v3.26.1
BUSINESS ACQUISITIONS AND SALES
 12 Months Ended
Dec. 31, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
BUSINESS ACQUISITIONS AND SALES

NOTE 4 —BUSINESS ACQUISITIONS AND SALES

 

Business Acquisitions

 

Elle Communications, LLC

 

On July 15, 2024, (the “Elle Closing Date”), the Company acquired all of the issued and outstanding membership interests of Elle, a California limited liability company, pursuant to a membership interest purchase agreement (the “Elle Purchase Agreement”) between the Company and Danielle Finck (“Elle Seller”). Headquartered in Los Angeles with offices in New York, Elle is an entertainment 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.

 

The total consideration paid by the Company in connection with the acquisition of Elle was approximately $4.7 million. On the Elle Closing Date, the Company paid the Elle Seller $1,863,000 cash and issued the Elle Seller 961,300 shares of the Company’s common stock. At various dates during the months between July and December 2024, the Company paid the Elle Seller approximately $0.6 million related to cash and excess working capital adjustments pursuant to the Elle Purchase Agreement.

 

The Elle Seller had the right to earn up to an additional $450,000 of consideration (the “Contingent Consideration”) for the acquisition, to be adjusted depending on the percentage increase or decrease of 2024 revenue as compared to 2023 revenue as specified in the Elle Purchase Agreement. The Contingent Consideration was calculated to be $486,000 and was paid in cash on April 14, 2025.

 

As part of the Elle Purchase Agreement, the Company entered into employment agreements with Danielle Fink and Silvie Snow Thomas, a key employee, each for a period of four years. 

 

The following table summarizes the fair value of the consideration transferred:

    
Cash paid to sellers at closing   $1,863,000 
Working capital and excess cash adjustment   630,635 
Fair value of common stock issued to the Elle Seller   1,768,792 
Contingent consideration   486,000 
Fair value of the consideration transferred  $4,748,427 

 

The following table summarizes the fair values of the assets acquired and liabilities assumed by the acquisition of Elle on the Elle Closing Date.

            
   July 15, 2024
(As initially reported)		   Measurement Period Adjustments(1)   December 31, 2024
(As adjusted)		 
Cash  $676,223   $—   $676,223 
Accounts receivable   357,570    —    357,570 
Intangibles   1,280,000    —    1,280,000 
Total identifiable assets acquired   2,313,793    —    2,313,793 
                
Accounts payable   (4,483)   —    (4,483)
Accrued expenses and other current liabilities   (388,613)   —    (388,613)
Total liabilities assumed   (393,096)   —    (393,096)
Net identifiable assets acquired   1,920,697         1,920,697 
Goodwill   2,892,065    (114,335)   2,777,730 
Fair value of the consideration transferred  $4,812,762   $(114,335)  $4,698,427 

 

(1)   Pursuant to the Elle Purchase Agreement, during the fourth quarter of 2024, the Company and the Elle Seller agreed on the working capital and cash adjustments which resulted in a $114,335 decrease to the purchase price from the initial purchase price recorded on the Elle Closing Date.

 

 

Due to the characteristics of the industry and services Dolphin provides, the acquisitions typically do not have significant amounts of physical assets since the principal assets acquired are client relationships, talent and trade names. As a result, a substantial portion of the purchase price is primarily allocated to intangibles assets and goodwill. Elle provided an additional customer vertical in which Dolphin did not have a presence and was interested in expanding. Goodwill resulting from the acquisition of Elle is not deductible for tax purposes.

 

Intangible assets acquired in the Elle acquisition amounted to:

 

  · Customer relationships: $1,080,000. The customer relationships intangible asset was valued using the multi-period excess earnings method, which was based on the estimate of future revenues and net income attributable to the existing customers, as well as any expected increases from existing customers and potential loss of customer relationships. The historical and estimated customer retention rate utilized was 88% and the assigned useful life for this asset was 7 years representing the period we expect to benefit from the asset.

 

  · Trade name: $200,000. Trade name refers to the Elle brand, which is well recognized in the target market. The fair value for the trade name was determined by using the Royalty Relief Method based on the Profit Split Method, which is based on the Company’s expected revenues and a royalty rate estimated using comparable industry and market data. As a result of the acquisition, the Company determined it was appropriate to assign a finite useful life of 5 years to the trade name. The Company decided that a finite life would be more appropriate, providing better matching of the amortization expense during the period of expected benefits.

 

The weighted-average useful life of the intangible assets acquired was 6.7 years.

   

 Unaudited Pro Forma Consolidated Statements of Operations

 

The following presents the unaudited pro forma consolidated operations as if Elle had been acquired on January 1, 2024:

    
   2024 
Revenues   $53,401,154 
Net loss  $(12,538,100)

   

The pro forma amounts for 2024 have been calculated after applying the Company’s accounting policies and adjusting the results of the acquisition of Elle to reflect (a) the amortization that would have been charged, assuming the intangible assets resulting from the acquisition had been recorded on January 1, 2024 and (b) include interest expense on the Second BKU Term Loan (see Note 10) in the amount of $78,480 for the year ended December 31, 2024.

 

The impact of the acquisition of Elle on the Company’s actual results for periods following the acquisition may differ significantly from that reflected in this unaudited pro forma information for several reasons. As a result, this unaudited pro forma information is not necessarily indicative of what the combined company’s financial condition or results of operations would have been had the acquisition been completed on January 1, 2024, as provided in this pro forma financial information. In addition, the pro forma financial information does not purport to project the future financial condition and results of operations of the combined company.

 

 

Special Projects Media LLC

 

 During the year ended December 31, 2025, the Company entered into an agreement with Andrea Oliveri and Nicole Vecchiarelli, (“Special Projects Sellers), to pay $416,171 of additional consideration related to the working capital adjustment. Since the agreement was made outside of the measurement period of one year from the acquisition date of October 1, 2023, the payment due to the Special Projects Sellers was recorded as acquisition costs in the consolidated statement of operations for the year ended December 31, 2025. The additional consideration related to the working capital adjustment was paid in installments during the year ended December 31, 2025 and there was no balance outstanding related to this arrangement as of December 31, 2025.

 

On May 14, 2024, the Company entered into an agreement with the Special Project Sellers to amend the purchase agreement of Special Projects to revise the working capital mechanism to provide the working capital surplus (as defined in the purchase agreement) plus 10% premium be paid to the Special Project Sellers by issuing 714,578 shares of the Company’s common stock. This resulted in an increase in the purchase price and goodwill of $181,688.

 

Sale of Business

 

Always Alpha Sports Management LLC

 

On November 14, 2025 (“AA Sales Date), the Company entered into a membership interest purchase agreement to sell all the issued and outstanding membership interests in Always Alpha to AA Holdings, a Delaware limited liability company. The total consideration received by the Company for the sale of Always Alpha was: (i) $243,417 in cash on AA Sales Date and (ii) three secured promissory notes each in the principal amount of $150,000, with stated maturity dates of February, May and August 2026. In addition, the Company received 150,000 Class A common units of AA Holdings, which was determined to have a nominal fair value.

 

As a result of the sale of Always Alpha, we deconsolidated our entire ownership interest in Always Alpha from our consolidated financial statements as of the AA Sales Date and recognized a gain on the disposal of $756,574 as follows:

     
Cash consideration received   $243,417 
Fair value of promissory notes   450,000 
Fair value of Class A common units of AA Holdings   — 
Fair value of consideration received  $693,417 
      
Always Alpha assets and liabilities deconsolidated     
Cash  $9,226 
Accounts receivable, net   569,880 
Other receivables   28,500 
Accounts payable   (6,226)
Deferred revenue   4,521 
Other current liabilities   (669,058)
Always Alpha net liabilities deconsolidated at carrying value   (63,157)
Gain on sale of Always Alpha  $756,574 

 

On February 13, 2026, the Company received $150,000 as payment for one of the promissory notes.