Greetings and welcome to Dolphin Entertainment Third Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. James Carbonara with Hayden IR. Please proceed, sir.

Thank you, and once again, welcome to Dolphin Entertainment’s third quarter 2020 earnings call. With me on the call are Bill O’Dowd, Chief Executive Officer and Mirta Negrini, Chief Financial Officer. I would like to begin the call by reading the Safe Harbor statement. This statement is made pursuant to the Safe Harbor 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 the meaning of 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 quarterly 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 would like to turn the call over to Bill O’Dowd, Chief Executive Officer of Dolphin Entertainment. Bill, please proceed. Bill O’Dowd: Thanks, James and thanks everyone for joining today. As usual, I am going to start by highlighting some top level financial results…

Thank you, Bill and good afternoon. Revenues for the third quarter of 2020 were $6,390,653 as compared to revenues in the third quarter of 2019 in the amount of $5,948,056. Overall, operating expenses decreased by approximately $500,000 during the 3 months ended September 30, 2020 as compared to the 3 months ended September 30, 2019. Direct costs decreased by approximately $100,000 for the 3 months ended September 30, 2020 as compared to the 3 months ended September 30, 2019 primarily due to the elimination of certain Viewpoint fixed costs. Selling, general and administrative costs decreased by approximately $70,000, mainly related to a decrease in travel expenses during the 3 months ended September 30, 2020 as compared to the 3 months ended September 30, 2019. Legal and professional fees increased by approximately $19,000 for the 3 months ended September 30, 2020 as compared to the 3 months ended September 30, 2019 primarily due to cost evaluation for convertible notes. Payroll costs decreased by approximately $351,000 during the 3 months ended September 30, 2020 as compared to the 3 months ended September 30, 2019 primarily due to the salary and staff reductions as a result of the decrease in revenues due to the effect of COVID-19. Our operating loss for the quarter ended September 30, 2020 of approximately $493,000 includes non-cash items from depreciation and amortization of approximately $514,000 as compared to an operating loss of approximately $1.4 million for the quarter ended September 30, 2019, including approximately $486,000 of non-cash items from depreciation and amortization. Net loss for the quarter ended September 30, 2020 was approximately $138,000 or zero of basic loss per share based on 33,382,027 weighted average shares and a $0.01 diluted loss per share based on 34,560,054 weighted average shares. This compares to net loss for the quarter ended September 30, 2019 of approximately $326,000 or $0.02 of basic loss per share on 16,071,891 weighted average shares and $0.05 diluted loss per share based on 19,847,935 weighted average shares outstanding. We should note that during the quarter ended September 30, 2020 we recorded beneficial conversion features of the conversion of two notes payable in the amount of $100,000 that is recorded in the caption interest expense and debt amortization. We also recorded net gains on changes in fair value of liabilities in the amount of approximately $454,000. During the 3 months ended September 30, 2019, we recorded gains on changes in the fair value of liability in the amount of approximately $722,000. That concludes my financial remarks. I will now ask the operator to open the phone line for Q&A. Operator, can you please poll for questions.

Thank you. [Operator Instructions] Our first question comes from Jack Vander Aarde with Maxim Group. Please proceed with your question.

Hi, great and thanks for taking my question. This is Albert Kim speaking for Jack Vander Aarde. But first congratulations on your quarter and solid third quarter performance despite the current environment. If I could just start with Be Social, your latest addition to the Super Group, I was just wondering if you could provide some color on kind of their performance thus far since the acquisition. I know you mentioned that they were one of the great drivers of this quarter’s revenue, but just digging a little deeper, if there has been any kind of growth due to organic growth or has it been mostly through cross-selling? And also finally, if you could provide some perspective into how much further growth is expected and possible through continued integration and increasing cross-selling their services? Bill O’Dowd: Sure. Thank you for the kind words, Albert at the start. Well, Be Social is a tremendously strategic acquisition. Interestingly, we only acquired them on August 16. So, they were with us for just under half of the quarter. So, they will contribute even more in future quarters to our results. They are growing organically. It’s a fast growing sector. They are a fast growing company within that sector, tremendous management team within Be Social, where it gets exponential for us and for them, but all in one family right is in addition to their current client roster of brands that use them to run social influencer marketing campaigns, we will be adding clients from each of our three PR firms, all of whom operate in industries that Be Social currently doesn’t service. So, that’s where the spider web of cross-selling creates exponential growth. We are actively working with Be Social, integrating their offerings into the consumer product offerings of the Door with their brands. We will be working with 42West to have Be Social and their influencer marketing campaign support. Our movie launches 42West has a big roster of movies to launch in the first half of next year, fingers to the sky, right. And of course, I don’t need to tell you how influential online marketing is for music with Shore Fire. So more good things to come from Be Social, but they are immediately paying dividends for us now.

Alright. Thank you so much. That was helpful. And if I could just switch frames to the overall business, as you mentioned there has been news about COVID vaccine developments and potential distribution by early 2021. Have these announcements made any impact for your expectations in the future regarding like growth in recovery or was your expectation kind of already kind of set in mind that around this timeline? It was going to be covering it better. Bill O’Dowd: Well, I mean, I think like the rest – thank you for that question like the rest of the world, we are all hopeful, right. We have – I am very proud of the results we just announced, right. We are blessed. We are very fortunate. I don’t think I will give you one. I mean, back in March and April, what I am about to say, I would not have thought possible, which is I think it’s fairly certain at this point, we can state that our revenues in 2020 will be higher than our revenues in 2019. That’s an incredible result that there is no chance any of us thought would have been possible and that’s a real tribute to the 150 or so people that work within Dolphin. So, I don’t want to pretend that I knew that, that was going to happen 8 months ago. Conversely, I think looking back in the crystal ball back in April, I think we all would have hoped that the restaurant business for the Door would have been further along by now. It’s just not. As I mentioned in my prepared remarks, the hotel business is coming back nicely. But we have been able to do all of this without the restaurant business of the Door and without movies and theaters for 42West. When those two things can happen and Dolphin can go back into production, we will really jump, right. So we are all hopeful for a vaccine that will make the consumer feel comfortable and local restrictions to be relaxed around movie theaters and restaurants. And if that were to happen in the spring, all the better, but we are managing ourselves now with the current reality, which is those two things are not really available at scale.

That’s really great to hear. It’s sounding like a very exciting few quarters coming up. And if I could just ask a very final question, because I know you might not – you might be early or I am just saying it’s not something you can share yet. But have there been any updates to kind of potential addition to the Super Group to finish off the roster? I think back in 2017, you made a mark about having planned to have six businesses in the roster by 2020. So, could you give us a little more update on that? Bill O’Dowd: Sure. It’s a question people want to know, I guess, Albert right. Well, we do want 6 companies in the core group. I stated on the Q2 earnings call that our goal was to have a sixth company inside the Super Group by the end of the year, I still believe that to be a realistic goal. We are working very hard for that. With that said, as I mentioned on the Q2 earnings call, as you know at some point, the original sixth company, which is a live event production company, would be one that we would be looking to add. It still doesn’t feel right to us that this is the right time to do that. We are still probably a few months away from having visibility as to when live events will safely return. But I do think we can add a very exciting company by the end of the year and then hopefully in a vertical that will be complimentary to what we already know. We are very excited for this. And as I mentioned then, just to kind of correlate, when we uplisted 3 years ago, we talked about the initial 3 years being a period of acquiring companies, right. A core group that we could build on in subsequent years at the end of the 3 years and we would start in 2021 looking to own some of the assets that we are promoting. And I think when we transition to that in the next few weeks, then that’s the point at which it gets really exciting for the CEOs of our companies. The reason why they joined our Super Group, in the first place and the ability to flex our muscles with some of the things that we choose to invest in. So in many ways 2021, it’s going to be the most exciting year of this journey for us even though so many great things were accomplished in 2020.

That sounds great. Thank you so much and again congratulations on year and quarter. That’s all the questions I have. Thank you. Bill O’Dowd: Sure. Thank you.

Thank you. We have come to the end of the Q&A session. I would like to turn the call back over to management for closing comments. Bill O’Dowd: Sure. Well, that was quick. Well, I think the only other thing I’d probably say is for those I know that some technical investors have enjoyed seeing the progress on our balance sheet. Just to kind of circle back on that in Q3, for those following with the acquisitions we made over the first 2 years of this journey, we had a working capital deficit of little over $15.5 million on December 31. That working capital deficit as of September 30 is now down to $2.4 million, less than $2.4 million, that’s over $13 million improvement, obviously. In addition, that includes current liabilities or lease liabilities of $1.8 million. So we are very, very close. And I would expect that we turn that around in the first quarter to the next year finish, that trajectory in addition where we are sitting on $9.2 million in cash at quarter’s end that is after we purchased Be Social. So we are feeling very strong. Our results have consistently improved quarter-to-quarter and we have beaten both our internal and consensus analyst expectations in every major metric. So, we feel very blessed. We hope the last 6 weeks of the year finished as strong as our journey to this point. And I appreciate everyone coming to the call and listening. It will be a long stretch before we speak again at the K. So we will make hopefully a couple of nice announcements in the interim and look forward to speaking again soon. Thank you all very much for your time.

Thank you. This does conclude today’s teleconference. You may disconnect your lines this time and thank you for your participation and have a great day.