 million, or 8.0%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase is primarily driven by $4.7 million additional revenues from a full year of Socialyte in 2023, $1.0 million of revenues from Special Projects, which was acquired in October 2, 2023, offset by a $2.5 million decrease in revenue from our existing subsidiaries.
Current wording
Revenues from entertainment publicity and marketing increased by approximately $5.2 million, or 12.1%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Previous wording
Payroll and benefits expenses increased by approximately $6.1 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily related to an increase of $4.1 million for a full year of Socialyte payroll in 2023 compared to only 1.5 months in 2022, $0.5 million of Special Projects payroll for the period between October 2, 2023 and December 31, 2023, and an increase of $1.7 million payroll due to additional headcount and salary increases to our employees in 2023, offset by $0.2 million of stock compensation issued to our employees in 2022.
Current wording
Payroll and benefits expenses increased by approximately $3.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily related to an increase of $1.7 million for a full year of Special Projects payroll in 2023 compared to only three months in 2023, $1.2 million of Elle payroll for the period between July 15, 2024 and December 31, 2024, $0.6 million of payroll for Always Alpha for the period between June 1, 2024 and December 31, 2024, offset by a reduction in Viewpoint payroll of $0.5 million due to ceasing operations.
Previous wording
Acquisition costs for the year ended December 31, 2023 were $0.1 million, related to our acquisition of Special Projects on October 2, 2023. Acquisition costs for the year ended December 31, 2022 were $0.5 million, primarily related to our acquisition of Socialyte on November 14, 2022.
Current wording
Acquisition costs for the year ended December 31, 2024 were $0.2 million, related to our acquisition of Elle on July 15, 2024. Acquisition costs for the year ended December 31, 2023 were $0.1 million, primarily related to our acquisition of Special Projects on October 2, 2023.
Previous wording
Depreciation and amortization increased $0.5 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022 related primarily to the amortization of Socialyte and Special Projects intangible assets in 2023.
Current wording
Depreciation and amortization increased $0.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023 related primarily to nine months amortization of Special Projects intangible assets and six months amortization of Elle intangible assets in 2024, in the amount of $0.5 million that were not present in the prior year. This increase was offset by a decrease in amortization of intangible assets of the other subsidiaries in the amount of $0.4 million related to intangible assets that had previously been impaired or were fully amortized.
Previous wording
Impairment of goodwill was $9.5 million for the year ended December 31, 2023 compared to $0.9 million for the year ended December 31, 2022.
Current wording
Impairment of goodwill was $6.7 million for the year ended December 31, 2024 compared to $9.5 million for the year ended December 31, 2023.
Previous wording
As discussed in Note 5 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, in the second quarter of 2023, we performed a quantitative assessment driven by triggering events related to declines in our market capitalization combined with the lack of positive response from the market to positive information related to future projects. The quantitative assessment resulted in the impairment of goodwill in the amount of $6.5 million of one of our entertainment publicity and marketing segment reporting units. In addition, as part our annual goodwill impairment review, we concluded that the fair value of the same reporting unit’s goodwill was below its carrying amount and recorded an impairment charge amounting to $3.0 million.
Current wording
As discussed in Note 5 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, in the third quarter of 2024, we performed a quantitative assessment driven by triggering events related to declines in our market capitalization combined with decreased revenue projections for certain of our subsidiaries. The quantitative assessment resulted in the impairment of goodwill in the amount of $6.5 million of three of our entertainment publicity and marketing segment reporting units, and $0.2 million goodwill impairment as a result of the closure of one of our reporting units. During the year ended December 31, 2023, we impaired $9.5 million allocated to several of our reporting units.
Previous wording
Impairment of intangible assets was $0.3 million for the year ended December 31, 2023. As discussed in Note 5 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, during the year ended December 31, 2023, the Company recognized an impairment of the trademarks and trade names of Socialyte and Be Social in connection with the rebranding of both subsidiaries as the new “The Digital Dept.” of the Company.
Current wording
Impairment of intangible assets was $0.3 million for the year ended December 31, 2023. As discussed in Note 5 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, during the year ended December 31, 2023, we recognized an impairment of the trademarks and trade names of Socialyte and Be Social in connection with the rebranding of both subsidiaries as the new “The Digital Dept.”. No such impairment was recorded during the year ended December 31, 2024.
Previous wording
Write-off of notes receivables was $4.1 million for the year ended December 31, 2023. As discussed in Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, during the fourth quarter of the year ended December 31, 2023, the Company determined the Midnight Theatre Notes had been impaired, resulting from a review of Midnight Theatre’s operating results and projections. As a result, as of December 31, 2023 the Company wrote off all outstanding Midnight Theatre Notes and any accumulated unpaid interest receivable.
Current wording
Write-off of notes receivables was $1.3 million and $4.1 million for the years ended December 31, 2024 and 2023, respectively. As discussed in Note 8 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, during the third quarter of the year ended December 31, 2024, we determined the Midnight Theatre Notes issued during the year ended December 31, 2024 had been impaired, resulting from a review of Midnight Theatre’s operating results and projections. As a result, as of December 31, 2024 we wrote off all outstanding Midnight Theatre Notes. During the fourth quarter of year ended December 31, 2023, we determined that Midnight Theatre Notes issued in 2021 and 2022 had been impaired and wrote off the outstanding Midnight Theatre Notes and any accumulated unpaid interest receivable.
Previous wording
Change in fair value of the contingent consideration was a loss of $33.2 thousand for the year ended December 31, 2023, compared a $47.3 thousand gain for the year ended December 31, 2022. The main components of the change in fair value of contingent consideration were the following:
Current wording
Change in fair value of the contingent consideration was a loss of $50 thousand for the year ended December 31, 2024, compared a loss of $33.2 thousand for the year ended December 31, 2023. The main components of the change in fair value of contingent consideration were the following:
Previous wording
Change in fair value of Convertible Note at Fair Value– We elected the fair value option for a convertible note issued in 2020. The fair value of the convertible note is re-measured at every balance sheet date and any changes are recorded on our consolidated statements of operations. For the years ended December 31, 2023 and 2022, we recorded changes in the fair value of the convertible note issued in 2020 in the amount of a loss of $11.4 thousand and a gain of $0.7 million, respectively. None of the decrease in the value of the convertible notes was attributable to instrument specific credit risk.
Current wording
Change in fair value of Convertible Note at Fair Value– We elected the fair value option for a convertible note issued in 2020. The fair value of the convertible note is re-measured at every balance sheet date and any changes are recorded on our consolidated statements of operations. For the years ended December 31, 2024 and 2023, we recorded changes in the fair value of the convertible note issued in 2020 in the amount of a gain of $35.0 thousand and a loss of $11.4 thousand, respectively. None of the decrease in the value of the convertible note was attributable to instrument specific credit risk.
Previous wording
Change in fair value of warrants– Warrants issued with the convertible note payable issued in 2020, were initially measured at fair value at the time of issuance and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date, with changes in estimated fair value of each respective warrant liability recognized as other income or expense. During the year ended December 31, 2023 and 2022, the fair value of the warrants decreased by $10.0 thousand and $0.1 million, respectively; therefore, we recorded gains in the change in the fair value of the warrants for the year ended December 31, 2023 and 2022 for those amounts, on our consolidated statements of operations.
Current wording
Change in fair value of warrants– The warrant issued with the convertible note payable at fair value issued in 2020 was initially measured at fair value at the time of issuance and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date, with changes in estimated fair value of the warrant liability recognized as other income or expense. The change in fair value of the 2020 warrant that was not exercised decreased minimally for the year ended December 31, 2024 and 2023.
Previous wording
Interest income – Interest income decreased by $0.3 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to the reversal of interest income in connection with the write-off of the Midnight Theatre notes receivable during 2023.
Current wording
Interest income – Interest income increased by $8.6 thousand for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to the reversal of interest income in connection with the write-off of the Midnight Theatre Notes receivable during 2023. We did not record any interest income in connection with the Midnight Theatre Notes during the year ended December 31, 2024.
Previous wording
Interest expense– Interest expense increased by $1.2 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was primarily due to increased convertible and nonconvertible notes, the BankProv term loan in connection with the purchase of Socialyte, as well as the promissory note issued in connection with the purchase of Socialyte, which were all outstanding during 2023 for a longer period as compared to the prior year. In addition, interest expense for the year ended December 31, 2023 includes the $79,286 prepayment penalty and $91,859 write-off of unamortized debt issue costs in connection with the Refinancing Transaction as defined in Notes 4 and 11 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Current wording
Interest expense– Interest expense remained consistent for the year ended December 31, 2024 as compared to the year ended December 31, 2023. Although, we obtained new related party nonconvertible notes and an increase in the term loan financing in 2024, the increase in debt was offset by one-time interest expenses incurred in 2023 of $79,286 of prepayment penalty and $91,859 write-off of unamortized debt issuance costs in connection with the Refinancing Transaction as defined in Note 11 to our consolidated financial statements included elsewhere in this Annual Report on the Form 10-K.
Previous wording
Equity in earnings or losses of unconsolidated affiliates includes our share of income or losses from equity investees.
Current wording
Equity in earnings or losses of unconsolidated affiliates includes our share of income or losses from equity investees. We impaired our equity investments in the unconsolidated affiliates during the fourth quarter of 2023. Therefore, no income or loss has been recorded during the year ended December 31, 2024.
Previous wording
We had an income tax expense of $0.05 million for the year ended December 31, 2023, compared to an expense of $0.2 million for the year ended December 31, 2022. The income tax expense for years ended December 31, 2023 and 2022 reflect the accrual of a valuation allowance in connection with the limitations of our indefinite lived tax assets to offset our indefinite lived tax liabilities. To the extent the tax assets are unable to offset the tax liabilities, we have recorded a deferred expense for the tax liability (a “naked credit”).
Current wording
We had an income tax expense of $87.9 thousand for the year ended December 31, 2024, compared to an expense of $53.5 thousand for the year ended December 31, 2023. The income tax expense for years ended December 31, 2024 and 2023 reflect the accrual of a valuation allowance in connection with the limitations of our indefinite lived tax assets to offset our indefinite lived tax liabilities. To the extent the tax assets are unable to offset the tax liabilities, we have recorded a deferred expense for the tax liability (a “naked credit”).
Previous wording
As of December 31, 2023, we have approximately $54.0 million of pre-tax net operating loss carryforwards for U.S. federal income tax purposes that begin to expire in 2028; federal net operating losses generated after December 31, 2017 have an indefinite life and do not expire. Additionally, we have state net operating loss carryforwards amounting to $57.8 million that begin to expire in 2029. A portion of the carryforwards may expire before being applied to reduce future income tax liabilities.
Current wording
As of December 31, 2024, we have approximately $58.9 million of pre-tax net operating loss carryforwards for U.S. federal income tax purposes that begin to expire in 2029; federal net operating losses generated after December 31, 2017 have an indefinite life and do not expire. Additionally, we have state net operating loss carryforwards amounting to $63.8 million that begin to expire in 2030. A portion of the carryforwards may expire before being applied to reduce future income tax liabilities.
Previous wording
Net loss was approximately $4.8 million or $0.49 per share based on 9,799,021 weighted average shares outstanding for basic loss per share and $0.56 per share based on 9,926,926 weighted average shares outstanding on a fully diluted basis for the year ended December 31, 2022
Current wording
Net loss was approximately $12.6 million or $1.22 per share based on 10,306,904 weighted average shares outstanding for basic and fully diluted loss per share for the year ended December 31, 2024.
Previous wording
Net loss was approximately $24.4 million or $1.69 per share based on 14,413,154 weighted average shares outstanding for basic loss per share and on a fully diluted basis for the year ended December 31, 2023.
Current wording
Net loss was approximately $24.4 million or $3.39 per share based on 7,206,577 weighted average shares outstanding for basic and fully diluted loss per share for the year ended December 2023.
Previous wording
Net cash used in operating activities was $4.6 million for the year ended December 31, 2023, an increase of $0.6 million from cash used in operating activities of $4.0 million for the year ended December 31, 2022. The increase in net cash used in operations was primarily as a result of (i) $19.7 million of increased net loss for the period; offset by (ii) a $3.5 million increase in non-cash items such as depreciation and amortization, bad debt expense, share-based compensation and impairment of capitalized production costs; (iii) $8.9 million of impairment of goodwill and intangible asset; (iv) $4.6 million of write-off of notes receivables; and (v) a $2.1 million net change in working capital.
Current wording
Net cash used in operating activities was approximately $0.2 million for the year ended December 31, 2024, a change of $4.9 million from the year ended December 31, 2023. The increase in cash flows from operations was primarily as a result a $11.9 million of decreased net loss for the year and a decrease of $0.3 million net change in working capital, which was offset by an increase of $7.3 million non-cash items such as depreciation and amortization, bad debt expense, share-based compensation, impairment of capitalized production costs, impairment of goodwill and other non-cash losses.** **
Previous wording
Net cash used in investing activities for the year ended December 31, 2022 was $7.9 million, which related primarily to:
Current wording
Net cash used in investing activities for the year ended December 31, 2024 was $2.5 million, which related primarily to:
Previous wording
Net cash provided by financing activities for the year ended December 31, 2023 mainly related to:
Current wording
Net cash provided by financing activities for the year ended December 31, 2024 was $4.2 million and mainly related to:
Previous wording
Net cash provided by financing activities for the year ended December 31, 2022 mainly related to:
Current wording
Net cash provided by financing activities for the year ended December 31, 2023 was $9.9 million and mainly related to:
Previous wording
Our debt obligations in the next twelve months from December 31, 2023 increased from the obligations as of December 31, 2022. The current portion of the debt increased to $4.9 million from $4.3 million, mainly due to an increase in the current portion of the BKU Term Loan (defined below in “Credit and Security Agreement – Refinancing Transaction”) in the amount of $0.6 million as compared to the current portion of the BankProv Term Loan in the prior year. We expect our current cash position, cash expected to be generated from our operations and other availability of funds, as detailed below, to be sufficient to meet our debt requirements.
Current wording
Our debt obligations in the next twelve months from December 31, 2024 increased from the obligations as of December 31, 2023. The current portion of the debt increased to $5.4 million from $4.9 million, mainly due to an increase in the current portion of the Bank United Credit Facility (defined below in “BankUnited Loan Agreements – Refinancing Transaction”) in the amount of $0.6 million as compared to the current portion of the Bank United Credit Facility in the prior year. We expect our current cash position, cash expected to be generated from our operations and other availability of funds, as detailed below, to be sufficient to meet our debt requirements.
Previous wording
On August 10, 2022, the Company entered into a purchase agreement (the “LP 2022 Purchase Agreement”) and a registration rights agreement (the “LP 2022 Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $25,000,000 in value of its shares of common stock from time to time over a 36-month period. Pursuant to the terms of the LP 2022 Registration Rights Agreement, the issuance of shares pursuant to the LP 2022 Purchase Agreement have been registered pursuant to our effective registration statement on Form S-1, and the related prospectus dated September 15, 2022.
Current wording
On August 10, 2022, we entered into a purchase agreement (the “LP 2022 Purchase Agreement”) and a registration rights agreement (the “LP 2022 Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $25,000,000 in value of our common stock from time to time over a 36-month period. Pursuant to the terms of the LP 2022 Registration Rights Agreement, the issuance of shares pursuant to the LP 2022 Purchase Agreement have been registered pursuant to our effective registration statement on Form S-1, and the related prospectus dated September 15, 2022.
Previous wording
The Company may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 50,000 shares of common stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 75,000 shares if the closing price is not below $7.50 and up to 100,000 shares if the closing price is not below $10.00, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. The purchase price for Regular Purchases (the “Purchase Price”) shall be equal to 98.75% of the lesser of: (i) the lowest sale price of the Common Stock during the Purchase Date, or (ii) the average of the three (3) lowest closing sale prices of the Common Stock during the ten (10) business days prior to the Purchase Date. In the event we purchase the full amount allowed for a Regular Purchase on any given business day, we may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price for the accelerated and additional accelerated purchases shall be equal to the lesser of 96% of (i) the closing sale price on the accelerated purchase date, or (ii) such date’s volume weighted average price.
Current wording
We may direct Lincoln Park, at its sole discretion, and subject to certain conditions, to purchase up to 50,000 shares of common stock on any business day (a “Regular Purchase”). The amount of a Regular Purchase may be increased under certain circumstances up to 37,500 shares if the closing price is not below $15.00 and up to 50,000 shares if the closing price is not below $20.00, provided that Lincoln Park’s committed obligation for Regular Purchases on any business day shall not exceed $2,000,000. The purchase price for Regular Purchases (the “Purchase Price”) shall be equal to 98.75% of the lesser of: (i) the lowest sale price of our common stock during the Purchase Date, or (ii) the average of the three (3) lowest closing sale prices of our common stock during the ten (10) business days prior to the Purchase Date. In the event we purchase the full amount allowed for a Regular Purchase on any given business day, we may also direct Lincoln Park to purchase additional amounts as accelerated and additional accelerated purchases. The purchase price for the accelerated and additional accelerated purchases shall be equal to the lesser of 96% of (i) the closing sale price on the accelerated purchase date, or (ii) such date’s volume weighted average price.
Previous wording
Pursuant to the terms of the LP 2022 Purchase Agreement, at the time the Company signed the LP 2022 Purchase Agreement and the LP 2022 Registration Rights Agreement, the Company issued 57,313 shares of common stock to Lincoln Park as consideration for its commitment (“LP 2022 commitment shares”) to purchase shares of our common stock under the LP 2022 Purchase Agreement. The commitment shares were recorded as a period expense and included within selling, general and administrative expenses in the consolidated statements of operations.
Current wording
Pursuant to the terms of the LP 2022 Purchase Agreement, at the time we signed the LP 2022 Purchase Agreement and the LP 2022 Registration Rights Agreement, we issued 28,657 shares of common stock to Lincoln Park as consideration for its commitment (“LP 2022 commitment shares”) to purchase shares of our common stock under the LP 2022 Purchase Agreement. The commitment shares were recorded as a period expense and included within selling, general and administrative expenses in the consolidated statements of operations.
Previous wording
Under applicable rules of the NASDAQ Capital Market, the Company could not issue or sell more than 19.99% of the shares of Common Stock outstanding immediately prior to the execution of the LP 2022 Purchase Agreement to Lincoln Park under the LP 2022 Purchase Agreement without shareholder approval. At a meeting held on September 27, 2022, our shareholders approved the issuance of up to $25 million of shares of our common stock pursuant to the LP 2022 Purchase Agreement.
Current wording
Under applicable rules of the NASDAQ Capital Market, we could not issue or sell more than 19.99% of the shares of our common stock outstanding immediately prior to the execution of the LP 2022 Purchase Agreement to Lincoln Park under the LP 2022 Purchase Agreement without shareholder approval. At a meeting held on September 27, 2022, our shareholders approved the issuance of up to $25 million of shares of our common stock pursuant to the LP 2022 Purchase Agreement.
Previous wording
During the year ended December 31, 2023, the Company sold 1,150,000 shares of common stock at prices ranging between $1.65 and $2.27 pursuant to the LP 2022 Purchase Agreement and received proceeds of $2.2 million. Subsequent to December 31, 2023, the Company sold 350,000 shares of common stock at prices ranging between $1.27 and $1.53 pursuant to the LP 2022 Purchase Agreement and received proceeds of $495,200.
Current wording
During the year ended December 31, 2023, we sold 575,000 shares of common stock at prices ranging between $3.30 and $4.54 pursuant to the LP 2022 Purchase Agreement and received proceeds of $2.2 million.
Previous wording
The Company evaluated the contract that includes the right to require Lincoln Park to purchase shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. The Company has analyzed the terms of the freestanding put right and has concluded that it has insignificant value as of December 31, 2023.
Current wording
We evaluated the contract that includes the right to require Lincoln Park to purchase shares of common stock in the future (“put right”) considering the guidance in ASC 815-40, “Derivatives and Hedging — Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting. We analyzed the terms of the freestanding put right and concluded that it has insignificant value as of December 31, 2024 and 2023.
Previous wording
During the year ended December 31, 2023, the Company issued three convertible notes payable in the aggregate amount of $1,000,000. As of December 31, 2023, the Company had ten convertible notes payable outstanding. The convertible notes payable bear interest at a rate of 10% per annum, with initial maturity dates ranging between the second anniversary and the sixth anniversary of their respective issuances. The balance of each convertible note payable and any accrued interest may be converted at the noteholder’s option at any time at a purchase price based on a 90-day average closing market price per share of the common stock. On November 15, 2023, the Company entered into agreements with two noteholders, holding a total of five convertible promissory notes, to extend the maturity date for two additional years. For one of these noteholders (holding three convertible notes), the Company agreed to lower the minimum conversion price to $1.00 per share. For the remaining convertible notes, three may not be converted at a price less than $2.50 per share and four of the convertible notes payable may not be converted at a price less than $2.00 per share, which were their original terms.
Current wording
** **As of December 31, 2024 and 2023, we had ten convertible notes payable outstanding. The convertible notes payable bear interest at a rate of 10% per annum, with initial maturity dates ranging between the second anniversary and the sixth anniversary of their respective issuances. The balance of each convertible note payable and any accrued interest may be converted at the noteholder’s option at any time at a purchase price based on a 90-day average closing market price per share of the common stock. Three of the convertible notes payable may not be converted at a price less than $5.00 per share, four of the convertible notes payable may not be converted at a price less than $4.00 per share, and three of the convertible notes payable may not be converted at a price less than $2.00 per share. On November 15, 2023, we entered into agreements with two noteholders, holding a total of five convertible notes payable, to extend the maturity date for two additional years. For one of these noteholders (holding three convertible notes), we agreed to lower the minimum conversion price to $2.00 per share.
Showing the first 40 of 64 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
On January 13, 2025, we entered into a second amendment to three of the convertible notes payable held by the same investor and agreed to extend the maturity date to January 13, 2027 and lower the minimum conversion price to $1.00. For the remaining convertible notes payable, three may not be converted at a price less than $5.00 per share and four of the convertible notes payable may not be converted at a price less than $4.00 per share, which were their original terms.
Current report — wording carried from elsewhere
On April 25, 2023, IMAX entered into an acquisition agreement with Amazon Content Services LLC, (the “Amazon Agreement”) for the distribution rights of The Blue Angels. The Blue Angels documentary motion picture was released in theatres on May 17, 2024 and began streaming on Amazon Prime Video on May 23, 2024.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
During the year ended December 31, 2022, the holder of one convertible promissory note issued during 2021 converted the principal balance of $500,000 into 125,604 shares of common stock at a conversion price of $3.98 per share. At the moment of conversion, accrued interest related to this note amounted to $5,278 and was paid in cash.
Previous report — wording carried elsewhere
On April 25, 2023, IMAX entered into the Amazon Agreement for the distribution rights of the documentary The Blue Angels. We estimate that we will derive approximately $3.75 million from the acquisition agreement and we expect that the documentary motion picture will be released in May of 2024.
Previous report — wording carried elsewhere
On February 22, 2024, the Company received $777,905 from IMAX, as a first installment in connection with the Amazon Agreement.