Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. 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 questions during the question-and-answer session. You may register to ask a question at any time by pressing star one on your touchtone phone. You may withdraw yourself from the queue by pressing star two. Please note this call may be recorded. I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to Mr. James Carbonara. Please go ahead. Thank you, operator, once again, welcome to Dolphin Entertainment's first quarter 2023 earnings call. With me on the call are Bill O'Dowd, Chief Executive Officer, and Mirta Negrini, Chief Financial Officer. I'd like to begin the call by reading the safe harbor statement. This statement is made pursuant to the safe harbor statement for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurances that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report on Form 10-K, contained in subsequent filed reports on Form 10-Q, as well as in other reports that the company files from time to time with the Securities and Exchange Commission. Any forward-looking statements included in this earnings call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events, or circumstances. Now, I'd like to turn the call over to Bill O'Dowd, Chief Executive Officer of Dolphin Entertainment. Bill, please proceed. Thanks, James. Hi, everyone, good afternoon, and thank you for joining us today. As always, we'll start with a review of some financial and operating highlights, followed by a full financial review, then open it up for Q&A. From a financial highlights perspective, we're happy to report that our first quarter revenue grew by 8% year-over-year to $9.9 million. Since Q1 is always our lowest revenue quarter because of the seasonality in our business, and especially with our influencer marketing companies, we expect Q2 revenue to be meaningfully higher and believe that we will hit our expected year-over-year revenue growth target of 20%-25% for full year 2023. Basically saying we're on track. We are also pleased that our operating loss per share for Q1 stayed the same as last year, despite adding a second influencer firm into our Q1 results. As noted just a second ago, we expect our influencer marketing firms to be down in Q1 due to seasonality, but also expect them to more than make up the ground in the rest of the year to deliver annual profits to Dolphin. Moving to operational updates. A clear highlight occurred after the quarter ended with the announcement that Amazon Studios acquired the worldwide rights to The Blue Angels. I know we spoke just six weeks ago, and this has occurred since. If you recall, this time last year, we announced a multi-year agreement with IMAX to jointly finance the development and production of a slate of feature-length documentaries for the global market. The first Project Greenlit was the Blue Angels, developed and co-produced by J.J. Abrams' Bad Robot Productions and Zipper Bros Films. Blue Angels started filming last summer and has finished production. We expect the film to hit IMAX theaters in the second half of this year. In terms of financial implications, we expect to generate approximately three and a half million of revenue to Dolphin from the acquisition agreement, which would result in a 75% ROI before the inclusion of any revenues to Dolphin from the ticket sales from IMAX institutional theaters. This fantastic return on the Blue Angels provides a formidable proof of concept for our Dolphin Ventures model, formerly known as Dolphin 2.0, of taking equity in projects that we market. Dolphin Ventures also saw a boost in Q1 with the announcement that veteran Fortune 500 executive Ellie Doty has joined as chief marketing officer. The rationale is that we expect to source, evaluate, and engage in multiple ventures opportunities over the next 12 to 24 months. Opportunities wherein we get paid a cash fee to secure the services of the various Dolphin agencies working on the account, but also where we receive equity in the product or services we are marketing. Additionally, as chief marketing officer, part of Ellie's role will be to communicate what we have built and giving an additional platform to both the work we are doing and to the incredible leaders within our Dolphin family. Ellie is one of those leaders herself. Leaders like Shore Fire Media, Dolphin's industry-leading music PR firm, whose client, Rhiannon Giddens, was just awarded the Pulitzer Prize in music, which followed Shore Fire clients receiving a collective 14 Grammy Awards in Q1, including Song of the Year and Best New Artist. That many Grammys is a reflection of the breadth and depth of Shore Fire's roster, which is what allowed it to place clients across a wide variety of major promotional vehicles in Q1, including Good Morning America, The Today Show, The Kelly Clarkson Show, and Rolling Stone, just to name a few. We have leaders like 42West, our film and television PR powerhouse, who has helped clients and worked on projects resulting in four nominations for the 76th Tony Awards, four awards at the Sundance Film Festival, and five awards at the South by Southwest Film Festival this year already. 42West's work on the Top Gun: Maverick campaign resulted in an Academy Award for Best Sound and six Oscar nominations, which follows a worldwide box office total of $1.49 billion in 2022, the biggest of client Tom Cruise's career to date. I realize I should have just rounded up to one and a half billion instead of 1.49. Hey. All right. Unsurprisingly, 42West and Shore Fire Media were once again honored by the Observer's PR Power List. We have leaders like The Door, our leading culinary, hospitality, and lifestyle PR firm, who just welcomed Carbone Fine Food to their ever-growing roster of clients in the consumer packaged goods space. Client Gigi Hadid paid tribute to Karl Lagerfeld in a stunning custom-made Givenchy dress on the steps of the 2023 Met Gala. Client Viceroy Hotels made Travel + Leisure's 2023 top 500 best hotels list. Leaders like Be Social and Socialyte, our top influencer marketing agencies that represent over 200 leading creator talent with hundreds of millions of followers on social media. Our creators were recently asked to join campaigns for Saks, Hyundai, Jose Cuervo Tequila, Revlon, and Pinterest, among dozens of others in Q1. Be Social and Socialyte were named top talent managers for creators by Business Insider. Lastly, leaders like Viewpoint Creative, Dolphin's respected creative relations agency and video production boutique. Creative agency, excuse me. Viewpoint's work in Q1 and year to date included a brand image campaign for CBS News New York, Big Red's Hot Sauce, and PayPal, of course. Now I'll turn to providing updates on some of our projects where Dolphin and its shareholders have equity and participate in the upside that our best-in-class marketing companies regularly enable for our clients. Starting with Midnight Theatre, as a reminder, Dolphin manages all aspects of publicity and marketing for Midnight Theatre and its restaurant, Hidden Leaf, while also facilitating talent and commercial relationships within the entertainment and culinary industries. Dolphin also holds a meaningful ownership stake in the venture. As we ramp up the programming at the theater throughout the summer, aiming to have a full seven-day-a-week schedule shortly after Labor Day, we have played host to an array of talent, including Gloria Steinem, New York Cabaret, The Moth, The Daily Show's Roy Wood Jr., who incidentally just hosted the White House Correspondents' Dinner, The Amy Schumer Show's Rachel Feinstein, Broadway's Andrew Barth Feldman, who co-stars with Jennifer Lawrence in an upcoming comedy film from Sony that, by all accounts, looks like it could be a summer hit. As well as screenings of Academy Award-winning Everything Everywhere All at Once and NCAA Basketball's March Madness in 4K high definition, just to name a few. Go Blue Jays. We also anticipate putting out our first original production, called A Brief History of Magic, in Midnight Theatre in July. We're very excited for that as it should allow us to double the number of shows per month this summer versus what we did this winter and spring, and so the Midnight Theatre is kicking into gear. Turning back to our multi-year agreement with IMAX to jointly finance the development and production of a slate of feature-length documentaries. You heard at the top of the call that with the sale to Amazon Studios of our first project together, The Blue Angels, that this partnership could not have gotten off to a better start. We're now looking for and evaluating opportunities for our second documentary together. We also anticipate doing more work with IMAX. We're actively sourcing and developing live shows with them that we can broadcast from Midnight Theatre into IMAX theaters nationwide. We expect to have a lot more to talk about on this topic between now and our Q2 earnings call. In summary, it's been a great start to the year with record Q1 revenues. As in previous years, we are confident that Q2 will be even significantly higher in revenues than Q1. Dolphin Ventures, previously known as Dolphin 2.0, will enjoy a fantastic return on its investment in The Blue Angels, with the revenues from IMAX institutional theaters still to come. Thank you for joining us, and to that end, I'll now turn it over to Mirta. Thank you, Bill. Good afternoon, everyone. I will now discuss results for the quarter ended March 31st, 2023. Revenue for the quarter ended March 31st, 2023, was approximately $9.9 million, 8% above the revenues for the quarter ended March 31st, 2022. Overall operating expenses for the three months ended March 31st, 2023, were approximately $12.5 million compared to approximately $11.1 million in the same period in the prior year. Operating expenses are composed of direct costs, payroll and benefits, selling, general, and administrative expenses, SG&A, changes in the fair value of contingent consideration, depreciation and amortization, and legal and professional fees. Direct costs for the quarter ended March 31st, 2023, were $219,000 compared to $1.1 million in the same period in prior year. Payroll costs were approximately $9.1 million compared to $7 million in the same period in the prior year. SG&A expenses of $1.9 million compared to $1.5 million for the same period in the prior year. Legal and professional fees were $763,000 compared to $938,000 in the same period in prior year. Operating loss for the quarter ended March 31, 2023 of $2,566,000 includes non-cash items from depreciation and amortization of $533,096 and a loss from the change in the fair value of contingent consideration of $15,485, along with one time a non-recurring audit fees of $300,000. This compares to an operating loss for the quarter ended March 31st, 2022 of $1,889,060, which includes non-cash items from depreciation and amortization of $407,238, and a loss from the change in the fair value of contingent consideration of $161,451, along with one-time and non-recurring professional fee expenses of approximately $300,000 primarily related to the 2021 audit. Net loss for the quarter ended March 31, 2023 of $2,969,320 included non-cash items from depreciation and amortization of $533,096, and a loss from the change in the fair value of contingent consideration of $15,485, along with one-time and non-recurring audit fees of $300,000. This compares to a net loss for the quarter ended March 31st, 2022 of $1,717,832, which includes non-cash items from depreciation and amortization of $407,238, and a loss from the change in the fair value of contingent consideration of $161,451, along with one time and non-recurring professional fee expenses of approximately $300,000 primarily related to the 2021 audit. Basic and fully diluted loss per share was $0.23 per share based on 12,640,285 weighted average shares outstanding. This compares to $0.20 of basic loss per share on 8,713,700 weighted average shares and $0.23 fully diluted loss per share based on 8,846,567 weighted average shares outstanding in the same period in the prior year. Unrestricted cash and cash equivalents of $7.9 million as of March 31, 2023, as compared to $6.1 million as of March 31, 2022. That concludes my financial remarks. I will now ask the operator to open the phone lines for Q&A. Operator, can you please poll for questions? Thank you. At this time, if you'd like to ask a question, please press star and on on your touchtone phone. You may remove yourself from the queue at any time by pressing star two. Once again, that is star one to ask a question. Our first queston will come from Allen Klee with Maxim Group. Good afternoon. Congratulations on the quarter. Thank you. Questions on The Blue Angels. Hi. I think I heard you say that you're done with the production. Remind us when the goal is for this to hit the theaters, how many theaters it goes in for how long, and then when it becomes available, and when do you recognize the revenue from Amazon? Thank you. Sure. Yeah. This is a big deal, so we should unpack it a little bit and certainly didn't expect to have such an amazing result on the first one out of the gate, so thank you for highlighting it, Allen. We just announced the deal a year ago this week in Cannes, where I'm going tomorrow. We started filming last summer. We finished filming in March. We're editing it now. We expect as of now, the plan is to be in theaters this fall, late September, October. Of course, those things can move up or back depending on a wide variety of factors, but that's the current plan. It would hit Amazon 30 days after, or so. It goes into theaters. With a documentary like this, we'd love to capture, you know, a little bit of the tailwinds to try and do a flying analogy maybe of Top Gun: Maverick. It certainly helped us with the hype and excitement around this film, which by all accounts is turning out beautiful. We would recognize this three and a half million in stages, but by the time it goes on the Amazon service, it would be recognized at least 90% of the revenue, if not the full 100%. If we're missing that last 10%, it would come very shortly thereafter. If the film's released this year, we should recognize it all during the year, and that's exciting for us. That's great. As we look into 2023 and we're thinking about Dolphin Ventures, you have or could you kind of go through what you've publicly said already of projects that are out there that could hit in revenue for yourselves this year? Sure. Yeah. It really is Blue Angels really is kind of kicking off, you know, being able to recognize revenue from Dolphin Ventures. It's an exciting time. Well, obviously, Blue Angels will happen, and which is fantastic. I should point out, before I forget to, I'm sure somebody would kill me, that the deal with Amazon is fabulous for us. We also will have additional revenue on the project from IMAX institutional theaters, forever. That's exciting as well that we share with IMAX, of course, and the creatives on the film. This will have a nice annuity, we believe, for us. That 75% ROI, not bad less than 12 months later. That's annualized, so less than 12 months will be higher. We'll continue to increase over the years. We're excited about what the next documentary might be with IMAX. That leads to directly answer your question, Alan. We'll have more to talk about on our Q2 earnings call, the ability to do more projects with IMAX will include some live streaming out of our theater that could result in some revenue generally during 2023. Midnight Theatre as a whole will be up, running and fully operational very shortly. We've got the restaurant open. We've got shows in there now about three nights a week, excuse me. When we have our magic show up in July, that'll give us comfort that we could be more in the four or five night a week range. Shortly after Labor Day. Shortly after Labor Day, excuse me, we expect to be seven days a week. When that does happen, Midnight Theatre will be generating meaningful revenue, we believe, here in 2023, and will be a nice catalyst for us. Be on the lookout for that press release about our magic show. We have other Dolphin Ventures in the works. you know, we do own a stake in Crafthouse Cocktails. Those types of deals I know many people on the call are fans of, wherein we put up no money, we don't make an investment of cash, but a company gets access to our supergroup. We get paid a cash fee every month in this structure, and we get equity in the company that we're promoting or the venture that we're promoting. Without giving a specific number and not, you know, stealing thunder from future announcements, I do believe we've identified the next two of those and are working towards closing and anticipate being able to announce the next one shortly or in the coming weeks. Let's just leave it at that ahead of our Q2 earnings call. Our goal there is maybe a year from the holidays to have six-eight of those types of ventures in our portfolio. Each will have an exit strategy. Maybe it's selling the company that we're working with, maybe it's doing a fundraise, et cetera. It would give us an exit within two to three years of it entering our portfolio. Having a slte like that, we obviously expect some of them to have Blue Angels type results. It wouldn't qualify to be a venture for us if it wouldn't result in seven figures, certainly to Dolphin. A few of them, we have high hopes that it could be exits of 8 figures or more. Obviously for a company of our size, you know, a $10 million exit is extremely meaningful. We're excited for that, and we're able to ramp that up because of hiring Ellie, putting the management team in place for ventures. We'll have more to say on that over the summer. Being able to handle six to eight of those at once and manage them to success. That's from a 2023 perspective, I'd say those are the big highlights. More IMAX, Midnight Theater and more ventures that we'll be able to share with everyone. Thank you. That's great color. The writers strike that's going on, does that have an impact on your business, or does it have to be going on for a long time for that to happen? Yeah, no, we're blessed. We're similar to the movie theaters in that we're kind of insulated in terms of it would have to go on a long time, because the projects we've already been hired to promote through the end of this year, we're identifying projects to promote early to middle of next year. Those are already finished films, much like Blue Angels would be, right? It will affect TV production, if it goes on throughout the summer. I wish I could be more optimistic about how quickly this may be over, but I think most of the industry is not optimistic at the moment. It will not affect our business, no. Happy to say. Okay, that's great. In terms of Socialyte and Be Social, how do you feel about the combining of the two and the opportunity you have with these two powerful companies now? Well, you know... working together? Yeah, I mean, in terms of Dolphin 1.0, you know, our core businesses, this combination, quite frankly, is probably the most exciting thing going, because, you know, as listeners of these earnings calls know in the last couple, we bought Socialyte the day of our earnings call back in November. We've been working to integrate these, get these two companies ready to merge and which we'll be announcing over the summer, you know, a new name and excitement around, you know, what will be when they are together, we think the largest and most formidable influencer marketing agency in all of entertainment. With that said, it's only gonna grow because we're gonna invest in the growth of that combined company, you know, more divisions, more segments, more platforms we promote on, because influencer marketing, I don't know if it's the fastest growing area in all of marketing, but if it's not, it's got to be very near the top. Anybody that's followed anything in marketing the last five years knows that influencer marketing is going only in one direction. 'Cause when you think about it, 10 years ago, it started with mommy bloggers, and five years ago, you might have, you know, Instagram campaigns. TikTok challenged the industry to come in with short-form video. Now think of all the different segments that are promoted online, right? I mean, it's affected every industry from books. Remember book talks a thing. Let's talk college athletes, NIL. You know, I played basketball at Creighton. Those who have met me in person know I'm seven feet tall. You know, it's a far different world today than when I played in terms of NIL. Well, those are influencers. Video gaming influencers. We really have synergies we can create with our large video gaming business within 42West and the influencer marketing firms which we don't do today. We are heavily female and beauty, lifestyle, wellness and are the market leader, which is the core cornerstone of influencer marketing today. In the next 3-5 years, I'd love to see us be twice as big, three times as big in influencer marketing. This year, influencer marketing will represent 25% of our revenues, you know, up from 0 before we bought Be Social, right? It would be a great success story if in 3-5 years, influencer marketing is half of our revenues, which is saying a lot considering how strong our PR firms are. That combination on our core business, that merger and doing it right this summer and into the fall will set us up for a lot of growth in the future years. Thank you. On the last call, you said that you had a desire to acquire a company in the live event space. Subsequent to that, we picked up a company that's kind of does things like that, and I got educated on what a good business it is. How do you think about how live events could play into what you do? It's, you know, it's nothing new for us in that, you know, that type of company was always something we said would be part of our group since 2017, right? It was gonna be the last piece we add because just we wanted to have the PR firms in place first then the influencer marketing agencies because they'll be fire hoses of water to potential clients for the right live events company that deals in our space. Live events can mean a lot of things to a lot of people. It can be a very lucrative business, especially, though, when you've got sister agencies like They will, you know. Why? Every movie premiere is a live event. Every streaming service show premiere is a live event. You know, look, think of all the different movies. I'm going to Cannes. You know, we're blessed to represent Martin Scorsese. He's got Killers of the Flower Moon premiering this Saturday. DiCaprio's in it. That's a live event. How many of those we represent every year. How about every hotel opening that The Door does? How about every restaurant opening The Door does? How about everything that can be done at Midnight Theatre? We've hosted, oh my goodness, I don't even know now, is it 10, 12 premieres at Midnight Theatre? We're not fully open. It's very hard, you know. Call it live events, call it experiential marketing. I have a very good friend that's listening in on this call now that's a big magazine publisher. I think he's probably made more money from his live events than he has from his magazines. You know, that type of like I say, experiential marketing, it's the other piece of earned media, which is what we specialize in, PR, influencer marketing, and experiential marketing that is the cornerstone of our strategy. One last, just while I'm riffing on this answer, you know, 42West is the unquestioned leader, right? Film and TV marketing. We are promoting, proud to say, you'll see a press release out on this this week or next week. We're promoting the Harry Potter: The Exhibition that's coming to New York. We have a friends and family Thursday, and I think it's open to the public Friday, if I've got that right. I'll be over in Cannes. Well, obviously, that's a big, big exhibition, right? I wonder if they're gonna do well financially. I'll think about it. You know, those types of opportunities, obviously, Warner Bros. owns the IP on that, but whether it's food festivals, music festivals, exhibitions, immersive experiences, think of the Van Gogh exhibits and everything else I just said before. If you're gonna bring celebrities to those types of events, which we would look for a company that does that, I think the world's your oyster at that point. Yes, I do think that live events should be a part of our future, for sure. Great. My last question is not as exciting, but more financial. Not as exciting as Harry Potter, Allen? No, I. Sorry. Just how to think about with your mix of business now, you mentioned, 1Q is the seasonally slowest quarter. How to think about how, just in general, the other quarters are relatively? Yeah. You know, as we weight more and more with influencer marketing, we're just gonna have to get used to this because smoothing it out over the year just won't be possible. Q2, Q3, they'll sequentially ramp up traditionally with our PR business too, by the way. You know, PR has a, I'll call it a dip in Q1. Influencer marketing is... There's no other word for it other than seasonality, because Q4 is through the roof for influencer marketing traditionally, because the brands wanna hire the influencers to, you know, for holiday sales. The brands shut off their budgets until you get to spring. You know, Coachella and other events, back to live events, traditionally start a heavy brand marketing season with influencers. Q1's always gonna be down for us, and Q4 could, you know... Well, every single year will be our highest revenue quarter. It'll be very interesting to see what happens this year since we've got two influencer marketing companies, which by then will be one merged entity, but still. Yeah, I think that's gonna be true. This year's second half of the year is gonna be overweight anyway because of the recognizing, probably recognizing the revenue of Blue Angels. But I think as a rule going forward, we'll grow year-over-year, every quarter as we've done for the past three years. We're confident in that because each of our companies learns to cross-sell with the other better, stronger, faster. Each year, we've added one more component that allows them to cross-sell with. Now it's Socialyte. Our Q2 should be better than last year's Q2. Our Q3 will be better than last year's Q3, et cetera, et cetera. Q4 will always be overweight, and Q1 will always be underweight. Q2 and Q3 are often quite similar. Was that helpful? Yes. Thank you so much, and congratulations. Thank you. It's an exciting time, and just don't expect 75% ROI on every venture. Ellie might have a heart attack, Allen. Thank you. Thank you. Thank you. At this time, there are no additional questioners. I'd like to turn it back to Mr. O'Dowd for closing remarks. Oh, gosh, okay. Well, first of all, I teach at the University of Miami. Shout out to all Hurricanes who just graduated and those past graduates that are on this call. There are a few of those as well. I know on the Q1 call, I always feel a little guilty 'cause I get to talk to everybody twice in six weeks, and, you know, usually not a lot has changed. Obviously, The Blue Angels has pride of place on this earnings call. I'm very happy that we were able to, together, get off to such a great start with our ventures. It's exciting times. Of course, having been in this business a long time, 27 years, and having formed multi-year partnerships with studios and networks in the past, I think, you know, having a success like that right out of the gate just cements the relationship we believe we've built with IMAX. I think when two good companies with all of our reach together whiteboard additional ways to work together, good things come out of it. I'm excited for that and sharing some of those ideas that we'll be executing on over the summer and into the Q2 earnings call. Obviously, I've been asked more than once, "What's the next documentary?" Well, we're gonna bask in the glow of this one for a month or two and really make sure that we pick the right next project together. We have some great, exciting submissions. Thank you all for listening. Thank you for giving us the opportunity to tell you our good news. I'll look forward to the next earning call in about three months. Thank you, everybody. Thank you, ladies and gentlemen. This concludes today's presentation. You may now disconnect.