PART I [Business](index=6&type=section&id=Item%201.%20BUSINESS) Dolphin Entertainment is an independent entertainment marketing and production company focused on owning assets it markets [Growth Opportunities and Strategies](index=8&type=page&id=Growth%20Opportunities%20and%20Strategies) The company's growth strategy involves expanding its core marketing business and developing a portfolio of owned content and live events - **Dolphin 1.0 (Core Business) Growth:** - Expand 42West to serve more streaming service clients and enter video gaming/e-sports - Grow Shore Fire's presence in Los Angeles, Nashville, and Miami - Expand The Door's high-margin consumer products PR business - Scale The Digital Dept.'s influencer talent roster and expand into new markets like New York and Miami - Leverage Special Projects' reputation to expand its celebrity booking clientele - Selectively pursue complementary acquisitions[28](index=28&type=chunk)[32](index=32&type=chunk)[38](index=38&type=chunk) - **Dolphin 2.0 (Ventures) Growth:** - Build a portfolio of premium film, television, and digital content - Develop and produce proprietary live events, leveraging in-house booking and promotion expertise - Develop consumer products in categories like liquor, cosmetics, and fashion by partnering with producers and leveraging celebrity/influencer talent[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Entertainment Publicity and Marketing](index=9&type=page&id=Entertainment%20Publicity%20and%20Marketing) This segment comprises specialized subsidiaries offering comprehensive marketing services across entertainment, hospitality, and lifestyle industries - **42West:** Offers talent publicity, entertainment marketing (film, TV, gaming), and strategic communications. Ranked 2 in the New York Observer's Power 50 PR firms in March 2022[42](index=42&type=chunk) - **Shore Fire:** Represents top musical artists, songwriters, record labels, and cultural institutions[48](index=48&type=chunk) - **The Door:** A leading PR agency for hospitality, lifestyle, and consumer products, including celebrity chefs and food festivals[49](index=49&type=chunk) - **The Digital Dept.:** Provides influencer talent management for over 200 creators, brand marketing campaigns, and event production[50](index=50&type=chunk) - **Special Projects:** A creative agency specializing in celebrity talent strategy, event activation, and brand amplification[51](index=51&type=chunk) - **Viewpoint:** A boutique creative branding and production agency known for producing promotional videos for leading cable networks[52](index=52&type=chunk) [Content Production](index=11&type=page&id=Content%20Production) The Content Production segment develops and produces films and digital series, notably the co-produced "The Blue Angels" documentary with IMAX - In June 2022, the company entered an agreement with IMAX to co-produce and co-finance a documentary on the Blue Angels[54](index=54&type=chunk) - Dolphin and IMAX each agreed to fund 50% of the production budget. As of December 31, 2023, Dolphin had paid a total of **$2,250,000** towards the project[54](index=54&type=chunk) - The film is expected to be released in May 2024[55](index=55&type=chunk) - The company operates in two reportable segments: Entertainment Publicity and Marketing (EPM) and Content Production[21](index=21&type=chunk) - The EPM segment is a marketing "super group" composed of subsidiaries including 42West, The Door, Shore Fire, Viewpoint, The Digital Dept., and Special Projects, providing a wide range of marketing services[19](index=19&type=chunk)[21](index=21&type=chunk) - The company's "Ventures" or "Dolphin 2.0" strategy focuses on owning assets it markets, specifically in Content, Live Events, and Consumer Products[24](index=24&type=chunk)[25](index=25&type=chunk) - A significant content investment is a multi-year deal with IMAX to co-finance and produce documentaries, with the first project being "The Blue Angels," co-produced with J.J. Abrams' Bad Robot Productions, set for a May 2024 release[26](index=26&type=chunk)[27](index=27&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20RISK%20FACTORS) The company faces significant financial risks including net losses and high debt, alongside business risks like competition and client retention - The company has a history of net losses, reporting a net loss of **$24.4 million** in 2023 and **$4.8 million** in 2022, with an accumulated deficit of **$133.6 million** as of December 31, 2023[64](index=64&type=chunk) | Debt as of December 31, | 2023 | 2022 | | :--- | :--- | :--- | | Related party debt (noncurrent) | $1,107,873 | $1,107,873 | | Notes payable (current and noncurrent) | $3,880,000 | $1,368,960 | | Convertible notes payable (current and noncurrent) | $5,100,000 | $5,050,000 | | Convertible note payable – fair value option | $355,000 | $343,556 | | Term loan (current and noncurrent) | $5,482,614 | $2,867,592 | | Line of credit | $400,000 | $— | | Non-convertible promissory note – Socialyte (current) | $3,000,000 | $3,000,000 | - Management has identified material weaknesses in internal controls over financial reporting, which could lead to misstatements in financial statements[73](index=73&type=chunk) - The entertainment industry strikes by the WGA and SAG-AFTRA in 2023 adversely affected the revenues of the 42West subsidiary[84](index=84&type=chunk) - The Series C Convertible Preferred Stock, held by an entity owned by the CEO, holds approximately **57%** of the company's voting power, giving the holder significant influence over business matters[96](index=96&type=chunk)[98](index=98&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports that it has no unresolved staff comments from the SEC - None[104](index=104&type=chunk) [Cybersecurity](index=22&type=section&id=Item%201C.%20CYBERSECURITY) The company has not experienced any material cybersecurity incidents and maintains policies overseen by the Director of Information Technology and Audit Committee - The Company is not aware of any cybersecurity threats or incidents to date that have materially affected its operations or financial condition[105](index=105&type=chunk) - The Audit Committee of the Board of Directors oversees the company's cybersecurity risk management and receives updates from the Director of Information Technology at least annually[109](index=109&type=chunk) [Properties](index=22&type=section&id=Item%202.%20PROPERTIES) The company does not own any real property, leasing all its office spaces in Coral Gables, Manhattan, Brooklyn, and Los Angeles - The company does not own any real property and leases all its office spaces[111](index=111&type=chunk) - Leased office locations include Coral Gables, FL; Manhattan, NY; Brooklyn, NY; and Los Angeles, CA[64](index=64&type=chunk)[111](index=111&type=chunk) [Legal Proceedings](index=22&type=section&id=Item%203.%20LEGAL%20PROCEEDINGS) The company reports that it currently has no material legal proceedings - The company currently does not have any material legal proceedings[113](index=113&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This section is not applicable to the company - Not applicable[114](index=114&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on The Nasdaq Capital Market under "DLPN", with approximately 305 shareholders of record as of March 25, 2024 - Common stock trades on The Nasdaq Capital Market under the symbol "DLPN"[116](index=116&type=chunk) - As of March 25, 2024, there were approximately **305** shareholders of record[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, including revenue growth, significant net losses, liquidity challenges, and critical accounting estimates [Results of Operations (2023 vs. 2022)](index=28&type=page&id=Results%20of%20Operations) In 2023, revenues increased by 8.0% to $43.1 million due to acquisitions, but net loss widened to $24.4 million from impairments and write-offs | Financial Metric | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$43,123,075** | **$40,505,558** | **+8.0%** | | Entertainment Publicity & Marketing Revenue | $43,067,557 | $40,058,880 | +7.5% | | Content Production Revenue | $55,518 | $446,678 | -87.6% | | **Total Expenses** | **$63,233,572** | **$45,080,700** | **+40.3%** | | Impairment of Goodwill | $9,484,215 | $906,337 | +946.4% | | Write-off of Notes Receivable | $4,108,080 | $— | N/A | | Payroll and Benefits | $35,030,257 | $28,947,730 | +21.0% | | **Net Loss** | **($24,396,725)** | **($4,780,135)** | **+410.4%** | | **Loss Per Share (Basic)** | **($1.69)** | **($0.49)** | **+244.9%** | - The increase in revenue was primarily driven by **$4.7 million** from a full year of Socialyte and **$1.0 million** from the newly acquired Special Projects[139](index=139&type=chunk) - A goodwill impairment charge of **$9.5 million** was recorded in 2023, compared to **$0.9 million** in 2022[147](index=147&type=chunk) - The company wrote off **$4.1 million** in notes receivable from Midnight Theatre in 2023[153](index=153&type=chunk) - The company impaired its equity method investments in Midnight Theatre and Crafthouse Cocktails, resulting in a total impairment of **$2.1 million** recorded within equity in losses of unconsolidated affiliates[160](index=160&type=chunk)[162](index=162&type=chunk) [Liquidity and Capital Resources](index=34&type=page&id=Liquidity%20and%20Capital%20Resources) The company reported negative working capital and increased debt to $19.3 million in 2023, relying on financing activities for liquidity - The company had negative working capital of **$6.7 million** as of December 31, 2023 and expects to need additional funding for operations over the next 12 months[77](index=77&type=chunk) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,617,167) | ($4,027,228) | | Net cash used in investing activities | ($4,537,174) | ($7,919,355) | | Net cash provided by financing activities | $9,517,183 | $10,913,806 | - Total debt increased by **40.9%** to **$19.3 million** as of Dec 31, 2023, from **$13.7 million** in the prior year, primarily due to a **$5.5 million** term loan related to a refinancing transaction[172](index=172&type=chunk) - The company utilized its equity facility with Lincoln Park Capital, selling **1,150,000** shares for proceeds of **$2.2 million** in 2023[178](index=178&type=chunk) - In connection with the "The Blue Angels" documentary, the company received its first installment of **$777,905** from IMAX on February 22, 2024[206](index=206&type=chunk)[512](index=512&type=chunk) [Critical Accounting Estimates](index=41&type=page&id=Critical%20Accounting%20Estimates) Critical accounting estimates involve fair value assessments of goodwill and intangible assets, leading to significant impairment charges in 2023 - Critical estimates include fair value of acquisitions, goodwill, intangible assets, contingent consideration, and convertible debt[208](index=208&type=chunk) - Goodwill is tested for impairment annually or when triggering events occur. A quantitative test was performed in Q2 2023 due to the company's market capitalization falling below its book value, leading to a **$6.5 million** impairment. An additional **$3.0 million** was impaired during the annual review[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) - Intangible assets, primarily customer relationships and trade names, are amortized and reviewed for impairment. In 2023, a **$341,417** impairment was recognized on trademarks and trade names due to the rebranding of Socialyte and Be Social into "The Digital Dept."[216](index=216&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section is not required for smaller reporting companies, and therefore, no information is provided - Not required for smaller reporting companies[224](index=224&type=chunk) [Financial Statements and Supplementary Data](index=44&type=section&id=Item%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section contains the company's audited consolidated financial statements for the fiscal years ended December 31, 2023 and 2022, as audited by their independent registered public accounting firm - This item includes the Report of Independent Registered Public Accounting Firm and the following audited financial statements: - Consolidated Balance Sheets - Consolidated Statements of Operations - Consolidated Statements of Cash Flows - Consolidated Statements of Changes in Stockholders' Equity - Notes to Consolidated Financial Statements[226](index=226&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=44&type=section&id=Item%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[227](index=227&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that as of December 31, 2023, the company's disclosure controls and internal control over financial reporting were not effective due to material weaknesses - The CEO and CFO concluded that disclosure controls and procedures were not effective as of December 31, 2023[229](index=229&type=chunk) - Material weaknesses were identified in several areas: - **Control Environment, Risk Assessment, and Monitoring:** Lack of structure, insufficient resources, and ineffective risk identification - **Control Activities and Information/Communication:** Deficiencies in IT general controls (user access, segregation of duties), lack of formal accounting policies, and inadequate review controls for complex areas like business combinations and revenue recognition[234](index=234&type=chunk)[236](index=236&type=chunk) - Management's remediation plan includes developing formal policies, enhancing management review, engaging a third-party consultant for complex transactions, implementing a new ERP system, and reevaluating monitoring activities[237](index=237&type=chunk)[238](index=238&type=chunk) [Other Information](index=47&type=section&id=Item%209B.%20OTHER%20INFORMATION) The company reports that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter[242](index=242&type=chunk) PART III [Directors, Executive Officers, and Corporate Governance](index=48&type=section&id=Item%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%2C%20AND%20CORPORATE%20GOVERNANCE) Information for this item is incorporated by reference from the company's Proxy Statement for the 2024 Annual Meeting of Shareholders - Information is incorporated by reference from the Proxy Statement for the 2024 Annual Meeting of Shareholders[245](index=245&type=chunk) [Executive Compensation](index=48&type=section&id=Item%2011.%20EXECUTIVE%20COMPENSATION) Details regarding executive compensation are incorporated by reference from the company's Proxy Statement for the 2024 Annual Meeting of Shareholders - Information is incorporated by reference from the Proxy Statement for the 2024 Annual Meeting of Shareholders[246](index=246&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=48&type=section&id=Item%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) Information on security ownership by beneficial owners and management is incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2024 Annual Meeting of Shareholders[247](index=247&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=48&type=section&id=Item%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Disclosures on related party transactions and director independence are incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2024 Annual Meeting of Shareholders[248](index=248&type=chunk) [Principal Accounting Fees and Services](index=48&type=section&id=Item%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information regarding principal accounting fees and services is incorporated by reference from the company's Proxy Statement - Information is incorporated by reference from the Proxy Statement for the 2024 Annual Meeting of Shareholders[249](index=249&type=chunk) PART IV [Exhibit and Financial Statement Schedules](index=49&type=section&id=Item%2015.%20EXHIBIT%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists documents filed as part of the Annual Report, including financial statements and an index of exhibits - The financial statements required by Item 8 are included with the report[252](index=252&type=chunk) - No financial statement schedules are filed[252](index=252&type=chunk) - An index of exhibits filed with the report or incorporated by reference is provided[253](index=253&type=chunk)[254](index=254&type=chunk) [Form 10-K Summary](index=50&type=section&id=Item%2016.%20FORM%2010-K%20SUMMARY) The company has not provided a Form 10-K summary - None[258](index=258&type=chunk)

Financial Data and Key Metrics Changes - Dolphin Entertainment achieved record quarterly revenue of $12 million for Q4 2023, an increase of 8% year-over-year [21][41][81] - Adjusted operating income was approximately $300,000 for Q4 2023, compared to $100,000 for the same period in 2022 [41][42] - Operating loss for Q4 2023 was approximately $8 million, while net loss was approximately $9.6 million, including non-cash and nonrecurring items [95][96] - Cash and cash equivalents stood at $6.4 million as of December 31, 2023, compared to $6.1 million a year earlier [97] Business Line Data and Key Metrics Changes - The digital department performed strongly in Q4, achieving its goals despite the merger distractions [102] - The skincare segment is expected to be a significant growth area, with plans to launch products annually [103] - The acquisition of Special Projects is anticipated to enhance cross-selling opportunities and synergies across various companies [82] Market Data and Key Metrics Changes - The company faced significant headwinds from industry strikes, particularly the actor strike, which impacted promotional activities for films [99][100] - Despite these challenges, the company managed to secure high-profile clients and partnerships, contributing to its revenue growth [21][41] Company Strategy and Development Direction - Dolphin Entertainment aims to expand its digital department and establish a fully scaled influencer management company [31][65] - The company is focusing on launching ventures in the alcoholic beverage space, with Staple Gin set to hit the market in Q2 2024 [39][40] - The strategy includes leveraging marketing expertise without significant capital investment, positioning the company for growth and shareholder value [116][117] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the normalization of business operations post-strikes, expecting a return to normalcy by the end of Q2 2024 [105] - The company anticipates strong organic growth driven by new ventures and collaborations, with a robust pipeline of opportunities [64][71] Other Important Information - The Blue Angels documentary is expected to generate approximately $3.75 million from the acquisition agreement, providing a 75% ROI [34][88] - The company has identified a new operator for the MasterCard Midnight Theater to revitalize the venue and improve profitability [113][115] Q&A Session Summary Question: How will the business normalize in 2024 after the strikes? - Management noted that the actor strike had a significant impact, but they are optimistic about recovery as many films were pushed to 2024 [99][100] Question: How did the digital department perform in Q4? - The digital department met its goals and successfully merged teams, maintaining stability during a critical selling season [102] Question: What are the expectations for the skincare and beauty categories? - The skincare segment is a key focus, with plans to launch products annually, and the beauty category is expected to grow significantly [103] Question: What is the outlook for the Blue Angels documentary? - The documentary is anticipated to perform well, with a strong promotional strategy in place for its theatrical release [88][92] Question: What are the plans for the MasterCard Midnight Theater? - The company is actively seeking a new operator to revitalize the restaurant and improve overall venue performance [113][115]

Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $10.2 million, representing a 3% increase year-over-year despite industry-wide strikes and an internal merger distraction [9][36] - Operating loss for Q3 2023 was $2.1 million, which includes approximately $1.2 million in noncash charges [9][37] - Net loss for Q3 2023 was $3.9 million, including nonrecurring write-offs and noncash items totaling approximately $2.4 million [15][37] - Cash and cash equivalents stood at $6.4 million as of September 30, 2023, compared to $6.1 million at the end of 2022 [63] Business Line Data and Key Metrics Changes - The merger of influencer marketing agencies created a new digital department, which is expected to drive growth in new verticals such as sports and culinary [4][10] - Operating expenses for Q3 2023 were approximately $12.3 million, up from $11 million in Q3 2022, with payroll costs increasing to approximately $8.4 million [14][37] Market Data and Key Metrics Changes - The company anticipates a return to normal operations post-strikes, with expectations of cash flow positivity by Q2 2024 [20][42] - The partnership with Mastercard is expected to enhance the visibility and value of the Midnight Theatre venue, which is located in a significant $4.5 billion complex in Manhattan [33][36] Company Strategy and Development Direction - Dolphin Entertainment aims to expand its influencer marketing capabilities and diversify revenue sources across seven operating subsidiaries [6][10] - The acquisition of Special Projects is seen as a strategic move to enhance the company's position in the live events market and leverage synergies with existing PR firms [12][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the challenges posed by industry strikes and anticipates a strong recovery in Q1 2024 [32][42] - The company believes it is in its strongest position in history, with a diversified revenue base and expectations of cash operating profits in 2024 [6][10] Other Important Information - The company has completed a seven-year journey to build an entertainment marketing Super Group, culminating in the acquisition of Special Projects [5][35] - The Midnight Theatre has begun operations seven days a week and is expected to host various events, including performances by renowned artists [33][36] Q&A Session Summary Question: When is the Blue Angels project expected to go into theaters? - The Blue Angels project is expected to be in theaters by Q2 2024, with revenue recognition anticipated upon delivery of the film [39] Question: Do clients pay more when they win awards? - Yes, clients typically pay a retainer during award campaigns and may receive bonuses for nominations, which can extend the duration of the campaign [40] Question: What is the expected impact of the Mastercard partnership on Midnight Theatre? - The partnership is expected to provide financial stability and operational support, enhancing the venue's profile and event offerings [45] Question: How does the company plan to grow its influencer marketing business? - The company plans to build out new verticals in influencer marketing, with a focus on sports and other areas, leveraging the recent merger [44] Question: Will there be any exits from equity stakes in products or companies in 2024? - The company anticipates potential exits in the second half of 2024, depending on the performance of certain products and partnerships [49]

PART I — FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The company reported increased revenue but a significantly widened net loss due to impairment charges, with declining assets and equity [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$65.7 million** due to goodwill impairment, while liabilities rose and equity significantly declined Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2023 ($) | Dec 31, 2022 ($) | | :--- | :--- | :--- | | **Total Assets** | **$65,740,268** | **$75,376,832** | | Cash and cash equivalents | $6,406,646 | $6,069,889 | | Goodwill | $22,796,683 | $29,314,083 | | **Total Liabilities** | **$42,845,304** | **$41,285,740** | | Total debt (Current + Noncurrent) | $19,234,619 | $13,737,981 | | **Total Stockholders' Equity** | **$22,894,964** | **$34,091,092** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue increased to **$31.1 million**, but net loss significantly widened to **$14.8 million** due to impairment charges and higher expenses Statement of Operations Summary (Unaudited) | Metric | Nine Months Ended Sep 30, 2023 ($) | Nine Months Ended Sep 30, 2022 ($) | | :--- | :--- | :--- | | **Revenues** | **$31,100,867** | **$29,366,748** | | Total Expenses | $43,228,963 | $32,333,954 | | Impairment of goodwill | $6,517,400 | $0 | | Loss from operations | $(12,128,096) | $(2,967,206) | | **Net loss** | **$(14,791,892)** | **$(2,850,863)** | | **Diluted loss per share** | **$(1.11)** | **$(0.37)** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was **$4.5 million**, offset by **$7.4 million** from financing, resulting in a **$2.9 million** cash increase Cash Flow Summary (Unaudited) | Cash Flow Activity | Nine Months Ended Sep 30, 2023 ($) | Nine Months Ended Sep 30, 2022 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,492,645) | $(3,634,388) | | Net cash used in investing activities | $(21,893) | $(3,172,544) | | Net cash provided by financing activities | $7,447,203 | $4,169,351 | | **Net increase (decrease) in cash** | **$2,932,665** | **$(2,637,581)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, significant impairments, debt refinancing, and subsequent events including an acquisition and public offering - All revenue for the three and nine months ended September 30, 2023, was generated by the Entertainment Publicity and Marketing (EPM) segment, with no revenue from the Content Production (CPD) segment[37](index=37&type=chunk) - A goodwill impairment of **$6,517,400** was recorded in Q2 2023 due to a sustained low market capitalization relative to book value, which was considered a triggering event[42](index=42&type=chunk)[43](index=43&type=chunk) - An intangible asset impairment of **$341,417** was recorded in Q3 2023 for the trademarks and trade names of Socialyte and Be Social, following their rebranding into "The Digital Dept."[45](index=45&type=chunk) - The company's investment in Crafthouse Cocktails was fully impaired by **$1,169,587** during Q3 2023 after Crafthouse failed to secure a new funding round[58](index=58&type=chunk) - On September 29, 2023, the company refinanced its debt, entering into a new loan agreement with BankUnited for a **$5.8 million** term loan and a **$750,000** revolving line of credit, which was used to repay the existing BankProv facility[83](index=83&type=chunk) - Subsequent to the quarter end, on October 31, 2023, the company raised gross proceeds of approximately **$2.31 million** through an underwritten public offering of **1.4 million** shares at **$1.65** per share[140](index=140&type=chunk) - On October 2, 2023, the company acquired Special Projects Media LLC for approximately **$10.0 million**, consisting of **$5.0 million** in cash and **2.5 million** shares of common stock[141](index=141&type=chunk)[142](index=142&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses revenue growth from acquisitions, increased net loss due to impairments and payroll, and strategic investments in content and live events - The company operates in two segments: Entertainment Publicity and Marketing (EPM) and Content Production (CPD). The EPM segment includes subsidiaries like 42West, The Door, and the newly formed 'The Digital Department' (from Be Social and Socialyte)[145](index=145&type=chunk) - The 'Dolphin Ventures' investment strategy focuses on acquiring ownership stakes in assets where the company's marketing expertise can influence success, such as content, live events, and consumer products. Key investments include Midnight Theatre and 'The Blue Angels' documentary[144](index=144&type=chunk)[146](index=146&type=chunk) Nine-Month Revenue Comparison (2023 vs 2022) | Segment | Nine Months Ended Sep 30, 2023 ($) | Nine Months Ended Sep 30, 2022 ($) | | :--- | :--- | :--- | | Entertainment publicity and marketing | $31,100,867 | $29,366,748 | | Content production | $0 | $0 | | **Total revenue** | **$31,100,867** | **$29,366,748** | - Payroll and benefits expenses for the nine months ended Sep 30, 2023, increased by **$5.2 million** compared to the prior year, primarily due to the inclusion of Socialyte payroll (**$3.5 million**) and other salary increases[161](index=161&type=chunk)[166](index=166&type=chunk) - The company expects to generate income in its Content Production segment in early 2024 from the release of 'The Blue Angels' documentary, from which it estimates it will derive approximately **$3.5 million**[148](index=148&type=chunk)[153](index=153&type=chunk) - Total debt increased to **$19.2 million** as of September 30, 2023, from **$13.7 million** at year-end 2022, an increase of **$5.5 million**[187](index=187&type=chunk) [Controls and Procedures](index=52&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were ineffective due to un-remediated material weaknesses, with remediation efforts underway - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were not effective as of September 30, 2023[232](index=232&type=chunk) - The ineffectiveness is due to material weaknesses disclosed in the Form 10-K for the year ended December 31, 2022, which have not been remediated[232](index=232&type=chunk) - Remediation efforts are underway, including developing formal policies, enhancing review precision, using a third-party consultant, improving closing procedures, and reevaluating monitoring activities[233](index=233&type=chunk)[235](index=235&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=54&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[238](index=238&type=chunk) [Risk Factors](index=54&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 - No material changes have occurred to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2022[239](index=239&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) No unregistered sales of equity securities or use of proceeds were reported for the period - None[240](index=240&type=chunk) [Exhibits](index=55&type=section&id=ITEM%206.%20EXHIBITS) The report lists various exhibits filed with the SEC, including CEO/CFO certifications and Inline XBRL data files - Exhibits filed include CEO/CFO certifications (31.1, 31.2, 32.1, 32.2) and XBRL data files[244](index=244&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q2 2023 increased by 11% to $11 million compared to Q1 2023, marking the second highest quarterly revenue performance in the company's history [68][78] - Operating loss for Q2 2023 was $7.4 million, with a net loss of $8 million, which included noncash items of over $7.1 million related to a nonrecurring $6.5 million impairment of goodwill [69][79] - Cash and cash equivalents were $7 million as of June 30, 2023, down from $7.9 million as of March 31, 2023 [91] Business Line Data and Key Metrics Changes - The influencer marketing segment, combining Be Social and Socialyte, is expected to represent 25% or more of total revenues in 2023, with significant growth anticipated in the coming years [10][84] - The Door, a marketing communications agency, welcomed new clients and secured projects with renowned culinary figures, enhancing its portfolio [7] - Viewpoint, the creative agency, worked on productions for notable brands, indicating a diverse project pipeline [8] Market Data and Key Metrics Changes - The influencer marketing industry has experienced strong double-digit CAGR over the past five years, growing from less than $2 billion in 2016 to over $14 billion in 2022 [63] - The company anticipates a strong second half of the year, driven by seasonal trends in influencer marketing and upcoming projects [67][111] Company Strategy and Development Direction - The company aims to merge Be Social and Socialyte to create a leading influencer marketing agency, expanding its services across various entertainment verticals [84][118] - The partnership with IMAX for the Blue Angels documentary is expected to generate significant revenue, with projections of over $3.5 million [80][88] - The company is focusing on expanding into live events and enhancing its influencer marketing capabilities, particularly in the culinary and athletic sectors [87][118] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for the second half of the year, citing multiple catalysts and a strong operational momentum from Q1 to Q2 [5][67] - The impact of the ongoing writer and actor strikes is expected to be minimal, as current projects have already been produced [92] - The company is well-positioned to capitalize on the growing influencer marketing space and anticipates significant revenue growth from upcoming projects [10][111] Other Important Information - The company has successfully removed all contingent consideration liabilities from its balance sheet, marking a significant milestone [4] - A one-time noncash goodwill impairment was recognized due to a decline in market capitalization, allowing for a reset of the company's financials [15][79] Q&A Session Summary Question: Update on ShaSha Lounge memberships - Memberships were recently put on sale, and the company is nearing the financial threshold to begin construction [19] Question: Revenue recognition from Amazon - Revenue from the Amazon deal is expected to be recognized in the first half of next year, with some payments anticipated in the current calendar year [20] Question: Impact of actor and writer strikes - The talent division's revenue will see a slight dip, but it represents a small fraction of overall revenue [38] Question: Timing for Blue Angels release - The film is anticipated to be released in Q1 2024, with considerations for the best release date [109] Question: Future of influencer marketing - The company sees significant opportunities in expanding influencer marketing beyond traditional sectors, including events specifically for influencers [118]

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, 2023 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) ——————— (State or othe ...

Dolphin Entertainment, Inc. (NASDAQ:DLPN) Q1 2023 Earnings Conference Call May 15, 2023 4:30 PM ET Company Participants James Carbonara – Managing Partner-Hayden IR, Inc. Bill O'Dowd – Chief Executive Officer Mirta Negrini – Chief Financial Officer Conference Call Participants Allen Klee – Maxim Group Operator Good day, everyone, and welcome to today's Dolphin Entertainment First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask ...

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 March 31, 2023 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) ——————— Indicate by c ...

Financial Data and Key Metrics Changes - Revenue for the year ended December 31, 2022, was approximately $40.5 million, a 13% increase from $35.7 million in 2021 [35] - Operating expenses for 2022 were approximately $45.1 million, compared to $41.2 million in the prior year [35] - Net loss for 2022 was $4.7 million, an improvement from a net loss of $6.5 million in 2021 [38][39] - Basic loss per share for 2022 was $0.49, compared to $0.85 in the prior year [40] Business Line Data and Key Metrics Changes - The addition of Socialyte and Be Social has created a leading influencer marketing firm, expected to represent 25% or more of revenues in 2023 [18] - The influencer marketing industry has seen strong double-digit CAGR, increasing from less than $2 billion in 2016 to an estimated $14 billion in 2022 [17] - The company expects to add 3 to 4 new 2.0 deals each year, which will create meaningful cash flow [30] Market Data and Key Metrics Changes - The influencer marketing segment is one of the fastest-growing areas in marketing, with expectations for continued growth in the coming years [18] - The company has expanded its reach in the influencer marketing space, now fully bicoastal with operations in New York, Miami, and Nashville [72] Company Strategy and Development Direction - The company aims to complete its original vision of building a Super Group with the acquisition of a live events production company [32] - The hiring of a seasoned CMO is expected to enhance brand-building capabilities and support the growth of 2.0 opportunities [4][10] - The company is focused on building ventures where it can receive equity stakes without upfront cash investments [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, expecting strong double-digit revenue growth and positive results from 2.0 ventures [31][88] - The company anticipates that the completion of its acquisition strategy will simplify financial reporting and align net income results more closely with operating income [3] Other Important Information - The company has paused the development of new NFT collections while awaiting improved market sentiment [25] - The IMAX documentary project is expected to be released in the second half of 2023, which could significantly impact revenues [26][69] Q&A Session Summary Question: What is the financial outlook for 2023? - Management expects to achieve double-digit growth, potentially exceeding $50 million in revenue, and aims to be EBITDA positive [88] Question: How will the acquisition of Socialyte impact growth? - The integration of Socialyte and Be Social is expected to create synergies and enhance the company's influencer marketing capabilities [70] Question: What are the expectations for operating expenses in 2023? - Operating expenses are expected to increase only slightly due to the full-year impact of Socialyte, with no significant surprises anticipated [87]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-38331 DOLPHIN ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) 150 Alhambra C ...