Dolphin Entertainment(US:DLPN)2025-05-13 21:26Revenue Performance - For the three months ended March 31, 2025, total revenue was $12,169,711, a decrease of approximately $3,066,181 compared to $15,235,892 for the same period in 2024[142]. - Revenue from the entertainment publicity and marketing segment increased to $12,077,678, representing 99.2% of total revenue, compared to 78.0% in the prior year[137]. - Revenue from content production decreased to $92,033, down approximately $3,329,108 from $3,421,141 in the previous year, primarily due to the revenue from The Blue Angels documentary[143]. Expense Analysis - Total expenses for the three months ended March 31, 2025, were $13,943,238, a decrease of approximately $1,128,114 from $15,071,352 in 2024[144]. - Direct costs decreased significantly to $344,414, down approximately $1,974,813 from $2,319,227 in the prior year, attributed to the amortization of production costs for The Blue Angels[144]. - Payroll and benefits expenses increased to $10,304,233, an increase of approximately $729,982 compared to $9,574,251 in the previous year, mainly due to the inclusion of Elle's payroll expenses[145]. - Selling, general and administrative expenses decreased to $1,772,444, down approximately $204,546 from $1,976,990 in the prior year, primarily due to reduced office rent expenses[146]. - Legal and professional fees decreased by $133 thousand for the three months ended March 31, 2025, primarily due to cost savings from bringing financial reporting in-house[149]. - Depreciation and amortization increased by $38 thousand for the three months ended March 31, 2025, compared to the same period in 2024[148]. Net Loss and Cash Flow - Net loss was approximately $2.3 million or ($0.21) per share for the three months ended March 31, 2025, compared to a net loss of approximately $0.3 million or ($0.04) per share for the same period in 2024[155]. - Cash used in operating activities was $1.7 million for the three months ended March 31, 2025, an increase of $0.5 million from the prior year[158]. - Cash flows provided by financing activities for the three months ended March 31, 2025 were $586 thousand, primarily from proceeds of convertible notes payable[160]. Debt and Financing - Total debt amounted to $23.0 million as of March 31, 2025, an increase of $597.1 thousand from December 31, 2024[161]. - The company issued six convertible notes payable during the three months ended March 31, 2025, receiving proceeds of $775,000[165]. - The company recorded a gain in fair value of $20 thousand for the convertible note payable at fair value for the three months ended March 31, 2025[171]. - The Socialyte Promissory Note, amounting to $3 million, matured on September 30, 2023, with no interest payments made during the three months ended March 31, 2025[176]. - As of March 31, 2025, the aggregate principal balance of DE LLC Notes was $2,242,873, with accrued interest of $434,066[180]. - The company issued three nonconvertible promissory notes totaling $983,112 to Mr. Donald Scott Mock, with accrued interest of $114,995 as of March 31, 2025[181]. - Interest expense related to DE LLC Notes and Mock Notes was $79,882 for the three months ended March 31, 2025, compared to $46,121 for the same period in 2024[182]. - The BankUnited Loan Agreement includes a $5,800,000 secured term loan, a $750,000 revolving line of credit, and a $400,000 commercial card[183]. - The Second Bank United Loan Agreement for $2.0 million was established to finance the acquisition of Elle Communications, LLC, maturing in December 2027[184]. - The First BKU Term Loan has an interest rate of 8.10% and a 5-year amortization schedule, while the Second BKU Term Loan has a 7.10% interest rate with a 3-year amortization[185]. - As of March 31, 2025, current liabilities were $1,708,051 and noncurrent liabilities were $4,349,537 related to the First and Second BKU Term Loans[187]. - The BankUnited Credit Facility requires a minimum debt service coverage ratio of 1.25:1.00 and a maximum funded debt/EBITDA ratio of 3.00:1.00[189]. - Amortization of debt origination costs under the Bank United Credit Facility amounted to approximately $7,012 for the three months ended March 31, 2025[188]. - The company recorded interest expense of $7,550 related to the BKU Line of Credit for the three months ended March 31, 2025[186]. Strategic Initiatives - The company has established an acquisition strategy to identify and acquire complementary businesses to enhance profits and cash flow, although no active negotiations are currently in place[127]. - The company plans to enter into Venture investments during 2025, focusing on developing internally owned assets in entertainment content, live events, and consumer products[128]. - Acquisition costs for the three months ended March 31, 2025, were $416,171, related to payments to Special Projects Sellers, with no acquisition costs recorded in the prior year[147].