Dolphin Entertainment's biggest risks in the FY2024 10-K
- Dolphin Entertainment faces severe recurring net losses, a $6.4 million working capital deficit, and material weaknesses in internal controls.
- The business depends heavily on retaining key employees across marketing subsidiaries like 42West and The Door, and remains vulnerable to client termination on 30-day notice and entertainment industry strikes.
The risks most specific to Dolphin Entertainment
- Risks Related to our Business and Financial Condition
We have a history of net losses and may continue to incur net losses
We incurred net losses of $12,603,225 in 2024 and $24,396,725 in 2023, with an accumulated deficit of $146,214,429.
- Risks Related to our Business and Financial Condition
Non-convertible promissory note – Socialyte (current) $ 3,000,000 $ 3,000,000
We carry a $3,000,000 non-convertible promissory note for Socialyte, which restricts our ability to obtain additional working capital financing.
- Risks Related to our Business and Financial Condition
Our management has determined that our disclosure controls and procedures and our internal controls over financial reporting are not effective as we have identified material weaknesses in our internal controls
Our management concluded that our internal controls over financial reporting were not effective due to several material weaknesses.
- Risks Related to our Business and Financial Condition
We may require additional financing, and we may not be able to raise funds on favorable terms or at all
We had negative working capital of $6.4 million as of December 31, 2024, and need additional funding to continue operations for the next 12 months.
- Risks Related to Our Entertainment Publicity and Marketing Business
Our business could be adversely affected if we fail to retain the principal sellers, and/or other key employees of 42West, The Door, Shore Fire, The Digital Dept. Special Projects, Elle and Always Alpha and the clients they serve
Our success depends on retaining key employees and former owners at marketing subsidiaries including 42West, The Door, Shore Fire, The Digital Dept., Special Projects, Elle, and Always Alpha.
- Risks Related to Our Entertainment Publicity and Marketing Business
A significant labor dispute in our clients’ industries could have a material adverse effect on our business
Industry-wide strikes by guilds such as the Writers Guild or Screen Actors Guild reduce the supply of entertainment content and demand for our marketing services.
- Risks Related to Our Entertainment Publicity and Marketing Business
Clients may terminate or reduce their relationships with us on short notice
Our marketing subsidiary agreements generally permit clients to terminate or reduce their relationships on short notice of usually 30 days.
- Risks Related to our Common Stock and Preferred Stock
We have recently issued, and may in the future issue, a significant amount of equity securities and, as a result, your ownership interest in our Company has been, and may in the future be, substantially diluted and your investment in our common stock could suffer a material decline in value
Our outstanding common stock increased from 6,170,332 shares to 11,162,026 shares between January 1, 2023, and December 31, 2024, causing substantial dilution.
- Risks Related to our Common Stock and Preferred Stock
The Series C Convertible Preferred Stock has super voting rights that may adversely affect our shareholders
Series C Convertible Preferred Stock held by Dolphin Entertainment LLC and owned by Mr. O’Dowd carries super voting rights.
- Risks Related to our Common Stock and Preferred Stock
The sale or issuance of our common stock to Lincoln Park may cause dilution and the sale of the shares of common stock acquired by Lincoln Park, or the perception that such sales may occur, could cause the price of our common stock to fall
We have an agreement with Lincoln Park Capital Fund LLC to sell up to $25 million of common stock, which may cause significant dilution and lower our stock price.
All 20 risk factors
Headings as the filing states them, in filing order.
Risks Related to our Business and Financial Condition
- 01Our results of operations, including our revenues from our Entertainment and Publicity Marketing segment, are highly susceptible to unfavorable economic conditions
- 02We have a history of net losses and may continue to incur net losses
- 03Non-convertible promissory note – Socialyte (current) $ 3,000,000 $ 3,000,000
- 04Our stock price has been volatile and may continue to be volatile in the future, and as a result, investors in our common stock could incur substantial losses
- 05Our management has determined that our disclosure controls and procedures and our internal controls over financial reporting are not effective as we have identified material weaknesses in our internal controls
- 06We rely on information technology systems that are susceptible to cybersecurity risks. In the event of a cybersecurity incident, we could experience operational interruptions, incur substantial additional costs, become subject to legal or regulatory proceedings or suffer damage to our reputation
- 07We may require additional financing, and we may not be able to raise funds on favorable terms or at all
Risks Related to Our Entertainment Publicity and Marketing Business
- 08Our business could be adversely affected if we fail to retain the principal sellers, and/or other key employees of 42West, The Door, Shore Fire, The Digital Dept. Special Projects, Elle and Always Alpha and the clients they serve
- 09We operate in a highly competitive industry
- 10The success of our entertainment publicity and marketing business depends on its ability to consistently and effectively deliver marketing and public relations services to our clients
- 11If we are unable to adapt to changing client demands, social and cultural trends or emerging technologies, we may not remain competitive and our business, revenues and operating results could suffer
- 12A significant labor dispute in our clients’ industries could have a material adverse effect on our business
- 13Clients may terminate or reduce their relationships with us on short notice
- 14If our clients experience financial distress, or seek to change or delay payment terms, it could negatively affect our own financial position and results
Risks Related to Acquisitions
- 15We are subject to risks associated with acquisitions and we may not realize the anticipated benefits of such acquisitions
- 16Losses incurred by us subsequent to completion of an acquisition may not be indemnifiable by the seller or may exceed the seller’s indemnification obligations
Risks Related to our Common Stock and Preferred Stock
- 17We have recently issued, and may in the future issue, a significant amount of equity securities and, as a result, your ownership interest in our Company has been, and may in the future be, substantially diluted and your investment in our common stock could suffer a material decline in value
- 18The Series C Convertible Preferred Stock has super voting rights that may adversely affect our shareholders
- 19Our common stock is listed on the Nasdaq Capital Market. We cannot assure you, that we will be able to maintain compliance with Nasdaq’s current listing standards, or that Nasdaq will not implement additional listing standards with which we will be unable to comply
- 20The sale or issuance of our common stock to Lincoln Park may cause dilution and the sale of the shares of common stock acquired by Lincoln Park, or the perception that such sales may occur, could cause the price of our common stock to fall
Other Dolphin Entertainment 10-Ks
- FY2025 10-K risk factors20 risks1 new1 dropped4 reworded
A new indebtedness risk highlights $24.5 million of total principal debt and potential pressure on financing, cash flow, and future productions.
Filed Mar 27, 2026
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.