Business Context and Reporting Period
This Form 8-K was filed by Dolphin Digital Media, Inc. on August 12, 2016. The report discloses a material financial event involving the company's wholly owned subsidiary, Dolphin Films, Inc., and its subsidiary Dolphin Max Steel Holding, LLC.
Key Financial Metrics
The filing details the creation of a direct financial obligation:
- Debt Facility: A $14.5 million non-revolving credit facility.
- Maturity Date: August 25, 2017.
- Interest Rates: Either 5.5% plus a base rate or 6.5% plus LIBOR.
- Collateral: Security interest in certain bank account funds pledged by Dolphin Films.
- Use of Proceeds: To pay a portion of print and advertising expenses for the domestic distribution of the motion picture "Max Steel."
The filing text does not provide clear values for revenue, profit, cash flow, margins, or overall liquidity positions outside of this specific transaction.
Material Changes
The primary material change is the incurrence of the $14.5 million debt obligation on August 12, 2016. This represents a new off-balance sheet arrangement or direct financial obligation not present in prior periods.
Outlook, Risks, and Management Commentary
Management commentary is limited to the specific purpose of the loan: funding the distribution of "Max Steel." The filing does not provide broader guidance, outlook, or a discussion of general risks and contingencies beyond the terms of this specific loan agreement.
Key Facts for Investor Verification
- Verify the total outstanding debt load of Dolphin Digital Media, Inc. following this $14.5 million addition.
- Confirm the specific bank accounts pledged as collateral and any restrictions on their use.
- Assess the projected box office performance of "Max Steel" to determine the company's ability to service the debt by the August 2017 maturity date.
- Review the company's most recent 10-K or 10-Q to understand the baseline liquidity before this new obligation.