Dolphin Entertainment (DLPN) risk factors, FY2025 10-K

Risks Related to our Business and Financial Condition

1. 01Our results of operations, including our revenues from our Entertainment and Publicity Marketing segment, are highly susceptible to unfavorable economic conditions
2. 02We have a history of net losses and may continue to incur net losses47% rewritten
3. 03Total principal amount of debt $ 24,476,675 $ 22,394,274New
4. 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
5. 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
6. 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
7. 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

1. 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, and Elle and the clients they serve
2. 09We operate in a highly competitive industry
3. 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
4. 11If we are unable to adapt to changing client demands, social and cultural trends or emerging technologies (including artificial intelligence), we may not remain competitive and our business, revenues and operating results could suffer
5. 12A significant labor dispute in our clients’ industries could have a material adverse effect on our business
6. 13Clients may terminate or reduce their relationships with us on short notice
7. 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

1. 15We are subject to risks associated with acquisitions and we may not realize the anticipated benefits of such acquisitions
2. 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

1. 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 value48% rewritten
2. 18The Series C Convertible Preferred Stock has super voting rights that may adversely affect our shareholders21% rewritten
3. 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
4. 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 fall27% rewritten