Business Context and Reporting Period
Company: Dolphin Digital Media, Inc. (formerly Dolphin Entertainment, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: December 30, 2010
Event: Entry into a Material Definitive Agreement regarding debt-to-equity conversion.
Key Financial Metrics
The filing does not provide standard financial statements (revenue, profit, cash flow, or margins). The primary financial data disclosed relates to a specific debt restructuring transaction:
- Debt Converted: $500,000 outstanding convertible note plus accrued interest.
- Equity Issued: 542,753 shares of Preferred Stock.
- Conversion Ratio: 1 Preferred Share converts to 4 Common Shares.
- Total Preferred Holdings: The investor (T Squared Investments LLC) will hold 1,402,753 shares of Preferred Stock post-transaction.
Material Changes
The material change reported is the conversion of a $500,000 debt obligation into equity. This transaction reduces the company's outstanding debt load and increases the number of preferred shares outstanding. The filing does not provide comparative financial data to quantify changes in liquidity or leverage ratios versus prior periods.
Guidance, Outlook, and Risks
Management Commentary: The company issued a press release on January 5, 2011, describing the transaction. No forward-looking guidance or outlook was provided in this filing.
Terms and Contingencies:
- The Preferred Stock has no voting rights.
- The Conversion Ratio is subject to adjustment for stock dividends, splits, or reclassifications.
- All Preferred Stock must convert to Common Stock upon a "Change of Control."
- The issuance was made under Section 4(2) of the Securities Act of 1933 (exemption from registration).
Investor Verification Checklist
- Verify the exact amount of accrued interest included in the $500,000 conversion value.
- Confirm the total authorized share count and the dilution impact of the 542,753 new Preferred Shares (and their potential conversion to 2,171,012 Common Shares).
- Review the "Change of Control" definition in the certificate of designation to understand mandatory conversion triggers.
- Check subsequent filings for the January 5, 2011 press release referenced in Item 9.01.