FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of consolidated financial instruments


	Level in		December 31, 2025				December 31, 2024
	Fair Value		Carrying		Fair		Carrying		Fair
	Hierarchy		Amount		Value		Amount		Value
Assets:
Cash and cash equivalents		1	$	8,756,585	$	8,756,585	$	8,203,842	$	8,203,842
Restricted cash		1		925,004		925,004		925,000		925,000

Liabilities:
Convertible notes payable		3	$	7,710,000	$	8,224,000	$	5,100,000	$	4,875,000
Convertible note payable at fair value		3		270,000		270,000		320,000		320,000
Convertible notes – related party		3		2,904,357		3,458,000		—		—
Contingent consideration⁽¹⁾		3		—		—		486,000		486,000

⁽¹⁾

On December 31, 2024, the Company calculated the final contingent consideration for the acquisition of Elle to be $486,000 and it was paid on April 14, 2025.

Schedule of convertible notes payable

Schedule of convertible notes payable
			December 31, 2025				December 31, 2024
	Level		Carrying Amount		Fair Value		Carrying Amount		Fair Value

10% convertible notes due in May 2026		3	$	500,000	$	602,000	$	—	$	—
10% convertible notes due in October 2026		3		300,000		291,000		800,000		793,000
10% convertible notes due in November 2026		3		300,000		291,000		300,000		298,000
10% convertible notes due in December 2026		3		150,000		146,000		650,000		643,000
10% convertible notes due in January 2027		3		300,000		290,000		800,000		839,000
10% convertible note due in April 2027		3		100,000		122,000		—		—
10% convertible notes due in June 2027		3		150,000		143,000		150,000		148,000
10% convertible notes due in August 2027		3		2,000,000		1,869,000		2,000,000		1,955,000
10% convertible notes due in September 2027		3		400,000		372,000		400,000		389,000
10% convertible notes due in January 2028		3		100,000		99,000		—		—
10% convertible notes due in July 2028		3		100,000		112,000		—		—
10% convertible notes due in October 2028		3		100,000		100,000		—		—
10% convertible notes due in December 2028		3		100,000		100,000		—		—
10% convertible note due in March 2029		3		50,000		65,000		—		—
10% convertible note due in April 2029		3		175,000		221,000		—		—
10% convertible note due in May 2029		3		100,000		126,000		—		—
10% convertible note due in June 2029		3		110,000		139,000		—		—
10% convertible note due in July 2029		3		350,000		394,000		—		—
10% convertible notes due in February 2030		3		425,000		553,000		—		—
10% convertible notes due in August 2030		3		1,800,000		2,075,000		—		—
10% convertible notes due in September 2030		3		100,000		114,000		—		—
10% convertible note with related party due in June 2027		3		1,302,795		2,007,000		—		—
10% convertible note with related party due in October 2029		3		1,409,495		1,286,000		—		—
10% convertible note with related party due in December 2029		3		192,067		165,000		—		—
			$	10,614,357	$	11,682,000	$	5,100,000	$	5,065,000

Schedule of convertible notes assumptions


	December 31,
Fair Value Assumption – Convertible Debt	2025			2024
Stock Price	$	1.56		$	1.07
Minimum Conversion Price	$	1.00 – 5.00		$	4.00 – 5.00
Annual Asset Volatility Estimate	$	65		$	65
Risk Free Discount Rate (based on U.S. government treasury obligation with a term similar to that of the convertible note)		3.47% – 3.71	%		4.23% - 4.26	%

Schedule of reconciliation of the fair values


	March 4th Note
Fair value as of December 31, 2023	$	355,000
Gain on change of fair value reported in the consolidated statements of operations		(35,000	)
Fair value as of December 31, 2024		320,000
Gain on change of fair value reported in the consolidated statements of operations		(50,000	)
Fair value as of December 31, 2025	$	270,000

Schedule of estimated fair value of assumptions


	December 31,
	2025			2024
Face value principal payable	$	500,000		$	500,000
Original conversion price	$	7.82		$	7.82
Value of common stock	$	1.56		$	1.07
Expected term (years)		4.18			5.18
Volatility		75	%		90	%
Risk free rate		3.66	%		5.18	%

Schedule of contingent consideration reconciliation of fair values


	Elle⁽¹⁾
Ending fair value balance reported in the consolidated balance sheet at December 31, 2023	$	—
Contingent consideration from acquisition of Elle		436,000
Loss on change of fair value reported in the consolidated statements of operations		50,000
Ending fair value balance reported in the consolidated balance sheet at December 31, 2024		486,000
Settlement of contingent consideration		(486,000	)
Ending fair value balance reported in the consolidated balance sheet at December 31, 2025	$	—

⁽¹⁾

On December 31, 2024, the Company calculated the final contingent consideration for the acquisition of Elle to be $486,000 and it was paid on April 14, 2025.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

Dolphin Entertainment, Inc. 10-K