Financial Data and Key Metrics Changes - Q2 2022 revenue was $10.3 million, a 19% increase year-over-year, while six months 2022 revenue reached $19.5 million, up 23% year-over-year, all from organic growth in Dolphin 1.0 business [7][33] - Operating income for Q2 2022 was approximately $489,000, compared to $221,293 for Q2 2021, reflecting a significant improvement [38] - Net income for Q2 2022 was $612,008, down from $1,349,942 in Q2 2021, primarily due to a one-time gain from debt extinguishment in the previous year [39] Business Line Data and Key Metrics Changes - Dolphin 1.0, which includes entertainment marketing, showed strong performance with significant contributions from 42West and Shore Fire Media, leading to double-digit revenue growth [12][14] - The Door, Dolphin's culinary PR firm, engaged in various promotional campaigns, contributing to overall business growth [13] - Be Social, the influencer marketing group, successfully executed campaigns for major brands, enhancing Dolphin's market presence [17] Market Data and Key Metrics Changes - The entertainment marketing sector remains robust, with Dolphin benefiting from high-profile projects like the release of "Top Gun: Maverick," which grossed over $1.3 billion globally [12] - The NFT market is anticipated to strengthen in the coming months, with Dolphin planning to launch two high-profile NFT collections in the fall [26][27] Company Strategy and Development Direction - Dolphin is focused on expanding its Dolphin 2.0 initiatives, which involve taking ownership stakes in projects and leveraging its marketing expertise to drive growth [19][20] - The company aims to diversify its investments and build a sustainable revenue model through various ventures, including Midnight Theatre and NFT projects [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased demand for earned media services as companies may cut back on expensive advertising during economic uncertainty [55] - The company expects Dolphin 2.0 revenues to begin contributing significantly in Q4 2022, particularly from the opening of Midnight Theatre and NFT launches [42][49] Other Important Information - Dolphin's debt has been significantly reduced from over $16 million to below $5.3 million, with most remaining debt being long-term [9][10] - The company has changed auditors to Grant Thornton LLP, which is expected to enhance financial reporting and compliance [11] Q&A Session Summary Question: Are all revenues from Dolphin 1.0, and when should we expect Dolphin 2.0 revenues? - Yes, all revenues are from Dolphin 1.0, and Dolphin 2.0 revenues are expected to start in Q4 2022 with the opening of Midnight Theatre and NFT launches [42] Question: Will the size of the NFT launches be similar to previous expectations? - The size of the NFT launches will remain the same, with a focus on timing for optimal market conditions [43] Question: What are the expected normalized legal and professional expenses? - Legal and professional expenses are expected to normalize to around $500,000, similar to last year's figures [45][46] Question: How might clients reducing internal marketing manpower affect Dolphin? - If clients reduce internal manpower, they may rely more on external services, potentially benefiting Dolphin's business [54]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ——————— FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 001-38331 DOLPHIN ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) ——————— Florida 86-078 ...

Dolphin Entertainment, Inc. (NASDAQ:DLPN) Q1 2022 Earnings Conference Call July 18, 2022 4:30 PM ET Company Participants James Carbonara - Hayden IR Bill O’Dowd - CEO Mirta Negrini - CFO Conference Call Participants Allen Klee - Maxim Group Brad Stevenson - Breakout Investors Operator Greetings, ladies and gentlemen, and welcome to the Dolphin Entertainment First Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions a ...

PART I — FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Dolphin Entertainment reported Q1 2022 revenue of $9.18 million, a significantly reduced net loss, and positive operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets increased to $54.1 million, liabilities decreased, and equity grew | Balance Sheet Highlights | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $9,624,275 | $7,688,743 | | Total current assets | $18,864,435 | $18,287,359 | | Goodwill | $20,021,357 | $20,021,357 | | **Total Assets** | **$54,143,466** | **$52,791,451** | | **Liabilities & Equity** | | | | Total current liabilities | $16,063,578 | $14,953,271 | | Total Liabilities | $29,426,402 | $29,856,561 | | Total Stockholders' Equity | $24,717,064 | $22,934,890 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2022 revenues grew 27.9% to $9.18 million, significantly narrowing the net loss to $0.79 million | Income Statement Highlights | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenues | $9,177,125 | $7,177,117 | | Total expenses | $10,140,834 | $8,737,057 | | Loss from operations | ($963,709) | ($1,559,940) | | Net loss | ($792,481) | ($5,271,985) | | Basic Loss per share | ($0.09) | ($0.73) | | Diluted Loss per share | ($0.13) | ($0.73) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2022 operating cash flow was $0.82 million, with financing providing $2.29 million, resulting in a $1.94 million net cash increase | Cash Flow Highlights | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $818,363 | ($52,036) | | Net cash used in investing activities | ($1,172,257) | ($525,856) | | Net cash provided by (used in) financing activities | $2,289,426 | ($233,671) | | Net increase (decrease) in cash | $1,935,532 | ($811,563) | | Cash, cash equivalents and restricted cash, end of period | $10,166,158 | $7,825,813 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue disaggregation, stable goodwill, debt, fair value measurements, equity financing, and a new IMAX co-production - All reported revenue of **$9.18 million** for Q1 2022 was generated by the Entertainment Publicity and Marketing (EPM) segment, with no revenue from the Content Production (CPD) segment[44](index=44&type=chunk) - The company's goodwill balance remained unchanged at **$20,021,357** as of March 31, 2022, with no impairment indicators identified during the quarter[49](index=49&type=chunk)[50](index=50&type=chunk) - During Q1 2022, the company sold **585,000 shares** of common stock under its agreement with Lincoln Park Capital, receiving proceeds of **$2,515,350**, with an additional **$22.5 million** remaining available as of March 31, 2022[99](index=99&type=chunk) - Subsequent to the quarter end, on June 24, 2022, the company entered into an agreement with IMAX to co-produce and co-finance a documentary on the Blue Angels, with each party funding **50%** of the production budget[125](index=125&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes 27.9% revenue growth to post-COVID recovery, reducing net loss, and highlights the 'Dolphin 2.0' investment strategy and strengthened liquidity - The company is pursuing an investment strategy called "Dolphin 2.0," focusing on acquiring ownership in assets it can market, such as entertainment content, live events, and consumer products, including NFTs, the Midnight Theatre, and Crafthouse Cocktails[128](index=128&type=chunk)[130](index=130&type=chunk) | Key Financial Metrics (Q1 2022 vs Q1 2021) | Q1 2022 | Q1 2021 | Change | | :--- | :--- | :--- | :--- | | Revenues | $9,177,125 | $7,177,117 | +$2.0M | | Payroll and benefits | $6,960,283 | $5,233,116 | +$1.7M | | Net Loss | ($792,481) | ($5,271,985) | +$4.5M | - Total debt was reduced by **$0.5 million (8.3%)** during the quarter, from **$6.2 million** at year-end 2021 to **$5.7 million** as of March 31, 2022[187](index=187&type=chunk) [Controls and Procedures](index=39&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were ineffective as of March 31, 2022, due to un-remediated material weaknesses, with remediation efforts underway - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of March 31, 2022, due to ongoing material weaknesses[212](index=212&type=chunk) - Remediation efforts are underway, including developing formal policies for risk assessment, enhancing management review precision, using a third-party consultant for complex transactions, and improving period-end closing procedures[213](index=213&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is not aware of any pending litigation expected to materially affect its financial position or operations - As of the report date, the company is **not aware** of any pending litigation[220](index=220&type=chunk) [Risk Factors](index=41&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors have occurred since the 2021 Annual Report on Form 10-K filing - No material changes to risk factors have occurred since the filing of the 2021 Form 10-K[221](index=221&type=chunk)

Dolphin Entertainment, Inc. (NASDAQ:DLPN) Q4 2021 Results Conference Call April 13, 2022 4:30 PM ET Company Participants James Carbonara - Hayden IR Bill O’Dowd - CEO Mirta Negrini - CFO Conference Call Participants Allen Klee - Maxim Group Operator Good afternoon, ladies and gentlemen, and welcome to Dolphin Entertainment Fourth Quarter 2021 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. ...

Financial Data and Key Metrics Changes - Revenue for Q3 2021 reached $9.4 million, a 70% increase year-over-year, with 41% organic growth from existing subsidiaries [10][49] - Operating income was approximately $38,000, a significant improvement from an operating loss of approximately $493,000 in Q3 2020 [52] - Net income for Q3 2021 was approximately $142,000 compared to a net loss of approximately $138,000 in the same period last year [53] - Cash and cash equivalents stood at $12.7 million as of September 30, 2021, up from $7.9 million at the end of 2020 [55] Business Line Data and Key Metrics Changes - Shore Fire Media, a music PR firm, publicized 40 tours year-to-date, contributing to the overall revenue growth [17] - 42West secured 19 Emmy nominations for its clients, showcasing the effectiveness of its PR campaigns [19] - Be Social launched a showroom concept, enhancing influencer marketing efforts and brand visibility [21][22] Market Data and Key Metrics Changes - The concert and event business is experiencing a resurgence, with significant publicity efforts aiding in the relaunch of major events [17] - The motion picture business is gradually recovering, with expectations for a full recovery by Q2 2022 [68] Company Strategy and Development Direction - The company is focusing on "Dolphin 2.0," which aims to leverage pop culture to market owned assets, including the acquisition of an ownership stake in Midnight Theater [26][32] - The NFT business is a key growth area, with plans to develop and program global NFT collections across various verticals [35][41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued revenue growth, even without a full recovery in the restaurant business, which is expected to positively impact future results [68] - The company anticipates launching additional 2.0 initiatives before the end of the year, indicating a strong pipeline of opportunities [45][46] Other Important Information - The company has achieved a record cash position, significantly exceeding its total debt, which positions it well for future acquisitions and investments [12][47] - The NFT initiative is expected to be a high-margin business, with potential for recurring revenue from secondary sales [66] Q&A Session Summary Question: What is the potential impact of NFTs on the business? - Management highlighted the excitement around NFTs, emphasizing the community-based approach and the potential for high margins and recurring revenue [60][62] Question: How is the company positioned in the recovery post-pandemic? - Management noted that growth has occurred without a full recovery, with expectations for continued momentum as the motion picture and restaurant sectors recover [68][69] Question: What are the expectations for the Midnight Theater's contribution? - Management expressed confidence in the investment, indicating that metrics will be available by the next earnings call, including advanced ticket sales [38][39] Question: How does the company view its expense structure relative to revenue growth? - Management indicated that the company is close to full staffing and expects operating leverage as the NFT business scales, which is anticipated to be the highest margin business [78]

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's analysis for Dolphin Entertainment, Inc [FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and equity, along with detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show the company's financial position, highlighting assets, liabilities, and equity as of September 30, 2021, and December 31, 2020 Consolidated Balance Sheet Highlights (Unaudited) | Account | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | **$19,951,080** | **$13,896,367** | | Cash and cash equivalents | $12,652,902 | $7,923,280 | | Goodwill | $20,015,800 | $19,627,856 | | **Total Assets** | **$54,133,675** | **$49,351,951** | | **Total Current Liabilities** | **$15,416,314** | **$16,852,512** | | **Total Liabilities** | **$30,601,506** | **$29,683,154** | | **Total Stockholders' Equity** | **$23,532,169** | **$19,668,797** | - The company's financial position strengthened, with total assets growing to **$54.13 million** and stockholders' equity increasing to **$23.53 million**. The increase in assets was primarily driven by a rise in cash and cash equivalents[10](index=10&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations detail the company's revenues, expenses, and net income or loss for the three and nine months ended September 30, 2021 and 2020 Statement of Operations Summary (Unaudited, in USD) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$9,399,432** | **$5,527,943** | **$25,219,793** | **$17,356,468** | | Income (Loss) from Operations | $38,289 | ($493,185) | ($1,100,358) | ($1,543,083) | | **Net Income (Loss)** | **$141,651** | **($137,630)** | **($3,780,392)** | **($1,007,384)** | | Diluted EPS | $0.02 | ($0.04) | ($0.50) | ($0.45) | - Revenues for the third quarter of 2021 increased by **70% year-over-year**, leading to a net income of **$141,651** compared to a net loss in the prior-year period. However, for the nine-month period, the net loss widened, primarily due to non-cash expenses related to changes in fair value of financial instruments[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The statements of cash flows summarize the company's cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2021 and 2020 Cash Flow Summary for Nine Months Ended Sep 30 (Unaudited, in USD) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $519,960 | ($607,707) | | Net cash used in investing activities | ($525,856) | ($1,060,524) | | Net cash provided by financing activities | $4,563,305 | $8,685,121 | | **Net increase in cash** | **$4,557,409** | **$7,016,890** | - The company generated positive cash flow from operations of **$0.52 million** for the first nine months of 2021, a significant improvement from the **$0.61 million** used in the same period of 2020. Financing activities were a major source of cash, primarily from the issuance of **$5.95 million** in convertible notes[19](index=19&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the accounting policies, significant transactions, and financial items presented in the consolidated financial statements - The company's recurring losses and accumulated deficit of **$101.8 million** as of September 30, 2021, raise substantial doubt about its ability to continue as a going concern. Management plans to raise additional capital to fund operations[53](index=53&type=chunk)[56](index=56&type=chunk) - On January 1, 2021, the company acquired B/HI Communications, an entertainment public relations agency, for consideration including stock and potential earn-outs[63](index=63&type=chunk)[64](index=64&type=chunk) - During 2021, the company received forgiveness for approximately **$2.8 million** in Paycheck Protection Program (PPP) loans, which was recorded as a gain on extinguishment of debt. The remaining **$0.3 million** loan was forgiven subsequent to the quarter end[33](index=33&type=chunk)[89](index=89&type=chunk)[144](index=144&type=chunk) - All company revenue for the reported periods was generated by the Entertainment Publicity and Marketing segment. The Content Production segment generated no revenue and incurred operating losses[130](index=130&type=chunk)[134](index=134&type=chunk) [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=35&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance, liquidity, and capital resources, highlighting revenue growth, non-cash charges, and going concern considerations - Revenue growth was primarily attributed to the acquisitions of Be Social and B/HI, alongside increased spending from existing clients as COVID-19 related restrictions eased[177](index=177&type=chunk) - The increase in net loss for the nine-month period was largely driven by non-cash charges, including a **$2.4 million** loss on the change in fair value of exercised warrants and a **$0.8 million** loss on the change in fair value of convertible notes[186](index=186&type=chunk)[187](index=187&type=chunk)[195](index=195&type=chunk) - The company's liquidity is supported by cash on hand and funds raised through financing activities, including the issuance of **$5.95 million** in convertible notes in 2021. Management continues to seek additional funding to support operations[204](index=204&type=chunk)[208](index=208&type=chunk)[213](index=213&type=chunk) - Management believes the company is out of compliance with certain debt covenants for its Term Loan with Bank United, N.A. as of September 30, 2021, and has consequently classified the entire loan balance as a current liability[212](index=212&type=chunk) [CONTROLS AND PROCEDURES](index=45&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were ineffective due to material weaknesses, with remediation efforts underway - Disclosure controls and procedures were determined to be ineffective due to ongoing material weaknesses[231](index=231&type=chunk) - A new material weakness was identified during the quarter concerning the processes and controls over valuation models used for measuring the fair value of certain financial instruments[231](index=231&type=chunk) - The company is implementing remediation measures, including reviewing the COSO framework, enhancing segregation of duties, and utilizing a third-party consulting firm to assist with complex accounting transactions[232](index=232&type=chunk)[234](index=234&type=chunk) [PART II — OTHER INFORMATION](index=47&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered sales of equity securities, defaults, and other required disclosures [LEGAL PROCEEDINGS](index=47&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company reports no material pending legal proceedings that would significantly impact its financial condition or operations - As of the report date, the Company is not aware of any material pending legal proceedings[238](index=238&type=chunk) [RISK FACTORS](index=47&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes have occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 - No material changes have been made to the risk factors disclosed in the 2020 Form 10-K[239](index=239&type=chunk) [UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=47&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company issued **$2.9 million** in convertible promissory notes through unregistered private placements during the third quarter of 2021 - Between July and September 2021, the Company issued **$2.9 million** in convertible promissory notes in unregistered transactions, relying on the exemption provided by Section 4(a)2 of the Securities Act[240](index=240&type=chunk)[241](index=241&type=chunk) [DEFAULTS UPON SENIOR SECURITIES](index=47&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reports no defaults upon its senior securities - None reported[242](index=242&type=chunk) [MINE SAFETY DISCLOSURES](index=47&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - None reported[243](index=243&type=chunk) [OTHER INFORMATION](index=47&type=section&id=ITEM%205.%20OTHER%20INFORMATION) The company reports no other information required to be disclosed in this section - None reported[244](index=244&type=chunk) [EXHIBITS](index=47&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including required certifications and XBRL data files - The report includes standard exhibits such as CEO/CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act and Inline XBRL documents[245](index=245&type=chunk)

Dolphin Entertainment, Inc. (NASDAQ:DLPN) Q2 2021 Results Earnings Conference Call August 16, 2021 4:30 PM ET Company Participants James Carbonara - Investor Relations Bill O'Dowd - Chief Executive Officer Mirta Negrini - Chief Financial Officer Conference Call Participants Allen Klee - Maxim Group Operator Good day, ladies and gentlemen. And welcome to the Dolphin Entertainment Second Quarter 2021 Earnings Conference Call. All lines have been placed on listen-only mode and the floor will be open for your q ...

\ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ——————— FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission file number: 001-38331 DOLPHIN ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) ——————— Florida 86-0 ...

PART I — FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and equity, with detailed notes for the three months ended March 31, 2021 [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Q1 2021 saw increased revenues to **$7.18 million** but a **net loss of $5.27 million** due to non-cash expenses, with total assets at **$49.16 million** Condensed Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2021 (USD) | December 31, 2020 (USD) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $7,111,717 | $7,923,280 | | Total current assets | $12,857,192 | $13,896,367 | | Goodwill | $20,098,451 | $19,627,856 | | Total Assets | $49,164,090 | $49,351,951 | | **Liabilities & Equity** | | | | Total current liabilities | $16,886,441 | $16,852,510 | | Total Liabilities | $28,677,269 | $29,683,154 | | Total Stockholders' Equity | $20,486,821 | $19,668,797 | Condensed Consolidated Statement of Operations (unaudited) | Metric | Three months ended March 31, 2021 (USD) | Three months ended March 31, 2020 (USD) | | :--- | :--- | :--- | | Total revenues | $7,177,117 | $6,633,800 | | Loss from operations | ($1,194,940) | ($870,859) | | Total other (expense) income, net | ($4,115,896) | $2,944,706 | | 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 | Condensed Consolidated Statement of Cash Flows (unaudited) | Cash Flow Activity | Three months ended March 31, 2021 (USD) | Three months ended March 31, 2020 (USD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($52,036) | ($351,666) | | Net Cash Used in Investing Activities | ($525,856) | ($260,532) | | Net Cash (Used in) Provided by Financing Activities | ($233,671) | $296,693 | | **Net Decrease in Cash** | **($811,563)** | **($315,505)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, COVID-19 impact, acquisitions, and a going concern warning due to recurring losses and working capital deficit - The company's financial statements raise substantial doubt about its ability to continue as a going concern due to recurring losses, a net loss of **$5.3 million** for the quarter, and an accumulated deficit of **$103.2 million** as of March 31, 2021[44](index=44&type=chunk) - On January 8, 2021, the company acquired B/HI Communications, Inc., an entertainment public relations agency, for total consideration of **$0.8 million** in common stock plus potential earn-outs, adding **$470,595** to goodwill[52](index=52&type=chunk)[49](index=49&type=chunk) Debt Composition as of March 31, 2021 | Debt Type | Amount (USD) | | :--- | :--- | | Convertible notes payable | $150,000 | | Convertible notes payable - fair value option | $1,298,740 | | Nonconvertible notes payable | $1,250,656 | | Term loan | $800,260 | | Payroll Protection Program loans | $3,099,869 | | **Total debt** | **$6,599,525** | - The company recorded significant non-cash losses from changes in fair value for various financial instruments in Q1 2021, including a **$2.56 million** loss on warrants, an **$871,449** loss on convertible notes, a **$365,000** loss on contingent consideration, and a **$71,106** loss on put rights[15](index=15&type=chunk) - All revenue for Q1 2021 and Q1 2020 was generated by the Entertainment Publicity and Marketing segment, with the Content Production segment reporting no revenue in either period[140](index=140&type=chunk)[145](index=145&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=39&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Q1 2021 performance, highlighting revenue growth from acquisitions, a significant net loss due to non-cash charges, and ongoing going concern doubts [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q1 2021 revenues increased to **$7.2 million** due to acquisitions, but a **$5.3 million net loss** resulted from higher operating expenses and significant non-cash fair value losses - Revenue from entertainment publicity and marketing increased by approximately **$0.5 million** year-over-year, primarily due to the revenues of the recently acquired Be Social and B/HI[198](index=198&type=chunk) - Payroll expenses increased by approximately **$0.3 million** year-over-year, reflecting the inclusion of Be Social and B/HI payroll costs, partially offset by personnel reductions in other subsidiaries due to COVID-19[206](index=206&type=chunk) - The significant increase in net loss was primarily driven by non-cash charges, including a **$2.56 million** loss on the change in fair value of warrants and an **$871,449** loss on the change in fair value of convertible notes[207](index=207&type=chunk)[211](index=211&type=chunk)[209](index=209&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces substantial doubt about its going concern ability due to a **$4.0 million** working capital deficit and **$103.2 million** accumulated deficit, relying on external capital - The company's financial condition, including a working capital deficit of **$4.0 million** and an accumulated deficit of **$103.2 million**, raises substantial doubt about its ability to continue as a going concern[222](index=222&type=chunk) - The company received approximately **$2.8 million** in Paycheck Protection Program (PPP) loans, which it expects will be forgiven[223](index=223&type=chunk) - As of March 31, 2021, all put rights related to the 42West acquisition had been exercised, with a remaining liability of **$1,054,235**[228](index=228&type=chunk) - The company believes it is out of compliance with certain debt covenants for its Term Loan as of March 31, 2021, classifying the entire **$800,260** balance as a current liability[231](index=231&type=chunk) [Controls and Procedures](index=49&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were ineffective due to material weaknesses, with remediation plans underway including external accounting firm assistance - Management concluded that disclosure controls and procedures were not effective as of March 31, 2021, due to material weaknesses disclosed in the 2020 Form 10-K[249](index=249&type=chunk) - Remediation plans are in progress, including a review of the COSO framework, enhancing segregation of duties, and documenting procedures for complex transactions[250](index=250&type=chunk)[251](index=251&type=chunk) - During the quarter, the company hired an accounting firm to assist in the review of accounting for complex transactions as part of its remediation efforts[252](index=252&type=chunk) PART II — OTHER INFORMATION [Risk Factors](index=50&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to previously disclosed risk factors were reported in the current period - There have been no material changes to the risk factors disclosed in the company's 2020 Annual Report on Form 10-K[255](index=255&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company issued a **$150,000** convertible promissory note and repurchased 22,867 common shares during the quarter - On March 30, 2021, the company issued a convertible promissory note for **$150,000** with a 10% annual interest rate, maturing in two years[256](index=256&type=chunk) Company Purchases of Equity Securities (Q1 2021) | Period | Total Number of Shares Purchased | Average Price Paid Per Share (USD) | | :--- | :--- | :--- | | Jan 2021 | — | $ — | | Feb 2021 | — | $ — | | Mar 2021 | 22,867 | $46.10 | | **Total** | **22,867** | **$46.10** | [Other Information](index=50&type=section&id=ITEM%205.%20OTHER%20INFORMATION) Post-quarter events include CEO and CFO salary increases and a director's resignation from the Board - Effective January 1, 2021, the annual base salary for the CEO was increased to **$400,000** and for the CFO to **$300,000**[259](index=259&type=chunk) - On May 16, 2021, Leslee Dart resigned from the Board of Directors but will continue as an employee, with the resignation not due to any disagreements with the company[260](index=260&type=chunk) [Exhibits](index=50&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed, including CEO and CFO certifications and XBRL documents - The report includes required certifications from the Chief Executive Officer and Chief Financial Officer pursuant to the Sarbanes-Oxley Act of 2002[261](index=261&type=chunk)