Overview

Dolphin Entertainment is a leading independent entertainment marketing and production company. The company operates through several subsidiaries that provide expert strategic marketing and publicity services to top brands in various industries, including motion picture, television, music, gaming, culinary, hospitality, lifestyle, and charitable industries. The company has an acquisition strategy to identify and acquire complementary businesses that can create synergistic opportunities and bolster profits and cash flow. Dolphin has also established an investment strategy, “Ventures” or “Dolphin 2.0,” to develop or acquire ownership stakes in entertainment content, live events, and consumer products.

Entertainment Publicity and Marketing (EPM)

Dolphin’s revenue is directly impacted by the retention and spending levels of existing clients and its ability to win new clients. The company earns revenues primarily from the following sources:

1. Talent services: Fees from creating and implementing strategic communication campaigns for performers and entertainers.
2. Entertainment Marketing and Brand Strategy: Fees from providing marketing direction, public relations counsel, and media strategy for entertainment content and brands.
3. Strategic Communications: Fees from advising companies on creating, raising, or repositioning their public profiles, primarily in the entertainment industry.
4. Digital Media Influencer Marketing Campaigns: Fees from arranging strategic marketing agreements between brands and social media influencers.
5. Celebrity Booking and Live Event Programming: Fees from arranging for brands and events to book celebrity and influencer talent.

Content Production (CPD)

Dolphin’s content production business, Dolphin Films, has produced multiple feature films and award-winning digital series, primarily aimed at family and young adult markets. The company is planning to fund future projects through third-party financing arrangements, domestic distribution advances, pre-sales, and location-based tax credits.

Revenues

For the three months ended March 31, 2025, the majority of Dolphin’s revenues came from the entertainment publicity and marketing segment, which accounted for 99.2% of total revenue. The content production segment contributed 0.8% of total revenue.

Expenses

Dolphin’s expenses consist primarily of direct costs, payroll and benefits, selling, general and administrative, acquisition costs, depreciation and amortization, and legal and professional fees.

Other Income and Expenses

Other income and expenses consist primarily of changes in fair value of convertible notes, interest income, and interest expense.

Results of Operations

For the three months ended March 31, 2025, Dolphin’s entertainment publicity and marketing revenues increased by $0.3 million, while content production revenues decreased by $3.3 million compared to the same period in the prior year. Direct costs decreased by $2.0 million, primarily due to the amortization of production costs for The Blue Angels documentary film in the prior year. Payroll and benefits expenses increased by $0.7 million, while selling, general and administrative expenses decreased by $0.2 million. Acquisition costs of $0.4 million were recorded in the current period. Depreciation and amortization increased by $38 thousand, and legal and professional fees decreased by $133 thousand.

Liquidity and Capital Resources

As of March 31, 2025, Dolphin had $8.0 million in cash and cash equivalents and restricted cash. 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 period. Cash flows used in investing activities were inconsequential, while cash flows provided by financing activities were $586 thousand, primarily from proceeds from convertible and nonconvertible notes payable, offset by repayments of existing term loans.

Dolphin’s total debt amounted to $23.0 million as of March 31, 2025, an increase of $597.1 thousand from December 31, 2024. The company’s debt obligations in the next twelve months are approximately $5.5 million, which it expects to be able to meet with its current cash position, cash expected to be generated from operations, and other available funds.

Outlook

Dolphin continues to execute on its acquisition and investment strategies to complement its existing entertainment publicity and marketing services and content production businesses. The company believes these strategies will create synergistic opportunities and bolster profits and cash flow. While Dolphin may acquire additional companies and enter into venture investments in the future, there is no assurance that it will be successful in doing so.