Dolphin Entertainment 2017 Revenue Increases 238% to $22.4 Million
NEW YORK and LOS ANGELES, April 4, 2018 /PRNewswire/ -- Dolphin Entertainment (NASDAQ: DLPN), a publicly-traded independent producer of premium feature films and digital content, and parent company of 42West, one of the largest public relations and marketing services firms in the entertainment industry, announces its financial results for the full year ended December 31, 2017.
Full Year 2017 Highlights
- Revenue of $22.4 million, up from $9.4 million as compared to the prior year.
- Operating loss of $1.1 million compared to an operating loss of $17.7 million in the prior year.
- Net income of $6.9 million, compared to a net loss of $37.2 million in the prior year.
- On a pro-forma basis, revenue was $27.1 million, the operating loss was $0.1 million and net income was $8.6 million. Financial information presented on a pro-forma basis assumes that the acquisition of 42West occurred on January 1, 2017 instead of March 30, 2017.
- On December 21, 2017 uplisted to NASDAQ.
- On December 26, 2017 announced the closing of a public offering with gross proceeds of $5,011,875.
- Acquired PR Powerhouse, 42West, on March 30, 2017 in a $28 million all-stock transaction.
- Named as agency of record for an online social media and social networking service with more than 2 billion monthly users, committing as much as $1 billion to original content in 2018.
- In July 2017, Joe Quenqua joined as a managing director. The former Disney executive is expected to expand the company's offerings in digital content and live events.
Dolphin's CEO, Bill O'Dowd, commented, "We had a very strong 2017. Revenue grew significantly, to $22.4 million, a 238% increase from the prior year. A substantial part of that total growth continues to be attributable to our March 2017 acquisition of 42West."
Mr. O'Dowd continued, "In 2018 we will continue to drive top and bottom line growth. In our content marketing division, we are already off to a good start having signed many new projects and clients this year. Furthermore, we continue to see opportunities to complement our organic growth by pursuing accretive acquisitions of companies or personnel in the highly-fragmented content marketing space. In terms of producing content, we are focused on moving at least one film into production, thereby generating additional revenues for that business unit and providing optionality in 2019. Collectively, the accomplishments of last year, including our uplisting to NASDAQ, have Dolphin well positioned to maximize shareholder value in 2018 and beyond."
About Dolphin Entertainment, Inc.
Dolphin Entertainment is a leading independent entertainment marketing and premium content development company. Through our recent acquisition of 42West, we provide expert strategic marketing and publicity services to all of the major film studios, and many of the leading independent and digital content providers, as well as for hundreds of A-list celebrity talent, including actors, directors, producers and recording artists. 42West is a recognized global leader in PR services for the entertainment industry and, in December 2017, the New York Observer listed 42West as one of the top four most powerful PR firms of any kind in the United States. The strategic acquisition of 42West brings together premium marketing services with premium content production, creating significant opportunities to serve our respective constituents more strategically and to grow and diversify our business. Our content production business is a long established, leading independent producer, committed to distributing premium, best-in-class film and digital entertainment. We produce original feature films and digital programming primarily aimed at family and young adult markets.
Investor Contact:
James Carbonara
Regional Vice President, Hayden IR
[email protected]
+ 1 646 755 7412
| DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES |
|||
| Consolidated Balance Sheets |
|||
| As of December 31, 2017 and 2016 |
|||
| (Unaudited) |
|||
| ASSETS |
2017 |
2016 |
|
| Current |
|||
| Cash and cash equivalents |
$ 5,296,873 |
$ 662,546 |
|
| Restricted cash |
- |
1,250,000 |
|
| Accounts receivable, net of allowance for doubtful accounts of $366,280 and $0 respectively |
3,700,618 |
3,668,646 |
|
| Other current assets |
422,118 |
2,665,781 |
|
| Total current assets |
9,419,609 |
8,246,973 |
|
| Capitalized production costs |
1,075,645 |
4,654,013 |
|
| Intangible assets, net of 1,043,255 of amortization |
8,506,745 |
- |
|
| Goodwill |
12,778,860 |
- |
|
| Property, equipment and leasehold improvements |
1,110,776 |
35,188 |
|
| Investments |
220,000 |
- |
|
| Deposits |
485,508 |
1,261,067 |
|
| Total Assets |
$ 33,597,143 |
$ 14,197,241 |
|
| LIABILITIES |
|||
| Current |
|||
| Accounts payable |
$ 1,097,006 |
$ 677,249 |
|
| Other current liabilities |
6,487,819 |
2,958,523 |
|
| Line of credit |
750,000 |
- |
|
| Put Rights |
2,446,216 |
- |
|
| Warrant liability |
- |
14,011,254 |
|
| Accrued compensation |
2,500,000 |
2,250,000 |
|
| Debt |
3,987,220 |
18,743,069 |
|
| Loan from related party |
1,708,874 |
684,326 |
|
| Deferred revenue |
48,449 |
46,681 |
|
| Note payable |
1,100,000 |
300,000 |
|
| Total current liabilities |
20,125,584 |
39,671,102 |
|
| Noncurrent |
|||
| Warrant liability |
1,441,831 |
6,393,936 |
|
| Put Rights |
3,779,794 |
- |
|
| Note payable |
675,000 |
- |
|
| Deferred tax |
187,537 |
- |
|
| Other noncurrent liabilities |
1,311,040 |
- |
|
| Total noncurrent liabilities |
7,395,202 |
6,393,936 |
|
| Total Liabilities |
27,520,786 |
46,065,038 |
|
| STOCKHOLDERS' EQUITY (DEFICIT) |
|||
| Common stock, $0.015 par value, 200,000,000 shares authorized, 10,565,789 and 7,197,761, respectively, |
158,487 |
107,967 |
|
| Preferred Stock, Series C, $0.001 par value, 50,000, 50,000 at December 31, 2017 and 2016 |
1,000 |
1,000 |
|
| Additional paid in capital |
98,816,550 |
67,835,440 |
|
| Accumulated deficit |
(92,899,680) |
(99,812,204) |
|
| Total Stockholders' Equity (Deficit) |
$ 6,076,357 |
$ (31,867,797) |
|
| Total Liabilities and Stockholders' Equity (Deficit) |
$ 33,597,143 |
$ 14,197,241 |
|
| DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES |
||
| Consolidated Statements of Operations |
||
| For the years ended December 31, 2017 and 2016 |
||
| (Unaudited) |
||
| 2017 |
2016 |
|
| Revenues: |
||
| Entertainment publicity |
$ 16,458,929 |
$ - |
| Production and distribution |
5,954,115 |
9,367,222 |
| Membership |
- |
28,403 |
| Total revenues |
22,413,044 |
9,395,625 |
| Expenses: |
||
| Direct costs |
4,638,710 |
10,661,241 |
| Distribution and marketing |
1,111,994 |
11,322,616 |
| Selling, general and administrative |
3,156,097 |
1,225,464 |
| Depreciation and amortization |
1,254,643 |
20,225 |
| Legal and professional |
1,806,448 |
2,405,754 |
| Payroll |
11,550,078 |
1,462,589 |
| Total expenses |
23,517,970 |
27,097,889 |
| Income (Loss) before other expenses |
(1,104,926) |
(17,702,264) |
| Other Income (Expenses): |
||
| Other income |
- |
9,660 |
| Extinguishment of debt |
4,012,277 |
(9,601,933) |
| Acquisition costs |
(749,440) |
- |
| Loss on disposal of furniture, office equipment and leasehold improvements |
(28,025) |
- |
| Warrant issuance expense |
- |
(7,372,593) |
| Change in fair value of warrant liability |
9,018,359 |
2,195,542 |
| Change in fair value of put rights and contingent consideration |
(2,301,914) |
- |
| Interest expense |
(1,594,940) |
(4,718,091) |
| Total other income (expense) |
8,356,317 |
(19,487,415) |
| Income (loss) before income taxes |
$ 7,251,391 |
$ (37,189,679) |
| Income tax |
338,867 |
- |
| Net income (loss) |
$ 6,912,524 |
$ (37,189,679) |
| Deemed dividend on preferred stock |
- |
5,247,227 |
| Net income (loss) attributable to common shareholders |
$ 6,912,524 |
$ (42,436,906) |
| Income (Loss) per Share: |
||
| Basic |
$ 0.72 |
$ (9.66) |
| Diluted |
$ (0.20) |
$ (9.66) |
| Weighted average number of shares used in per share calculation |
||
| Basic |
9,586,986 |
4,389,096 |
| Diluted |
10,608,828 |
4,389,096 |
| DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES |
|||||
| Consolidated Statements of Cash Flows |
|||||
| For the years ended December 31, 2017 and 2016 |
|||||
| (Unaudited) |
|||||
| 2017 |
2016 |
||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||
| Net income (loss) |
$ |
6,912,524 |
$ |
(37,189,679) |
|
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|||||
| Depreciation and amortization |
1,254,643 |
20,225 |
|||
| Amortization of capitalized production costs |
3,356,785 |
7,822,549 |
|||
| Impairment of capitalized production costs |
269,444 |
2,075,000 |
|||
| Bad debt |
330,714 |
- |
|||
| Loss on extinguishment of debt |
2,723 |
9,601,933 |
|||
| Warrant issuance |
- |
7,394,850 |
|||
| Loss on disposal of fixed assets |
28,025 |
- |
|||
| Change in fair value of warrant liability |
(9,018,359) |
(2,195,542) |
|||
| Change in fair value of put rights and contingent consideration |
2,443,261 |
- |
|||
| Compensation paid with shares of common stock (2017 Plan) |
330,065 |
- |
|||
| Gain on extinguishment of debt |
(4,500,000) |
- |
|||
| Changes in operating assets and liabilities: |
|||||
| Accounts receivable |
1,343,958 |
(3,668,646) |
|||
| Other current assets |
2,243,667 |
- |
|||
| Prepaid expenses |
- |
161,250 |
|||
| Related party receivable |
- |
72,518 |
|||
| Capitalized production costs |
(47,861) |
619,206 |
|||
| Deposits |
821,122 |
(863,998) |
|||
| Deferred revenue |
1,768 |
(1,371,687) |
|||
| Accrued compensation |
250,000 |
185,000 |
|||
| Accounts payable |
381,521 |
(1,393,296) |
|||
| Deferred tax |
187,537 |
||||
| Other current liabilities |
1,260,641 |
3,757,873 |
|||
| Other noncurrent liabilities |
507,371 |
- |
|||
| Net Cash Provided by (Used in) Operating Activities |
8,359,549 |
(14,972,444) |
|||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||
| Restricted cash |
1,250,000 |
(1,250,000) |
|||
| Payment of working capital adjustment (42West) |
(185,031) |
- |
|||
| Purchase of fixed assets |
(227,040) |
- |
|||
| Acquisition of 42West, net of cash acquired |
13,626 |
- |
|||
| Net Cash Provided by (Used in) Investing Activities |
851,555 |
(1,250,000) |
|||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||
| Proceeds from loan and security agreements |
- |
12,500,000 |
|||
| Repayment of loan and security agreements |
- |
(410,000) |
|||
| Warrant |
- |
50,000 |
|||
| Sale of common stock |
500,000 |
7,500,000 |
|||
| Sale of common stock and warrants (unit) in Offering |
3,945,284 |
- |
|||
| Proceeds from line of credit |
750,000 |
- |
|||
| Proceeds from notes payable |
2,175,000 |
- |
|||
| Repayment of notes payable |
(700,000) |
- |
|||
| Repayment of debt |
(10,255,849) |
(4,263,602) |
|||
| Payment to designated employees |
(481,546) |
- |
|||
| Proceeds from the exercise of warrants |
35,100 |
- |
|||
| Exercise of put rights |
(1,225,000) |
- |
|||
| Advances from related party |
1,388,000 |
320,000 |
|||
| Repayment to related party |
(707,766) |
(1,204,093) |
|||
| Net Cash Provided by (Used in) Financing Activities |
(4,576,777) |
14,492,305 |
|||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
4,634,327 |
(1,730,139) |
|||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
662,546 |
2,392,685 |
|||
| CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
5,296,873 |
$ |
662,546 |
|
| SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: |
|||||
| Interest paid |
$ |
77,263 |
$ |
156,666 |
|
| SUPPLEMENTAL DISCLOSURES OF NON CASH FLOW INFORMATION: |
|||||
| Conversion of related party debt and interest to shares of common stock |
$ |
- |
$ |
3,073,410 |
|
| Conversion of debt into shares of common stock |
$ |
- |
$ |
3,164,000 |
|
| Conversion of loan and security agreements, including interest, into shares of common |
$ |
- |
$ |
22,091,388 |
|
| Conversion of loan and security agreements converted to warrants to purchase shares of |
7,034,990 |
||||
| Payment of certain accounts payable with shares of common stock |
$ |
58,885 |
$ |
- |
|
| Issuance of shares of Common Stock pursuant to 2017 Plan |
$ |
330,065 |
$ |
- |
|
| Issuance of shares of Common Stock related to the 42West Acquisition |
$ |
14,320,351 |
$ |
- |
|
| DOLPHIN ENTERTAINMENT, INC AND SUBSIDIARIES |
||||||||||||||
| Consolidated Statements of Changes in Stockholders' Equity (Deficit) |
||||||||||||||
| For the year ended December 31, 2017 and 2016 |
||||||||||||||
| (Unaudited) |
||||||||||||||
| Additional |
Total |
|||||||||||||
| Preferred Stock |
Common Stock |
Paid-in |
Non controlling |
Accumulated |
Stockholders |
|||||||||
| Shares |
Amount |
Shares |
Amount |
Capital |
interest |
Deficit |
Equity (Deficit) |
|||||||
| Balance December 31, 2015 |
217,150 |
$ |
232,043 |
2,047,309 |
$ |
30,709 |
$ |
26,510,949 |
$ |
2,977,808 |
$ |
(62,615,428) |
$ |
(32,863,919) |
| Net loss for the year ended |
- |
- |
- |
- |
- |
- |
(37,189,679) |
(37,189,679) |
||||||
| Income attributable to the non |
- |
- |
- |
- |
- |
7,097 |
(7,097) |
- |
||||||
| Return of capital to noncontrolling |
- |
- |
- |
- |
- |
(14,200) |
- |
(14,200) |
||||||
| Acquisition of 25% interest in |
- |
- |
- |
- |
(921,122) |
(2,970,705) |
- |
(3,891,827) |
||||||
| Issuance of common stock during the |
- |
- |
187,572 |
2,814 |
1,872,189 |
- |
- |
1,875,003 |
||||||
| Extinguishment of debt at a price of |
- |
- |
3,078,980 |
46,185 |
37,236,640 |
- |
- |
37,282,824 |
||||||
| Issuance of common stock for |
316,400 |
4,746 |
3,159,254 |
3,164,000 |
||||||||||
| Preferred stock dividend related to |
50,000 |
100,000 |
- |
- |
(5,227,247) |
- |
- |
(5,127,247) |
||||||
| Issuance and conversion of Series B |
(165,000) |
(330,000) |
1,567,500 |
23,513 |
6,246,735 |
- |
- |
5,940,247 |
||||||
| Retirement of Series A Preferred |
(52,150) |
(1,043) |
- |
- |
(1,041,957) |
- |
- |
(1,043,000) |
||||||
| Balance December 31, 2016 |
50,000 |
$ |
1,000 |
7,197,761 |
$ |
107,966 |
$ |
67,835,440 |
$ |
- |
$ |
(99,812,204) |
$ |
(31,867,798) |
| Balance December 31, 2016 |
50,000 |
$ |
1,000 |
7,197,761 |
$ |
107,967 |
$ |
67,835,440 |
$ |
- |
$ |
(99,812,204) |
$ |
(31,867,797) |
| Net income for the year ended |
- |
- |
- |
- |
- |
- |
6,912,524 |
6,912,524 |
||||||
| Sale of common stock during the year |
- |
- |
50,000 |
750 |
499,250 |
- |
- |
500,000 |
||||||
| Sale of common stock and warrants |
- |
- |
1,215,000 |
18,225 |
3,927,059 |
- |
- |
3,945,284 |
||||||
| Issuance of shares from partial |
- |
- |
1,332,885 |
19,993 |
9,960,107 |
- |
- |
9,980,100 |
||||||
| Issuance of shares for payment of |
6,140 |
92 |
61,487 |
61,579 |
||||||||||
| Issuance of shares related to |
- |
- |
837,415 |
12,562 |
14,307,789 |
- |
- |
14,320,351 |
||||||
| Shares issuable for contingent |
- |
- |
- |
- |
3,644,251 |
- |
- |
3,644,251 |
||||||
| Shares issued per equity |
- |
- |
59,320 |
890 |
329,175 |
- |
- |
330,065 |
||||||
| Shares retired from exercise of puts |
- |
- |
(132,859) |
(1,993) |
(1,748,007) |
- |
- |
(1,750,000) |
||||||
| Effect of reverse stock split on |
- |
- |
127 |
1 |
(1) |
- |
- |
- |
||||||
| Balance September 30, 2017 |
50,000 |
$ |
1,000 |
10,565,789 |
$ |
158,487 |
$ |
98,816,550 |
$ |
- |
$ |
(92,899,680) |
$ |
6,076,357 |
SOURCE Dolphin Entertainment
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