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
[email protected]

SOURCE: Dolphin Entertainment, Inc.



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