Dolphin Entertainment, Inc. LD Micro 20th Annual Main Event Conference

Wow. Well done. She's very enthusiastic.

That was impressive. Well, pleasure to meet you all, and thank you all for coming in here today. I know it's a long day, and appreciate you making the time at 3:00 on an afternoon. I thought I'd just talk you through a few slides about why I'm buying from my own company and see if it's of interest to you as well. I am doing it as if you have a working understanding of Dolphin, but of course, we have a Q&A that happy to answer any questions about our company. I won't go through the whole history of Dolphin or anything besides those beautiful forward-looking statements, where we are today. The five takeaways I hope for this conversation, we'll go through a slide on each, is just why am I buying? We have organic growth. We have free cash flow catalysts in the short term.

We don't need to raise any additional capital. The last equity we drew down was May of 2024. I'm buying, so that's always hopefully a good sign. We have ventures upside, which we'll talk about at the end, with no capital outlay from Dolphin. Okay. First, DLPN is well-positioned to benefit from organic growth in the markets we serve, especially influencer marketing. If you're not familiar with our story, again, I'll be brief. We up-listed to NASDAQ nine years ago as an acquisition story that we're going to buy entertainment marketing companies to build both horizontal and vertical scale. We bought PR firms in each major area of entertainment, and we bought vertical scale, married those PR firms with influencer marketing and celebrity booking, event marketing.

Influencer marketing, if you have any exposure or interest in the marketing field, has been and continues to be the driver of growth in marketing. It is not your father's marketing industry or Mad Men anymore. It is very much influencer marketing, and we think we're extremely well-positioned. We bought two influencer marketing companies and merged them to create what we think is the best in the industry, a company called The Digital Dept. When you have these different companies, you can cross-sell. Today, you tend to package PR and influencer marketing, earned media, right? If all the marketing's broken into paid and earned, we think we built a powerhouse in earned media with our PR firms and our influencer marketing. Then, of course, you have economies of scale. We own Hollywood's most well-known PR firm for film and TV called 42West.

We have the world's largest music PR firm in Shore Fire Media. We have a very large culinary and hospitality PR firm in The Door. We have a nonprofit impact PR firm called Elle Communications. That is how we're growing our revenue year-over-year, as you can see. Last year, we were named agency of the year in the country. That is any industry, not just entertainment. Those are many of our senior leaders. You can see we're also heavily female-led. All of our subsidiaries have a female CEO, and they just built beautiful companies. Our results are only improving, but we have some very near-term, short-term, excuse me, yeah, near-term free cash flow catalysts. As I mentioned, we're growing both revenue and profit anyway. But then we have spent money to protect an investment we made.

One of the acquisitions where we felt like the books were not sold to us exactly accurately, and so we're in one piece of litigation that we have invested in that we expect a resolution in the spring next year. We have a trial date for that. We also have leases that expire. When you buy a lot of companies, you get a lot of leases. So we have three active leases in New York and two in Los Angeles. The largest in each market expire 12 months from now in New York and L.A. We'll be saving over $1 million a year just on consolidating our leases. Then, of course, we'll see on the next slide even more cash flow savings. Then as we make continued profit from our subsidiaries and whatnot, we have a lot of NOLs.

We're going to be saving a lot of cash, and there's a lot of value to those NOLs, of course, far in excess of our current market cap. We don't need to raise any capital. That is probably a nice thing to say at this market, right, or this conference. Sometimes we feel like our cash flow's obscured a little bit because when you acquire marketing companies, you're not acquiring companies with physical assets. So you take a heavy amortization hit. You have to put pretty much over 90% of your acquisition prices either in goodwill or in intangible assets. As you amortize the intangible assets, you're taking non-cash expenses every single quarter. Those will expire. We're in the final mostly 3-4 years of those.

But we've, in previous years, have had to take over $600,000, almost $700,000 a quarter of non-cash expenses, which just obviously obscure how we're really doing on an operating basis, we feel. Which is why we think EBITDA is a much more valuable way to recognize how we're doing. Also, we paid for the acquisitions, typically half cash, half stock, and we borrowed some of the cash. That acquisition loan, which I think hit a peak of almost $8 million, has less than $3.5 million remaining. It matures September 29, 2028. So we just passed under the two-year mark, and that'll save us $2.2 million of cash a year, married to the lease savings of over $1 million a year. You can see if our company doesn't continue to grow at all, we have an improvement of free cash flow by over $3 million two years from now.

What do we plan to do with that? Corporate stock buyback is certainly on the table. Can't announce. Nothing's for certain, but we're pointing to that date as something that would be exciting, especially since, as I said, I've been buying in the market now. We'll talk about that on this slide. So as I was just saying how we have management alignment on our stock price, each one of our CEOs has a significant stake in the company. They all have committed to stay with us for a long period of time. I started buying. When we finished the acquisition strategy, I was blocked, as you can imagine, for several years from buying from the company because I had material non-public information about what our next acquisition was going to be. We bought one company a year for nine straight years. I was freed up. Felt like coming out of jail.

So I bought $100,000 of stock in the fall of 2024 while we put in place a 10b5-1 plan. By the end of that year, you have to do the 90-day hold, as you all know. I started buying $5,000 a week the first week of April of last year. So we're now over 18 months later. I've bought over 500,000 shares of our stock, anywhere from $1 to $1.70, I think. That's added up to a little over 4% of all shares outstanding. I plan to keep buying for the next couple of years. We'll see how high all these shares that I'll be buying before then the company would start a buyback. So why am I invested this heavily in the stock? It is because of everything I was just saying.

Lastly, the point of putting the group together, so we're trying a different presentation this year than what we did in the past. In the past, I assumed everybody in the room had never heard of our company, and we talked about what our strategy was, which companies we bought each year, and then took you through 20 minutes of who we are. This year, I'm just saying, why am I buying for the last 18 months, and what do we see, and what are our financial results related to that? I'm going to go back now and say, okay, let's assume for a minute you bought the most well-known marketing companies in entertainment in each of these verticals, and you married the PR with the influence marketing and the celebrity booking. What would you do with it?

That was the question I asked at the same conference in December of 2016, before we had bought the first company, and before we uplisted to NASDAQ. The answer is, why did you do it? First of all, if it was just to work together, you kind of stay private. You can kind of just work together. The point of putting the group together was so that we would then take ownership stakes in some of the things that we're marketing. That would monetize the scale and the reach of the group in a way that just simply providing services does not. We call that ventures, and imagine if you owned a piece of a music festival or a food festival or a consumer product that entertainment tends to influence. That's the point of the group.

So with the group done, we announced a deal in February, a strategic partnership with DealMaker, and if you're familiar with them, then hopefully this is one of those wow moments because DealMaker and Reg. I'll go to this slide. The number one problem for launching anything or even having an existing brand that you can't get traction is you don't have funds, and the second problem is you don't have the money to market it. DealMaker's kind of the market leader in Reg CF and Reg A deals. You can see this was actually 3 months ago, so now they're over $2.8 billion raised. I believe, if I'm not mistaken, they were 39% of the market share in 2025. I've told that they're over half the market share in the first 6 months of this year.