Dolphin Entertainment Announces Second Quarter 2020 Results

NEW YORK, NY and LOS ANGELES, CA / ACCESSWIRE / August 17, 2020 / Dolphin Entertainment, Inc. (NASDAQ:DLPN), a leading independent entertainment marketing and production company, reports its operating results for the three months ended June 30, 2020.

Bill O'Dowd, CEO of Dolphin Entertainment, commented: "This is a great day at Dolphin Entertainment. Not only have our second quarter results bested both internal and analyst expectations, but we have acquired leading influencer marketing firm Be Social, the fifth member of our Entertainment Publicity and Marketing Super Group. It is no surprise that both content and brands are increasingly marketed online. And, correspondingly, PR campaigns are often won or lost through awareness and "buzz," or the lack thereof, in social media. Having the ability to design and execute best-in-class influencer marketing and social media campaigns to complement the PR strategies created by 42West, Shore Fire Media and The Door was by far our highest priority this year. By combining Be Social with our three industry-leading PR firms, we have added tremendous capabilities, and cross-selling opportunities, to an already powerful group."

"We now have five of the six companies in place, on schedule, from the three-year plan we laid out upon joining NASDAQ in December, 2017," continued O'Dowd. "And, we are thrilled that all five companies were our first choice in their respective verticals. It is on days like today, when we add a new member to the Dolphin family, that we most feel a surge in the momentum behind the unique platform we are building."

Highlights

Total revenue, fully derived from the Company's core entertainment and publicity segment, was $5,194,725 for the three months ended June 30, 2020 as compared to $6,273,983 in the same period in the prior year.
Operating loss for the three months ended June 30, 2020 of $179,038, which included non-cash items from depreciation and amortization of $496,461, as compared to operating loss of $1,202,079 including non-cash items for depreciation and amortization of $478,560 for the same period in the prior year.
Net Loss for the three months ended June 30, 2020 of $2,943,601, which included non-cash items from net losses from changes in fair value of liabilities in the amount of $1,705,869 and debt amortization in the amount of $856,863, compared to net loss of $796,650 which included non-cash items from net gains from changes in fair value of liabilities in the amount of $723,116 for the same period in the prior year.
42West's extraordinary range of client work for 33 programs and individuals earned a total of 145 Emmy nominations. This includes the HBO limited series "Watchmen," which led all programs with 26 nominations including Outstanding Drama Series, as well as Pop TV's comedy "Schitts Creek," a 15-time nominee including nods for Outstanding Comedy Series and all four members of its principal cast (Eugene Levy, Catherine O'Hara, Daniel Levy and Annie Spencer).
The Door launched "Safe Eats" solution for New York restaurants:. Safe Eats, a 501c3 non-profit organization, answers the call of restaurant owners and consumers during this pandemic by providing the industry's most detailed toolkit for safe dining along with New York's very first trustmark for indoor/outdoor dining, takeout and delivery. Safe Eats provides a continuously updated COVID-19 operator manual, preferred pricing for PPE, and a Safe Eats trustmark/window decal signifying their commitment to public safety.
The Door announced openings and re-openings of multiple hotel clients including the opening of both Virgin Hotels Nashville and Kenoza Hall located in the Catskills region of New York, as well as the re-opening of Virgin Hotels Chicago and the Viceroy Santa Monica, which is just completing a $21 million renovation.
Viewpoint Creative completed the strategic design and full-service production of a branding campaign for long-time client Direxion, to introduce a new line-up of strategic weight ETFs. Using consistent brand and animation styles, the Direxion campaign has launched with video pre-rolls, banner ads and in print. The featured products include Direxion's FLYT (Flight to safety), ESNG (ESG) and QMJ (S&P 500 High minus low quality) products. The FLYT ETF, launched into the teeth of the COVID-19 market drawdown, has rapidly achieved success, with over $30mm in acquired assets since its debut.
Dolphin Entertainment acquired the rights to Special Delivery, an original screenplay written by Brian Hurwitz, and has attached Vaughn Stein to direct. Emerson Davis, Dolphin's Vice-President of Development and Production, is handling development of the project and will oversee production.
Viewpoint Creative announced the selection of "Worcester 6: Heroes Remembered" into the Boston International Film Festival. Viewpoint Creative conceived, shot, and produced the 5-part short-form digital series on behalf of The Leary Firefighters Foundation to honor the six heroic firefighters that perished in the Worcester Cold Storage Warehouse Fire twenty years ago.
Furthermore, on June 9, 2020, Dolphin closed on a securities purchase agreement, previously announced on June 5th, 2020, with several institutional investors for the issuance and sale of 7,900,000 shares of its common stock at a price of $1.05 per share, for aggregate gross proceeds of approximately $8.3 million, in a registered direct offering.
Today, August 17, 2020, announced a major expansion of entertainment marketing capabilities through the acquisition of influencer marketing leader, Be Social. Founded over 8 years ago by Ali Grant, Be Social is a Los Angeles-based digital communications group representing both brands and highly-engaged digital influencers. Be Social has worked with hundreds of leading beauty, fashion and lifestyle brands on influencer campaigns, including H&M, Nordstrom and Disney, oftentimes alongside the roster of digital talent they represent, which include many of the most recognized influencers across social media.

Conference Call Information

To participate in this event, dial approximately 5 to 10 minutes before the beginning of the call.
Date, Time: August 17, 2020, at 4:30 p.m. ET
Toll-Free: 877-407-0782
International: 201-689-8567
Live Webcast: https://www.webcaster4.com/Webcast/Page/2225/36620

Conference Call Replay Information

The replay will be available beginning approximately 1 hour after the completion of the live event.
Toll-Free: 877-481-4010
Reference ID: 36620

About Dolphin Entertainment, Inc.

Dolphin Entertainment is a leading independent entertainment marketing and production company. Through our subsidiaries 42West, The Door and Shore Fire Media, we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the film, television, music and hospitality industries. In December 2019, all three PR firms were ranked among the Observer's "Power 50" PR Firms in the United States, an unprecedented achievement. Dolphin's acquisition of Viewpoint Creative adds full-service creative branding and production capabilities to our marketing group. Dolphin's legacy content production business, founded by Emmy-nominated CEO Bill O'Dowd, has produced multiple feature films and award-winning digital series.

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)

ASSETS

 
As of June 30, 2020
 
 
As of December 31,
2019
 

Current

Cash and cash equivalents

 
$
12,560,206
 
 
$
2,196,249
 

Restricted cash

 
 
714,089
 
 
 
714,089
 

Accounts receivable, net

 
 
2,521,885
 
 
 
3,581,155
 

Other current assets

 
 
187,504
 
 
 
372,872
 

Total current assets

 
 
15,983,684
 
 
 
6,864,365
 

Capitalized production costs

 
 
274,575
 
 
 
203,036
 

Right-of-use assets

 
 
6,567,094
 
 
 
7,435,903
 

Intangible assets, net of accumulated amortization of $5,130,784 and $4,299,794, respectively.

 
 
7,530,549
 
 
 
8,361,539
 

Goodwill

 
 
18,072,825
 
 
 
17,947,989
 

Property, equipment and leasehold improvements, net

 
 
858,098
 
 
 
1,036,849
 

Investments

 
 
220,000
 
 
 
220,000
 

Deposits and other assets

 
 
239,746
 
 
 
502,045
 

Total Assets

 
$
49,746,571
 
 
$
42,571,726
 

LIABILITIES

Current

Accounts payable

 
$
966,096
 
 
$
832,089
 

Other current liabilities

 
 
2,667,019
 
 
 
3,387,130
 

Line of credit

 
 
–
 
 
 
1,700,390
 

Term loan

 
 
1,100,357
 
 
 
–
 

Put Rights

 
 
2,663,237
 
 
 
2,879,403
 

Accrued compensation

 
 
2,625,000
 
 
 
2,625,000
 

Accrued interest

 
 
2,071,073
 
 
 
1,986,679
 

Debt

 
 
–
 
 
 
3,311,198
 

Paycheck Protection Program loan

 
 
1,041,997
 
 
 
–
 

Loan from related party

 
 
1,107,873
 
 
 
1,107,873
 

Lease liability

 
 
1,515,458
 
 
 
1,610,022
 

Contract liability

 
 
370,466
 
 
 
309,880
 

Convertible notes payable

 
 
802,500
 
 
 
2,383,610
 

Convertible notes payable at fair value

 
 
740,000
 
 
 
–
 

Notes payable

 
 
692,743
 
 
 
288,237
 

Total current liabilities

 
 
18,363,819
 
 
 
22,421,511
 

Noncurrent

Put Rights

 
 
–
 
 
 
124,144
 

Convertible notes payable

 
 
195,000
 
 
 
1,100,000
 

Convertible notes payable at fair value

 
 
1,654,522
 
 
 
629,618
 

Warrants Liability

 
 
585,559
 
 
 
189,590
 

Derivative liability

 
 
–
 
 
 
170,000
 

Notes payable

 
 
625,429
 
 
 
1,074,122
 

Paycheck Protection Program loan

 
 
1,753,703
 
 
 
–
 

Contingent consideration

 
 
800,000
 
 
 
330,000
 

Lease liability

 
 
5,659,094
 
 
 
6,386,209
 

Other noncurrent liabilities

 
 
570,000
 
 
 
570,000
 

Total noncurrent liabilities

 
 
11,843,307
 
 
 
10,573,683
 

Total Liabilities

 
 
30,207,126
 
 
 
32,995,194
 

STOCKHOLDERS' EQUITY

Common stock, $0.015 par value, 200,000,000 shares authorized, 31,608,903 and 17,892,900, respectively, issued and outstanding at June 30, 2020 and December 31, 2019.

 
 
474,142
 
 
 
268,402
 

Preferred Stock, Series C, $0.001 par value, 50,000 authorized, issued and outstanding at June 30, 2020 and December 31, 2019.

 
 
1,000
 
 
 
1,000
 

Additional paid in capital

 
 
115,966,906
 
 
 
106,465,896
 

Accumulated deficit

 
 
(96,902,603
)
 
 
(97,158,766
)

Total Stockholders' Equity

 
$
19,539,445
 
 
$
9,576,532
 

Total Liabilities and Stockholders' Equity

 
$
49,746,571
 
 
$
42,571,726
 

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
For the three and six months ended June 30, 2020 and 2019

 
For the three months ended
 
 
For the six months ended
 

 
June 30,
 
 
June 30,
 

 
2020
 
 
2019
 
 
2020
 
 
2019
 

Revenues:

Entertainment publicity and marketing

 
$
5,194,725
 
 
$
6,273,983
 
 
$
11,828,525
 
 
$
12,523,890
 

Content production

 
 
–
 
 
 
–
 
 
 
–
 
 
 
78,990
 

Total revenues

 
 
5,194,725
 
 
 
6,273,983
 
 
 
11,828,525
 
 
 
12,602,880
 

Expenses:

Direct costs

 
 
656,849
 
 
 
1,279,657
 
 
 
1,285,361
 
 
 
2,467,076
 

Selling, general and administrative

 
 
978,527
 
 
 
1,071,460
 
 
 
2,223,345
 
 
 
1,859,623
 

Depreciation and amortization

 
 
496,461
 
 
 
478,560
 
 
 
1,017,464
 
 
 
960,203
 

Legal and professional

 
 
362,853
 
 
 
449,061
 
 
 
572,314
 
 
 
832,732
 

Payroll

 
 
2,879,073
 
 
 
4,197,324
 
 
 
7,779,939
 
 
 
8,510,486
 

Total expenses

 
 
5,373,763
 
 
 
7,476,062
 
 
 
12,878,423
 
 
 
14,630,120
 

Loss before other income (expenses)

 
 
(179,038
)
 
 
(1,202,079
)
 
 
(1,049,898
)
 
 
(2,027,240
)

Other income (expenses):

Gain (loss) on extinguishment of debt

 
 
–
 
 
 
–
 
 
 
3,259,866
 
 
 
(21,287
)

Change in fair value of convertible notes and derivative liabilities

 
 
(696,420
)
 
 
30,000
 
 
 
(548,961
)
 
 
30,000
 

Loss on deconsolidation of Max Steel VIE

 
 
–
 
 
 
–
 
 
 
(1,484,591
)
 
 
–
 

Change in fair value of warrants

 
 
(483,519
)
 
 
81,766
 
 
 
(411,004
)
 
 
81,766
 

Change in fair value of put rights

 
 
47,070
 
 
 
251,350
 
 
 
1,517,810
 
 
 
1,778,376
 

Change in fair value of contigent consideration

 
 
(573,000
)
 
 
360,000
 
 
 
(470,000
)
 
 
90,000
 

Interest expense and debt amortization

 
 
(1,058,694
)
 
 
(317,687
)
 
 
(1,682,976
)
 
 
(605,657
)

Total other income (expense)

 
 
(2,764,563
)
 
 
405,429
 
 
 
180,144
 
 
 
1,353,198
 

Net loss

 
$
(2,943,601
)
 
$
(796,650
)
 
$
(869,754
)
 
$
(674,042
)

Loss per share – Basic

 
$
(0.12
)
 
$
(0.05
)
 
$
(0.04
)
 
$
(0.04
)

Loss per share – Diluted

 
$
(0.12
)
 
$
(0.05
)
 
$
(0.09
)
 
$
(0.12
)

Weighted average number of shares used in per share calculation

Basic

 
 
23,596,206
 
 
 
15,969,926
 
 
 
21,818,711
 
 
 
15,957,085
 

Diluted

 
 
25,299,336
 
 
 
19,172,087
 
 
 
26,071,775
 
 
 
19,671,124
 

CONTACT:

James Carbonara
Hayden IR
(646)-755-7412
james@haydenir.com

SOURCE: Dolphin Entertainment, Inc.

ReleaseID: 602024