Dolphin Entertainment(US:DLPN)2021-08-15 16:00Revenue Performance - For the three months ended June 30, 2021, revenues from the entertainment publicity and marketing segment were $8,643,244, an increase of approximately $3.4 million compared to $5,194,725 for the same period in 2020[172]. - For the six months ended June 30, 2021, total revenues were $15,820,362, up by $3.9 million from $11,828,525 in the same period of 2020[172]. - The company has seen signs of improvement in demand for its services as industries gradually reopen, with increased revenues and cash flows noted for the three months ended June 30, 2021[152]. - The company expects growth in its entertainment marketing division driven by increased digital streaming marketing budgets from key clients over the next several years[158]. Expenses and Losses - The company reported a net loss of $3,922,043 for the six months ended June 30, 2021, with an accumulated deficit of $101,894,084 as of the same date[152]. - Total expenses for the three months ended June 30, 2021, were approximately $8.59 million, an increase of 60.9% compared to $5.37 million for the same period in 2020[174]. - Payroll expenses increased by approximately $2.7 million for the three months ended June 30, 2021, primarily due to the inclusion of payroll costs from Be Social and B/HI acquisitions[175]. - Selling, general and administrative expenses rose by approximately $0.2 million for the three months ended June 30, 2021, attributed to costs from Be Social and B/HI acquisitions[176]. - The company reported an accumulated deficit of $101.9 million as of June 30, 2021, with net losses of $3,922,043 for the same period, raising doubts about its ability to continue as a going concern[201]. Acquisitions and Investments - The acquisition of B/HI Communications, Inc. was completed for $0.8 million in common stock and up to an additional $1.2 million contingent on performance targets[144]. - The company plans to complete one additional acquisition in 2021 to enhance its entertainment publicity and marketing services[145]. - Net cash used in investing activities for the six months ended June 30, 2021, was $525,856, primarily related to the acquisition of B/HI[196]. Cash Flows and Financing - Cash flows provided by operating activities were $30,060 for the six months ended June 30, 2021, a decrease of $0.7 million from the same period in 2020[193]. - Cash flows from financing activities for the six months ended June 30, 2021, were $1.8 million, primarily from $3.1 million in proceeds from convertible notes payable[198]. - The company issued seven convertible promissory notes totaling $3,050,000 in 2021, bearing interest at 10% per annum, with conversion options based on the stock's market price[208]. - The company recorded interest expenses of $42,482 related to convertible notes payable for the six months ended June 30, 2021, and made cash interest payments of $31,149 during the same period[210]. Debt and Compliance - Total debt as of June 30, 2021, was approximately $8.0 million, including $2.0 million of PPP Loans, with total stockholders' equity at approximately $22.2 million[205]. - The company believes it is out of compliance with certain debt covenants due to current economic factors and uncertainties related to COVID-19[207]. - The Term Loan with Bank United, N.A. has an outstanding balance of $700,227 as of June 30, 2021, and matures on March 15, 2023[206]. - The company recorded a loss in fair value of $602,475 for convertible promissory notes for the six months ended June 30, 2021[214]. Tax and Debt Forgiveness - The company recorded an income tax benefit of $38,851 for the six months ended June 30, 2021, due to a reduction of the valuation allowance against deferred tax liability[187]. - The company received notifications of forgiveness for PPP Loans amounting to $1.1 million in 2021, with additional applications for forgiveness totaling $1.2 million pending[203]. - The company recorded a gain on extinguishment of debt of approximately $1.01 million for the three months ended June 30, 2021, related to the forgiveness of PPP Loans[181]. - Interest expense and debt amortization decreased by approximately $0.03 million for the three months ended June 30, 2021, compared to the same period in the prior year[186]. Production Pipeline - The company operates in two segments: entertainment publicity and marketing, and content production, with the former generating all revenues reported for the periods ended June 30, 2021[146]. - The company has a pipeline of feature films ready for pre-production, pending financing, including titles like "Youngblood" and "Sisters Before Misters"[165].