Q2 2021 Dolphin Entertainment Inc Earnings Call
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Good day, ladies and gentlemen, and welcome to the Dolphin Entertainment's second quarter 2021 earnings conference call. All lines have been placed on listen only mode and the floor will be opened for your questions and comments following the presentation.
At this time it is my pleasure to turn the floor over to Mr. James Carbonara with Investor Relations, Sir the floor is yours.
Thank you and once again welcome to Dolphin Entertainment's second quarter 2021 earnings call with me on the call are below doubt Chief Executive Officer, and Knits integrating 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 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 meaning of section 27 eight of the Securities Act of 1933 and section 21 of the Securities Exchange Act of 1934, although the company believes the expectations and assumptions reflected in these forward looking statements are reasonable it makes no assurances that.
Such expectations will prove to be incorrect actual results may differ materially from those expressed or implied in the forward looking statements due to various risks and uncertainties for.
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 Companys 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.
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 below down Chief Executive Officer of Dolphin Entertainment Bill. Please proceed.
Thanks, James and Hi, everyone. Good afternoon, and thank you for joining us today.
Now James has asked me to follow our traditional format, where I start by discussing our financials at a high level and then speak about adults and one point out in the second quarter.
And then move to our recent launch of Dolphin to point out and announcements regarding N F Ts.
But James hold on receipt brother, because I'm in a break from format. This I realize maybe unconventional.
But I would like to first pay tribute to those who have been following dolphin since before March 23rd of this year.
Everyone knows that date and the one when we made our first stop in 2.0 announcement.
And then in Ftes and the trading in our stock one.
Nuclear <unk>.
No I want to speak to those who have been with us even before January of this year when we made our last acquisition.
Yep I want to speak to the Oh, Gee stakeholders and investors some of whom have followed us since we first spoke of our dream of building an entertainment marketing Super group.
L D micro in December 2016, when we were in OTC stock and had even been brought 40 to us into the family.
And I want to speak to those who I met following year during our roadshow prior to our uplifting to NASDAQ in December 2017.
Those are the people I want to speak to right now.
James Carbonara of Hayden IR Who's the first addition to the team after deciding to take dolphin public in the summer of 2016.
And who arranged for that first speaking engagement at LD micro I should add.
To John Shaw, Jason Sarto, and Keith Goodman of Maxim, who helped us achieve the uplifting to Nasdaq.
And have been with US every step of the way to.
Josh Shine failed and all of my friends at Lincoln Park.
Johnson at Bard to Marvin Shanken go chains.
Our directors, especially the original independent directors of my guesstimate and extend them and Nelson for modest who've seen the entire journey.
Zamir tenet greaney, our CFO who's also been with us since before we were public.
And to all of our Ceos, and former private company owners, Amanda lowest Charlie day, Maryland Alley, and Dean who each share the belief that we are stronger together than any of us would be alone.
So their senior management teams, who care so much about the work they do them behalf of our clients.
And to all of the over 160 Dolphins working with us today.
I want to talk to them and all the others like them those who believed and continue to believe in what we're building here at dolphin.
And so and speaking to all of you I'm gonna be inspired by many of our musician clients.
And dedicate this song this earnings call.
You know who you are in this earnings call is for you.
So here we go.
From a financial perspective, we have reached several significant milestones this quarter looking at the P&L.
We have set a new record with $8.6 million in revenues. Please note that this follows Q1, which set a then record of $7.2 million in revenues.
That is 20% sequential growth.
From the previous record holding court.
And as you might expect it has significant growth from last year's Q2 revenues of $5.2 million 60.
66% growth to be exact.
Next looking at our operating income this is another huge milestone.
Hence, we uplifted to NASDAQ in December 2017, it's positive for the first time, even when including the noncash expense depreciation and amortization.
Yeah.
Positive operating income from a micro cap entertainment company, even including the DNA expense from our acquisitions.
From a P&L perspective that is how we measure ourselves and so this is a big moment for our company.
Now sure it's fun to report those numbers in the P&L, but for my money. The real story is the balance sheet.
As we took on debt to assemble the Super group many solid as is our biggest weakness.
As our achilles' heel.
First a doubt it we could add other private companies into our group.
That started happening with the door only six months after we joined NASDAQ They.
Then switch the story and said we wouldn't make it to the point, where we could pay off those debts.
They didn't just say it they proclaimed it.
Everyone's entitled to their opinion of course, and we respect that but many of those opinions were stated his conclusion.
They were absolutely.
To this day would never come.
Yeah.
Recap, where we are then Shelley.
Little more than three years since our up listing.
The pool.
Our version of Libra, James maybe we.
Acquired not one <unk>.
Not too.
<unk> three not four but five additional companies to join <unk> 42.
Oh, I guess other market, leading companies did want to join and create a super group after all.
No.
And even doing all of that.
From a peak working capital deficit of just under $16 million, one and a half short years ago.
And even after bringing in six companies.
We are now reporting the first working capital surplus in Dolphin history.
At one point to $5 million and since we're a cash positive micro cap company.
Cough cough.
We expect this surplus will only continue to grow.
Why is that so important to us why is the balance sheet.
So great because that working capital surplus will give us strength on our balance sheet for the next set of acquisitions and 2.0 investments.
For acquisitions on the same terms of any of the six we've already done for example, we would be able to pay the cash component for any of them from cash currently on our balance sheet.
Obviously, we had not been in this position previously so this is another huge milestone for us.
Speaking of cash.
We now have nine $3 million of unrestricted cash.
Which is more than all remaining debt.
Yep.
All that.
Including long term debt.
And including the remaining $2 million in PPP loan, which we expect to be fully forgiven.
Which of course will only improve our working capital surplus.
And last but not least.
Remember all those puts from any of the acquisitions dating back to 2017 totaling $11 million.
Yeah those have been paid in full thank you very much completely off our balance sheet.
Nonetheless, not a dollar not.
Oh.
So our balance sheet, what was stated to be a weakness by those who couldn't see beyond it to what we were building yep.
Our balance sheet today, one and a half years later can only be fairly described as possibly our biggest strength.
When compared to our micro cap peers.
And let me tell you that.
That feels so good.
So.
So very good.
Alright, now we can stop giving James a heart attack when I'll go back to his script instead of mine.
Let me give you some updates on our Super group the companies that are making those great numbers happen.
During the second quarter, a 42 west was involved in various capacities with 13 films that earned a total of 32 Academy Award nominations and won six Oscars. This.
Past Friday as movies are slowly coming back to theaters 42, west handled respect Mgm's biographical drama film based on the life of the Franklin and looking ahead upcoming promotional campaigns include some doozies.
Including Universal Pictures film adaptation of six time, Tony Award, winning musical Dear Evan Hansen coming in September.
Mgm's highly anticipated latest installment in the James Bond franchise coming in October as well as Paramount's top gun to starting our very own client Tom cruise coming in November.
So we've got a major releases coming out one after the other through the fall.
Turning to music.
Sure Fire media had a terrific second quarter really really great.
Let's spend a little extra time on short buyer, because marilyn and the team are truly firing on all cylinders.
I'll start with a special shout out to shore fire media clients, Carole King and Todd Rundgren, who are inducted into the rock and roll Hall of Fame awesome.
And although the return of a full turn calendar is very much a moving target. These days short fire worked with day, one client Bruce Springsteen quarters returned to Broadway with the summer run at the St. James Theater, as well as long time clients Hall of notes in the Dave Matthews band.
Live performances.
It's not just the arts shortly.
<unk> represents many businesses from all facets of the music industry.
Including one of the digital company from Quincy Jones.
Right the ticket reselling platform among many others.
Finally, it should be pointed out that short buyers work with musicians its authors and Influencers. That's attracted a lot of attention and allow for the growth of a very nice roster of non musician clients, including former athlete Sean John Sean Johnson East excuse me and Chris Bosh go he.
Shifting to consumer in hospitality, the door welcomed iconic ice cream brand Hagen dazs and beloved European Baby food brand holiday.
And led campaigns for the dominant hotel Jefferson's Ocean Bourbon and Virgin hotels in New Orleans.
Also Charlie and Lois at the door taken a leadership position for us in these early months of the NFL business Guy.
Guiding our launches and developing processes to onboard more large scale campaigns, which will highlight soon but I wanted to take a moment to thank them for all their hard work in this space.
As for video production viewpoint viewpoint excuse me again also had an exceptional quarter.
Producing a wide range of videos, where everything from traditional network and entertainment clients C. N N national geographic Viacom and HBO Max to the rapidly growing consumer product and brand video work done for clients, including Paypal Biogen in AAA.
And on a personal level. This is a company that cares deeply about charitable opportunities and making a positive impact in the world. So I'd like to highlight viewpoint work with the door to develop strategy and digital content for Leary fighter firefighters foundations International firefighters day broadcast event, which recognizes firefighter.
<unk> and launched the foundations virtual training video series with the largest fire training exercise in New York City.
And finally, moving to Influencer marketing be social was another company that had a fantastic quarter really executing across both the brand campaign side and the influence or talent management sides of the business.
What can happen when you got a young exciting market leader in such a growing market and I honestly think some maybe sleeping on this aspect of our company.
It was on this earnings call last year that I tried to my best to express our great enthusiasm for adding be social to our Super group.
Explain that Influencer marketing and P. R are the twin pillars of earned media with Influencer campaigns, representing tremendous growth in our industry.
E marketer and business insider recently inaugurated their forecast for this industry with an expectation of 33, 6% year over year growth to 369 billion and Influencer marketing spend in the U S. In 2021, which is 1 billion more than 2020.
Furthermore, their forecast for both 2022 and 2023 also showed double digit growth with total influencer marketing spend nearing 5 billion in the U S. In 2023.
We very much wanted to be in this space and we have a gem of a company would be social their skill set is an advantage for our Super group.
And we'll be sure to leverage it to the fullest extent possible with our two point O initiatives.
Speaking of which.
Let's talk about so often to point out.
As a recap for anyone new on the call or to the Dolphin story, we define the work of our Super group under Golf and one point I was the very best at marketing pop culture and.
And we define what we call dolphin to point that was using pop culture to market.
Specifically marketing assets that we own.
Simply put we are looking to own assets for which our marketing companies have a particular expertise and therefore, which will give us the best chances for success.
We want to own, but we know we can market better than anybody else.
So what would those categories be there are three entertainment content live events and consumer products.
And we also talked about a fourth category, where we in wherein excuse me, we take equity Stakes in other People's companies that have entertainment content live events or consumer products.
Those are the buckets are categories, we talked about when we talk about often to point out.
We use the first three years of our public companies existed to build scale and reach across all of pop culture.
Assembling our Super group of marketing companies that we think are the very best of what they did and marketing film television music culinary hospitality video games esports consumer products et cetera.
I think after the one point of summary, I just gave that would be very difficult that we don't have.
For anyone to say that we don't have the best in class subsidiaries across all of its verticals.
The rest of our lifetimes will now also include developing producing and purchasing assets that we will own giving us greater upside and success with these projects.
We've previously.
Previously announced our expectation that we will see too.
Had two initiatives for each of the four categories per year to guide to a cadence we feel we can achieve.
Only exception to this pace will be that we will not start over live events investments until 2022.
For obvious reasons.
It's pretty much everyone on this call knows we have previously announced our entrance into the NFL business, which was the first of our two consumer products announcements expected for this year.
I can now also say that we've identified our first two point out content initiative.
And our first two point out equity stake initiative.
And while we had hoped to be able to speak about both of those initiatives on this earnings call. The timing of our partners' dictates that we will probably need to wait until later in this quarter to be able to do so.
Those initiatives will give us the first one in each of the three buckets for this year.
Content consumer product in equity and we are hard at work in selecting the second one in each of those three buckets for 2021.
And speaking of the NFC business.
Many of you saw the partnership with MTX, we announced two weeks ago today.
<unk> platform and technical skills with the blockchain, where the final pieces in the puzzle we felt we needed to have the launch large scale collectible businesses with major partners.
I don't think there's anyone on this call that hasnt heard of <unk>, but just in case.
They are leading crypto currency exchange with over 1 million users and over $10 billion of average trading volume per day.
Last month, they announced the largest raise in crypto exchange history of 900 million series B round valuing the company at $18 billion.
To expand their visibility in the U S MTX assault sponsorship opportunities and sports and E Sports industries, which dovetail nicely with our F. T ambitious also in those industries.
Some of Mtx's sponsorship highlights.
Include their 19 year naming rights deal for Fts Arena.
Home of my beloved Miami heat.
They're $210 million 10 year sponsorship of TSM labeled the most valuable team in esports by Forbes.
The largest sponsorship deal in esports history and their groundbreaking deal to become the official currency crypto currency exchange brand in major League baseball.
Such agreement with one of the major sports leagues in the United States.
So in summary, we feel our goals and interests in NFC space our lives.
Our dolphin will develop and execute accretive branding production and marketing of these programs along alongside MTX, who will use our crypto exchange services and technical development as the backbone of the marketplaces.
Together, we will develop and program global NFC market places targeting all targeting olive garden's verticals, including the sports film television music gaming esports culinary lifestyle and charity industries.
We see the trading of entities is much more than just a list of digital products. We view our marketplace experiences is the future of fandom for internationally recognized brands and franchises in sports and entertainment.
To achieve this vision we.
We need a seamless user experience because buying nfc's today, it's the opposite of that put it nicely goodbye entities today on your theory in blockchain. It's clunky, we wanted to be able to have the wallet in the product all in one place we wanted to be able to allow the consumer to pay with crypto credit card or traditional currency. We wanted to have the product.
Available on wholly owned programs online destinations. We wanted to have the same product available for purchase directly in App and we also wanted to have actual customers customer support when necessary all of which are enormous differentiating factors that MTX either provides now or can provide as we build larger and larger marketplaces.
Which we intend to do.
To put it simply dolphin and many many others were waiting for the ability to sell out of Ts using credit cards and for the elimination of gas fees that prohibit competitively pricing collectibles.
Simply no business rationale for selling products at 10 or $20 when it costs you $100 and gas these to upload these product for sale.
By the way when it would cost to consumer another $100 a download the product after by those.
Those capacities are why the NFC markets, primarily up until now have been dominated by speculative asset like art, because they can be priced at $1000 or more or even a 100 bucks and gas be it becomes just a fraction of the cost.
Now with F T X and the ability to take credit cards and the elimination of gas fees, we think for ourselves and honestly for the major studios and record labels that are predominantly sat on the sidelines as well waiting like we have been when you can sell digital products for any price point.
$25 or less if you want to then you can create a true market a true cross industry ecosystem and collectibles.
We like the state of the industry and we like our position and experience within a given that our PR firms have marketed collectibles for virtually every major studios consumer products division as well as industry leaders like <unk> and Mattel.
We know how to market collectibles and now.
We can make our own and price them competitively.
Let's see what happens over the next few months, we're certainly very excited for the possibilities.
And to remind everyone nfc's only represent one of the dolphin to point out initiatives, we expect to announce this year.
We believe each of these two initiatives, including entities have the potential to be a major catalyst for our company.
Dolphin to point after having identified the first initiative in content and after identifying the first initiative in equity.
<unk> is gathering momentum and we can't wait to share more.
Oh and did I mention that we have reported positive operating income on record revenues Oh, Yes, I did okay. That's good and how about the fact that we have a working capital surplus with more cash on the books and all remaining debt, including both long term and the P. P. P loans, which we expect to be forgetting Oh, I already said that too okay. Great. You said I just want to.
Make sure I didn't forget to mention that we are a profitable entertainment Microcap company with a working capital surplus and more cash on our books in total debt.
Before we even start dolphin to pointed out okay, I'm, just glad I didn't forget to say that.
I'd like to finish my prepared remarks at the same point I started them by saying the most sincere. Thank you.
To everyone, who has faith in us along our journey.
We are far from reaching our fullest potential.
We know that but it's also important to celebrate successfully reaching milestones along the way.
And I would say that record revenues positive operating income and a working capital surplus are each absolutely a reason to celebrate.
Yeah.
So with that said now I'll turn it over to Mircera.
Thank you Bill and good afternoon, everyone I will now discuss results for the quarter ended June 32021.
Revenue for the quarter ended June 32021 was approximately $8.6 million compared to approximately $5.2 million in there.
Warner ended June 32020.
Overall operating expenses for the second quarter of 2021 were approximately $8.6 million compared to approximately $5.4 million.
In the second quarter of 2020.
Operating expenses are composed of direct costs.
General and administrative costs, depreciation and amortization legal and professional fees and payroll.
Direct costs for the second quarter of 2021 eight.
$833511 compared to $656849 same period of the prior year.
Selling general and administrative expenses for the second quarter of 2021 were approximately $1.2 million compared to $970.978527.
The second quarter of 2020.
Legal and professional fees, but $457998 in the second quarter of 2021.
<unk> $362853 in the second quarter of 2020.
<unk> costs were approximately $5.6 million in the second quarter of 2021 as compared to approximately $2.9 million in second quarter of 2020.
Operating income for the quarter ended June $32021.56293.
Noncash items from depreciation and amortization of $478270 as compared to an operating loss of $179078, which included noncash items from depreciation and amortization of 496461.
For the same period in the prior year.
Net income for the quarter ended June 32021 of approximately $1.3 million included the benefit of approximately net $1 million in noncash items, primarily from a $1 million.
Englishman have debt and positive changes in the fair value of derivative liabilities and contingent consideration.
$498974.
Actually offset by depreciation and amortization of $478270.
This compares to a net loss of approximately $2.9 million, which included noncash items from depreciation and amortization of $496461 a negative change in fair value.
On a liability one put right and contingent consideration items in the amount of $1.7 million.
And approximately $2.
$9 million from the beneficial conversion feature.
Convertible instruments for the three months ended June.
2020.
Well the three months ended June 32021, we have basic earnings per share of 17 cents per share based on 7.664 million weighted average shares outstanding and diluted earnings per share of 13 cents per share based on 7 million 900.
13396 weighted average shares outstanding.
For the three months ended June 32020, we had basic and diluted loss per share of <unk> 62 cents per share based on 4 million 719241 weighted average shares outstanding.
Cash and cash equivalents were $9.9 million as of June 32021, compared to $8.6 million.
As of December 31st 2020, including restricted cash of approximately $7 million in each period.
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.
Certainly thank you. The floor is now opened for your questions. If you do have a question. Please press star one on your telephone keypad at this time.
Using a speaker phone, we asked that while posting a question you pick up your handset to provide the best sound quality.
Ladies and gentlemen.
One for any questions or comments at this time.
Well go first to Alan Klee at Maxim Group. Your line is open Sir Please go ahead.
Thank you and congratulations this was really an impressive quarter.
Okay, a couple of things on the financials to start.
The sequential increase in revenue from the first quarter.
Where did that come from and.
Any thoughts on the sustainability of it thank you.
Sure.
Thank you Alan yet.
Yeah. It's a nice this is a nice called the beyond.
Well I mean, we.
First on the sustainability.
We're excited about the fact that our revenues grew.
As they did.
Without movies in theaters and without the restaurants business and without the live touring to the largest into a large degree as we talked about on our last quarter. So.
I really don't want to give the credit obviously to each of the subs because.
This is where having a market leaders in their respective fields.
They're growing even without you know certain recovery catalysts.
And I think it was a little surprising to many that the growth we did experience from the first quarter.
I think.
With.
Q3, and through the end of this year.
Uh huh.
I am feeling that we are.
We certainly don't see anything that there was no one time revenue or event that occurred or something that would.
It was just organic growth.
We anticipate we don't see any reason why you can't continue.
And I am not.
Thing, though that I think certain of it.
Recovery.
<unk> will come back this year.
The movies are right as of right now at least as I stated in the prepared remarks, but I don't think we are confident I do not think we are confident in the music business right now and we're hopeful and the restaurants. We're also.
Waiting and seeing so obviously that only bodes well for 2022, because I don't think any of US think it will go beyond that so.
That is just.
Organic growth across each of the subs.
Thank you Jim I, just have a few more financial related questions.
If I were to.
Calculated gross margin if I took your direct costs and payroll.
And.
I have to imagine that as cost of goods sold and came up with a gross margin that number also improved sequentially.
So the profitability of the of the gross profit.
<unk> and I was wondering if you could maybe point to what was behind that and thoughts on.
The potential for that to improve.
Well to a large degree is that you know we've invested to keep our very best people during a pandemic right and.
And in doing so I'm trying to look beyond the pandemic and when you've got superstars and we think we've got a whole host of them.
We wanted to keep them, even if they were working at 70.80, 90% capacity and you're starting to see that I mean look at the margin growth to your point Alan.
Quite simply the same amount of people, we're able to handle a little bit more work.
And there it is.
And and we'd rather invest in the people, we have and have them all at full salary and et cetera et cetera than some of our competitors have been laying off people or or whatnot. So.
<unk>.
It.
Worked out very well for us this quarter, and we think going forward.
Right I also in the last three quarters.
SG&A has declined sequentially could you explain what's going on there.
We're pulling it up Alan.
Ellen.
Sure.
Sure.
Is that one I don't know if the top of my head brother.
That's why I can move on.
So.
Sure.
Dolphin to point, where you're owning an asset.
<unk>.
Picture not specific numbers.
Do you think that the margins of the businesses in general when you own it compared to where you're doing the PR marketing that.
How do you think the margins would be for the two point or businesses relative to your legacy other businesses.
Yeah I mean.
In one sentence.
The thought processes of course it.
When you can own the asset.
You can make a better margin and gross dollars too I might add then servicing the asset.
So.
I'm excited for the margins, we're showing now and thank you for pointing that out Alan that was it.
Okay. The question you asked previously, but when we go into two point out.
With successful assets. There's just you could service all day long, you'll never get to the margin ever that you can do by servicing assets you own.
Obviously, so and speaking as someone who has produced.
Successful TV series and in the past and in digital series and it just doesn't compare on a dollar for dollar investment basis. So.
As we get as our company evolves to include more and more and more to point out initiatives and where.
Where we will be in a quarter, where we'll be three years from now like we took us on a trip down memory Lane in my prepared remarks.
And thank those who are with us since three years ago, when we laid out the strategy.
Three years Super group, So we could get to this day.
Three years after starting to point out the margin profile will be vastly.
Hopefully.
Even even stronger than it is today, because we have a much much bigger mix of two point, though to go with our one point of revenue.
That's great.
On the <unk>.
Art, if I could add RC goes not only know that that's why they joined the dolphins right. The whole point of doing dolphin the whole point from an it seems.
Timely to reminisce back to the road show that you know as I mentioned at LD micro as Josh Seinfeld.
Tim Bard, where Elisa Tim Johnson, sorry, we're listening into then the whole vision was to get to this point, so that we could own.
Some of the assets, we are marketing in and that's why each of those private company owners joined the group because they know the margins better.
They know what can happen if you have a successful.
Yeah.
Piece of content or lives of that or or consumer products. So.
I think I mentioned it on the 10-K call. This year with 2021 represented for all of Us.
And is the starting line.
And that's why we're so excited and it's great to be at the starting line.
With where we are financially obviously.
Sorry, Alan I know you had another question no no that's fine. Thank you.
For Nf teens, it seems like the S. T X partnership is pretty meaningful and potentially game changing could you.
Comment on where you think that can bring this business and kind of what we can look forward to seeing.
In 'twenty one.
Yeah sure and.
I'd, probably you know our friends at <unk>, probably don't need us.
Sure.
[laughter], they're selling points if you will.
With them, but but.
Obviously, there are great.
Well recognized company and doing it very quickly just a couple of years of existence, but what they represent for us as we were out there looking and surveying the landscape of Nmc's right, where the business was going to go right. I think we've we by that I mean people that have sold or marketed collectibles business not an art.
The collectibles business.
Previously in the physical world, we needed to create price points that were under $50, a product and we needed to create price points and the 10 to $25 range and it just wasn't possible until you could.
Eliminate the gas because he needed a different blockchain.
Then or a work around to the current theory and blockchain.
And these are primarily sold so that's point number one and secondly to reach all consumers and not just 1% of consumers you needed to be able to have the consumer pay with something other than crypto.
So when we were looking for those two things MTX Emily fit those two bills and allowed us to do both of those but they are in exchange.
And they're both of them.
The U S components, SPX and an international one too so as we have aspirations to do global NFL.
NFC marketplaces, right in those industries and music.
Theres nothing more global than music right.
Film TV other at other industries and verticals that are global by nature right than to be able to accept payment and not just credit credit card, obviously eliminate much of it but.
Crypto, but in Fiat currency to and with an exchange that license and.
Uh huh.
Available globally.
That is the.
Nicole partner in the blockchain partner, we wanted for what our aspirations are in the collectibles business.
When you think about the promise of digital delivery right, what's the biggest disruptor in that in our industry and our lifetime Netflix right well.
Netflix have that you know traditional linear cable channels didnt, they werent bound by national boundaries.
Sure.
They're a global service that's digital delivery on a global scale.
Collectibles can be transformed that same way with digital delivery. If you have a partner that can be global and <unk>.
The reason to highlight those two.
Or three sponsorship deals after you exited it and I'll state the obvious here, but I think it's implied.
You can't just do.
Drop a check in need.
A major sports arena in this country right if they named it the NBA franchises arena and there are the official partner of major League baseball altogether, either one of those deals Youre vetted.
Six ways to Sunday right right. This is an exchange that in the U S follows the K Y C compliance and know your customer that they they follow AML anti money laundering laws.
They have to be to be endorsed and accepted by two of the four major sports leagues and the only crypto currency exchange by any.
So you know we can't feel more comfortable with our choice of partner.
And their technological expertise is exactly what we went into the market to speak as we got closer to this fall as we have aspirations again for global collectibles marketplaces.
We're excited about the partnership we enjoyed our time with them so far and there's a lot more to come.
It seems like Wood F T X.
One of the other opportunity around I think you might've thought you did touch on this but with the NFC market.
Potentially be transforming from more of a high end art markets more.
Collectibles lower end and so we may not even know if we're looking at what's happened this year with.
With high end.
What the real opportunity is that this market is being created for.
For a different type of product.
What do you think about that.
Yeah I think.
I don't think we'll even need the three year horizon.
I'd be surprised if 12 months from now.
Whatever we're calling NFC is today and maybe you know a branding our marketing campaign will change that right.
Whatever that is 12 months from now.
We'll be a market that bifurcated, there theres still will probably be an art or speculative market aspect too.
Trading on the blockchain I I don't think it will go away, it's not something we have any.
Particular interest and our expertise in but I think you know imagine a world in which the major studios are launching their own collectibles from Disney the Paramount to Universal to Warner brothers to Sony to.
So the major record labels, Sony Music Warner Music Universal music, that's a lot of marketing that's a law.
A lot of firepower, that's a lot of pop culture.
A recognition across the general consumer population I mean, there'll be almost unavoidable.
That products are being offered and I think and if it was you have if you have custom interfaces, which we're getting too.
And if you have the ability to pay with a credit card and then it purchasing and I hope he is gonna be indistinguishable from purchasing.
You know.
A a mulligan on ebay or.
Product from Amazon right.
Go to a custom interface web.
Website, and you are going to purchase something so.
I think if that all.
All grouped under the umbrella of what an NFL businesses, great. If it's something if it just seems it's just more it would just seem as what it will be selling consumer products and tickets to experiences and unlocking.
Value for collectors value for people buying these digital products in.
In real World benefits to then then it's gonna look vastly different and it will be.
It'll it'll it has the potential to boom is why we're excited to be in it I mean.
The dollar amounts in the tech space have been reported widely up till now, but if someone really wants to think about it how many people gross number of people in the U S have bought it and it's EBITDA.
I do not believe it would have been I don't think that number would reach 1 million people.
12 months from now we might have 10, 25.50 million people would've thought what we call at NFL, which is collectible that just happened to be delivered on the blockchain.
The exponential growth of the consumer base.
And that's what.
What we see coming and why we want to play in that space.
Last question, how do you feel about the environment.
Sure.
Producing an independent.
Phil.
Better I do.
I don't want to get ahead of my skis on what any of our.
Content initiatives that we may know are coming.
But I would say that I do feel better Allen.
I.
The industry is coming back production assurance, while not solved.
Completely is getting into a place where I feel.
That.
We feel there will be more independent production, starting even as early as Q4. This year certainly Q1 of next year and.
Without having to take the very expensive burden.
Risking it on you know COVID-19 outbreak onset.
So I do feel good about <unk>.
Production and I I'd be surprised if we arent able to take advantage of opportunities in.
And the filmed entertainment space.
Uh huh.
In the coming months.
That's great congratulations thank you.
Thank you.
And with no other questions holding I'll turn the conference back to Mr. Downfield additional or closing comments.
Well thank you.
I'm looking forward to a second question, but.
As usual is very thorough so probably took a lot of people's questions and <unk>.
And.
Thank you for those.
<unk>.
I'm excited for what's to come I think by the time, we speak again in this format.
Yeah 13 weeks in the middle of November.
I imagine we'll have.
Quite a few.
I'm hopeful additional topics to talk about and what we are free to talk about today.
And maybe that's just all part of the plan.
It allows us today to be a celebration of those three milestones we hit it certainly feels great as I think you probably sense.
My.
Prepared remarks record revenue congratulations to each of the companies within dolphin.
You know to report.
Positive operating income even after that.
Depreciation and amortization, which is higher for our company than others, because we've been an acquisition story up till now.
<unk> is really a fabulous milestone.
Since listing on NASDAQ.
And and of course, our working capital surplus you know we've got a.
<unk> balance sheet, the only going to improve and I'm.
I'm very very thankful for those who believed in us from day, one and who we picked up along the way.
And this this type of validation I'm sure is very comforting for them. So thank you everybody that's been listening and I. Appreciate the time and we look forward to speaking again in the next quarter and see what we can talk about.
Have a great day.
Ladies and gentlemen that will conclude today's conference. We thank you for your participation you may disconnect at this time and have a great day.
Okay.
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