Dolphin Entertainment Q1 Revenue Grows to Record $7.2 Million

By: Dolphin Entertainment via AccessWire

May 17, 2021 at 16:15 PM EDT

"Dolphin 2.0" Commences with Q1 Formation of NFTs Division and Q2 Launch of NFT Collections for First Two Verticals: Sports and Culinary

MIAMI, FL / ACCESSWIRE / May 17, 2021 / Dolphin Entertainment, Inc. (NASDAQ: DLPN), a leading entertainment marketing and premium content production company, announces its financial results for the first quarter ended March 31, 2021.

"We are pleased to announce record quarterly revenue, breaking $7 million," states Dolphin Entertainment CEO, Bill O'Dowd. "Furthermore, our Super Group of Entertainment Marketing and Publicity companies welcomed a new addition to the family in January - B/HI, a leading PR firm for entertainment consumer products, video gaming and eSports. Now a division of 42West, the company is thriving and we couldn't be happier about the cross-selling that is already well under way."

"The first quarter also witnessed our planned expansion into Dolphin 2.0, where we will own some of the assets we are promoting. We launched our NFT Division in March, and announced our partnership with Hall of Fame Resort & Entertainment Company. And, today, our first NFTs together have hit the market, featuring the iconic Tim Brown, one of the greatest wide receivers to ever play the game."

"We also announced the culinary world will represent our second vertical for NFTs. We believe our upcoming recipe card collection will be the first major entry in the culinary NFT space, and is launching with several of the most recognized chefs in the United States. Also, we dropped today a collection of NFTs from world-famous artist Romero Britto, in collaboration with our long-time client, the South Beach Wine and Food Festival."

"We will continue to add NFT programs across all aspects of pop culture, as well as additional partnerships within the verticals we have already launched. Furthermore, we continue to expect five additional Dolphin 2.0 initiatives will be announced this year."

Highlights

Total Q1 revenue increased to $7.2 million, compared to $6.6 million in Q1 2020;
Operating loss for the quarter ended March 31, 2021 of $1.2 million, included non-cash items from depreciation and amortization of $482,712 as compared to operating loss of $870,859, which included non-cash items from depreciation and amortization of $521,003, for the same period in the prior year.
Cash and cash equivalents of $7.1 million as of March 31, 2021, compared to $7.9 million as of December 31, 2020.
Net loss for the quarter ended March 31, 2021 of $5.3 million, which included $4.4 million in non-cash items stemming from depreciation and amortization of $482,712 and a negative change in fair value of derivative liabilities, warrants, put rights and contingent consideration of $3.9 million, compared to net income of $2.1 million, which included non-cash items from depreciation and amortization of $521,003, offset by a non-cash positive change in fair value of derivative liabilities, warrants, put rights and contingent consideration items in the amount of $1.8 million, for the same period in the prior year.
Dolphin Entertainment Acquired B/HI (Formerly Bender/Helper Impact)
42West was involved in various capacities with 13 films that earned a total of 32 Academy Award nominations and won six Oscars.
Shore Fire clients performed, presented and won at the 2021 Grammys
Dolphin Entertainment Launched its Non-Fungible Tokens (NFTs) Division
Dolphin Entertainment's NFTs Division entered its 1^st vertical, Sports, with First NFT Partnership with Hall of Fame Resort & Entertainment; Announced Heisman Trophy Winners and Pro Football Hall of Fame Inductees Tim Brown, Earl Campbell and Doak Walker To Kick-Off NFT Collection
Dolphin Entertainment's NFTs Division entered its 2^nd vertical, Culinary, with NFT collectible recipe card system, launching with top chefs throughout the United States; Partnered for NFT collection with world renowned artist Romero Britto, in celebration of the 20^th anniversary of South Beach Wine & Food Festival.

About Dolphin Entertainment, Inc.

Dolphin Entertainment is a leading independent entertainment marketing and premium content development 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, gaming and hospitality industries. Viewpoint Creative and Be Social complement their efforts with full-service creative branding and production capabilities as well as social media and influencer marketing services. 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's Non-Fungible Tokens (NFTs) division is dedicated to designing, producing, distributing and promoting NFTs for itself and its clients within the film, television, music, gaming, epicurean, and technology industries. The NFTs division is comprised of executives across all six of Dolphin's wholly-owned subsidiaries blending their collective expertise in creative services, digital design, production, marketing, sales and public relations. To learn more, visit: https://www.dolphinentertainment.com

This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, Dolphin Entertainment Inc.'s offering of common stock as well as expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by the use of words such as "will," "would," "anticipate," "expect," "believe," "designed," "plan," or "intend," the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, Dolphin Entertainment's actual results may differ materially from the results discussed in its forward-looking statements. Dolphin Entertainment's forward-looking statements contained herein speak only as of the date of this press release. Factors or events Dolphin Entertainment cannot predict, including those described in the risk factors contained in its filings with the Securities and Exchange Commission, may cause its actual results to differ from those expressed in forward-looking statements. Although Dolphin Entertainment believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved, and Dolphin Entertainment undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

ASSETS	As of March 31, 2021			As of December 31, 2020
Current
Cash and cash equivalents	$	7,111,717		$	7,923,280
Restricted cash		714,096			714,096
Accounts receivable, net		4,708,359			5,027,101
Other current assets		323,020			231,890
Total current assets		12,857,192			13,896,367
Capitalized production costs, net		325,866			271,139
Right of use assets		7,586,271			7,106,279
Intangible assets, net of accumulated amortization of$ 6,142,939 and $5,747,941, respectively.		7,327,061			7,452,059
Goodwill		20,098,451			19,627,856
Property, equipment and leasehold improvements, net		736,996			800,071
Deposits and other assets		232,253			198,180
Total Assets	$	49,164,090		$	49,351,951
LIABILITIES
Current
Accounts payable	$	620,913		$	1,190,184
Term loan		800,260			900,292
Notes payable		1,049,935			846,749
Convertible notes payable at fair value		-			580,000
Paycheck Protection Program loan		582,438			582,438
Loan from related party		1,107,873			1,107,873
Accrued interest - related party		1,875,161			1,783,121
Accrued compensation - related party		2,625,000			2,625,000
Put rights		1,054,235			1,544,029
Lease liability		1,926,917			1,791,773
Contract liability		2,928,797			1,855,209
Other current liabilities		2,314,912			2,045,842
Total current liabilities		16,886,441			16,852,510
Noncurrent
Notes payable		200,721			426,645
Convertible notes payable		150,000			1,445,000
Convertible notes payable at fair value		1,298,740			947,293
Paycheck Protection Program loan		2,517,431			2,517,431
Contingent consideration		895,000			530,000
Lease liability		6,313,936			5,964,275
Warrants Liability		215,000			450,000
Other noncurrent liabilities		200,000			550,000
Total noncurrent liabilities		11,790,828			12,830,644
Total Liabilities		28,677,269			29,683,154

Commitments and contingencies (Note 19)
STOCKHOLDERS' EQUITY
Common stock, $0.015 par value, 40,000,000 shares authorized, 7,605,477 and 6,618,785, respectively, issued and outstanding at March 31, 2021 and December 31, 2020		114,080			99,281
Preferred Stock, Series C, $0.001 par value, 50,000 authorized, issued and outstanding at March 31, 2021 and December 31, 2020		1,000			1,000
Additional paid in capital		123,615,767			117,540,557
Accumulated deficit		(103,244,026	)		(97,972,041	)
Total Stockholders' Equity	$	20,486,821		$	19,668,797
Total Liabilities and Stockholders' Equity	$	49,164,090		$	49,351,951

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)

	For the three months ended
	March 31,
	2021			2020

Revenues:
Entertainment publicity	$	7,177,117		$	6,633,800
Production and distribution		-			-
Total revenues		7,177,117			6,633,800

Expenses:
Direct costs		829,151			688,977
Selling, general and administrative		1,482,471			1,120,616
Depreciation and amortization		482,712			521,003
Legal and professional		344,607			284,440
Payroll		5,233,116			4,889,623
Total expenses		8,372,057			7,504,659
Loss from operations		(1,194,940	)		(870,859	)

Other Income (expenses):
(Loss) gain on extinguishment of debt		(57,363	)		3,259,865
Loss on deconsolidation of Max Steel VIE		-			(1,484,591	)
Change in fair value of convertible notes and derivative liabilities		(871,449	)		147,459
Change in fair value of warrants		(2,562,877	)		72,515
Change in fair value of put rights		(71,106	)		1,470,740
Change in fair value of contingent consideration		(365,000	)		103,000
Acquisition costs		(22,907	)		-
Interest expense and debt amortization		(165,194	)		(624,282	)
Total other (expense) income, net		(4,115,896	)		2,944,706
(Loss) income before income taxes	$	(5,310,836	)	$	2,073,847
Income tax benefit		38,851			-
Net (loss) income	$	(5,271,985	)	$	2,073,847

(Loss) earnings per share - Basic	$	(0.73	)	$	0.40
(Loss) earnings per share - Diluted	$	(0.73	)	$	0.05

Weighted average number of shares used in per share calculation
Basic		7,267,297			4,099,713
Diluted		7,267,297			5,676,996