Please standby your program is about to begin. [Operator Instructions] Good day everyone, and welcome to today’s Dolphin Entertainment Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note this call will be recorded and I will be standing by if you should need any assistance. It’s now my pleasure to turn the conference over to Mr. James Carbonara, Investor Relations. Please go ahead sir.

Thank you, operator. And once again, welcome to Dolphin’s third quarter 2022 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 the 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 risk factors 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, and hi everyone. Good afternoon. And thank you for joining us today. As you might expect, I’ll start off the call by spending some time with breaking news of today’s bringing our social life to the Dolphin family, followed by an update on various Dolphin initiatives and a full financial review and then we’ll open it up for Q&A. So, here we go. I’ll begin by giving a brief description of Socialyte. The company was founded in 2011, the early days of social media marketing as I believe, Socialyte is an influencer marketing powerhouse, with teams in New York, Los Angeles, Miami and Nashville representing some of the most sought-after creators, from digital-only to celebrity-level talent. Socialyte has a client roster of more than 125 market-leading influencers, including Jana Kramer, Lauren Bushnell Lane, Catt Sadler, and Mary Fitzgerald. For this high end roster of talent Socialyte secures thousands of campaigns each year with such leading brands as Amazon, American Express, Bose, Cartier, Target and more. So, Socialyte has the talent roster and manages the talent’s careers and secures campaigns for the talent. Socialyte has a sister agency Lytehouse, which also came into the Dolphin family, which represents some of the world's most iconic brands, providing the full suite of services for influencer campaigns, from strategy and casting, through execution and delivery, with in-depth analytics and reporting. So Lytehouse comes at it from the brand side, and the company delivers hundreds of campaigns annually with current and recent clients including Airbnb, Amazon, American Express, Ann Taylor, Armani Beauty, Audi, Conde Nast, Etsy, Keurig Dr. Pepper, Michael Kors, Perrier, Prada, Ralph Lauren and W Hotels. Okay, so, now that you know a little bit about Socialyte. Let me describe why this is a highly strategic acquisition for us. I’ll give…

Thank you, Bill, and good afternoon, everyone. I will now discuss results for the quarter ended Septemebr 30, 2022. Revenues for the quarter were approximately $9.9 million as compared to approximately $9.4 million for the quarter ended September 30, 2021. Overall, operating expenses for the quarter ended September 30, 2022 were approximately $11 million, compared to approximately $10.5 million in the same period of the prior year. Operating expenses are composed of direct costs, payroll and benefits, selling, general and administrative costs, SG&A, acquisition cost, depreciation and amortization, and legal and professional fees and changes in the fair value of contingent consideration. Direct costs decreased by approximately $200,000 to approximately $837,000. The decrease was primarily attributable to the decrease in Viewpoint’s revenue in comparison with the same period in the prior year Viewpoint incurred third-party cost related to the productions of marketing materials which are included in direct costs. Payroll and benefit expenses increased by approximately $1.2 million to approximately $7 million, primarily due to additional headcount in 2022 to support the growth of our business and stock compensation issued to our employees under the 2017 plan. SG&A costs were approximately the same during the three months ended September 30, 2022 as compared to the same period in the prior year. Acquisition cost of approximately $300,000 were primarily legal and professional fees related to the Socialyte deal. There were no acquisition cost during the same period in the prior year. Legal and professional fees increased by approximately $300,000 to approximately $800,000. The increase is primarily due to legal and auditor fees associated with the Lincoln Park agreement and the filing of the S-1 and consulting fees for the implementation of a new enterprise resource planning system. These are all one-time costs. Operating loss for the quarter ended September 30, 2022…

[Operator Instructions] First we’ll go to James Carbonara with our investor relations.

Thank you operator and hi, Bill. Allen Klee of Maxim Group emailed in four questions. The first one is, what is your plan on NFTs, given all that’s happening with FTX current prices and volumes?

Sure. This is unusual. I’ll pertain to you Allen and James. I would say what’s our plan, yeah. We need to evaluate it, to be quite honest, I mean, the crypto space is obviously in quite a bit of turmoil right now. We’ve weathered and pushed the launch of Creature Chronicles to out passed what was socially the crypto winner of the spring and summer. We had a very successful launch. I don’t know where crypto is going to from here and we need to just take it day-by-day without making any hard promises one way or the other. As I mentioned, Allen, you may not heard because of your emailing these questions, but as I mentioned in my prepared remarks, we don’t have any exposure on the FTX side. And we’ll see what it all means as we go forward and live it day by day. We do believe we have an expertise and being able to market in that space and it’s proven by Creature Chronicles, proven by the hard work the team does for a variety of clients every day, but I don’t know that we can commit today to knowing what the future is going to hold.

Great. And then, his next one, which I think you may have already addressed was, please provide an update on the Night Theatre and Hidden Leaf.

Yeah, I mean, and this could have we have told on the prepared remarks, for this when its seen on the space is, is gorgeous, the theatre is gorgeous, the restaurant is gorgeous. Theatre is unique. Those walls that are interactive and high fidelity projection that being allowed for some really cool experiences and we knew – I was educated on the process – during the process about how popular space would be for private events and the team believed in that they knew it from beginning. The Brookfield was very complementary of its concepts for private events during the construction phase and it seems to be prudent through in these first few weeks as I mentioned some of the names, I mean, not only the big book, the theatre for private events without even being fully open, I think to a sponsor of those private events they all want to come back for more. So, it’s a really nice environment and brand new space. So it gives us the private events are light glowing for any venue and it’s by definition the only dual private event that’s going to bring you anymore revenue and profits in the programming – more of programming. So it’s an encouraging sign ahead of getting our programming right and getting it up seven days a week.

Great. And then, as third of his four questions is, any other changes in 2.0 initiatives?

Well, he probably would have liked the comments about ShaSha. I mean, I know there are some of our folks probably listening this call would really like the ShaSha model and so do we. It’s not just the ShaSha itself models us talking about in the prepared remarks, but we do feel like having access to the super grid only bolstered by Socialyte right now gives us an opportunity to participate in the revenues or profits of the clients or in equity of the clients. And so, or initiatives and so, it’s – we’ve done a couple of those deals in the past, ShaSha is one that combines that concept being a client and we can market ShaSha and get paid to market ShaSha, but also have it a meaningful ownership percentage in it invest us to help and make ShaSha in New Orleans more of a success and hope demanded nationally. So, that’s a very good deal for both sides and we feel very good about that. So, those types of deals were we get – little bit of festivals both worlds are very appealing and two Charlie Dougeillo and The Door they were been from the ground for ideating what that could be. So that there is an example. Quite frankly the vision of putting a super good theatre that they could each of our senior leaders and quite frankly all the staffs can ideas that can meet the ideas that the outcomes like ShaSha and which are – we are talking about James Beard Award Winning chef right. Nina Compton is pretty darn big and a group of 12 chefs is a pretty big deal. And so, I think this just open up a lounge that’s open to the public, but also has a membership program component. So, there is a good example of I think something that we are excited about in two point since you last spoke.

Great. And then, Allen’s last question any commentary related to outlook?

Yeah, sure. Let’s see, well, I mean, obviously, whatever I would have said, before Socialyte, would change with Socialyte, right, it’s been by the way, it’s a bit fun in commentary, we don’t – I was thinking about just how to convey it in brief comments, the growth of the influencer marketing industry to those who may not be as familiar with it. I went back and I remember when Dolphin was producing shows in Nickelodeon we are starting to dabble with online content. This is before Netbook’s one screening [Indiscernible] series back about 2008 we had, so we want to want that class on the air. And I remember having the first conversations with digital groups at CAA and others. And grant in the app social media budget by the loan departments and then Facebook, I think Facebook some – went public in 2006, I think it’s about right and I looked up from 2008 when we were playing the beginning slates the original series for AOL and Facebook called The MI. This is a great journey question. What was the average time an American spend on social media in 2008, two years after Facebook went public, it was eight minutes – eight minutes a day and then last year, it was 2 hours and 24 minutes a day, average. So, it’s not a surprise that brands followed eyeballs and the eyeballs of the average American as you get younger even more so, 2 hours and 24 minutes a day is what I read online yesterday, just to get that stat now it’s like a while. So, Socialyte will change things, but it’s obviously on both revenue and profit but, as I look back at Q3 am I happy with our revenue growth? I think that had Creature Chronicles…

Thank you, Bill. That concludes the questions received from Allen Klee of Maxim Group. I’ll hand it back to the operator. Operator?

Thank you. And at this time, this will conclude our Q&A session. I’ll turn it back to management if there are any additional or closing remarks.

Man, I missed both Allen’s voice and another question. The – well, thank you. Thank you for listening and obviously a very exciting day. I don’t want to bury the lead and they saying with the artisans actually not being more thrilled to add Socialyte to the Dolphin family, the management team as I quickly alluded to in the prepared remarks are outstanding CEO, Sarah Boyd is very, very impressive and a great leader, same with Roy Peters at Los Angeles I really enjoy getting to know them. I had a lot of respect with for all the family market, very kind people and I know that they are going to be allied with Dolphin for years to come and significant shareholders in Dolphin. So, it’s an exciting time for Dolphin and I really am very, very happy with this transaction heading into holiday season, as anyone knows is the prime cheese in the influencer marketing out of the ordinary that happy profits more can come in the fourth quarter. So, I hope we all have a holiday season and if I don’t talk to everyone on the call before then. Our best you and yours and I look forward to the next time we get an opportunity to speak. Thank you everybody.

Thank you. This concludes today’s call. We thank you for your participation. You may disconnect at any time.